H.R. 98 related
All Actions: H.R.9132 — 117th Congress (2021-2022)
All Actions: H.R.5693 — 118th Congress (2023-2024)
“Congress passed a bill authorizing the Horseracing Integrity and Safety Authority (“Authority”) as a
private self-regulatory organization.
The Authority must develop rules related to horseracing, including anti-doping, medication control and racetrack safety.
The Federal Trade Commission (FTC)
is given broad oversight over the Authority. The FTC, after providing an opportunity for public comment, must approve or disapprove any rule proposed by HISA. Civil sanctions imposed by the Authority for violations of its rules or standards may be appealed to the Commission for review by an Administrative Law Judge and by the Commission.
The Authority must also submit guidance it develops to the Commission. In addition, certain practices involving drugs are made unfair or deceptive practices under Section 5(a) of the FTC Act.”
ON THE FLOOR:
“[Extensions of Remarks]
[Page E47]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
OPPOSING THE UNCONSTITUTIONAL HORSERACING INTEGRITY AND SAFETY
AUTHORITY
______
HON. LANCE GOODEN
of Texas
in the house of representatives
Tuesday, January 24, 2023
Mr. GOODEN of Texas.
“Mr. Speaker, I rise today in opposition to the
unconstitutional Horseracing Integrity and Safety Authority (HISA).
During the 117th Congress, I filed an amendment to the omnibus spending
bill to strip language from the bill that had been intended to “fix”
the Horseracing Integrity and Safety Act, which was found
unconstitutional by the Fifth Circuit Court of Appeals on November 18,
2022, because Congress had unlawfully delegated its lawmaking power to
a private corporation called the “Authority”. The Appeals Court said
the Authority needed more oversight from the Federal Trade Commission
(FTC), but the language included in the omnibus had been hastily put
together and failed to address the underlying issue raised by the
Appeals Court. The so-called “fix” still did not allow the FTC to
make policy decisions. The FTC still may only reject rules proposed by
the Authority if they are inconsistent with the Act, but the Act is
written so broadly that no rule will ever be rejected. After the rules
have gone into effect, the FTC may now issue its own rules, but it
still may do so only to make them consistent with the Act. It cannot
impose its own policy decisions on the Authority’s rules.
Unfortunately, my amendment did not receive a vote in this era of
governing by omnibus, but I will be working this Congress to pass
legislation through regular order that will fix the constitutional
problems with HISA.” SOURCE
“HORSERACING INTEGRITY AND
SAFETY ACT
Mr. GRASSLEY. Madam President,
in the early hours of Tuesday morning,
we were given the text to the omnibus
appropriations bill. With the end of the
year fast approaching, everyone is trying to get this bill signed into law
quickly. That is true even if it has not
been fully reviewed and every consequence thought out.
We saw this 2 years ago, when the
omnibus was included with COVID-relief funding, within the 2020 omnibus
was the Horseracing Integrity and
Safety Act.
Prior to this 2020 act becoming law,
with no process and no opportunity to
debate the merits of the act, horseracing was regulated by States, and
Congress had no role on how the industry was regulated.
What this 2020 bill did was impose a
one-size-fits-all Federal regulatory approach on all States, from Iowa to Kentucky, to West Virginia, to New York.
This is a bill that had never gone
through the committee process, but it
managed to end up in the omnibus.
As a result of this hasty lawmaking,
last month, we saw the Fifth Circuit
Court of Appeals strike down the law
on the grounds that the act is unconstitutional. Regular order in the Senate, especially through committee
process, would have prevented this unconstitutional language.
This did not come as a surprise. It
was clear that the private nonprofit
Horseracing Authority created in the
2020 omni wielded nearly unlimited
Federal rulemaking authority and answered to no one, not even the President of the United States.
The court ruled that the power of the
Federal Government can be wielded
only by the Federal Government, not
private entities like the ‘‘Authority.’’
For months I have worked with
horsemen in Iowa and my colleagues in
the Senate to address the obvious failures with implementation of this law
since it went into effect earlier this
year.
I specifically asked the FTC about
the extent of its oversight of the FTC,
a key factor for the Fifth Circuit’s ruling.
The FTC response was simple. It said
it did not have any oversight over the
‘‘Authority.’’ This is clearly unconstitutional and is inconsistent with conservative principles of small government and reigning in the Federal bureaucracy.
Now that the courts have found HISA
unconstitutional, Congress should
work a fix through the regular committee process to avoid the pitfalls of
the previous legislation.
But that is not what is happening
today. In the 2022 omni once again, the
special interests that invented the unconstitutional ‘‘Authority’’ in the first
place have convinced their supporters a
quick fix is needed in this omnibus.
The same people who pushed the unconstitutional ‘‘Authority’’ through in
an end of year omnibus are once again
forcing legislation without any input
from Senators like me.
This fix to the unconstitutional Federal rulemaking power wielded by the
‘‘Authority’’ is included on page 1,930.
How many members of Congress even
know that this is included? Probably
very few.
I have since introduced an amendment that would strike this text with
Senator MANCHIN. Since then numerous
offices reached out to find out what
this is—and once they do—have expressed the same opposition to this becoming law that I have.
This is just one example of which
there are many, of legislating on an
omnibus. It lets a select few Members,
or in this case just one Member, of
leadership create new Federal regulatory frameworks for entire industries.
I support ensuring safe, humane
horseracing. But I also support small
tracks, like Prairie Meadows in Iowa,
which don’t have the billionaires backing like those in States that host Triple Crown races.
And I am not alone because most
other States have tracks like Prairie
Meadows.
Instead of governing this way, Congress should work with State racing
commissions to regulate horseracing in
a responsible way to ensure racetrack
safety and the economic viability of
small tracks across the country.
I will work with any Senator who is
willing to stand up for small tracks in
the next Congress and fix this broken
way of governing.” SOURCE
No. 23-402
STATE OF OKLAHOMA, ET AL., PETITIONERS
v.
UNITED STATES OF AMERICA, ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
No. 23-402
In the Supreme Court of the United States
STATE OF OKLAHOMA, ET AL., PETITIONERS
v.
UNITED STATES OF AMERICA, ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
BRIEF FOR THE FEDERAL RESPONDENTS
IN OPPOSITION
ELIZABETH B. PRELOGAR
Solicitor General
Counsel of Record
BRIAN M. BOYNTON
Principal Deputy Assistant
Attorney General
MARK B. STERN
JOSEPH F. BUSA
COURTNEY L. DIXON
Attorneys
Department of Justice
Washington, D.C. 20530-0001
SupremeCtBriefs@usdoj.gov
(202) 514-2217
(I)
QUESTIONS PRESENTED
The Horseracing Integrity and Safety Act of 2020
(Act), 15 U.S.C. 3051 et seq., authorizes the Horseracing
Integrity and Safety Authority (Authority), a private
entity, to propose racetrack safety and anti-doping
rules for the horseracing industry. The Act empowers
the Federal Trade Commission (FTC) to determine
whether those proposed rules will take effect and to abrogate, add to, or modify the rules. The Authority is
funded through fees allocated and collected under rules
approved by the FTC. But the Act gives state racing
commissions the option of allocating and collecting the
fees themselves and then remitting the fees to the Authority. The questions presented are as follows:
- Whether the Act unconstitutionally delegates
governmental power to a private entity. - Whether the Act’s fee provisions violate the anticommandeering doctrine.
