ARCI: Potential regulatory chaos necessitates another delay of FTC action on HISA rulesFebruary 3, 2023,
Lexington, KY — The Association of Racing Commissioners International has formally asked the Federal Trade Commission to set aside and temporarily not approve proposed anti-doping and medication control rules proposed by the Horseracing Integrity and Safety Authority until the constitutionality of the HISA Act is determined by the courts.
“This has nothing to do with wanting uniform rules or having a central rule making authority, two things the ARCI supports,” said Ed Martin, ARCI President. “This has all to do with avoiding a situation where an enforcement action is overturned because the authority of the enforcing entity to act is in question. The potential exposure to the entire sport is avoided by leaving the existing state rules and enforcement in place until this gets sorted out.”
The ARCI Board voted unanimously to make a similar request in early December and the FTC shortly thereafter rejected the proposed HISA rules without prejudice citing reasons of the underlying legal uncertainty. With the Fifth Circuit Court’s rejection earlier this week of HISA’s petition based on changes made recently to the Act, the potential for regulatory chaos remains.
The filing made today reads as follows:
“ARCI requests that the FTC yet again reject the Rules or, at the very least, withhold decision until all legal challenges to the Act are finally adjudicated.
“As you might know, in addition to the federal court case that led to the Fifth Circuit’s ruling, other litigations raising material questions about the legitimacy and constitutionality of the Act remain pending. Moreover, after HISA resubmitted the proposed Rules, the Fifth Circuit denied HISA and the FTC’s petition to vacate the court’s earlier ruling and for a rehearing, meaning two important things: (1) by mandate of the Fifth Circuit, the preliminary injunction prohibiting HISA enforcement in states within the Fifth Circuit will return to full effect and no longer be stayed; and (2) the Fifth Circuit’s decision that the Act is unconstitutional will stand for the time being.
“Once again, the FTC is in a unique position to restore some level of regulatory certainty to the horseracing industry. It should do so by quickly and publicly announcing what it already determined a few weeks ago — that it will not approve HISA’s proposed Rules at this time. A decision to the contrary would come at too great a cost, as it would lead to regulatory uncertainty, exacerbate existing confusion throughout the horseracing industry, and seriously compromise public interests.”
Racing’s Possible “Catch-22”
Should the FTC approve the HISA rules and penalties were imposed for a violation of those rules the action could be appealed and potentially overturned and wiped away due to the finding in the Fifth Circuit that HISA is unconstitutional.
Likewise if a racing commission enforces the existing State anti-doping rule and penalties imposed for a violation are appealed using the argument that the federal rule preempts state action the possibility that it can be overturned also exists.
The only way to avoid this Catch-22 is to leave state rules and enforcement in place by delaying final action on the HISA ADMC rules.
The ARCI has not taken a position on the pending litigation, although some member States have and are litigating the constitutionality of the Act. In August, Martin called for HISA to sit down with all litigants and negotiate a way out. That did not happen.