Columbus, OH — On March 31, 2022, the United States District Court for the Northern District of Texas dismissed a constitutional challenge to the Horseracing Integrity and Safety Act (HISA) brought by the National Horsemen’s Benevolent and Protective Association. Judge James Wesley Hendrix held that, under current precedent, HISA does not violate the United States Constitution’s private nondelegation doctrine.

(Story here: https://www.thoroughbreddailynews.com/federal-judge-dismisses-hbpa-constitutionality-suit-vs-hisa/)

The “current precedent” to which Judge Hendrix referred is a line of cases decided by the United States Circuit Court for the Fifth Circuit which are extremely tolerant of delegation of governmental authority, and which are binding on the Texas court that decided this case. The language in Judge Hendrix’s conclusion tells the tale:

The Court recognizes that HISA’s regulatory model pushes the boundaries of public-private cooperation. . . . [D]espite its novelty, the law as constructed stays within current constitutional limitations as defined by the Supreme Court and the Fifth Circuit. Perhaps the Supreme Court or the Fifth Circuit will cabin [i.e., limit] their private-nondelegation precedent in light of HISA’s reach. But this district court will not “read tea leaves to predict where [the doctrines] might end up.” . . . . [U]nder present articulations of the private-nondelegation doctrine, the plaintiffs’ challenge must fail.

The Fifth Circuit’s permissive view of private nondelegation has not been accepted throughout the other circuits. At the August 2021 Racing and Gaming Conference at Saratoga Race Course, respected racing legal scholar Bennett Liebman opined that the Supreme Court is looking for the right case in which to rein in Congress’s delegation of its authority to private organizations. Liebman was proved right in March of 2022 in the Rettig case, a Fifth Circuit decision on which Judge Hendrix relied heavily.

The Supreme Court has discretion to grant or deny certiorari (to decide or refuse to decide an appeal) in cases without respect to the merits of the cases themselves. When Rettig was appealed from the Fifth Circuit, the Supreme Court denied the petition for a writ of certiorari, which is normally a one-sentence entry on the docket. In Rettig, however, Justice Alito took the unusual step of appending a lengthy statement explaining that although Rettig involved the issue of limits on the federal government’s authority to delegate its powers to private actors, “the case presents threshold questions that could complicate our review of that important [issue], but the statutory scheme at issue here points up the need to clarify the private non-delegation doctrine in an appropriate future case.”

We respectfully await the National HBPA’s announcement of its plans regarding appeal. The HBPA’s decision, however, will be reached partly by evaluating the need to convince the Fifth Circuit and possibly the Supreme Court thereafter that HISA goes beyond the permissible limits of the private nondelegation doctrine.

The other HISA challenge, which involves the USTA, nine states, and a group of other entities as plaintiffs, is awaiting decision in the United States District Court for the Eastern District of Kentucky. This case also presents the private nondelegation issue, and because it arises in the Sixth Circuit where there is no unusually permissive interpretation of this doctrine, it could well reach the opposite result to the one reached in Texas. Moreover, the lead argument in the USTA’s case concerns the anticommandeering rule, a Constitutional doctrine that Justice Alito, mentioned above, applied restrictively in the Murphy case, which rejected Congress’s attempt to deny regulatory authority over sports betting to the states.