(III)
TABLE OF CONTENTS
Page
Opinions below …………………………………………………………………… 1
Jurisdiction………………………………………………………………………… 1
Statement:
A. Legal background ……………………………………………………. 2
B. Proceedings below……………………………………………………. 5
Argument…………………………………………………………………………… 7
Conclusion ……………………………………………………………………….. 16
TABLE OF AUTHORITIES
Cases:
Alpine Securities Corp. v. Financial Industry
Regulatory Authority, No. 23-5129,
2023 WL 4703307 (D.C. Cir. July 5, 2023)…………………… 15
Carter v. Carter Coal Co., 298 U.S. 238 (1936) ………………… 7
Clapper v. Amnesty International USA,
568 U.S. 398 (2013)…………………………………………………….. 11
FERC v. Mississippi, 456 U.S. 742 (1982)…………………….. 12
First Jersey Securities, Inc. v. Bergen,
605 F.2d 690 (3d Cir. 1979), cert. denied,
444 U.S. 1074 (1980)…………………………………………………….. 9
Hodel v. Virginia Surface Mining & Reclamation
Ass’n, 452 U.S. 264 (1981)…………………………………….. 12, 13
National Horsemen’s Benevolent & Protective
Ass’n v. Black, 53 F.4th 869 (5th Cir. 2022)……. 3, 4, 14, 15
New York v. United States, 505 U.S. 144 (1992) ……………. 12
Printz v. United States, 521 U.S. 898 (1997) …………………. 12
R.H. Johnson & Co. v. SEC, 198 F.2d 690
(2d Cir.), cert. denied, 344 U.S. 855 (1952)……………………. 9
Sorrell v. SEC, 679 F.2d 1323 (9th Cir. 1982)………………….. 9
Sunshine Anthracite Coal Co. v. Adkins,
310 U.S. 381 (1940)……………………………………………………. 7-9
IV
Cases—Continued: Page
United States v. Salerno, 481 U.S. 739 (1987)……………….. 11
Constitution, statutes, and rules:
U.S. Const. Art. III ……………………………………………………… 11
Consolidated Appropriations Act, 2023,
Pub. L. No. 117-328, Div. O, Tit. VII, § 701,
136 Stat. 5231-5232 ……………………………………………………… 4
Horseracing Integrity and Safety Act of 2020,
Pub. L. No. 116-260, Div. FF, Tit. XII,
134 Stat. 3252 ……………………………………………………………… 2
Maloney Act, ch. 677, § 1, 52 Stat. 1070…………………………… 4
15 U.S.C. 78s(c)………………………………………………………. 4, 5, 9
15 U.S.C. 78s(e)……………………………………………………………… 9
15 U.S.C. 3051(4) …………………………………………………………… 3
15 U.S.C. 3052(a) …………………………………………………………… 2
15 U.S.C. 3052(b)(1)……………………………………………………….. 2
15 U.S.C. 3052(f)……………………………………………………………. 3
15 U.S.C. 3052(f)(1)(c)……………………………………………………. 3
15 U.S.C. 3052(f)(2) ………………………………………………….. 3, 13
15 U.S.C. 3052(f)(2)(D)…………………………………………………. 13
15 U.S.C. 3052(f)(3) ……………………………………………………….. 3
15 U.S.C. 3052(f)(3)(D)………………………………………….. 3, 6, 13
15 U.S.C. 3053 ……………………………………………………………. 2, 8
15 U.S.C. 3053(a) …………………………………………………………… 2
15 U.S.C. 3053(b) …………………………………………………………… 9
15 U.S.C. 3053(b)(1)……………………………………………………….. 2
15 U.S.C. 3053(b)(2)……………………………………………………. 3, 8
15 U.S.C. 3053(c)……………………………………………………………. 9
15 U.S.C. 3053(c)(2)………………………………………………. 3, 8, 10
15 U.S.C. 3053(e) …………………………………………….. 4, 8, 10, 11
15 U.S.C. 3054(d)(1)……………………………………………………….. 3
V
Statutes and rules—Continued: Page
15 U.S.C. 3054(d)(2)……………………………………………………….. 3
15 U.S.C. 3054(h) …………………………………………………………… 3
15 U.S.C. 3054(j)………………………………………………………….. 11
15 U.S.C. 3054(l)(1)………………………………………………………. 12
15 U.S.C. 3055-3057……………………………………………………….. 2
15 U.S.C. 3057(c)……………………………………………………………. 3
15 U.S.C. 3057(c)(1)(B)…………………………………………………… 9
15 U.S.C. 3057(d) …………………………………………………………… 3
15 U.S.C. 3058(b) …………………………………………………………… 3
15 U.S.C. 3058(c)……………………………………………………………. 3
15 U.S.C. 3058(c)(3)(C)(i)……………………………………………….. 9
Sup. Ct. R. 10(a)…………………………………………………………… 15
D.C. Cir. R. 36(e)(2)……………………………………………………… 15
Miscellaneous:
FTC, Order Approving the Enforcement Rule
Proposed By the Horseracing Integrity and Safety
Authority (Mar. 25, 2022) ………………………………………….. 10
(1)
In the Supreme Court of the United States
No. 23-402
STATE OF OKLAHOMA, ET AL., PETITIONERS
v.
UNITED STATES OF AMERICA, ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
BRIEF FOR THE FEDERAL RESPONDENTS
IN OPPOSITION
OPINIONS BELOW
The opinion of the court of appeals (Pet. App. 1a-43a)
is reported at 62 F.4th 221. The opinion of the district
court (Pet. App. 44a-70a) is not published in the Federal
Supplement but is available at 2022 WL 1913419.
JURISDICTION
The judgment of the court of appeals was entered on
March 3, 2023. A petition for rehearing was denied on
May 18, 2023 (Pet. App. 71a). On July 18, 2023, Justice
Kavanaugh extended the time within which to file a petition for a writ of certiorari to and including October
15, 2023, and the petition was filed on that date. The
jurisdiction of this Court is invoked under 28 U.S.C.
1254(1).
2
STATEMENT
A. Legal Background - Congress enacted the Horseracing Integrity and
Safety Act of 2020 (Horseracing Act or Act), Pub. L. No.
116-260, Div. FF, Tit. XII, 134 Stat. 3252, in order to
prevent doping and improve safety in the horseracing
industry. Congress modeled the Act’s framework on
the longstanding regulatory scheme used in the securities industry, in which industry members are subject to
rules proposed by self-regulatory entities, which in turn
are overseen by the Securities and Exchange Commission (SEC). See Pet. App. 60a-61a.
The Horseracing Act recognizes the Horseracing Integrity and Safety Authority (Authority)—a “private,
independent, self-regulatory, nonprofit corporation”—
“for purposes of developing and implementing a horseracing anti-doping and medication control program and
a racetrack safety program.” 15 U.S.C. 3052(a). The
Authority’s Board of Governors consists of four members from the horseracing industry and five members
from outside the industry. See 15 U.S.C. 3052(b)(1).
The Authority operates under the oversight of the Federal Trade Commission (FTC or Commission). See 15
U.S.C. 3053.
The Horseracing Act directs the Authority to propose rules concerning doping, racetrack safety, and
other subjects. See 15 U.S.C. 3055-3057. The Authority
must submit a proposal to the FTC “in accordance with
such rules as the Commission may prescribe.” 15
U.S.C. 3053(a). The FTC must publish the proposal,
provide an opportunity for public comment, and then
determine whether to approve the proposal. See 15
U.S.C. 3053(b)(1). The FTC must approve a proposed
rule if it determines that the rule “is consistent with”
3
the Act and the Commission’s regulations. 15 U.S.C.
3053(c)(2). A proposal takes effect only if the Commission approves it. See 15 U.S.C. 3053(b)(2).
The Act requires various “covered persons”—i.e.,
owners, breeders, trainers, jockeys, and other persons
involved in the horseracing industry—to register with
the Authority and to comply with the rules approved by
the FTC. See 15 U.S.C. 3051(4), 3054(d)(1) and (2). The
Authority may investigate violations of the rules. 15
U.S.C. 3054(h). The Authority also may conduct disciplinary proceedings and impose civil sanctions upon violators. See 15 U.S.C. 3057(c) and (d). A final decision
by the Authority to impose discipline is subject to review by an FTC administrative law judge (ALJ). See 15
U.S.C. 3058(b). The ALJ’s decision is in turn subject to
review by the Commission. See 15 U.S.C. 3058(c).
The Authority is funded through fees collected from
covered persons. See 15 U.S.C. 3052(f). Every year,
the Authority calculates each State’s proportionate
share of the fees that must be collected. See 15 U.S.C.
3052(f)(1)(C). It then allocates that amount among covered persons in each State, in accordance with rules approved by the Commission. See 15 U.S.C. 3052(f)(3).
Alternatively, a state racing commission may elect to allocate the State’s fees in the manner that it prefers and
then remit the fees to the Authority. See 15 U.S.C.
