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Thursday, July 18, 2024 | Back issues
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Federal horse racing regulator evades constitutional power checks, owners argue in appeals court

Congress created a private authority with unchecked power to regulate horse racing, the owners say, noting that its member cannot be appointed nor removed by federal officials.

DES MOINES, Iowa (CN) — Representatives from the horse racing industry on Wednesday urged a federal appeals court to revive their effort to block the enforcement of racing regulations, claiming Congress violated the constitutional separation of powers in creating a private authority with unchecked power to regulate horse racing in the United States.

Congress in 2020 passed the Horseracing Integrity and Safety Act to create nationwide regulation of the horse racing industry in response to doping scandals and numerous race-related horse deaths that prompted critics' calls for the industry’s demise.

The Iowa Horsemen’s Benevolent and Protective Association filed suit in Arkansas federal court in 2023, along with two racehorse owners in Arkansas and Iowa, respectively. They say the federal law unconstitutionally delegates lawmaking power from Congress to the Horseracing Integrity and Safety Authority Inc., a private corporation that is unaccountable to any branch of the federal government, to broadly regulate everything from horse doping to the horseshoes the animals wear while racing.

The authority is governed by a nine-member board of directors consisting of five independent members and four racing industry members. None of the nine members are appointed, nor removable, by the president or any other government official.

The plaintiff horse owners appealed to the Eighth Circuit following a ruling denying their motion for a preliminary injunction against enforcement of the horse racing regulations. Their attorney, Frank Garrison of the Pacific Legal Foundation in Arlington, Virgina, argued before a three-judge panel in St. Louis-based appellate court Wednesday.

“The private nondelegation doctrine stands for a simple principle: that nobody outside of government should wield the government’s power,” Garrison said. Yet the authority has “sweeping power to write its rules and enforce those rules.”

Senior U.S. Circuit Judge Michael Melloy, a George W. Bush appointee, replied, “The FTC would take issue with that assertion.”

Washington-based Justice Department attorney Courtney Dixon, representing the Federal Trade Commission, agreed.

She cited a Sixth Circuit ruling from 2023 in a similar case saying the horse racing act, as amended in 2022, gave the FTC final say over its administration.

“The act places the private authority in a subordinate position to the public agency in satisfaction of the private nondelegation doctrine,” she said.

U.S. Circuit Judge Raymond Gruender, a George W. Bush appointee, wondered how conflicts between the authority and the FTC would be resolved.

“What I’m curious about is, let’s say the authority,” nearly half of which represents the racing industry, “is determined that they don’t want to have any regulation related to drugs in the horses. And the FTC on the other hand thinks there should be," the judge said. "What allows the FTC, if anything, to initiate a rule in that regard?”

Dixon said the FTC’s authority there would be its general rulemaking power, under the amended statute, to abrogate, add to or modify authority rules.

Three members of Congress — including Senate Minority Leader Mitch McConnell, a Republican from Kentucky who introduced the Horseracing Integrity and Safety Act in 2020 — filed an amicus curiae brief with the appeals court in support of preservation of the act as written. The brief was also signed by Democratic Representative Paul Tonko of New York and Republican Representative Andy Barr of Kentucky.

“HISA responded to an acute situation,” McConnell and the congressmen state in their brief. “Horseracing had two options. It could evolve, or it could disappear.” Congress, they said, “enacted HISA for the benefit of horses and jockeys, and for the survival of a key industry.”

Without the act, they said, “horse racing would be governed by as many regimes as there are states that allow racing, each with its own permitted dosages and protocols for testing. This was fertile ground for honest mistakes. It was also fertile ground for strategic behavior, with disastrous results for horses, jockeys, and the industry."

The third member of the panel that heard Wednesday’s oral argument was Chief U.S. Circuit Judge Steven Colloton, a George W. Bush appointee. The appeals court did not say when a decision would be issued.

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Categories / Appeals, Business, Entertainment, Government, Law, National

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