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UNITED STATES OF AMERICA
BEFORE THE FEDERAL TRADE COMMISSION
OFFICE OF ADMINISTRATIVE LAW JUDGES
In the Matter of
)
)
JASON SCOTT, DVM,
)
Appellant,
)
vs.
)
)
THE HORSERACING INTEGRITY & )
SAFETY
AUTHORITY,
a
federal )
administrative agency.
)
Appellee.
)
Docket No. 9449
APPELLANT’S MOTION TO DISQUALIFY
Dr. Scott respectfully requests the recusal of Judge Himes based on (1) Judge Himes’s
demonstrable history of prosecutorial bias and dicta commentary regarding his preference for the
harshest penalties; (2) his systematic, habitual, and escalating sua sponte interventions against
Covered Persons; (3) his advocacy against Dr. Scott in this case; (4) his heavy-handed restrictions
on Dr. Scott’s appeal rights; (5) his consistent expansion of HISA’s appeal rights; and (6) his
admitted past association with a member of HISA’s board. Though any one of these facts, taken
alone, may be insufficient to warrant disqualification, this motion is based on the accumulation of
these facts. This motion is supported by the affixed Memoranda and the exhibits attached thereto.
Respectfully submitted,
/s/ Joseph C. DeAngelis
BREWSTER & DEANGELIS, PLLC
Clark O. Brewster, OBA #1114
Joseph C. DeAngelis, OBA #34142
2617 East 21st Street
Tulsa, Oklahoma 74114
(918) 742-2021, Fax (918) 742-2197
Attorneys for Dr. Jason Scott
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ABBREVIATIONS
Shell II -
In the matter of Dr. Scott Shell, DVM, Docket No. 9439,
Shell II ALJ Decision
In the matter of Dr. Scott Shell, DVM, Docket No. 9439,
Administrative Law Judge Decision on Application for Review
(March 6, 2025)
Serpe
In the matter of Phil Serpe, Docket No. 9441, Administrative Law
Judge Decision on Application for Review (September 12, 2025)
Overly
In the matter of Dr. Larry Overly, DVM, Docket No. 9443,
Overly AuOBr
In the matter of Dr. Larry Overly, DVM, Docket No. 9443, The
Authority’s Proposed Findings of Fact, Conclusions of Law, and
Supporting Legal Brief (December 15, 2025)
Overly ALJ Decision
In the matter of Dr. Larry Overly, DVM, Docket No. 9439,
Administrative Law Judge Decision on Application for Review
(January 27, 2026)
Kriple –
In the matter of Zvi Kriple, Docket No. 9446, Administrative Law
Judge Decision on Application for Review (March 4, 2026)
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UNITED STATES OF AMERICA
BEFORE THE FEDERAL TRADE COMMISSION
OFFICE OF ADMINISTRATIVE LAW JUDGES
In the Matter of
)
)
JASON SCOTT, DVM,
)
Appellant,
)
vs.
)
)
THE HORSERACING INTEGRITY & )
SAFETY
AUTHORITY,
a
federal )
administrative agency.
)
Appellee.
)
Docket No. 9449
MEMORANDUM IN SUPPORT OF APPELLANT’S MOTION TO DISQUALIFY
The arbitrator side-barred with HIWU’s counsel on a break before Dr. Scott presented even
a single witness. Unprompted, he said, “You guys would never try anything with me unless you
had a winner.” 1 That arbitrator rejected all of Dr. Scott’s defenses without mention or explanation.
Though history rarely repeats, it often rhymes. Judge Himes seems poised to rule against Dr. Scott
without even acknowledging Dr. Scott’s arguments in this case. By filing this motion, Dr. Scott
means no disrespect, but the following circumstances are concerning and warrant inquiry.
LEGAL STANDARD
Parties are “entitled to the cold neutrality of an impartial judge.” 2 “The test for
disqualification has been succinctly stated as being whether a disinterested observer may conclude
that (the agency) has in some measure adjudged the facts as well as the law of a particular case in
advance of hearing it.” 3 A judge “should never assume the role of advocate.” 4 Excessive judicial
interventions require recusal if the record shows that the judge “was actually biased or that he
Ex. 1, Excerpt from Hearing Day 1; See Ex.2, DeAngelis Declaration, ¶ 2 for additional context.
Pastrana v. Chater, 917 F. Supp. 103, 105 (D.P.R. 1996) (citation omitted).
3
Cinderella Career & Finishing Schs., Inc. v. F.T.C., 425 F.2d 583, 591 (D.C. Cir. 1970) (citation omitted);
see also United States v. Microsoft Corp., 253 F.3d 34, 114 (D.C. Cir. 2001).
4
Warner v. Transamerica Ins. Co., 739 F.2d 1347, 1351 (8th Cir. 1984).
1
2
1
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projected the appearance of advocacy or partiality” 5 or where a judge “visibly and forcefully
assumes the prosecution’s role.” 6 Similarly, statements and actions in a judge’s official capacity
are not immune from scrutiny. They “will” support disqualification “if they reveal such a high
degree of favoritism or antagonism as to make fair judgment impossible.” 7
ARGUMENT
I.
Judge Himes Has a Prosecutorial Bias, As Demonstrated by His Comments in
Dicta and Escalating Sua Sponte Interventions
Judge Himes’s pattern of advocating for harsher sanctions and imposing them sua sponte
far exceeds what would be expected of a neutral adjudicator and demonstrates systematic bias
favoring the regulatory agency.
Begin with Shell II (March 6, 2025). The arbitrator permitted a three-month and a $5,000
reduction to the suspension and fine. Judge Himes affirmed the sanction but offered the following
commentary: “But if I were the decisionmaker in the first instance, under the totality of the
circumstances I would modify the Ineligibility reduction to 1.5 months.” 8 At this point, Judge
Himes viewed his review authority as “cabined” and did not modify the penalty. From that posture,
Judge Himes’s dicta as to his personal preference for a harsher penalty served no purpose in the
opinion other than to reveal his bias for harsher penalties.
Next consider Serpe (Sep. 12, 2025). The arbitrator imposed no fine. On review, Judge
Himes imposed the maximum fine 9 over the objection of both parties. 10 Perhaps more striking,
Judge Himes simultaneously ruled that fines were not mandatory and that the amount was
See Van Leirsburg v. Sioux Valley Hosp., 831 F.2d 169, 172 (8th Cir. 1987).
United States v. Rivera-Rodriguez, 761 F.3d 105, 121 (1st Cir. 2014).
7
Liteky v. United States, 510 U.S. 540, 555 (1994).
8
Shell II ALJ Decision at 69.
9
Serpe at 65.
10
See Serpe at 56–64.
5
6
2
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“discretionary.” 11 Yet Judge Himes elected sua sponte to exercise a “discretionary” power to its
maximum force in the face of unanimous opposition.
The pattern continued in Overly (Jan. 27, 2026). HISA alleged error in imposing concurrent
penalties but (as in Serpe) alleged no abuse of discretion in a reduction of fault. 12 Judge Himes sua
sponte imposed the maximum suspension (four years total) and fine ($50,000 total). 13 Judge Himes
did so without finding that the arbitrator’s mere one-month reduction in Ineligibility was an abuse
of discretion. 14 Instead, the basis of Judge Himes’s modification was his subjective belief that the
one-month reduction was “too lenient.” 15 Judge Himes likewise foreshadowed his willingness to
breach the cap on penalties by sua sponte alleging aggravating circumstances, even though the
rules place the burden on the Authority (not an ALJ) to establish aggravating factors. 16
Finally, consider Kriple (March 4, 2026). Judge Himes affirmed a two-year suspension of
a trainer charged with neglect, finding no abuse of discretion due to a lack of guidance. One would
expect that an unbiased adjudicator would simply have noted the lack of guidance and stopped
there. But Judge Himes criticized HISA’s two-year penalty (a devastating sanction) as “overly
lenient” and advocated for harsher sanctions. 17 That advocacy referenced a case imposing an 18-
Id. at 62 (“[T]he arbitrator had discretion to determine the amount of any fine awarded, which, as I noted
above, could be as low as $0.”); Id. at 63 (if no fine was awarded, “an explanation for the decision to
dispense with any fine at all was necessary . . . I am not holding that an arbitrator in a HIWU-initiated case
must always impose a fine.”)