3052(f)(2). If a state commission does not elect that
course, it “shall not impose or collect from any person a
fee or tax relating to anti-doping and medication control
or racetrack safety matters for covered horseraces.” 15
U.S.C. 3052(f)(3)(D). - In National Horsemen’s Benevolent & Protective
Association v. Black, 53 F.4th 869 (2022), the Fifth Circuit held that the Horseracing Act, as initially enacted,
4
violated a constitutional principle that is sometimes
known as the “private nondelegation doctrine.” See id.
at 880. The court explained that, under that doctrine, a
private entity may aid a governmental agency in implementing a federal regulatory scheme, but only if it
“functions subordinately” to the agency and is subject
to the agency’s “authority and surveillance.” Id. at 881
(citation omitted). The court determined that the FTC
lacked constitutionally sufficient control over the Authority’s activities. See id. at 880-890.
In reaching that conclusion, the Fifth Circuit highlighted a “key distinction” between the Horseracing Act
and the securities-industry regulatory scheme on which
it was modeled. Black, 53 F.4th at 887. The securitiesindustry scheme, the court emphasized, allows the SEC
to “abrogate, add to, and delete from” the rules of selfregulatory organizations as the SEC deems “necessary
or appropriate.” Ibid. (quoting 15 U.S.C. 78s(c)). The
Act in its original form, in contrast, did not grant the
FTC comparable authority to abrogate or modify the
Authority’s rules. See ibid. Because the Commission
lacked the “final word on the substance of the rules,”
the court concluded that the FTC exercised insufficient
control over the Authority’s actions. Ibid. - Congress responded by amending the Horseracing Act to empower the FTC to “abrogate, add to, or
modify the rules” promulgated under the Act “as the
Commission finds necessary or appropriate to ensure
the fair administration of the Authority, to conform the
rules of the Authority to requirements of this Act and
applicable rules approved by the Commission, or otherwise in furtherance of the purposes of this Act.” 15
U.S.C. 3053(e); see Consolidated Appropriations Act,
2023, Pub. L. No. 117-328, Div. O, Tit. VII, § 701, 136
5
Stat. 5231-5232. That language is substantially identical to the language used in the statutes that empower
the SEC to oversee self-regulatory organizations in the
securities industry. See 15 U.S.C. 78s(c).
B. Proceedings Below - Petitioners are a group of States, state racing
commissions, and private entities involved in horseracing. See Pet. App. 8a. In 2021, before the Fifth Circuit
issued its decision in Black and before Congress
amended the Horseracing Act in response, petitioners
brought this suit in the United States District Court for
the Eastern District of Kentucky. See Complaint 1. Petitioners alleged that the Act on its face violated the private nondelegation doctrine, and that its fee provisions
violated the anticommandeering doctrine. See Pet.
App. 8a.
The district court dismissed petitioners’ suit. See
Pet. App. 44a-70a. In rejecting petitioners’ private nondelegation challenge, the court determined that the
FTC exercised sufficient oversight of the Authority because the Act in its then-current form empowered the
FTC to approve or disapprove rules proposed by the
Authority, see id. at 55a-63a, and to review de novo the
Authority’s orders imposing discipline, see id. at 64a65a. In rejecting petitioners’ anticommandeering challenge, the court explained that the Act gives state racing commissions “a choice”: state entities may either
allocate fees themselves and then remit the fees to the
Authority, or allow the Authority to allocate and collect
the fees. Id. at 67a. - While petitioners’ appeal was pending, the Fifth
Circuit issued its opinion in Black, and Congress
amended the Horseracing Act in response. See Pet.
App. 8a. The Sixth Circuit upheld the amended Act and
6
affirmed the district court’s judgment. See id. at 1a43a.
The court of appeals first rejected the claim that the
amended Act, on its face, violated the private nondelegation doctrine. See Pet. App. 10a-21a. The court interpreted the Constitution and this Court’s precedents
to mean that “a private entity may aid a public federal
entity that retains authority over the implementation of
federal law,” so long as the private entity is “subordinate to a federal actor.” Id. at 11a, 13a. The court determined that the Authority is subordinate to the FTC
in rulemaking because the amended Act empowers the
Commission to write or rewrite rules as it wishes. See
id. at 13a-16a. The court also determined that the Authority is subordinate to the FTC in imposing discipline
because the Act empowers the Commission to regulate
the Authority’s disciplinary proceedings and to review
its disciplinary orders de novo. See id. at 16a-17a.
The court of appeals next rejected the claim that the
Act’s fee provisions commandeer state racing commissions. See Pet. App. 22a-27a. It observed that the Act
“presents States with a choice, not a command”:
“States may elect to collect fees from the industry and
remit the money to the Horseracing Authority or States
may refuse.” Id. at 23a. The court acknowledged that
the Act includes a “conditional preemption” provision,
under which a State that refuses to collect fees may not
impose its own fees or taxes “relating to anti-doping and
medication control or racetrack safety matters.” Id. at
24a (quoting 15 U.S.C. 3052(f)(3)(D)). But the court explained that, under this Court’s precedents, “Congress
may encourage the States through conditional preemption.” Id. at 23a.
7
Judge Cole concurred. See Pet. App. 28a-43a. He
expressed the view that the Horseracing Act had complied with the Constitution even before Congress
amended it in response to the Fifth Circuit’s decision.
See id. at 29a.
ARGUMENT
Petitioners argue (Pet. 13-35) that the Horseracing
Act violates the Constitution by delegating governmental power to the private Authority and by commandeering the States. The court of appeals correctly rejected
those contentions, and its decision does not conflict with
any decision of this Court or of another court of appeals.
The petition for a writ of certiorari should be denied. - Petitioners contend that the Horseracing Act on
its face violates the private nondelegation doctrine.
That argument lacks merit.
a. In Carter v. Carter Coal Co., 298 U.S. 238 (1936),
this Court explained that the Constitution prohibits the
federal government from transferring unchecked governmental power to a private entity. The statute at issue in that case allowed producers of two-thirds of the
coal in a particular district to set wages and hours for
all producers in that district, without review by any federal agency. See id. at 281-283. The Court held that the
statute violated the Constitution by delegating to “private persons” the unchecked “power to regulate the affairs of an unwilling minority.” Id. at 311.
In Sunshine Anthracite Coal Co. v. Adkins, 310 U.S.
381 (1940), however, this Court clarified that Congress
may rely on private entities to assist public agencies in
the performance of their functions. The statute at issue
in that case authorized local boards consisting of private
coal producers to propose minimum prices for coal, but
empowered the National Bituminous Coal Commission
8
to approve, disapprove, or modify those prices. See id.
at 388. The Court held that the statute complied with
the Constitution because the private boards “function[ed] subordinately” to a federal agency. Id. at 399.
The Court emphasized that the agency, not the private
boards, ultimately “determine[d] the prices” and that
the agency “ha[d] authority and surveillance over the
[private boards’] activities.” Ibid.
The court of appeals correctly held that the Horseracing Act, at least as amended, complies with those
principles. Under the Act, the Authority operates only
as an “aid to the Commission” and is “subject to its pervasive surveillance and authority.” Sunshine Anthracite, 310 U.S. at 388.
The Act grants the Commission “supervision over
the rules that govern the horseracing industry.” Pet.
App. 13a. As relevant here, the Authority may only propose rules to the FTC, see 15 U.S.C. 3053, and a proposed rule takes effect only if the Commission approves
it, see 15 U.S.C. 3053(b)(2). The Act directs the FTC to
approve a proposed rule only if the Commission determines, in its own judgment, that the proposal “is consistent with” the Act and with other rules approved by
the Commission. 15 U.S.C. 3053(c)(2). The amended
Act also empowers the FTC to “abrogate, add to, and
modify” rules as the Commission “finds necessary or
appropriate to ensure the fair administration of the Authority, to conform the rules of the Authority to the requirements of [the Act] and applicable rules approved
by the Commission, or otherwise in furtherance of the
purposes of [the Act].” 15 U.S.C. 3053(e). Because the
FTC has “the final word on the substance of the rules,”
the Authority’s role in proposing the rules does not vio-
9
late the Constitution. Pet. App. 16a (citation omitted);
see Sunshine Anthracite, 310 U.S. at 399.
The Act also grants the FTC “oversight and control
of the Authority’s enforcement activities.” Pet. App.
16a. The Authority must conduct its disciplinary proceedings in accordance with rules approved by the Commission. See 15 U.S.C. 3057(c)(1)(B). Any order imposing discipline is, in addition, subject to de novo review
by an ALJ and then by the Commission itself. See 15
U.S.C. 3053(b) and (c). The FTC is not limited to the
evidence considered by the Authority; rather, it “may,
on its own motion, allow the consideration of additional
evidence.” 15 U.S.C. 3058(c)(3)(C)(i). It is thus the
Commission, not the Authority, that “ultimately decides
how the Act is enforced.” Pet. App. 17a.
