EMERGENCY DOCKET

The Supreme Court on Monday allowed a federal law intended to standardize anti-doping and safety regulations in horse racing to remain in place while a challenge to that law plays out.

The conservative U.S. Court of Appeals for the 5th Circuit, based in New Orleans, ruled in July that key parts of the law are unconstitutional. That decision prompted the private non-profit created to propose and enforce the rules to come to the Supreme Court in September, asking the justices to put the 5th Circuit’s decision on hold. The nonprofit, the Horseracing Integrity and Safety Authority, told the Supreme Court that if the 5th Circuit’s decision is allowed to go into effect nationwide, “more horses would die and more cheaters would prosper.”

Both the Biden administration and Senate Minority Leader Mitch McConnell, a Republican from Kentucky, supported the authority’s request. McConnell argued that under the law, horse racing in the United States “is safer, fairer, and more transparent” than it was before the law was passed.

In a brief unsigned order more than a month after the horse racing authority filed its request, the justices agreed to put the 5th Circuit’s ruling on hold while they consider a petition for review of that decision. The challengers in the case agree that the Supreme Court should weigh in, making it more likely that the justices will do so.

In 2019, more than 400 Thoroughbreds died in the U.S. from injuries related to horse racing – a fatality rate significantly higher than the rate in Europe or Asia. One year later, Congress passed the Horseracing Integrity and Safety Act to improve safety in the horse racing industry. The law had broad bipartisan support, and then-President Donald Trump signed it into law in December 2020.

The law used a framework similar to the one used in the securities industry. It gave the authority, operating under the oversight of the Federal Trade Commission, the power to propose rules regarding issues such as doping, medication control, and racetrack safety.

The National Horsemen’s Benevolent & Protective Association, a trade group of Thoroughbred racehorse owners and trainers, went to federal court in 2021 to challenge the law. The 5th Circuit initially ruled that the provisions of the law giving the authority the power to make rules were unconstitutional under a theory known as the private nondelegation doctrine – the idea that the government cannot delegate its powers to private entities – because they gave the private group too much power.

In December 2022, Congress amended the law to give the FTC the power to make changes to the authority’s rules. The trade group then returned to court to renew its challenge to the law.

The 5th Circuit this time deemed unconstitutional parts of the law giving the authority the power to enforce the law – for example, the power to investigate, issue subpoenas, conduct searches, impose fines, and seek injunctions. It reasoned that the law “is enforced by a private entity,” the authority, which “does not ‘function subordinately’ to the FTC when enforcing HISA. That is not permitted under the private nondelegation doctrine.”

The authority came to the Supreme Court in September, asking the justices to put the 5th Circuit’s ruling on hold to give it time to file a petition for review of that ruling (or, alternatively, to go ahead and grant review now to decide whether the enforcement provisions violate the private nondelegation doctrine).

The authority emphasized that the program set up under the law is now “‘firmly embedded into the Thoroughbred industry and is already yielding substantial benefits — racetrack conditions are improving, equine fatality rates are declining, and wagers from racing fans are increasing.” If the 5th Circuit’s decision is not put on hold, the authority insisted, it will “‘plunge the Thoroughbred industry into regulatory chaos’ with ‘potentially deadly’ consequences.”

The authority added that the FTC has the power both to stop enforcement actions by the authority and to review decisions once they are made. “That is the same framework,” the authority noted, “that has governed the relationship between the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) for 85 years.”

The Biden administration agreed that the Supreme Court should put the 5th Circuit’s ruling on hold, stressing that the Supreme Court has “long applied a strong presumption in favor of allowing a challenged statute to remain in effect pending judicial review.” This is particularly true, it continued, when two other federal courts of appeals have upheld the same enforcement provisions, making it even more likely that the Supreme Court will ultimately grant review of the 5th Circuit’s decision.

Justice Samuel Alito on Sept. 23 issued an order that kept the 5th Circuit’s ruling on hold while the Supreme Court considered the authority’s request.

The horsemen’s trade group countered that there was no need for the Supreme Court to put the 5th Circuit’s decision on hold because the law does not apply to horse racing within the states that make up that circuit.

The group also pushed back against the authority’s suggestion that allowing the 5th Circuit’s decision to remain in place would lead to a “crisis in horseracing.” The horse racing industry, the group wrote, is in fact “deeply divided over the” law, while the question whether the law is effective “at protecting the health of horses is a topic of hot dispute.”

The authority’s argument, the group said, boils down to the contention that if “a broad injunction is issued, it won’t be able to continue operating as a private police department, private district attorney’s office, and private administrative law judge. That, of course, is precisely the problem: a private corporation should not perform those functions enforcing federal law in the first place.”

By contrast, the group continued, its members would be harmed by an order keeping the 5th Circuit’s ruling on hold. “[I]rreparable harm results when horsemen are subject to suspensions, scratches, and other orders barring them from participating in races. It is impossible in the context of sports to make up to make up a race that it only run once, or to provide financial compensation after-the-fact when there is no way to know where a horse would have placed if allowed to run.”

Texas, which joined the lawsuit, agreed with the trade group that the Supreme Court should weigh in but that a stay is not required. “The Fifth Circuit’s only error,” the state suggested, “was not going further and concluding that even more of HISA is unconstitutional.” And the state questioned how effective the FTC’s oversight of the authority’s enforcement actions actually is: “Since July 2022, the Authority has issued over 2,000 enforcement rulings regarding racetrack safety and taken over 375 enforcement actions regarding anti-doping and medication-control rules. The FTC’s website, however, indicates that an ALJ has reviewed sanctions in just 13 cases under HISA.”

In a one-paragraph order on Monday, the justices granted the authority’s request to put the 5th Circuit’s ruling on hold. As is often the case with such orders, they did not provide any reasoning for their decision, nor did they indicate why it had taken them so long to act on the authority’s appeal.

Justice Ketanji Brown Jackson penned a brief dissent from the decision to temporarily block the 5th Circuit’s ruling. In her view, the authority had not shown any real emergency justifying the court’s intervention at this stage – particularly when the challengers agree that the court should review the merits of the lower court’s decision.

This article was originally published at Howe on the Court.