12
Overly AuOBr at 27.
13
Overly ALJ Decision at 95.
14
Id. at 21-22 (“To find an abuse of discretion, there must be “a plain error, discretion exercised to an end
not justified by the evidence, a judgment that is clearly against the logic and effect of the facts as are
found.”) (citation omitted).
15
Id. at 68
16
Id. at 94. Note that one of the alleged constitutional defects is that HISA does not grant the FTC charging
authority. Notwithstanding, Judge Himes appears to claim that he can assume that power for himself.
17
Kriple at 22.
11
3
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year suspension “as a stern warning to others” and emphasized that lesser sanctions were criticized
in the media. 18
II.
Judge Himes Assumed the Role of Advocate Against Dr. Scott Sua Sponte
In the March 17 Order, Judge Himes concludes from a cherry-picked record, that “[t]he
papers filed in this review include a prima facie showing of grounds for vacatur and remand” and
implies that such reversal is permitted without a showing of prejudice. 19 The March 17 Order
contains a three-page narrative articulating a theory of error and prejudice which, in essence,
argues that anything less than the maximum penalty is prejudicial to HISA. 20 In that narrative,
Judge Himes articulates as many four alleged errors in the assessment of the penalty and provides
a roadmap for asserting those errors. 21
Crucially, the Authority makes none of these arguments. The Authority never claims that
the “lack of explanation” is a reversible error. The Authority never even requests review of that
issue — because it cannot. 22 Judge Himes has, in effect, submitted his own application for review
as to the penalty and deemed that such application should supersede Dr. Scott’s challenge to
liability. Such application completely transforms the issues presented for appeal without a lawful
application raising any challenge to the penalty under 16 CFR § 1.146(a). Indeed, unlike Overly,
Shell, and Perez, Dr. Scott raised no challenge to the sanction itself. Like the arbitrator below,
Judge Himes never explains why Dr. Scott’s defenses to a threshold issue should be disregarded.
Judge Himes simply assumed the role of advocate.
Id. at 23-24.
March 17 Order at 3.
20
March 17 Order at 4–6 (identifying penalty “less than the mandatory 24-month period” as prejudicial but
noting that the imposition of a “maximum” $25,000 fine “does not prejudice the Authority directly.”).
21
March 17 Order at 4–6.
22
In re Shell, Docket No.9439, Order Dismissing HIWU’s Application for Review at 5 (12/06/2024)
(“[N]either HIWU nor the Authority may seek ALJ review pursuant to 15 U.S.C. § 3058(b)(1) or FTC Rule
1.146(a) as a ‘person aggrieved’ by civil sanctions imposed by the Authority.”).
18
19
4
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III.
Judge Himes’s Heavy-Handed Restrictions on Dr. Scott’s Appeal Rights
Judge Himes proposes a remand, which is a dispositive order. 23 Dr. Scott’s inability to
justify his opposition to such an order would presumably result in a remand, yet Judge Himes
severely restricts Dr. Scott’s ability to oppose. Normally, a decision from the administrative law
judge must be “based on a consideration of the whole record.” 24 The parties are provided an
opportunity to brief the pertinent issues with simultaneous briefs and simultaneous replies
amounting to 10,000 words. 25 But here, Judge Himes permits only a 1500-word brief by Dr. Scott
and a 1500-word reply for the Authority. Compared to the normal procedure for disposing of an
appeal, Judge Himes restricted Dr. Scott’s briefing by 85%. On the other hand, Judge Himes grants
the Authority — and only the Authority — a right of reply that is reduced by a mere 40%. 26 Dr.
Scott has no right to respond. Considering that the Authority never raised the asserted errors in its
brief, Dr. Scott has no notice as to what the Authority’s argument will ultimately be.
IV.
The Accumulation of Facts Would Cause a Reasonable Person to Question Judge
Himes’s Neutrality
Judicial interventions, even if authorized, must be restrained so as to maintain the
appearance of neutrality. In the case of Rivera-Rodriguez, the First Circuit found that repeated
instances of interventions “conveyed an appearance of judicial bias” where those interventions all
had a “common theme — the court helping the government with its case.” 27 These interventions
occurred where the court grew “impatient” with the government’s efforts in the case, after which
the court would assume “the prosecutor’s role in questioning the cooperating witness.” 28 Jurors
16 CFR 1.146(d)(3)(i).
16 CFR 1.146(d)(2).
25
16 CFR 1.146(c)(3)–(5).
26
A reply is normally limited to 2500 words. Judge Himes permitted 1500.
27
United States v. Rivera-Rodriguez, 761 F.3d 105, 122–23 (1st Cir. 2014)
28
Id. at 123–24.
23
24
5
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are, by definition, random people from the street who have been vetted for neutrality. Thus, they
provide a decent metric for when a reasonable person would perceive bias.
Translating to the appellate context, the framing of issues is primarily vested with the
parties, 29 and the burden of proof is placed primarily on the Authority to sustain the charge. 30
Though a reviewing ALJ has the authority to make “any” finding justified by the record, such
interventions should be restrained to maintain the appearance of neutrality.
But Judge Himes’s interventions have been anything but restrained. Judge Himes routinely
punishes parties for bringing appeals by imposing the harshest possible sanction, even when such
action is unanimously opposed. Judge Himes’s consistent practice is to “visibly and forcefully
assume[] the prosecution’s role” to override even the Authority’s barest attempts at leniency. 31
From a review of Judge Himes’s opinions after Shell, he has never modified a penalty in a Covered
Person’s favor. His uniform practice has been to impose the maximum possible penalty even where
he finds no abuse of discretion in the prior imposition of a lesser penalty, as in Overly.
Reviewing Judge Himes’s dicta commentary, a reasonable person would attribute these
decisions to bias. Indeed, at least three times in four opinions, he condemned penalties for being
“too lenient” and advocated for penalties approaching two decades in length. Such statements
served no legitimate purpose in the opinions, yet Judge Himes made them anyways. Notably, HISA
leveraged these facts in this very case in their attempt to pressure Dr. Scott to abandon his pending
federal case and forego an appeal. 32 That Judge Himes’s prosecutorial advocacy is so obvious and
notorious that HISA would leverage it against the Covered Person potentially appearing before
him is proof enough that a reasonable observer would find bias.
16 CFR 1.146(a)
16 CFR 1.146(c)(6)(i).
31
United States v. Rivera-Rodriguez, 761 F.3d 105, 121 (1st Cir. 2014).
32
Ex.2, Declaration of Attorney Joseph DeAngelis.