Longstanding practice reinforces those conclusions.
Since 1938, Congress has authorized self-regulatory organizations in the securities industry to propose rules
and to discipline their members, subject to oversight by
the SEC. See Maloney Act, ch. 677, § 1, 52 Stat. 1070.
Like the scheme at issue here, the securities laws empower the SEC to “abrogate, add to, and delete” selfregulatory organizations’ proposed rules, 15 U.S.C.
78s(c), and to review self-regulatory organizations’ disciplinary decisions, see 15 U.S.C. 78s(e). Multiple
courts of appeals have rejected private nondelegation
challenges to the use of those organizations in implementing the securities laws, citing the SEC’s power to
supervise the organizations’ activities. See R.H. Johnson & Co. v. SEC, 198 F.2d 690, 695 (2d Cir.), cert. denied, 344 U.S. 855 (1952); First Jersey Securities, Inc.
v. Bergen, 605 F.2d 690, 697 (3d Cir. 1979), cert. denied,
444 U.S. 1074 (1980); Sorrell v. SEC, 679 F.2d 1323,
1325-1326 (9th Cir. 1982).
10
b. Petitioners’ contrary arguments lack merit. Petitioners contend (Pet. 17-20) that the Act improperly allows the Authority’s proposed rules to take effect even
if the FTC disagrees with them. But a proposed rule
can take effect only if the Commission determines that
it is “consistent with” the Act and other “applicable
rules approved by the Commission.” 15 U.S.C. 3053(c)(2).
Exercising that power, the FTC has directed the Authority to modify proposed rules that do not comport
with the Commission’s understanding of the statute.
See, e.g., FTC, Order Approving the Enforcement Rule
Proposed By the Horseracing Integrity and Safety Authority 29 (Mar. 25, 2022) (directing Authority to modify
a proposed rule); id. at 34-35 (same).
The amended Act also empowers the FTC to “abrogate, add to, and modify” the Authority’s rules as the
Commission finds “necessary or appropriate.” 15
U.S.C. 3053(e). Petitioners assert (Pet. 17) that the
FTC’s “back-end role” is “merely ministerial,” but that
is incorrect. The Act grants the Commission “complete
authority” to “write and rewrite the rules.” Pet. App.
15a, 19a.
Petitioners also argue (Pet. 19) that a rule proposed
by the Authority can remain in effect while the Commission conducts a rulemaking process to abrogate it. But
“[t]o the extent this timing gap creates a problem, the
FTC is free to resolve it ahead of time. It might, for
example, adopt a rule that all [Authority proposals] do
not take effect for 180 days, thereby giving the FTC
time to review rules and prepare preemptive modifications.” Pet. App. 19a. Petitioners, moreover, have
brought a facial challenge to the Horseracing Act. See
id. at 17a. Even assuming that the Act raises constitutional concerns in some situations, such as the interim
11
period while the Commission is seeking to abrogate a
rule, a court would have no sound basis for invalidating
the Act on its face. See ibid. (citing United States v.
Salerno, 481 U.S. 739, 745 (1987)).
Petitioners next claim (Pet. 21) that the Authority
may conduct investigations “without FTC supervision.”
But the Authority’s investigations, like all its other activities, must comply with the rules made or approved
by the FTC. See 15 U.S.C. 3053(e). The Commission’s
“rulemaking and rule revision power gives it ‘pervasive’
oversight and control of the Authority’s enforcement
activities, just as it does in the rulemaking context.”
Pet. App. 16a (citation omitted).
Petitioners also object (Pet. 20) to a never-invoked
provision under which the Authority may bring civil
suits to enforce the Horseracing Act. See 15 U.S.C.
3054(j). But petitioners lack Article III standing to
challenge the Authority’s hypothetical initiation of a
civil suit against an unknown defendant in unknown circumstances at some unknown future time. See Clapper
v. Amnesty International USA, 568 U.S. 398, 401
(2013). The court of appeals correctly declined to address petitioners’ argument in the context of this facial
challenge, instead “sav[ing] resolution of such questions
- * * for a day when the Authority’s actions and the
FTC’s oversight appear in concrete detail, presumably
in the context of an actual enforcement action.” Pet.
App. 20a-21a. Petitioners’ objection to Section 3054(j)
lacks merit in any event. The Commission, exercising
its general rulemaking power, could require the Authority to obtain its approval before bringing any civil
suits.
Finally, petitioners challenge (Pet. 21) a Horseracing Act provision under which a state racing commission
12
or a “breed governing organization” may, with the Authority’s approval, elect to have “a breed of horses other
than Thoroughbred horses” be covered by the Act. 15
U.S.C. 3054(l)(1). But no justiciable dispute exists with
respect to that provision. Petitioners have identified no
reason to think that a state racing commission or breed
governing organization will imminently elect to have another breed of horses covered by the Act, much less that
such an election would be approved by the Authority
and would injure petitioners. In any event, the Commission’s general rulemaking power allows it to “revoke
the Authority’s decision [to approve an election] or
place procedural and substantive conditions on any such
decision.” Pet. App. 20a.
- There is likewise no merit to petitioners’ contention that the Horseracing Act’s fee provisions commandeer the States.
a. Under the anticommandeering doctrine, Congress may neither command state legislatures to enact
state law, see New York v. United States, 505 U.S. 144,
161 (1992), nor conscript state officers to administer
federal law, see Printz v. United States, 521 U.S. 898,
935 (1997). Congress may, however, “encourage a State
to regulate in a particular way” or “hold out incentives
to the States as a method of influencing a State’s policy
choices.” New York, 505 U.S. at 166. In particular,
“where Congress has the authority to regulate private
activity under the Commerce Clause,” Congress may
“offer States the choice” between (1) “regulating that
activity according to federal standards” and (2) “having
state law pre-empted by federal regulation.” Id. at 167;
see FERC v. Mississippi, 456 U.S. 742, 764-765 (1982);
Hodel v. Virginia Surface Mining & Reclamation
Ass’n, 452 U.S. 264, 288-289 (1981).
13
As the court of appeals correctly held, the Horseracing Act’s fee provisions comport with those principles
because they offer States “a choice, not a command.”
Pet. App. 23a. Under those provisions, a state racing
commission may choose whether or not to collect fees
and remit them to the Horseracing Authority. See 15
U.S.C. 3052(f)(2). If a state racing commission elects to
collect the fees, it determines how the fees are “allocated, assessed, and collected.” 15 U.S.C. 3052(f)(2)(D).
If a state racing commission declines to perform that
function, the Authority collects the fees itself, but the
state racing commission may not “impose or collect” its
own fees “relating to anti-doping and medication control
or racetrack safety matters for covered horseraces.” 15
U.S.C. 3052(f)(3)(D). “This scheme fits comfortably
within the conditional preemption framework” permitted by this Court’s precedents. Pet. App. 24a.
b. Petitioners’ contrary arguments lack merit. Petitioners contend (Pet. 33) that “Congress may not secure
States’ compliance in one context by threatening to cut
off state power in another, broader context.” But the
Act does no such thing. To the contrary, the preemption
clause concerns the same “context” as the Horseracing
Authority’s fees (ibid.): It simply precludes a state racing commission from imposing or collecting its own fees
or taxes “relating to anti-doping and medication control
or racetrack safety matters for covered horseraces.” 15
U.S.C. 3052(f)(3)(D).
Petitioners also argue (Pet. 34) that “Congress may
not use preemption as a cudgel to coerce compliance.”
But this Court has squarely rejected the argument that
“the threat of federal usurpation of [state] regulatory
[authority] coerces the States.” Hodel, 452 U.S. at 289.
14
Finally, petitioners argue that Congress may not
“threaten to preempt state laws when the ‘threat serves
no purpose other than to force unwilling States’ to enforce a federal program.” Pet. 34 (citation omitted).
But this Court has upheld conditional preemption as a
“permissible method of encouraging a State to conform
to federal policy.” Pet. App. 26a (citation omitted). In
all events, the Act’s preemption provision does serve
purposes other than inducing the States to comply, by
preventing double taxation and encouraging nationwide
uniformity. See ibid. - Constitutional challenges to the amended
Horseracing Act are currently pending before the Fifth
and Eighth Circuits. See National Horsemen’s Benevolent & Protective Ass’n v. Black, No. 23-10520 (5th
Cir.) (argued Oct. 4, 2023); Walmsley v. FTC, No.
