The 5th Circuit Court of Appeals ruled on July 5 that the enforcement provisions of the Horseracing Integrity and Safety Act of 2020 are unconstitutional. On Sept. 23, U.S. Supreme Court Justice Samuel Alito ordered an administrative stay on the mandate of the 5th Circuit.
HISA empowers the Horseracing Integrity and Safety Authority to create and enforce nationwide rules for thoroughbred racing. In 2022, the 5th Circuit held HISA facially unconstitutional under the private nondelegation doctrine because the authority’s rulemaking wasn’t subordinate to the Federal Trade Commission, according to the opinion.
At that time, the 5th Circuit didn’t consider a separate nondelegation challenge to the authority’s enforcement power. Congress responded to the 5th Circuit’s decision by amending HISA, giving the FTC power to abrogate, add to or modify the authority’s rules.
On remand, the district court held the amendment cured HISA’s constitutional deficiencies because the FTC now has general rulemaking power over the authority’s activities, according to the opinion.
The 5th Circuit agreed with the majority of the district court’s opinion, but it disagreed on one aspect. The 5th Circuit concluded that HISA’s enforcement provisions violate the private nondelegation doctrine.
According to the opinion, the statute empowers the authority to investigate, issue subpoenas, conduct searches, levy fines and seek injunctions — all without the FTC’s say-so. The 5th Circuit found that HISA’s enforcement provisions are unconstitutional on that ground.
The 5th Circuit affirmed in part and reversed in part.
In a similar case, Oklahoma v. United States, the 6th Circuit Court of Appeals found the amendments to HISA ameliorated the concerns underlying the nondelegation challenge. It concluded HISA, as amended, gives the FTC final say over implementation of the law relative to the authority, allowing it to uphold HISA as constitutional.
In the 5th Circuit’s case, Alito ordered a response to the application be filed on or before Sept. 30.