29
30
6
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The pattern of intervention escalated here. Dr. Scott exclusively asked whether he could be
found liable for a violation. Judge Himes, without a lawful application, completely disregarded the
question presented to him in favor of the Authority’s mere suggestion that the degree of penalty
was not “explained.” This decision is suspect for several reasons. First, the Authority has no right
to appeal, so it is unclear why Judge Himes is even considering a request for remand. 33 Nothing in
the application makes the non-opposition to a stay conditional. 34 Second, the issue presented was
whether the undisputed facts foreclose a finding of liability. If Dr. Scott is correct, any “error” in
the calculation of the penalty is moot. And third, the Authority waived any objection to the
computation or wording of the penalty by not objecting under Rule 7380. 35 Purportedly exercising
“de novo” review, Judge Himes effectively resurrected an issue that the Authority waived upon
the Authority’s mere suggestion of irregularity. As occurred in Shell and Overly, this dynamic has
repeatedly circumvented the Authority’s lack of standing to appeal, and this dynamic has inured
yet again exclusively to the Authority’s benefit.
Where Judge Himes expanded the Authority’s appellate rights, he restricted Dr. Scott’s.
Not only did Judge Himes effectively eliminate Dr. Scott’s appeal in favor of his own single-issue
assertion of error, he restricted or outright eliminated the procedures available to Dr. Scott for
dispositive briefing. 36
From this context, a reasonable person would view Judge Himes’s escalating and one-sided
interventions “project[] the appearance of advocacy or partiality” 37 and, more specifically, a pro-
In re Shell, Docket No.9439, Order Dismissing HIWU’s Application for Review at 5 (12/06/2024)
(“[N]either HIWU nor the Authority may seek ALJ review pursuant to 15 U.S.C. § 3058(b)(1) or FTC Rule
1.146(a) as a ‘person aggrieved’ by civil sanctions imposed by the Authority.”).
34
Ex.2A, Email to HISA Counsel
35
Ex. 3, Rule 7380 Objections (Withdrawn).
36
See also 16 CFR § 3.22(c).
37
See Van Leirsburg v. Sioux Valley Hosp., 831 F.2d 169, 172 (8th Cir. 1987).
33
7
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Authority prejudgment that sanctions should always be the maximum or higher. The accumulation
of the excessive judicial interventions demonstrates a bias that is prosecutorial in nature and
confirms that Dr. Scott will be forced to fight this appeal on two fronts: against HISA and against
the judge. That deprives him of his right to an impartial adjudicator.
From this context, Judge Himes’s disclosed association with a HISA board member
deserves a second look. The question is whether a reasonable observer who knows all of the above
facts and the disclosed association with a HISA board member would perceive bias. The fact that
Judge Himes believed that his contacts with Ms. Mazur were substantial enough to require
disclosure is evidence that he believed a reasonable person could perceive bias. A reasonable
person could, and likely would, attribute Judge Himes’s excessive pro-Authority interventions to
his disclosed association with a high-ranking member of that party, which regularly appears before
him. “Appearance may be all there is, but that is enough.” 38
CONCLUSION
Dr. Scott has already suffered one proceeding where the outcome was predetermined and
his arguments were completely ignored. He should not be made to suffer another. At the very least,
Judge Himes’s conduct conveys the impression to any reasonable observer that (1) he has
prejudged anything less than the maximum penalty as “overly lenient” and deserving of
modification and (2) such bias is so strong that he would sua sponte override a request to review
preliminary issues that would moot those concerns. Dr. Scott respectfully requests that Judge
Himes recuse.
38
United States v. Microsoft Corp., 253 F.3d 34, 115 (D.C. Cir. 2001)
8
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Dated: April 3, 2026.
Respectfully submitted,
/s/ Joseph C. DeAngelis
BREWSTER & DEANGELIS, PLLC
Clark O. Brewster, OBA #1114
Joseph C. DeAngelis, OBA #34142
2617 East 21st Street
Tulsa, Oklahoma 74114
(918) 742-2021, Fax (918) 742-2197
Attorneys for Dr. Jason Scott
9
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CERTIFICATE OF SERVICE
Pursuant to 16 CFR 1.146(a) and 16 CFR 4.4(b), a copy of the foregoing is being served
this 3 day of April, 2026, via First Class mail, e-filing, and/or email upon the following:
rd
Office of the Secretary
Federal Trade Commission
600 Pennsylvania Avenue NW, Suite CC-5610
Washington. DC 20580
Office of Administrative Law Judges
Hon. D. Michael Chappell
Chief Administrative Law Judge
Federal Trade Commission
600 Pennsylvania Avenue, NW Washington, DC 20580
(Via e-mail to oalj@ftc.gov and electronicfilings@ftc.gov)
(April Tabor atabor@ftc.gov; Pablo Zylberglait PZYLBERGLAIT@ftc.gov)
(Eric Winker ewinker@ftc.gov; Dana Gross dgross@ftc.gov)
Horseracing Integrity and Safety Authority
Samuel Reinhardt (email samuel.reinhardt@hisaus.org)
Michelle Pujals, HIWU General Counsel (email mpujals@hiwu.org)
Allison Farrell, HIWU Litigation Counsel (email afarrell@hiwu.org)
401 West Main Street, Suite 222
Lexington, KY 40507
Counsel for Horseracing Integrity and Safety Authority
Bryan Beauman (bbeauman@sturgillturner.com)
Rebecca C. Price (rprice@sturgillturner.com)
Leigh Reed (lreed@sturgillturner.com)
Sturgill Turner
333 West Vine St., Ste. 1500
Lexington, KY 40507
/s/ Joseph C. DeAngelis
10
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[11/19/25 at 5:52:25 -5:55:45.]
Mr. Hackney: Okay, break, 15 minutes?
Mr. Brewster: Will we go to 5.30 if we need to, or…
Mr. Hackney: You can go as late as you want.
Mr. Brewster: You won't be here, but we’ll be here
Mr. Hackney: Oh, no, I'll be here. I'll be here. Look, as an old trial lawyer of over 50 years, I
hated it when people made me leave early, then right into a cross. I mean, I'm
gonna let you get through what you're doing at the time.
[pause – directed to HIWU counsel]
And I will apologize to you only because I was waiting for you to say something.
About how long he was going.
Mr. Greene:
Well, I want to give some leeway, so…
Mr. Hackney: Well, you were very professional and very ethical, okay? And I appreciate it.
Mr. Greene:
Ryan [Lipes] was at DOJ before. Ryan was at DOJ before coming to work at our
firm, so he's been at the highest levels.
Mr. Hackney: Were you a prosecutor? Well, you still are a prosecutor, that's all y'all are.
Mr. Lipes:
Suck me back into this…
Mr. Hackney: Well, are the cases here as set in… you guys would never try anything with me
unless you had a winner.
Mr. Greene:
We hope so.
Mr. Lipes:
You know, that was pretty… that's crazy to me, just because I think my
generation. It was set law.
Mr. Greene:
I mean, it was set law.
Mr. Lipes:
Chevron deference to us was… They required a whole class on Chevron for us.
And then just one day, we wake up, and it's gone, and I was like, that class and
that $200 book was a waste of time.
Exhibit
1
exhibitsticker.com
Mr. Hackney: No, no, I'm not talking about this case. I'm talking about, you know, you got the
rules written by the bureaucrats, and they, you know, they… my God, I mean, I'm
looking at it. As an old DOJ lawyer, what do you think about the, Chevron
opinion?
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Mr. Hackney: Let me tell you, I know the guys that brought that case took it all the way up. And
they're good lawyers, but my God. That was egregious.
Mr. Greene:
It definitely threw the world into chaos in terms of admin law.
Mr. Hackney: What?
Mr. Greene:
Threw admin law into chaos.
Mr. Hackney: Yeah, and, and… I mean, one of the issues I'm gonna raise with you and them —
I want somebody to tell me, under the HIWU rule — I'll be damned if I can figure
out sometimes, not who has the burden, but what is the burden?
Mr. Greene:
I'll make sure I talk about that.