23-2687 (8th Cir.) (briefing completed Jan. 22, 2024).
For now, however, the Sixth Circuit remains the only
court of appeals that has addressed the amended Act’s
constitutionality. Given the absence of a circuit conflict,
neither question presented warrants the Court’s review
at this time.
Petitioners contend (Pet. 22) that the Fifth and Sixth
Circuits applied conflicting “analytical frameworks” in
reviewing the original and amended Acts. That is incorrect. Both courts applied the same framework, asking
whether the Authority functions subordinately to the
Commission. See National Horsemen’s Benevolent &
Protective Ass’n v. Black, 53 F.4th 869, 881 (5th Cir.
2022) (“If the private entity does not function subordinately to the supervising agency, the delegation of
power is unconstitutional.”); Pet. App. 13a (“[A] private
entity must be subordinate to a federal actor in order to
withstand a non-delegation challenge.”). The Fifth Cir-
15
cuit held that the Authority did not function subordinately to the FTC under the original Act, see Black, 53
F.4th at 882-890, while the Sixth Circuit has held that
the Authority does function subordinately to the FTC
under the amended Act, see Pet. App. 13a-21a.
Petitioners also observe (Pet. 25) that, whereas the
Fifth Circuit struck down the original Act, two district
courts upheld it. But the original Act is no longer in
effect, and any disagreement about the constitutionality
of a superseded statute does not warrant this Court’s
review. The Court, moreover, ordinarily grants certiorari to resolve conflicts among different courts of appeals, not to resolve conflicts with decisions of district
courts. See Sup. Ct. R. 10(a).
Petitioners further observe (Pet. 27) that a motions
panel of the D.C. Circuit recently granted an injunction
pending appeal halting a disciplinary proceeding conducted by a self-regulating securities association. See
Alpine Securities Corp. v. Financial Industry Regulatory Authority, No. 23-5129, 2023 WL 4703307, at *1
(July 5, 2023) (per curiam). But Alpine Securities involves an administrative proceeding brought under a
different (though analogous) statutory scheme, and it is
unclear whether the motions panel even passed on a
nondelegation claim, since the plaintiff in that case has
raised multiple constitutional challenges, see Mot. for
Injunction Pending Appeal at 6-15, Alpine Securities,
supra (No. 23-5129), and the panel’s decision did not
specify which of those challenges prompted it to grant
injunctive relief, see Alpine Securities, 2023 WL
4703307, at *1. In granting preliminary relief, moreover, the panel did not definitively resolve the merits.
See ibid. Finally, the panel’s decision was unpublished
and thus lacks binding precedential effect. See D.C.
16
Cir. R. 36(e)(2) (“[A] panel’s decision to issue an unpublished disposition means that the panel sees no precedential value in that disposition.”). For all those reasons, the Sixth Circuit’s decision in this case does not
conflict with the D.C. Circuit’s interlocutory ruling in
Alpine Securities.
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
ELIZABETH B. PRELOGAR
Solicitor General
BRIAN M. BOYNTON
Principal Deputy Assistant
Attorney General
MARK B. STERN
JOSEPH F. BUSA
COURTNEY L. DIXON
MAY 2024
Proposed Enforcement Rule Modification — Series 8000
TENDERED TO FTC BY HISA FOR CONSIDERATION
AGENCY: Federal Trade Commission
ACTION: Proposed Rule Modification
SUMMARY: As directed by the “Horseracing Integrity and Safety Act of
2020,
” the Federal Trade Commission (“FTC” or “Commission”) issues a
proposed rule modification related to the enforcement by the Horseracing
Integrity and Safety Authority (“HISA” or the “Authority”) of its regulatory
power over horse racing in the United States. The proposed rule modification,
which is applicable to all covered horses, covered persons and covered
racetracks, amends the Rule Series 8000 Enforcement Rules, which establish
rule violations and civil sanctions, procedures for disciplinary and
accreditation hearings, and provisions concerning the exercise of investigatory
powers by the Authority. The proposed rule modification will enhance the
Enforcement Rules and ensure that the Authority’s enforcement activities are
conducted pursuant to a set of uniform standards.
DATES: The effective date of this proposed rule is July 1, 2022.
The deadline for comments is __.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
Pursuant to Section 3053(a) of the Horseracing Integrity and Safety Act of
20201 (“Act”) and Rule 1.142 thereunder,2 on October 3, 2022, the Horseracing
Integrity and Safety Authority (“HISA” or the “Authority”) initially filed with
the Commission the proposed rule modification described herein, which has
been prepared by HISA. On that date, HISA filed the text of Rule 8400, to
which the modifications were being made. On May 15, 2023, HISA filed a rule
modification to Rule 8400 which was identical to the initial submission on
October 3, 2022, but which included the full text of the Rule 8000 Series. The
Commission has published notice of the proposed rule modification submitted
by HISA and has solicited comments on the proposed rule modification from
interested persons.
- Violations, Sanctions, Hearing Procedures, and Investigatory Powers
8011 Calculation of Time. In calculating any period of time prescribed in the Rule
8000 Series, time shall be calculated in calendar days. If the last day of a specified
period of time falls on a Saturday, Sunday, or holiday, then the last day of the period
shall be considered to be the next working day immediately following the Saturday,
Sunday, or holiday. - Violations
Violations under this Rule shall include:
(a) Failure to cooperate with the Authority or an agent of the Authority during
any investigation;
(b) Failure to respond truthfully, to the best of a Covered Person’s knowledge, to
a question of the Authority or an agent of the Authority with respect to any matter
1 Pub. L. 116–260, div. FF, title XII, §1201, Dec. 27, 2020, 134 Stat. 3252, codified at 15 USC
Ch. 57A §§3051-3060. 2 16 CFR Part 1 Subpart S § 1.142.
2
under the jurisdiction of the Authority;
(c) Tampering or attempted tampering with the application of the safety,
performance, or anti-doping and medication control rules or process adopted by the
Authority, including:
(1) Intentional interference, or an attempt to interfere, with an official or
agent of the Authority;
(2) Procurement or the provision of knowingly false information to the
Authority or agent of the Authority; and
(3) The intimidation of, or an attempt to intimidate, a potential witness;
(d) Assisting, encouraging, aiding, abetting, conspiring, covering up, or any
other type of intentional complicity involving a racetrack safety violation, or the
violation of a period of suspension or ineligibility;
(e) Threatening or seeking to intimidate a person with the intent of discouraging
the person from the good faith reporting to the Authority, an agent of the Authority
or the Commission, of information that relates to:
(1) a suspected or alleged violation of a rule in the Rule 2200 Series; or
(2) a suspected or alleged noncompliance with a rule in the Rule 2200
Series;
(f) Failure to comply with a written order or ruling of the Authority or an agent
of the Authority pertaining to a racing matter or investigation;
(g) Failure to register with the Authority, failure of a Responsible Person to
register a Covered Horse, making a knowingly false statement or omission of
information in an application for registration with the Authority, or failure to advise
the Authority of material changes in the application information as required under
any provision in Authority regulations;
(h) Perpetrating or attempting to perpetrate a fraud or misrepresentation in
connection with the care or racing of a Covered Horse;
(i) Failure to remit fees as required under 15 U.S.C. 3052(f)(3); and
(j) Failure by a Racetrack to collect equitable allocation amounts among Covered
Persons in conformity with the funding provisions of 15 U.S.C. 3052(f)(3) and any
3
rules pertaining thereto.
- Schedule of Sanctions for Violations; Consent Decrees; Notice of
Suspected or Actual Violation
(a) Application. This Schedule shall apply to any violation of, or failure to
comply with, the Act or regulations promulgated by the Authority by a Covered
Person, except for:
(1) Anti-doping and medication control rule violations as established in
the Rule 3000 Series; and
(2) State laws or regulations not pre-empted by 15 U.S.C. Section
3054(b).
