FTC Rejects HISA Anti-Doping and Medication Rules

The Federal Trade Commission issued Dec. 12 an order disapproving the proposed Anti-Doping and Medication Control rule submitted by the Horseracing Integrity and Safety Authority after a public comment period. The Horseracing Integrity and Safety Act, which created HISA, includes a requirement that its rules must be submitted for approval to the FTC.

The Commission's order explains that its disapproval arises from the legal uncertainty arising from a recent decision by the U.S. Court of Appeals for the Fifth Circuit, which declared the Horseracing Integrity and Safety Act unconstitutional. Because the next steps in the litigation could render the proposed rule unenforceable in the states that make up the circuit and in those that are plaintiffs in litigation, approving the proposed rule would be inconsistent with the Act's foundational principle that horse racing rules be uniform across the nation. Accordingly, the commission did not reach the merits of the proposed rule, which the Authority may re-submit if the legal uncertainty is resolved.

The Commission vote was 3-0-1, with Commissioner Christine S. Wilson abstaining.

"Everything HISA has implemented will be status quo come Jan. 1, 2023. It doesn't impact our racetrack safety program and that will continue to operate as it has been. What it does is obviously delays the implementation of the Anti-Doping and Medication Control program," said HISA CEO Lisa Lazarus. "From HISA's standpoint, we are ready, excited, and eager to launch that program because it will be a game-changer for the industry. But we understand given the climate we are in and the legal uncertainties, the FTC felt it was prudent to reject the rules and allow time for the legal issues to be clarified and resolved."

That uncertainty started Nov. 18 with a ruling by the U.S. Fifth Circuit Court, which overturned a ruling by Judge James Wesley Hendrix of the U.S. District Court for the Northern District of Texas and declared HISA constitutional. The federal act also is being scrutinized by the U.S. Sixth Circuit Court of Appeals based in Cincinnati, which is considering an appeal of a ruling finding HISA constitutional made in U.S. District Court for the Eastern District of Kentucky by Judge Joseph Hood. Oral arguments were held Dec. 7.

Hood found that the HISA legislation allows the FTC sufficient "authority and surveillance" over the Authority to ensure that it functions as a private entity that is subordinate to the FTC, and not the other way around, in the rule-making process. Hendrix essentially made the same type of ruling as Hood. The Fifth Circuit said Congress got the cart before the horse, making HISA the entity with "the whip hand."

Should the Sixth Circuit side with Hood, and should the Fifth Circuit not change its position, the conflicting rulings would set up a situation that would require the U.S. Supreme Court to essentially break the tie.

Lazarus said either winning a stay from the Fifth Circuit Court ruling or a favorable ruling by the Sixth Circuit could also buy HISA time to implement the anti-doping and medication control rules.

"HISA is pursuing a stay. If we secured a stay for a significant period of time until the Supreme Court might hear the case, for example, we could go back to the FTC and seek legal approval on that basis and represent to them that we have the stability to launch the program," she said. "That would require it to fit the timeline from the Sixth Circuit, and they are expected to rule in the next month or two."

As HISA's status winds its way through the legal maze, Lazarus also said it is important for the state commissions and racing regulatory authorities be aware that as of Jan. 1 they will continue to be responsible for all collection and testing. Lazarus said HISA will not be collecting 2023 fees from the states because a vast majority of those fees relate to the launch of the anti-doping program.

"The assessments for 2022 are still be pursued because those counts have already be incurred," she said.

Ben Mosier, executive director of the Horseracing Integrity & Welfare Unit, released a separate statement after the FTC decision.

"As the designated independent enforcement agency of the Horseracing Integrity and Safety Authority's Anti-Doping and Medication Control Program, the Horseracing Integrity & Welfare Unit has spent the past seven months preparing for the program's implementation on Jan. 1, 2023, and stood ready to enforce this national, uniform program on that date pending approval from the Federal Trade Commission. Following today's decision by the FTC to deny HISA's draft ADMC rules without prejudice due to current legal uncertainties, HIWU will continue its education and outreach efforts to all stakeholders in the Thoroughbred industry. As HISA re-submits the draft ADMC rules for the FTC's approval, HIWU will use any additional time before implementation as an opportunity to ensure the industry is even more prepared for an efficient rollout of this program, which will promote fair competition in the sport of Thoroughbred racing and the safety and welfare of our human and equine athletes."

The Association of Racing Commissioners International said it was pleased with the FTC decision given the "serious questions that exist about the constitutionality of the HISA Act."

"The RCI has not taken sides in the litigation, although some member States are actively challenging the constitutionality of the HISA Act.  We believe this Act needs a rewrite in order to work and we stand ready to help in a process to build a consensus as to what modifications must be made in order to achieve the goals articulated by Senator McConnell, Representatives Barr, and Tonko."

Eric Hamelback, CEO of the National Horsemen's Benevolent and Protective Association, which has been involved in legal challenges to HISA's constitutional authority, also issued a statement supporting the FTC's decision.

"The recent FTC decision is another positive step forward for horsemen in our battle against the unconstitutional takeover of our industry. The strength of our legal arguments led to a unanimous decision in the Fifth Circuit, and now the FTC has done the right thing in declining to defy a federal court that has found HISA unconstitutional. The FTC order is clear: state law continues to govern medication issues until our final victory in this case," he said.

Legal correspondent Dick Downey contributed to this story.