Mr. Hackney: Is it administrative law? Because it says very… it's, you know, it's… Not based
upon, you know – great weight and preponderance of the evidence. What do y'all
think? I mean, I don't know. I've asked this question, hell, I've gotten 3 different
answers from people at HIWU. Because they asked us to comment on the rules,
and that was one of the first things I said is, I mean, you know, there's a lot here,
But I told somebody one time I did -- I spent a lot of time in -- in the former
Soviet Union in Russia, and I said, you know, I read the constitution of the Soviet
Union and it was the greatest document of freedom I ever read. Unfortunately, the
implementation sucks. I mean, he can have the greatest rules in the world, but if
you can’t interpret them [inaudible].
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UNITED STATES OF AMERICA
BEFORE THE FEDERAL TRADE COMMISSION
OFFICE OF ADMINISTRATIVE LAW JUDGES
In the Matter of
)
)
JASON SCOTT, DVM,
)
Appellant,
)
vs.
)
)
THE HORSERACING INTEGRITY & )
SAFETY
AUTHORITY,
a
federal )
administrative agency.
)
Appellee.
)
Docket No. 9449
DECLARATION OF JOSEPH C. DE ANGELIS
Joseph C. DeAngelis, an attorney licensed in Oklahoma and Texas, submits this declaration
in support of Appellant’s Motion to Recuse. See 28 U.S.C. § 1746.
1.
I am counsel for Appellant Dr. Jason Scott in this and related matters. I am familiar
with the facts and circumstances of this case. By submitting this declaration, I do not intend to
waive the attorney-client or work product privileges.
2.
I do not specifically recall being present for the conversation between the arbitrator
and HIWU’s counsel referenced in the introduction, but I am admittedly unsure. Side-bar
conversations were frequent throughout the hearing, and we observed or interrupted several
conversations between the arbitrator and HIWU’s counsel and witnesses. That said, I cannot
remember if my first encounter with this particular conversation was in person or from reviewing
audio. The audio is unclear as to who was present in the room. I asked Mr. Brewster, my cocounsel, if he was present. To his recollection, he left the room during the pause referenced in the
transcript. He does not specifically remember the conversation.
3.
I initially interposed no objection to Judge Himes’s assignment based on the email
Exhibit
2
exhibitsticker.com
communication conveyed to us disclosing the professional relationship with Ms. Mazur. I was
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aware of Judge Himes’s recent order denying a motion to disqualify on this basis and believed
such a challenge to be premature without additional grounds.1
4.
During the arbitration, I was aware of Judge Himes’s decision in the Shell II matter.
Judge Himes’s formulation of the “compelling justification” standard formed the basis of HIWU’s
theory of the case. I was also generally aware of the Serpe opinion but had not read it closely.
5.
After the arbitrator’s award, I contacted the Authority’s counsel and stated my
intent to appeal. My purpose was to negotiate a stay of penalties. The Authority proposed that Dr.
Scott simply drop the appeal and the pending federal action. The Authority’s counsel specifically
referenced the “risk” that this case would be assigned to Judge Himes who, they said, “does his
own thing” and tends to impose harsher penalties on appeal.
6.
I proposed that Dr. Scott would hold the federal action in abeyance if the Authority
filed a non-opposition to the stay and if that stay was granted. The Authority agreed with this
proposal. Following the March 17 Order, I reached out to the Authority’s counsel to confirm that
the non-opposition was unconditional. The Authority confirmed that their non-opposition to a stay
was simply “pending” the disposition of the appeal. The email confirming this agreement is
attached as Exhibit 2A.
7.
Upon Judge Himes’s proposed assignment, I further reviewed all past opinions
written by him in HISA cases and the briefing in those cases, which are available through the
FTC’s online legal library. My primary purpose was to assess for style and arguments. At this
time, I discovered the Galvin order and stated my non-objection to the email disclosure. As my
1 See In the Matter of Dr. Michael J. Galvin, Docket No. 9445, Order Denying Motion for Disqualification; see also
United States v. Rivera-Rodriguez, 761 F.3d 105, 112 n.8 (1st Cir. 2014) (“An initial intervention by the judge that
makes defense counsel uneasy may not justify an objection from counsel, who is sensibly reluctant to challenge the
judge prematurely. Over the course of the trial, however, if those one-sided judicial interventions multiply, defense
counsel may then realize that he or she must object on the basis of the appearance of judicial bias, citing the cumulative
effect of the judge's one-sided interventions.”
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review, I noticed the tendency to which the Authority referred and began documenting what I
believed to be statements concerning for bias.
8.
In the midst of that review, Judge Himes issued the March 17 Order. The Order was
concerning for the reasons discussed in the Memorandum. I discussed with Mr. Brewster and the
client. We concluded that the accumulation of facts triggered a duty of inquiry into whether Judge
Himes could be neutral in this matter. The objection is made in good faith. Neither Dr. Scott nor
his counsel intends any disrespect my making such an inquiry.
I declare under penalty of perjury that the foregoing was true and correct.
Executed on April 3, 2026.
/s/ Joseph C. DeAngelis
Joseph C. DeAngelis
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Joey DeAngelis
From:
Sent:
To:
Cc:
Subject:
Paterno, Lide <lpaterno@akingump.com>
Tuesday, March 17, 2026 11:06 PM
Joey DeAngelis; Pitz, Taylor N. (CIV)
Sara Sanchez
RE: Joint Motion
Hi Joey,
As discussed, the Authority agrees not to oppose Dr. Scott’s request to the ALJ to stay the arbitrator’s
decision pending the ALJ’s review of that decision, in exchange for Dr. Scott’s agreeing to request that the
District Court hold the federal litigation in abeyance pending resolution of the FTC proceedings in his
case. That way we are not litigating the same issues in two places at the same time. As stated in the
Authority’s response to Dr. Scott’s stay application, the Authority does not oppose the requested stay of
the arbitrator’s decision pending either (i) vacatur of the Arbitrator’s decision and remand for new
arbitration proceedings; or (ii) fulsome review by the ALJ that results in a de novo determination by the
ALJ.
The bottom line is that, provided that Dr. Scott upholds his agreement to continue to hold the court
litigation in abeyance while the FTC proceedings take place, the Authority will not oppose a stay of the
arbitrator’s decision by the ALJ until the ALJ issues a final decision—whether that ALJ decision vacates
the arbitrator decision and remands for new arbitration proceedings, or whether the ALJ issues his own
de novo determination on the Rule violations charged.
Hope that helps to clarify things.
Lide
Lide E. Paterno
Akin
Direct: +1 202.887.4078
From: Joey DeAngelis <JCDeAngelis@brewsterlaw.com>
S nt: Tuesday, March 17, 2026 6:00 PM
To: Paterno, Lide <lpaterno@akingump.com>; Pitz, Taylor N. (CIV) <taylor.n.pitz@usdoj.gov>
Cc: Sara Sanchez <ssanchez@peiferlaw.com>
Subj ct: RE: Joint Motion
Lide,
Exhibit
Best,
1
2A
exhibitsticker.com
Just following up on our phone call. After ALJ Himes’s order, I called to clarify the scope of the Authority’s nonopposition to a stay, and you confirmed that the Authority’s non-opposition to a stay is not contingent upon the
immediate vacatur and remand for a new hearing, and that the Authority would not oppose a stay if the FTC continues
forward with review of the arbitrator’s decision. So, if the ALJ denies the request for immediate vacatur and moves
forward with review, the Authority’s position is that a stay should still be entered so that we are not litigating these
issues simultaneously with the FTC and federal court. Let me know if this accurately summarizes our conversation.
