Injunction Halts Implementation of HISA Rules in LA, WV

A federal judge based in Louisiana has enjoined the Horseracing Integrity and Safety Authority and Federal Trade Commission from implementing racetrack safety rules, enforcement rules, and assessment methodology rules in Louisiana and West Virginia.

Judge Terry A. Doughty's ruling, in response to a lawsuit filed by the states of Louisiana and West Virginia, the Jockeys' Guild, and others, explicitly states the geographic scope of a granted injunction shall be limited to those two states.

The order, which applies across the board to agents and representatives of HISA and the FTC, as well as all defendants named in the lawsuit, was entered July 26. The suit was filed June 30 in U.S. District Court for the Western District of Louisiana, Lafayette Division.

The order, by its terms, says it will remain in effect pending the final resolution of the case or until further orders from Doughty, the Fifth Circuit Court of Appeals, or the United States Supreme Court.

Doughty's 28-page memorandum ruling first finds that the plaintiff states have standing to bring the action, which is a necessary part of the court's judicial authority to grant relief. He largely ruled against HISA on procedural issues.

Doughty found for plaintiffs on four elements he wrote are necessary to establish grounds for a preliminary injunction: (1) a substantial likelihood that the plaintiffs would succeed on the merits of the case; (2) that plaintiffs are likely to suffer irreparable harm in the absence of relief; (3) the possible injury to plaintiffs outweighs the possible injury to the defendants; and (4) issuance of the injunction is in the public interest.

"Today's ruling from the Western District of Louisiana relates only to the Federal Trade Commission rules, is limited in geographic scope to Louisiana and West Virginia (except with respect to the named plaintiffs), and does not question HISA's constitutionality or validity," Lisa Lazarus, CEO of HISA, said in released statement. "The Authority remains focused on implementing the Racetrack Safety program and drafting Anti-Doping and Medication Control rules for implementation in January 2023. Congress enacted HISA to enhance equine and jockey welfare and protect the integrity of this great sport by, for the first time, creating national rules and standards to govern Thoroughbred racing. These measures are backed by research and informed by the expertise of independent and industry representatives.

"The reality is that the majority of racing participants support the Authority's mission to protect those who play by the rules and hold those who fail to do so accountable in order to keep our equine and human athletes safe and the competition fair. The immense collaboration with state racing commissions, stewards, veterinarians, racetracks, trainers, and other horsemen that have taken place to date is evidence of this support, and we intend to continue to fulfill our mandate and work to make the industry safer."

Doughty's finding that plaintiffs are likely to win the case on the merits is not based on constitutional grounds. Instead, Doughty took issue with HISA's compliance with the federal Administrative Procedures Act and what he describes as excesses in its rulemaking.

The APA, according to the order, allows for a 30-day comment period between the time proposed rules are published in the Federal Register and the effective date of the rules. The Act allows for exceptions to this rule for good cause, including shortening of the comment period. Doughty found a 14-day comment period was not established for good cause, in violation of the Act.

According to the ruling, HISA's rules exceed its authority as defined in its enabling legislation. This part of the ruling is limited in that Doughty wrote, "While Plaintiffs cite numerous implemented rules that are outside HISA's authority, this court finds merit in only three."

Doughty wrote that the definition of a horse covered by HISA as written in the rules exceeds the definition set out in the statute; that the enforcement rules give HISA authority to seize records of persons covered by the Act, whereas the statute does not; that funding methodology rules go beyond the statute by allowing HISA to use purse size as a factor in determining state-by-state assessment amounts.

The purse size factor in HISA assessments appeared economically favorable for West Virginia and Louisiana relative to states with higher purses, such as California, Kentucky, and New York.

The issues raised by Doughty could be changed to bring the HISA rules in compliance with the APA.

Eric Hamelback, CEO of the National Horsemen's Benevolent and Protective Association, a group that has opposed HISA implementation, called the judge's opinion "further proof the framework of HISA must be re-evaluated and not put into effect in its current state."

"While this injunction application is only for the two states, with the Jockeys' Guild mentioned as plaintiffs, this does provide an application outside of Louisiana and West Virginia," he added in remarks from a released statement. "I would strongly encourage HISA to evaluate this court's decision and consider a voluntary stand down in every state in order to save further litigation and chaos that most certainly will come from other jurisdictions."

HISA is expected to continue legal action to counter the ruling, which could ultimately bring the case before the Fifth Circuit Court of Appeals.