The United States Fifth Circuit Court of Appeals again ruled that the enforcement powers of the Horseracing Integrity and Safety Authority are an unconstitutional delegation of power reserved for the government.
The Authority, a private corporation, was given rule-making and enforcement powers over horse racing by a 2020 act of Congress. The Fifth Circuit ruling was its third since HISA began operations. The case stems from an action filed in a Texas federal district court in 2021 by the National Horsemen's Benevolent and Protective Association, its state affiliates, and others.
The Fifth Circuit has been consistent in three rulings against HISA's enforcement powers. The latest decision came after the U.S. Supreme Court granted review of the dispute, only to send it back to the Fifth Circuit for further action after the high court decided a case called FCC v. Consumers’ Research. The Fifth Circuit decided the outcome of that case does not change its stance.
The latest ruling is in conflict with a decision made by the Sixth Circuit Court of Appeals, holding the Authority's enforcement powers are constitutional primarily because it is, by statute, overseen by the Federal Trade Commission, an agency of the federal government. Both circuits, as well as the Eighth Circuit Court of Appeals, have ruled the Authority's rule-making power is constitutional.
A recent example of the FTC's oversight power occurred May 1 when the Commission, led by chairman Andrew Ferguson, conducted a hearing to review a suspension and fine imposed on Thoroughbred trainer Phil Serpe by the Authority. A decision by the FTC in the Serpe case is due by June 30.
Still, the Fifth Circuit's 45-page opinion authored by Chief Judge Stuart Kyle Duncan says, "The statute empowers the Authority to investigate, issue subpoenas, conduct searches, levy fines, and seek injunctions—all without the FTC’s say-so. That is forbidden by the Constitution."
National HBPA CEO Eric Hamelback said in a statement, "We have been fighting this battle for the constitutional rights of horsemen for over five years, and we continue to win. It is just common sense that Congress cannot make a private corporation the judge, jury, and executioner of our industry."
Daniel Suhr, president of the Center for American Rights and HBPA lead counsel, added, "We are thrilled that the court sided with our legal arguments once again. By basically reissuing the prior ruling, the Fifth Circuit has laid down a strong marker that government power must be wielded by government officials, who are accountable to the people. That is a cornerstone of our Constitution."
The Fifth Circuit ruling maintains the status quo in horse racing states affected by its past decisions. There is a substantial likelihood that all issues concerning HISA's legality will eventually be decided by the U.S. Supreme Court.
"Although expected, we are still disappointed by the Fifth Circuit's ruling, particularly given the Sixth Circuit's strong affirmation of HISA's constitutionality after the Supreme Court sent the cases back to the lower courts last June," HISA CEO Lisa Lazarus noted in a statement. "HISA remains the law of the land, and our rules and programs are fully in effect. While we await the Supreme Court's ultimate word, we will continue to be focused on our mission of protecting the safety and integrity of Thoroughbred racing."