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Joseph C. DeAngelis
Brewster & DeAngelis, PLLC
2617 E. 21st Street
Tulsa, Oklahoma 74114
(918) 742-2021 – Telephone
(918) 742-2197 – Facsimile
Website: www.brewsterlaw.com
Email: JCDeAngelis@brewsterlaw.com
Disclaimer: This message and any attachments may contain information that is highly confidential, privileged, and exempt from
disclosure, and recipient other than the intended recipient is advised that any dissemination, distribution, copying, or other use
of this message is strictly prohibited. If you have received this message in error, please notify the sender immediately.
From: Paterno, Lide <lpaterno@akingump.com>
S nt: Tuesday, March 17, 2026 4:47 PM
To: Joey DeAngelis <JCDeAngelis@brewsterlaw.com>; Pitz, Taylor N. (CIV) <taylor.n.pitz@usdoj.gov>
Cc: Sara Sanchez <ssanchez@peiferlaw.com>
Subj ct: Re: Joint Motion
Yes, feel free to call the number below. Thanks.
Lide E. Paterno
Akin
Robert S. Strauss Tower | 2001 K Street N.W. | Washington, DC 20006 |USA | Direct: +1 202.887.4078
Fax: +1 202.887.4288 | lpaterno@akingump.com | akingump.com | Bio
From: Joey DeAngelis <JCDeAngelis@brewsterlaw.com>
S nt: Tuesday, March 17, 2026 5:42:52 PM
To: Paterno, Lide <lpaterno@akingump.com>; Pitz, Taylor N. (CIV) <taylor.n.pitz@usdoj.gov>
Cc: Sara Sanchez <ssanchez@peiferlaw.com>
Subj ct: RE: Joint Motion
I can talk 5:45 ET. Shouldn’t take long. Should I call your direct number in your signature block?
From: Paterno, Lide <lpaterno@akingump.com>
S nt: Tuesday, March 17, 2026 4:41 PM
To: Joey DeAngelis <JCDeAngelis@brewsterlaw.com>; Pitz, Taylor N. (CIV) <taylor.n.pitz@usdoj.gov>
Cc: Sara Sanchez <ssanchez@peiferlaw.com>
Subj ct: RE: Joint Motion
Hi Joey,
I’m surprised by your note. Happy to speak. I could talk this evening from 5:45 to 6:00 ET; tomorrow
between 9:00 and 10:00 am ET; or Friday between 9:30 a.m. and 11:45 a.m. ET. Would any of those times
work on your end?
2
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Lide
Lide E. Paterno
Akin
Direct: +1 202.887.4078
From: Joey DeAngelis <JCDeAngelis@brewsterlaw.com>
S nt: Tuesday, March 17, 2026 4:21 PM
To: Paterno, Lide <lpaterno@akingump.com>; Pitz, Taylor N. (CIV) <taylor.n.pitz@usdoj.gov>
Cc: Sara Sanchez <ssanchez@peiferlaw.com>
Subj ct: RE: Joint Motion
**EXTERNAL Email**
Lide,
Upon reviewing your response to the application and the order just entered, I have concerns that the Authority has
breached our agreement regarding a stay. Let me know a good time to talk.
Best,
Joseph C. DeAngelis
Brewster & DeAngelis, PLLC
2617 E. 21st Street
Tulsa, Oklahoma 74114
(918) 742-2021 – Telephone
(918) 742-2197 – Facsimile
Website: www.brewsterlaw.com
Email: JCDeAngelis@brewsterlaw.com
Disclaimer: This message and any attachments may contain information that is highly confidential, privileged, and exempt from
disclosure, and recipient other than the intended recipient is advised that any dissemination, distribution, copying, or other use
of this message is strictly prohibited. If you have received this message in error, please notify the sender immediately.
From: Paterno, Lide <lpaterno@akingump.com>
S nt: Thursday, March 12, 2026 2:14 PM
To: Joey DeAngelis <JCDeAngelis@brewsterlaw.com>; Pitz, Taylor N. (CIV) <taylor.n.pitz@usdoj.gov>
Cc: Sara Sanchez <ssanchez@peiferlaw.com>
Subj ct: Joint Motion
Hi Joey and Taylor,
My understanding is that the Authority intends to file a response to Dr. Scott’s stay application shortly
after the FTC matter is docketed, which hopefully will occur later today or tomorrow. The response will
confirm that the Authority does not oppose the stay application, even though the parties dispute the
merits. Consistent with the agreement between the Authority and Dr. Scott, I’ve drafted the attached
3
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joint motion to hold the federal court case in abeyance pending resolution of the FTC proceedings. Can
you please let us know if you have any edits?
Thanks,
Lide
Lide E. Paterno
Akin
Robert S. Strauss Tower | 2001 K Street N.W. | Washington, DC 20006 | USA | Direct: +1 202.887.4078
Fax: +1 202.887.4288 | lpaterno@akingump.com | akingump.com | Bio
This email message was sent from Akin Gump Strauss Hauer & Feld LLP. The information contained in
this e-mail message is intended only for the personal and confidential use of the recipient(s) named
above. If you have received this communication in error, please notify us immediately by e-mail, and
delete the original message
-Filtered by A49WUSA using Country blocking & 76 Threat Intelligence Feeds
This email message was sent from Akin Gump Strauss Hauer & Feld LLP. The information contained in
this e-mail message is intended only for the personal and confidential use of the recipient(s) named
above. If you have received this communication in error, please notify us immediately by e-mail, and
delete the original message
This email message was sent from Akin Gump Strauss Hauer & Feld LLP. The information contained in
this e-mail message is intended only for the personal and confidential use of the recipient(s) named
above. If you have received this communication in error, please notify us immediately by e-mail, and
delete the original message
This email message was sent from Akin Gump Strauss Hauer & Feld LLP. The information contained in
this e-mail message is intended only for the personal and confidential use of the recipient(s) named
above. If you have received this communication in error, please notify us immediately by e-mail, and
delete the original message
4
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Request for Clerical Corrections to Final Decision
HIWU vs. Scott, Dr. Jason
REF #1501001099
Participants: Sam Reinhardt, Lisa Lazarus, Ryan Lipes, Paul Greene, Kathryn Crouse, Sandy
Ballott, Monica Pilarski, Allison Farrell, Joseph DeAngelis, Clark Brewster, Diana Tkaczuk,
Hugh Hackney, Jason Scott
Ryan Lipes
02/20/2026 9:48 AM
Good morning:
HIWU is in receipt of the Final Decision in this matter and respectfully requests the following
clerical and typographical corrections under Rule 7380:
1. In the Caption on page 1, please correct the Claimant’s name to “Horseracing Integrity &
Welfare Unit”.
2. In paragraph 1.1 on page 1, please correct “van” to “truck.” Both terms are used in the
decision, but the vehicle was not a van.
3. In paragraph 1.2 on page 1, please correct the Claimant’s name to “Horseracing Integrity &
Welfare Unit”.
4. In paragraph 1.2 on pages 1-2, please correct the name of the statute to the “Horseracing
Integrity and Safety Act of 2020."
5. In sections 4-6, HIWU requests that the numbered paragraphs continue for the sake of
consistency.
6. Under section 5 on page 31 (second paragraph), please correct the spelling of the witness’s
name to “Pickard” (instead of Piccard).
7. Under section 6 on page 31, please correct the spelling of “Bret” (instead of Brett; there is
only one “t”).
8. Under section 6 on page 32 (second full paragraph), please correct van to “truck."
Exhibit
3
exhibitsticker.com
9. Under section 6 on page 33 (fifth full paragraph), please correct van to “truck."
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10. Under section 6 on page 34 (second full paragraph), please correct the misspelling of
veterinarian in the first sentence.