(b) Imposition of Sanction. The Authority, the Racetrack Safety Committee, the
stewards, any steward or body of stewards selected from the National Stewards
Panel, or an Arbitral Body, after any hearing required to be conducted in accordance
with the Rule 7000 Series or Rule 8000 Series and upon finding a violation or failure
to comply with the regulations of the Authority with the exceptions identified in
paragraph (a), may impose one or more of the following sanctions on a Covered
Person for each violation of the rules of the Authority, in proportion to the nature,
chronicity and severity of the violation:
(1) For a violation of Rule 2271(b) or 2272 relating to the use of Shock
Wave Therapy, a violation of Rule 2273 relating to the use of other electrical or
mechanical devices, or a violation of Rule 2280 relating to the use of the riding crop,
impose the penalties set forth in Rules 2272, 2274, 2282, and 2283, in addition to
any penalty set forth in Rule 8200(b)(2) through (12);
(2) impose a fine upon a Covered Person in the following amounts:
(i) Up to $50,000.00 for a first violation, or
(ii) up to $100,000.00 for a second violation of the same or similar
nature to a prior violation, or any violation that due to its nature, chronicity or severity
poses an actual or potential threat of harm to the safety, health and welfare of Covered
Persons, Covered Horses, or the integrity of Covered Horseraces,
(3) deny or suspend the registration of a Covered Person for a definite
period, probationary period, or a period contingent on the performance of a particular
act;
4
(4) revoke the registration of a Covered Person subject to reapplication at
a specified date;
(5) impose a lifetime ban from registration with the Authority;
(6) deny a Covered Person or a Covered Horse access to any location
under the jurisdiction of the Authority during the period of a suspension;
(7) impose a temporary or permanent cease and desist order against a
Covered Person;
(8) require a Covered Person as a condition of participation in horseracing
to take any remedial or other action that is consistent with the safety, welfare, and
integrity of Covered Horses, Covered Persons, and Covered Horseraces;
(9) deny or require the forfeiture of purse money, disqualify a horse, or
make changes to the order of finish in Covered Races as consistent with the safety,
welfare, and integrity of Covered Horses, Covered Persons, and Covered
Horseraces;
(10) censure a Covered Person;
(11) prohibit a Racetrack from conducting any Covered Horserace; or
(12) impose any other sanction as a condition of participation in
horseracing as deemed appropriate by the Authority in keeping with the seriousness
of the violation and the facts of the case, and that is consistent with the safety,
welfare, and integrity of Covered Horses, Covered Persons, and Covered
Horseraces.
(c) Consent Decrees. The Authority shall have the discretion to enter into a
consent decree or other similar agreement with a Covered Person as necessary to
promote the safety, welfare, and integrity of Covered Horses, Covered Persons, and
Covered Horseraces.
(d) Notice of Suspected or Actual Violation.
(1) The Authority, the Racetrack Safety Committee or one or more
stewards may issue a Notice of Suspected or Actual Violation to a Covered Person
in any case in which the Authority has reason to believe that the Covered Person has
violated or has failed to comply any provision of regulations of the Authority. The
notice shall:
5
(i) Identify the provision or provisions which the Covered Person is
believed to have violated;
(ii) specify with reasonably particularity the factual basis of the
Authority’s belief that the provision has been violated; and
(iii) provide the Covered Person at least 7 days to respond, or a longer
period as deemed appropriate and specified in the Notice based upon:
(A) the seriousness of the violation;
(B) the imminence of risk to Covered Persons, Covered Horses,
Covered Horseraces, or the public; or
(C) any other relevant factor.
(2) Upon receipt of the Notice of Suspected or Actual Violation, the
Covered Person shall respond in writing to the issuing body within the time period
specified in the notice. The Covered Person shall include in the response:
(i) A statement by the Covered Person admitting the violation, or
explaining the reasons why the Covered Person believes that a violation has not
occurred;
(ii) all relevant details concerning the circumstances of the suspected
or actual violation, including the results of any investigation undertaken by the
Covered Person of the circumstances, and identification of any persons responsible
for the circumstances; and
(iii) a detailed explanation of any remedial plan the Covered Person
proposes to undertake to cure the suspected or actual violation, and the date of the
expected completion of the remedial plan.
(3) Upon receipt of the written response of the Covered Person, the issuing
body may accept any proposed remedial plan, subject to any reasonable
modifications the issuing body deems necessary, or it may initiate disciplinary
proceedings in conformity with the provisions of Rule 8300. If the issuing body
determines that no violation has occurred, the issuing body shall so inform the
Covered Person and no further action shall be taken.
- Disciplinary Hearings and Accreditation Procedures
- Application
6
An alleged violation or failure to comply with the provisions of the Rule 2200 Series
and any alleged violation of the rules set forth in Rule 8100 shall be adjudicated in
accordance with this Rule 8300 Series, except that:
(a) An alleged violation of the anti-doping and medication control rule
provisions in the Rule 3000 Series shall be adjudicated in accordance with the
procedures set forth therein; and
(b) This regulation shall not apply to the adjudication of violations arising under
state laws, racing rules and regulations not preempted under 15 U.S.C. Section
3054(b).
- Adjudication of Violations in the Rule 2200 Series
(a) The stewards shall adjudicate all alleged violations of Rule 2271(b) or 2272
relating to the use of Shock Wave Therapy, Rule 2280 relating to the use of the
riding crop, and Rule 2273 relating to the use of other electrical or mechanical
devices. The stewards shall apply the hearing procedures of the state jurisdiction in
which the violation is alleged to have occurred. Provided however, that in any state
that has not entered into an agreement with the Authority under which the state
stewards serve in an adjudicatory capacity under the Rule 8000 Series and enforce
the Rule 2200 Series, a hearing may be conducted by one or more stewards,
notwithstanding any state rule to the contrary. All testimony at a stewards’ hearing
shall be given under oath, and a record of the hearing shall be kept by use of an audio
recorder, video recording or by court reporter’s transcript. Any ruling by the
stewards finding a violation may be appealed to the Board of the Authority under
the procedures described in Rule 8350. An appeal shall be filed in writing within 10
days of the issuance of the ruling by the stewards.
(b) With regard to any matter involving an alleged violation of a rule in the Rule
2200 Series other than those set forth in paragraph (a) above, the Racetrack Safety
Committee may, at its discretion and taking into account the seriousness of the
alleged violation and the facts of the case:
(1) Refer the matter to one or more members of the National Stewards
Panel for adjudication in conformity with the procedures established in the Rule
7000 Series;
(2) Refer the matter to an independent Arbitral Body for adjudication in
conformity with the procedures established in the Rule 7000 Series;
7
(3) Refer the matter to the stewards for adjudication in accordance with
the hearing procedures of the applicable state jurisdiction. Provided however, that
in any state that has not entered into an agreement with the Authority under which
the state stewards serve in an adjudicatory capacity under the Rule 8000 Series and
enforce the Rule 2200 Series, a hearing may be conducted by one or more stewards,
notwithstanding any state rule to the contrary; or
(4) Conduct a hearing upon the matter itself, under the procedures set forth
in Rule 8340.
- Adjudication of Rule 8100 Violations
With regard to any matter involving an alleged violation of a rule established in Rule
8100, the Board of the Authority may at its discretion and taking into account the
seriousness of the violation and the facts of the case:
(a) Refer the matter to one or more members of the National Stewards Panel for
adjudication in conformity with the procedures established in the Rule 7000 Series;
(b) Refer the matter to an independent Arbitral Body for adjudication in
conformity with the procedures established in the Rule 7000 Series;
(c) Refer the matter to the stewards for adjudication in accordance with the
hearing procedures of the applicable state jurisdiction. Provided however, that in
any state that has not entered into an agreement with the Authority under which the
state stewards shall serve in an adjudicatory capacity under the Rule 8000 Series and
enforce the Rule 2200 Series, a hearing may be conducted by one (1) or more
stewards, notwithstanding any state rule to the contrary; or
(d) Conduct a hearing upon the matter itself, under the procedures set forth in
Rule 8340. - Initial Hearings Conducted Before the Racetrack Safety Committee or
the Board of the Authority
(a) An initial hearing before the Board shall be conducted by a panel of three
Board members. The Board chair shall appoint the panel members and shall also
designate one of them as the chair of the panel. At the discretion of the panel of the
Board, an initial hearing may be conducted in person, or by means of an audio-visual
teleconferencing system or a telephone audio system.
