Losing Side in Sixth Circuit HISA Appeal Wants Rehearing

Six weeks after the United States Court of Appeals for the Sixth Circuit upheld the constitutionality of the Horse Racing Integrity and Safety Act (HISA), the losing plaintiffs/appellants in a case led by the states of Oklahoma, West Virginia and Louisiana have petitioned for a rarely granted “en banc” procedure that asks for a rehearing before all 28 of that court’s judges instead of just the panel of three that issued the Mar. 3 decision.

“A panel of this Court [held] that the [HISA] Authority’s ability to issue federal regulations over the Federal Trade Commission [FTC]’s objection does not violate the private non-delegation doctrine because, since the [December 2022] statutory amendment, the FTC can modify those rules after the fact,” the Apr. 17 filing stated.

“The panel also refused to decide whether the Authority’s exclusive power to bring enforcement actions in federal court was unconstitutional, and it concluded that HISA’s fee-collection regime does not unconstitutionally coerce the States to administer a federal regulatory program,” the filing stated.

“Respectfully, those holdings were erroneous, and this Court should rehear the case en banc in order to resolve those questions of exceptional importance,” the filing stated.

The chances of being granted the en banc appeal equate to long odds for the plaintiffs, whose underlying case was tossed out by a federal judge last year.

The Sixth Circuit took on only seven en banc hearings between January 2018 and September 2021, according to the University of Cincinnati Law Review.

A United States Court of Appeals explanatory page about how en banc requests work stated that the granting of that type of rehearing is “rare” at the federal level.

“Because each merits panel may enter precedential opinions, a party seeking en banc consideration must typically show that either the merits panel has 1) failed to follow existing decisions of the U.S. Supreme Court or Federal Circuit precedent or 2) followed Federal Circuit precedent that the petitioning party now seeks to have overruled by the court en banc,” the court’s explanatory page stated.

And during Tuesday’s West Virginia Racing Commission (WVRC) meeting, Anthony Eates, the deputy attorney general representing the WVRC, told commissioners in a HISA litigation update that, “We are filing a petition for rehearing. I don’t know the likelihood of success in that.”

In short, the Sixth Circuit had ruled that a change of language in the HISA law at the end of 2022 was sufficient to alleviate the plaintiffs’ concerns over constitutionality.

But a separate–yet related–Nov. 18, 2022, decision by the Fifth Circuit in an appeal successfully led by the National Horsemen’s Benevolent and Protective Association (NHBPA) did, in fact, declare HISA unconstitutional.

Because two different federal courts have now issued opposing opinions about the constitutionality of a federal statute, some legal experts have predicted the U.S. Supreme Court might agree to hear the conflicting cases and come up with one uniform national ruling on whether or not HISA is constitutional.

In the Sixth Circuit case, the plaintiffs are the states of Oklahoma and West Virginia (plus their racing commissions); the state of Louisiana; three Oklahoma tracks (Remington Park, Will Rogers Downs and Fair Meadows); the Oklahoma Quarter Horse Association, the U.S. Trotting Association, and Hanover Shoe Farms, a Pennsylvania Standardbred breeding entity.

The defendants are the United States of America, the HISA Authority, and six individuals acting in their official capacities for the Federal Trade Commission (FTC).

On Apr. 26, 2021, the plaintiffs had sued, alleging that “HISA gives a private corporation broad regulatory authority.”

On June 2, 2022, that claim was dismissed by a judge in U.S. District Court, Eastern District of Kentucky (Lexington) for failure to state a claim of action. The plaintiffs then appealed to the U.S. Sixth Circuit.

While that Sixth Circuit appeal was pending, the Fifth Circuit came out with its decision in the NHBPA case, which stated that HISA is unconstitutional because it “delegates unsupervised government power to a private entity,” and thus “violates the private non-delegation doctrine.” The order remanded the case back to U.S. District Court (Northern District of Texas) for “further proceedings consistent with” the Appeals Court’s reversal.

On Dec. 23, 2022, Congress enacted legislation amending the operative language of HISA to purportedly cure the constitutional defect that was identified in the Nov. 18 Fifth Circuit opinion. The amendment–only a very small section of a much larger year-end spending bill–was signed into law by President Biden Dec. 29.

The Apr. 17, 2023, en banc filing took umbrage with the alleged fixes in that law.

“The recent amendment merely allows the FTC to undergo a separate notice-and-comment rulemaking after the fact in an effort to repeal or modify the rule post-promulgation. This ability to modify on the backend standing alone is far from sufficient to satisfy the private non-delegation doctrine,” the filing stated.

“All of HISA’s other constitutional defects, too, remain unremedied. The Authority continues to exercise the exclusive authority to enforce HISA in federal court, even though the power to bring federal civil actions to enforce public rights in federal court is a uniquely governmental function

that can be exercised only by officers of the United States,” the filing stated.

“Finally, the amendment does nothing to cure HISA’s anticommandeering violation. Congress abrogated its own responsibility to fund this federal program by using the threat of preemption to foist the costs of administering HISA onto the States, which the Supreme Court has held violates the anticommandeering doctrine,” the filing stated.

“Congress has not appropriated the funds necessary to administer HISA. Instead, Congress expects the States to foot the bill, coercing them into collecting and remitting to the Authority the fees that the Authority ultimately deems necessary,” the filing stated.

“The federal government cannot threaten to preempt state laws when the ‘threat serves no purpose other than to force unwilling States,’” the filing stated while quoting from a legal precedent.

The post Losing Side in Sixth Circuit HISA Appeal Wants Rehearing appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.