11. Under section 6 on page 34 (third full paragraph), please correct van to “truck."
12. Under section 6 on page 35 (second full paragraph), please correct van to “truck."
This request by HIWU is not a waiver of HIWU’s right to contest the tenure of Arbitrator
Hackney, and it is not an acknowledgment or acceptance that the decision is the operative or
final decision in this matter. To preserve all rights in the event the decision is not vacated,
HIWU requests that any final corrected decision be held in abeyance pending the resolution of
HIWU’s objection to Arbitrator Hackney’s qualification to preside over this Arbitration.
Thank you,
Ryan
Diana Tkaczuk
03/03/2026 2:15 PM
Good afternoon,
Does opposing counsel have an response they would like to provide? Thank you.
Allison Farrell
03/04/2026 7:51 AM
Good Morning,
HIWU hereby withdraws its request for clerical corrections to the Final Decision that was issued
in this case on February 13, 2026.
Thank you,
Allison Farrell
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Table Of Contents
Shell Order Dismissing HIWU Application for Review.....................................................................2
Shell II ALJ Decision.......................................................................................................................7
Serpe ALJ Decision.......................................................................................................................80
Overly HISA OPN Brief...............................................................................................................210
Overly ALJ Decision....................................................................................................................238
Kriple ALJ Decision.....................................................................................................................337
Galvin Order Denying Motion for Disqualification........................................................................365
0001
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UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
OFFICE OF ADMINISTRATIVE LAW JUDGES
__________________________________________
)
In the Matter of
)
)
Dr. Scott Shell, DVM
)
)
Appellant.
)
__________________________________________)
Docket No. 9439
ORDER (1) DISMISSING HIWU’S APPLICATION FOR REVIEW AND
(2) DENYING DR. SHELL’S MOTION TO STRIKE AS MOOT
I.
On October 18, 2024, Dr. Scott Shell and the Horseracing Integrity and Welfare Unit
(“HIWU”) each filed an Application for Review of the civil sanctions imposed against Dr. Shell
(“Application for Review”) by the Horseracing Integrity and Safety Authority (the “Authority”).
The sanctions were imposed by the Authority pursuant to a decision by an arbitrator (“the
Decision”) that found Dr. Shell violated Rule 3214(a) of the Authority’s Anti-Doping and
Medication Control (“ADMC”) Program by possessing a banned substance.
On October 28, 2024, Dr. Shell and HIWU each filed responses to the other’s
Application for Review. Also on October 28, 2024, the Authority filed a response in support of
HIWU’s Application for Review and filed a response to Dr. Shell’s Application for Review. That
same day, Dr. Shell filed a Motion to Strike HIWU’s Application for Review and the Authority’s
response in support, contending that HIWU lacks standing to seek review of the Authority’s
sanctions by an Administrative Law Judge (“ALJ”) of the Federal Trade Commission (“FTC” or
“Commission”).
On October 29, 2024, the presiding ALJ ordered HIWU and the Authority each to file a
response to Dr. Shell’s Motion to Strike, and to affirmatively demonstrate their right to ALJ
review of a civil sanction imposed by the Authority. The October 29 Order also allowed
Dr. Shell to file a reply brief, and stayed proceedings on both Applications for Review, pending
resolution of the jurisdictional question. On November 12, 2024, HIWU and the Authority each
filed a response to Dr. Shell’s Motion to Strike, and Dr. Shell’s reply followed on November 19,
2024.
For the reasons set forth below, HIWU’s Application for Review is DISMISSED.
Accordingly, Dr. Shell’s Motion to Strike is DENIED AS MOOT. The stay of proceedings on
Dr. Shell’s Application for Review is LIFTED.
0002
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II.
By way of background, HIWU is an agency created for the purpose of investigating and
enforcing the ADMC Program on behalf of the Authority, pursuant to the Horseracing Integrity
and Safety Act of 2020 (“HISA”), 15 U.S.C. §§ 3051-3060, and its implementing regulations
(“HISA Rules”). 15 U.S.C. § 3055(c)(4)(B); HISA Rule 3010(e) (stating that the ADMC
Program will be implemented and enforced on behalf of the Authority by an agency known as
HIWU), (f)(5). 1 HIWU is responsible for charging violations of the ADMC Program, which are
then adjudicated on behalf of the Authority pursuant to arbitration procedures. 15 U.S.C.
§ 3055(c)(4)(B); HISA Rule 7000, et seq. The adjudication determines whether the charged
violation occurred and, if so, determines an appropriate sanction pursuant to the HISA Rules.
HISA Rules 7340, 7350. Once a decision is issued pursuant to these procedures, the Authority is
legally bound to impose the civil sanctions determined. HISA Rules 3010(f)(8), 3710(a). The
sanctions are subject to ALJ review upon application by the Commission or a “person aggrieved”
by the sanctions, pursuant to 16 C.F.R. § 1.146.
In his Motion to Strike, Dr. Shell argues that neither HISA nor the rules promulgated by
the FTC for its oversight of the Authority (“FTC Rules”) permit either HIWU or the Authority to
seek ALJ review of sanctions imposed by the Authority. Dr. Shell argues that HISA and the FTC
Rules only allow for ALJ review upon application by the Commission or a “person aggrieved”
by the sanctions, and that a proper reading of the statute and rules demonstrates that only the
person subject to the sanctions, and not HIWU or the Authority, can be considered a “person
aggrieved” by the sanctions. Dr. Shell argues that to read the statute and FTC Rules to permit
HIWU or the Authority to qualify as a “person aggrieved” would be illogical, based on the plain
language and context of HISA and the FTC Rules and would lead to absurd outcomes, including
due process violations.
HIWU argues that the arbitrator erred in the Decision by: (1) determining that the period
of ineligibility imposed on Dr. Shell should run concurrently with a sanction that he is serving
for a separate violation regarding the administration of a banned substance, in contravention of
the HISA Rules; and (2) treating the possession of four banned substances as a single antidoping
rule violation, in contravention of the HISA Rules. HIWU contends that it has standing as a
“person aggrieved” within the meaning of HISA and the FTC Rules based on its interest in the
correct application of the HISA Rules, arising out of its HISA mandate.
In its response in support of HIWU’s Application for Review, the Authority argues that
the Decision is erroneous and that it undermines the predictability and reliability of future
outcomes under the ADMC Program. In its response to Dr. Shell’s Motion to Strike, the
Authority states that although HIWU enforces the ADMC Program on behalf of the Authority,
during the arbitration the Authority is considered only an “interested party” and it is legally
bound to impose the civil sanctions that are determined by the arbitrator, with no discretion to
modify the arbitrator’s decision. Therefore, the Authority requests that HIWU’s Application for
Review be heard in order to correct an improper decision that would otherwise stand.
See 88 Fed. Reg. 5070, 5073 (Jan. 26, 2023) (FTC Notice of HISA Proposed Rule and Request for Comment)
(explaining that the ADMC “Protocol will be implemented and enforced on behalf of the Authority by . . . the
Horseracing Integrity and Welfare Unit” which was created for this purpose).
1
2
0003
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III.
A.
HISA Language
The starting point in construing a statute is to examine the language of the statute itself.
Bartenwerfer v. Buckley, 598 U.S. 69, 74 (2023). Section 3058(b)(1) of HISA provides that a
civil sanction imposed by the Authority is subject to de novo review by an FTC ALJ “on
application by the [Federal Trade] Commission or a person aggrieved by the civil sanction . . . .”