(b) An initial hearing before the Racetrack Safety Committee shall be heard by
8
a quorum of the Racetrack Safety Committee. The Racetrack Safety Committee
chair shall act as the chair of the hearing panel unless the Chair is unavailable, in
which case the Racetrack Safety Committee chair shall designate a member of the
quorum to act as the chair of the panel. At the discretion of the Racetrack Safety
Committee, an initial hearing may be conducted in person, or by means of an audiovisual teleconferencing system or a telephone audio system.
(c) Persons entitled to notice of a hearing before the Board or the Racetrack
Safety Committee shall be informed not less than twenty (20) days prior to the
hearing of:
(1) The time, place, and nature of the hearing;
(2) the legal authority and jurisdiction under which the hearing is to be
held;
(3) a description of the rule or rules allegedly violated, specifying by
number the rule allegedly violated; and
(4) a statement of the factual basis of the alleged violation in sufficient
detail to provide adequate opportunity to prepare for the hearing.
(d) At any time prior to, during, or after the hearing, the Board or the Racetrack
Safety Committee in its discretion may require the submission of written briefs or
other information as will assist in the hearing of the matter.
(e) All testimony in proceedings before the Board or the Racetrack Safety
Committee shall be given under oath, and a record of the proceedings shall be kept
in stenographic or recorded form.
(f) The burden of proof shall be on the party alleging the violation to show, by a
preponderance of the evidence, that the Covered Person has violated or failed to
comply with a provision of or is responsible for a violation of a provision of the
Authority’s regulations.
(g) The Board or the Racetrack Safety Committee shall allow a full presentation
of evidence and shall not be bound by the technical rules of evidence. However, the
Board or the Racetrack Safety Committee may disallow evidence that is irrelevant
or unduly repetitive of other evidence. The Board or the Racetrack Safety Committee
shall have the authority to determine, in its sole discretion, the weight and credibility
of any evidence or testimony. The Board or the Racetrack Safety Committee may
admit hearsay evidence if it determines the evidence is of a type that is commonly
9
relied on by reasonably prudent people. Any applicable rule of privilege shall apply
in hearings before the Board or the Committee.
(h) A party shall be entitled to present its case or defense by oral or documentary
evidence, to be represented by counsel at the party’s expense, to submit rebuttal
evidence, and to conduct such limited cross-examination as may be required for a
full and true disclosure of the facts.
(i) Presiding Officer for the Conduct of the Hearing. The Board or the Racetrack
Safety Committee may appoint a presiding officer to assist in regulating the orderly
conduct of and presentation of evidence at the hearing. The Board or the Racetrack
Safety Committee may assign to the presiding officer any or all of the following
powers, in any manner that the Board or Racetrack Safety Committee determines is
most appropriate based upon the nature and complexity of the subject matter of the
hearing. The presiding officer may be granted the power to:
(1) rule upon requests, including all requests for adjournments;
(2) set the time and place of hearing, recesses and adjournments;
(3) administer oaths and affirmations;
(4) summon and examine witnesses, including the authority to direct a party
to appear and to testify;
(5) order that opening and closing statements be made;
(6) admit or exclude evidence;
(7) allow oral argument, so long as it is recorded;
(8) issue orders limiting the scope and length of cross-examination, the length
of briefs, and other similar matters;
(9) order the parties to appear for a prehearing conference to consider
matters that may simplify the issues or expedite the proceeding; and
(10) perform all acts and take all measures necessary for the maintenance of
order and the efficient conduct of the hearing.
(j) Presiding Officer for the Submission of a Hearing Report. The Board or the
Racetrack Safety Committee may direct a presiding officer to issue in writing a
hearing report at the conclusion of the hearing, and to submit it to the Board or the
10
Racetrack Safety Committee and all parties. A copy of the record of the hearing shall
accompany the hearing report. The hearing report shall set forth findings of fact,
conclusions of law and a recommended disposition. If the presiding officer finds that
imposition of a penalty under Rule 8200 upon a party to the hearing is warranted,
the recommended penalty shall be set forth in specific detail, including the length of
any suspension and the amount of any fine. If so directed by the Board or the
Racetrack Safety Committee, the presiding officer shall establish a schedule for the
filing by the parties of:
(1) briefs to be considered by the presiding officer prior to the presiding
officer’s preparation of the hearing report; and
(2) exceptions to the presiding officer’s hearing report after the hearing report
has been delivered to the parties. The exceptions may include for consideration and
adoption by the Board or the Racetrack Safety Committee the particular findings of
fact, conclusions of law and recommendations for disposition with which the party
disagrees and the reasons for such disagreement, any general comments by the party
on the suitability of the hearing report, and the party’s alternative proposed findings
of fact, conclusions of law and recommendations for disposition. A party shall send
a copy of its exceptions to all other parties or their attorneys and presiding officer.
(k) Review by the Board or the Racetrack Safety Committee. Upon receipt of
the record of the hearing, and of any hearing report and exceptions thereto submitted
pursuant to paragraph (j), the Board or the Racetrack Safety Committee shall review
the record and submissions. The period for review shall not exceed twenty (20) days
unless extended by the Board or the Racetrack Safety Committee upon notice to all
parties.
(l) Written Decision. The Board or the Racetrack Safety Committee shall issue
to all parties within 30 days of the close of the review period a written decision
setting forth findings of fact, conclusions of law and the disposition of the matter
including any penalty imposed. If a hearing report has been received, the Board and
the Racetrack Safety Committee shall have discretion to adopt, modify or reject any
or all of the hearing report including, but not limited to, the appropriate disposition
of the proceeding and any penalty recommended.
- Appeal to the Board
(a) Any decision rendered by the Racetrack Safety Committee, the stewards, the
National Stewards Panel, or an Arbitral Body, may be appealed on the record to the
11
Board. The decision may be appealed by a party to the decision, or the decision may
be reviewed upon the Board’s own initiative and at its discretion.
(b) Any decision rendered by an initial Board hearing panel may be appealed on
the record to the Board, to be reviewed by a quorum of the Board which shall not
include the Board members who were on the panel in the initial hearing. The decision
may be appealed by a party to the decision, or the decision may be reviewed upon
the Board’s own initiative and at its discretion.
(c) An appeal shall not automatically stay the decision. A party may request the
Board to stay the decision. A stay may be issued by the Board, or any official or
body of the Authority to whom the Board delegates the authority to review requests
for stay, for good cause shown.
(d) A party to the decision may appeal to the Board by filing with the Board a
written request for an appeal within 10 days of receiving a written order. The appeal
request shall contain the following information:
(1) The name, address, and telephone number, if any, of the appellant;
(2) a description of the objections to the decision;
(3) a statement of the relief sought; and
(4) whether the appellant desires to have a hearing of the appeal.
(e) The Board may in its discretion review a decision based solely upon written
submissions scheduled for filing with such timing and response requirements as the
Board may require. Alternatively, or in addition to written submissions, the Board
may set a date, time, and place for a hearing. Notice shall be given to the appellant
in writing and shall set out the date, time, and place of the hearing, and shall be
served personally or sent by electronic or U.S. mail to the last known address of the
appellant. If the appellant objects to the date of the hearing, the appellant may obtain
a continuance, but the continuance shall not automatically stay imposition of a
sanction or prolong a stay issued by the Board. At the discretion of the Board, the
hearing may be conducted in person, or by means of an audio-visual
videoconferencing system or a telephone audio system.
(f) Upon review of the decision which is the subject of the appeal, the Board
shall uphold the decision unless it is clearly erroneous or not supported by the
evidence or applicable law.
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(g) Upon completing its review, the Board may:
(1) Accept the decision;
(2) Reject or modify the decision, in whole or in part;
(3) Remand the matter, in whole or in part, to the stewards, Racetrack
Safety Committee, the National Stewards Panel, or an Arbitral Body, as the case
may be, for further proceedings as appropriate; or
(4) Conduct further proceedings on the matter as appropriate, including
but not limited to requiring the submission of written briefs or, in extraordinary
circumstances and at the Board’s discretion, the taking of additional testimony
before the Board under oath.
(h) The Board may appoint a presiding officer to assist in regulating the orderly
conduct of and presentation of evidence at a hearing in accordance with Rule
8340(i). The Board may also direct a presiding officer to issue in writing a hearing
report at the conclusion of the hearing in accordance with Rule 8340(j).
