Eighth Circuit Court of Appeals Ruling Backs HISA

The United States Eighth Circuit Court of Appeals ruled that legal challenges to the Horseracing Integrity and Safety Act have little likelihood of success.

The court’s opinion, handed down Sept. 20, upheld a lower court order denying a preliminary injunction motion filed by by Iowa Horsemen’s Benevolent and Protective Association, William Walmsley, and Jon Moss. In that motion, they sought to shut down HISA operations in their jurisdiction.

“Walmsley has not established a fair chance of success on the merits, so the district court did not abuse its discretion in denying the motion for a preliminary injunction. The order of the district court is affirmed,” wrote Chief Judge Steven M. Colloton, who was wholly joined in the majority opinion by Judge Michael J. Melloy.

In the opinion released today, Judge Raymond W. Gruender dissented in part, arguing that HISA’s enforcement powers are unconstitutional. His view mirrors a ruling by a unanimous three-judge panel of the Fifth Circuit Court of Appeals. However, the Eighth Circuit majority ruling on the enforcement issue is in lockstep with the Sixth Circuit Court of Appeals.

The ruling marks the third time that a federal court of appeals has considered the constitutionality of HISA, with agreement that HISA’s oversight of racing is constitutional but varying results on HISA’s enforcement powers.

Read the full decision

Generally speaking, the federal government cannot constitutionally grant government authority to private entities, in this case the Horseracing Integrity and Safety Authority, without retaining government oversight. But in this case all three appellate courts have written that because the Federal Trade Commission, a government agency, has the upper hand over HISA, a private corporation, in the establishment of HISA rules governing horse racing it is constitutional.

“We join the other two circuits in concluding that the Authority is subordinate to the (Federal Trade) Commission such that the rulemaking structure of the act does not violate the private nondelegation doctrine (of the U.S. Constitution),” Colloton wrote.

Colloton’s majority opinion says, “Our two sister circuits reached differing conclusions on the constitutional question (about enforcement powers). We agree with the Sixth Circuit that the statute is not unconstitutional on its face because the Commission’s rulemaking and revision power gives it ‘pervasive oversight and control of the Authority’s enforcement activities.'”

The split among the appellate courts on the constitutionality of HISA’s enforcement powers could not be more pronounced. The Sixth Circuit unanimously ruled in favor of HISA on this issue; the Fifth Circuit unanimously ruled against HISA on this issue; and the Eighth Circuit favored HISA in a 2-1 opinion on this issue.

As reported previously at BloodHorse, the division among the appellate courts is likely to be settled by the U. S. Supreme Court unless the proponents and opponents of HISA negotiate a settlement. Currently, the most probable vehicle for continuing litigation lies in a not-yet-filed petition for certiorari, or review, to the Supreme Court, in the Fifth Circuit case. The high court declined to grant review of the opinion of the Sixth Circuit.