15 U.S.C. § 3058(b)(1). Nowhere in the statute is HIWU (or the Authority) given the right to
obtain ALJ review of an arbitrator’s Decision or imposed sanctions. In contrast, the World AntiDoping Agency (“WADA”) Code, upon which the ADMC Program is in part modeled, 2
expressly grants WADA the “right to appeal” adjudicative decisions “to the [Court of Arbitration
for Sport].” WADA Code 13.2.3. When a statute does not include agencies within the category of
“person adversely affected or aggrieved,” the conclusion “[t]hat an agency in its governmental
capacity is not ‘adversely affected or aggrieved’ is strongly suggested . . . .” Director, Office of
Worker’s Comp. Programs v. Newport News Shipbuilding & Dry Dock Co., 514 U.S. 122, 129
(1995). In that same vein, there is a presumption that “when an agency in its governmental
capacity is meant to have standing, Congress says so.” Id. (emphasis in original).
B.
Language in the HISA Rules
“[I]t is a common tool of statutory construction to consider what words or phrases mean
in nearby statute sections or related regulations.” Barry v. McDonough, 101 F.4th 1348, 1355
(Fed. Cir. 2024) (internal quotations omitted). In that regard, the FTC Rules regarding the review
of sanctions imposed under HISA are relevant in determining the meaning of a “person
aggrieved by the civil sanction.” FTC Rule 1.146(a), Review of Civil Sanction by an ALJ,
requires that an application for ALJ review always “be served on the Authority.” 16 C.F.R.
§ 1.146(a). This language strongly suggests that the phrase “person aggrieved” refers to the
person subject to the sanction, not HIWU or the Authority; otherwise, the rule would permit
HIWU to file an appeal without providing any notice to the person subject to the sanction, which
would amount to a violation of procedural due process. See Dusenbery v. United States, 534 U.S.
161, 167 (2002) (explaining that procedural due process requires notice and an opportunity to be
heard). In addition, the requirement of service on the Authority of its own application for review
nonsensically results in the Authority or HIWU serving its own agency or itself, respectively.
“[T]o construe statutes so as to avoid results glaringly absurd, has long been a judicial function.”
Armstrong Paint & Varnish Works v. Nu-Enamel Corp., 305 U.S. 315, 333 (1938); see United
States v. Turkette, 452 U.S. 576, 580 (1981).
FTC Rule 1.146(a)(1) further provides: “Within 10 days of being served with the
application, the Authority may file a response limited to no more than 1,000 words stating the
reasons the sanction should be upheld and whether an evidentiary hearing conducted by the
Administrative Law Judge is either unnecessary, or necessary to supplement or to contest facts in
the record found by the Authority.” (emphasis added). The Rule thus contemplates the
Authority’s role only as the one defending and seeking to uphold the sanctions imposed, not
contesting the sanctions as a “person aggrieved.” Additionally, if HIWU or the Authority were
2
See 88 Fed. Reg. 5070 (Jan. 26, 2023).
3
0004
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deemed to be a “person aggrieved” by sanctions, then the person actually subject to the sanctions
would not be permitted to file a response, because the Rule allows only the Authority to do so.
Interpreting FTC Rule 1.146(a) to include HIWU or the Authority as a “person aggrieved” by the
sanction would therefore lead to an absurd result, which should be avoided. Armstrong Paint &
Varnish Works, 305 U.S. at 333.
Furthermore, the regulatory history of the HISA Rules also supports the conclusion that
the phrase “person aggrieved” refers to the person subject to the sanction, rather than to HIWU
or the Authority. In the October 4, 2022 publication on Procedures for Review of Final Civil
Sanctions Imposed under HISA, the FTC explained that an ALJ conducts de novo review of a
final civil sanction imposed by the Authority “when an application for review [is] filed either by
the Commission or by the person subject to the sanction. . . .” 87 Fed. Reg. 60077 (Oct. 4, 2022)
(emphasis added). Moreover, in contrast to the FTC Rules regarding an application for review
before an ALJ, the FTC Rules regarding an application for review of an ALJ decision explicitly
provide that “[t]he Authority or a person aggrieved by the decision of the Administrative Law
Judge under § 1.146 may petition the Commission for review of such decision.” 16 C.F.R.
§ 1.147(b)(1) (emphasis added). This provision, explicitly allowing the Authority to seek review
of an ALJ decision, further supports the conclusion that, had it been intended for the Authority or
HIWU to be able to file an application for review before the ALJ, the FTC Rules would have
expressly provided for it, and that the failure to do so was purposeful.
C.
Legal Standing
“The phrase ‘person adversely affected or aggrieved’ is a term of art used in many
statutes to designate those who have standing to challenge or appeal an agency decision, within
the agency or before the courts.” Newport News, 514 U.S. at 126. To establish legal standing: (1)
“[t]he plaintiff must have suffered or be imminently threatened with a concrete and particularized
‘injury in fact’ that is fairly traceable to the challenged action of the defendant and likely to be
redressed by a favorable judicial decision,” Lexmark Int’l, Inc. v. Static Control Components,
Inc., 572 U.S. 118, 125 (2014); and (2) the plaintiff’s asserted interest must fall within the “zone
of interests” protected by the statute. Newport News, 514 U.S. at 127; Association of Data
Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153 (1970).
“Injury in fact [means] an invasion of a legally protected interest which is (a) concrete
and particularized, . . . and (b) actual or imminent, not conjectural or hypothetical[.]” Lujan v.
Defs. of Wildlife, 504 U.S. 555, 560 (1992) (internal quotations omitted). The “mere existence
and impairment of . . . governmental interest” does not meet the “person adversely affected or
aggrieved” requirement. Newport News, 514 U.S. at 130. “Agencies do not automatically have
standing to sue for actions that frustrate the purposes of their statutes.” Id. at 132.
HIWU has not specified a concrete, imminent injury based on the sanctions imposed on
Dr. Shell. The only injury HIWU claims is based on the nature of the arbitrator’s decision and
interpretation of the HISA rules, not the sanctions themselves. Therefore, HIWU has failed to
establish an injury-in-fact.
4
0005
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Even if HIWU had shown an injury-in-fact, however, HIWU has not established that its
interest falls within the “zone of interests” protected by HISA. HIWU and the Authority rely on
their roles as enforcers of HISA and their interests in ensuring that the regulations are properly
interpreted and applied. However, as the Supreme Court held in Newport News, the
government’s vindication of a general policy interest alone does not fall within the “zone of
interests” required to confer standing under a statute. 514 U.S. at 127-29.
IV.
As set for above, neither HIWU nor the Authority may seek ALJ review pursuant to 15
U.S.C. § 3058(b)(1) or FTC Rule 1.146(a) as a “person aggrieved” by civil sanctions imposed by
the Authority. Accordingly, it is hereby ORDERED: (1) HIWU’s Application for Review is
DISMISSED; (2) Dr. Shell’s Motion to Strike is DENIED AS MOOT; and (3) the stay of
proceedings on Dr. Shell’s Application for Review is LIFTED. An order for further proceedings
on Dr. Shell’s Application for Review pursuant to FTC Rule 1.146(c)(2) will issue separately.
ORDERED:
D. Michael Chappell
Chief Administrative Law Judge
Date: December 6, 2024
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UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
OFFICE OF ADMINISTRATIVE LAW JUDGES
__________________________________________
)
)
)
Dr. Scott Shell, DVM
)
)
Appellant.
)
__________________________________________)
In the Matter of
Docket No. 9439
ADMINISTRATIVE LAW JUDGE DECISION
ON APPLICATION FOR REVIEW
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TABLE OF CONTENTS
TABLE OF CONTENTS ............................................................................................................................i
TABLE OF ABBREVIATIONS................................................................................................................ii
I.
INTRODUCTION.......................................................................................................................... 1
II.