(i) The Board shall issue its written decision based on the record and any further
proceedings, testimony, or hearing report and exceptions thereto submitted in
accordance with Rule 8340(k). If a hearing report and exceptions have been
submitted, the Board’s written decision shall in accordance with Rule 8340(l)
include findings of fact, conclusions of law and the disposition of the matter
including any penalty imposed. The Board shall not be bound by the timing
provisions in Rules 8340(k) and (l) relating to the period for review and the issuance
by the Board of its written decision. A copy of the Board’s decision shall be served
upon all parties by first class mail, electronic mail, or personal service.
(j) The decision of the Board shall be the final decision of the Authority.
- Accreditation Procedures
(a) Any decision issued by the Authority denying, suspending or revoking
racetrack accreditation may:
(1) Be appealed within 10 days by the Racetrack to the Authority for a de
novo hearing reviewing the Authority’s decision; or
(2) Reviewed by the Authority on its own initiative.
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(b) The Authority’s order suspending or revoking accreditation shall be stayed
automatically pending review of the decision by the Authority.
(c) At its discretion, the Authority may request and consider any additional
information from any source that may assist in the review.
(d) The Racetrack may request to make a presentation before the Authority
concerning racetrack safety and any remedial efforts proposed to be undertaken by
the Racetrack. At its discretion, the Authority may permit the Racetrack to make
such presentation.
(e) In conducting its review, that Authority may consider all factors that it deems
appropriate, including but not limited to:
(1) The extent and magnitude of any deficiencies in racetrack operations
conducted at the Racetrack;
(2) The threat posed by the deficiencies to the safety and integrity of
horseracing conducted at the Racetrack;
(3) The adequacy of the efforts the Racetrack proposes to undertake or has
undertaken to remedy all deficiencies at the Racetrack;
(4) The likelihood and timeframe within which compliance will be
achieved by the Racetrack, given the resources available to the Racetrack and the
past record of the Racetrack in achieving and maintaining compliance with the rules
of the Authority; and
(5) Any other factors the Authority deems relevant to its review.
(f) Upon completing its review, the Authority may take one or more of the
following actions:
(1) Order that the Racetrack’s accreditation be denied, suspended or
revoked, upon a vote in favor of denial or revocation by two-thirds of a quorum of
the members of the Board;
(2) Reinstate accreditation subject to any requirements the Authority
deems necessary to ensure that horseracing will be conducted in a manner consistent
with racetrack safety and integrity. The Authority may also impose a fine upon
reinstatement in an amount not to exceed $50,000.00. The Authority may require the
Racetrack to report at prescribed intervals on the status of racetrack safety operations
and remedial efforts to improve safety pursuant to the Authority’s racetrack safety
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rules; or
(3) Prohibit a Racetrack from conducting any Covered Horserace.
- Final Civil Sanction
Any decision rendered by the Board of the Authority under Rule 8350, or the
Authority under Rule 8360, shall constitute a final civil sanction subject to appeal
and review in accordance with the provisions of 15 U.S.C. 3058.
Rule 8380 – Guidelines for Confidentiality and Public Reporting
As used in this Rule, “public disclosure” means the dissemination or distribution of
information by the Authority to the general public.
(a) This Rule shall apply to an alleged violation of any provision of the Act, the
Rule 2000 Series, the Rule 8000 series, or the Rule 9000 Series. It shall not apply
to (1) an alleged violation of the anti-doping and medication control rule provisions
in the Rule 3000 Series; or (2) an alleged violation arising under state laws, racing
rules and regulations not preempted under 15 U.S.C. Section 3054(b).
(b) After notice of a violation of any provision in the Rule 2200 Series, the Rule
8000 series, or the Rule 9000 Series has been provided to a Covered Person by the
Authority or any official or body authorized to adjudicate violations under the Rule
8000 Series, the Authority shall publicly disclose the following information relating
to the alleged violation:
(1) the identity of any Covered Person who is the subject of the alleged
violation;
(2) the identity of any applicable horse; and
(3) the rule violated and, where appropriate, the basis of the asserted
violation.
(c) Information as described in paragraph (b) concerning a violation of the Rule
2100 Series shall be disclosed in accordance with this Rule by the Authority either
upon issuance of a Notice of Suspected Violation, or at any time thereafter, as
deemed appropriate by the Authority.
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(d) If at any time information pertaining to an alleged violation is publicly
disclosed by the Covered Person charged with the violation or any employee or agent
of the Covered Person, the Authority may comment on the information publicly
disclosed by the Covered Person.
(e) The Authority shall not be required to make public disclosure if public
disclosure will compromise an ongoing investigation or proceeding. When the
Authority determines that an ongoing investigation or proceeding will no longer be
compromised by public disclosure, the Authority shall at such time make any public
disclosure required under this Rule.
(f) Notwithstanding any provision to the contrary in the rules of the Authority,
the Authority may make public disclosure of any relevant information at any time,
including prior to delivery of notice of a violation, if the Authority determines that
such disclosure:
(1) Concerns a violation or circumstance that poses a serious and imminent
risk of harm to Covered Persons, Covered Horses, or the public; or
(2) Is otherwise in the best interest of horseracing conducted at Covered
Horseraces.
(g) The Authority shall publicly disclose the resolution of an alleged violation
no later than twenty (20) calendar days after the earlier of:
(1) the imposition of a final civil sanction;
(2) a resolution between the Authority and the Covered Person; or
(3) the dismissal of the allegation or a finding of no violation by the
Authority.
(h) Public disclosure under paragraph (g) (1) & (2) shall include the following:
(1) the name of the Covered Person who committed the violation and any
Covered Horse affected by the violation;
(2) the Rule violated;
(3) the sanction imposed;
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(4) the order or other ruling issued in the matter; and
(5) the results of any appellate decisions concerning the violation.
(i) Public Disclosure shall not be required under this Rule if the Covered Person
alleged to have committed a violation is a minor. Public disclosure concerning a
case involving a minor shall be at the discretion of the Authority and in proportion
to the facts and circumstances of the case.
(j) Publication shall be accomplished at a minimum by placing the required
information on the Authority’s website, or publishing it through other means.
(k) Pursuant to 15 U.S.C. 3054, this Rule shall preempt any provision of State
law or regulation, including those pertaining to data practice and privacy laws.
- Investigatory Powers
(a) The Commission, the Authority or their designees:
(1) Shall have free access to:
(i) with regard to Covered Persons, books, records, offices, racetrack
facilities, and other places of business of Covered Persons are used inthat
relate to the care, treatment, training, and racing of Covered Horses, and
(ii) with regard to any person who owns a Covered Horse or performs
services on a Covered Horse, books, records, offices, facilities, and other places of
business that are used inrelate to the care, treatment, training, and racing of Covered
Horses.
(2) May seize:
(i) any medication, drug, substance, or injectable paraphernalia in violation
or suspected violation of any provision of 15 U.S.C. Chapter 57A or the regulations
of the Authority; and , and any object or device reasonably believed to have been
used in furtherance of the violation or suspected violation.
(ii) intravenous tubing, syringes, needles, nasogastric tubes, container
bags, vials, electrical devices, riding crops not in compliance with Rule 2281, and
similar items that may be evidence of a violation or suspected violation of any
provision of 15 U.S.C. Chapter 57A or the regulations of the Authority.
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(b) Upon final resolution of a violation, the Commission, the Authority or their
designees shall return seized property, including but not limited to phones,
computers and other repositories of electronic data, the possession of which is not
specifically prohibited by the Act or the rules of the Authority.
(c) A Covered Person shall:
(1) Cooperate with the Commission, the Authority or their designees
during any investigation; and
(2) Respond truthfully to the best of the Covered Person’s knowledge if
questioned by the Commission, the Authority, or their designees about a racing
matter.
(d) A Covered Person or any officer, employee or agent of a Covered Person
shall not hinder a person who is conducting an investigation under or attempting to
enforce or administer any provision of 15 U.S.C. Chapter 57A or the regulations of
the Authority.
(e) The Commission or the Authority may issue subpoenas for the attendance of
witnesses in proceedings within their jurisdiction, and for the production of
documents, records, papers, books, supplies, devices, equipment, and all other
instrumentalities related to matters within the jurisdiction of the Commission or the
Authority.
(f) Failure to comply with a subpoena or with the other provisions of this Rule
may be penalized by the imposition of one or more penalties set forth in Rule 8200.
(g) The Commission or the Authority may administer oaths to witnesses and
require witnesses to testify under oath in matters within the jurisdiction of the
Commission or the Authority.