THE UNDERLYING FACTS....................................................................................................... 2
A. Summary of the Case............................................................................................................... 2
B. Dr. Shell’s Practice and HIWU’s Search................................................................................. 3
C. The Four Banned Substances Charged As Possession Violations........................................... 4
D. The Federal Injunction Covering West Virginia ..................................................................... 7
E. HIWU’s Other “Administration” Case .................................................................................... 8
F. The Arbitration Subject to this Review ................................................................................... 8
1. Compelling Justification.................................................................................................. 9
2. Sanctions........................................................................................................................ 11
III.
ISSUES ON REVIEW ................................................................................................................. 12
IV.
SCOPE OF REVIEW.................................................................................................................. 12
V.
ANALYSIS OF THE ISSUES..................................................................................................... 14
A. The Possession Violation and Compelling Justification Defense.......................................... 14
1. “Compelling Justification” ............................................................................................ 15
2. Dr. Shell’s “Non-Covered Horses” Practice as a Compelling Justification .................. 16
a. Otherwise Covered Horses Physically in West Virginia ........................................ 17
b. Dr. Shell’s Farm Practice Proof .............................................................................. 20
i. Dr. Scollay’s Mahoning Presentation............................................................... 20
ii. Dr. Shell’s Follow-up Conversation................................................................. 22
iii. The Randall Equine Email Exchange............................................................... 23
c. Inadequacy of Dr. Shell’s Proof.............................................................................. 24
i. Dr. Shell’s Records Overall.............................................................................. 24
ii. The Four Banned Substances ........................................................................... 26
d. Overall Assessment of Dr. Shell’s Compelling Justification Proof ........................ 33
B. Dr. Shell’s Estoppel Argument.............................................................................................. 35
C. Dr. Shell’s Constitutional Arguments.................................................................................... 40
1. Rule 3214 Is Not Unconstitutionally Vague..................................................................... 40
2. Prosecution of this Case by the Authority and HIWU is Not Unconstitutional................ 42
VI.
SANCTIONS ................................................................................................................................ 44
A. Single or Separate Violations Under Rule 3228(d) ............................................................... 44
B. Consecutive Ineligibility Based on the Administration Case Sanction ................................. 51
C. Applying the No Fault or Negligence (NF) and No Significant Fault or
Negligence (NSF) Analyses to the Sanctions ........................................................................ 58
1. Overview ....................................................................................................................... 58
2. NF: Applying Rule 3324................................................................................................ 58
3. NSF: Applying Rule 3225 ............................................................................................. 60
a. Objective Considerations ........................................................................................ 62
b. Subjective Considerations....................................................................................... 64
4. Sanctions Summary .......................................................................................................... 69
VII.
CONCLUSION ............................................................................................................................ 70
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TABLE OF ABBREVIATIONS
AB1 – Appeal Book Part 1
AB2 – Appeal Book Part 2
ADMC – Anti-Doping and Medication Control
ADRV – Anti-Doping Rule Violation
AOBr. – Appellant’s Opening Brief
ARBr. – Appellant’s Reply Brief
ARPFOF – Appellant’s Reply to Authority’s Proposed Findings of Fact
AuOBr. – Authority’s Opening Brief
AuRPCOL – Authority’s Reply to Appellant’s Proposed Conclusions of Law
AuRPFOF – Authority’s Reply to Appellant’s Proposed Findings of Fact
HISA – Horseracing Integrity and Safety Act, 15 U.S.C. §§ 3051-60
HIWU – Horseracing Integrity & Welfare Unit
The Authority – Horseracing Integrity and Safety Authority
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I.
INTRODUCTION
This decision arises under the Horseracing Integrity and Safety Act (“HISA”), 15 U.S.C.
§§ 3051 et seq., and the Rules implementing the Act. Among other things, HISA created the
Horseracing Integrity and Safety Authority (the “Authority”), a private, independent, selfregulatory, nonprofit corporation, to “develop[] and implement[] a horseracing anti-doping and
medication control program and a racetrack safety program” throughout the United States. 1
The Authority promulgated, and the Federal Trade Commission approved, rules that
include the statutorily-required Anti-Doping and Medication Control (“ADMC”) Program. 2 The
HISA and ADMC Program rules address, in summary: (1) the persons and thoroughbred
racehorses the Program covers; (2) the substances that are banned outright or subject to threshold
presence requirements, or are regulated as controlled medications; (3) the conduct constituting
violations and corresponding sanctions; and (4) investigation and enforcement in furtherance of
the statute. 3 The Authority has contracted with the Horseracing Integrity & Welfare Unit
(“HIWU”) to implement and enforce the ADMC Program on behalf of the Authority. 4 HIWU
charges of ADMC Program violations are heard by an Internal Adjudication Panel, which, as
1
15 U.S.C. § 3052(a).
2
15 U.S.C. §§ 3053, 3055, 3057.
See generally ADMC Rule 3000 series; 88 Fed. Reg. 5070-5201 (Jan. 26, 2023) (FTC Notice of HISA Proposed
Rule and Request for Comment); Order Approving the ADMC Rule Proposed by HISA (Mar. 27, 2023)
(https://www.ftc.gov/system/files/ftc_gov/pdf/P222100CommissionOrderAntiDopingMedication.pdf); 88 Fed. Reg.
27894 (May 3, 2023) (FTC Notice of Final Rule, effective May 22, 2023) (available at https://hisaus.org/
regulations?modal-shown=true#equine-anti-doping-and-controlled-medication-protocol-rules).
3
15 U.S.C. §§ 3054(e)(1)(B) & (E), 3055; Rules 3010(e)(1), 5720(a); HISA Announces Selection of Drug Free
Sport International as Partner to Build Independent Anti-Doping and Medication Control Enforcement Agency (May
3, 2022), https://www.hiwu.org/news/hisa-announces-selection-of-drug-free-sport-international-as-partner-to-buildindependent-anti-doping-and-medication-control-enforcement-agency.
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here, may consist of a single arbitrator. 5 The FTC has authority to review civil sanctions imposed
for ADMC Program Rule violations in HIWU-initiated enforcement proceedings. 6
Under the ADMC Program, the more serious violations are Anti-Doping Rule Violations
(“ADRVs”), which include Banned Substances that “should never be in a horse’s system.” 7 To
implement the Program, the Authority issued a Prohibited List of Banned Substances. 8 Rule
3214(a), applicable to Covered Persons, prohibits “Possession of a Banned Substance . . . unless
there is a compelling justification for such Possession.”
II.
THE UNDERLYING FACTS
A.
Summary of the Case
As a veterinarian who provides services to Covered Horses, Appellant Dr. Scott Shell is a
Covered Person subject to HISA, to the ADMC Program Rules, and to the enforcement system
created. 9 HIWU has charged Dr. Shell with Possession of four Banned Substances, discussed
more fully below. Possession is undisputed. Therefore, the case turns on whether Dr. Shell had “a
compelling justification for such Possession,” as well as on other defenses asserted. Rule
3214(a). One additional wrinkle is worthy of mention at this point.
Dr. Shell practices in both Ohio and West Virginia, and services both Covered Horses,
subject to HISA, and non-Covered Horses, commonly found on farms. Also, while HISA and the
5
Rules 3360, 7020.
6
15 U.S.C. § 3058; 16 C.F.R. § 1.145 et seq.; see 87 Fed. Reg. 60077 (Oct. 4, 2022) (Final Rule).
Rule 3010(c). See also Rules 1020 (definition of ADRV), 3111(a) (Prohibited Substances). Capitalized terms used,
but not defined in this decision, are those defined in HISA Rule 1020 of the General Provisions. Other abbreviations
are set forth in the Table of Abbreviations.
7
8
Rules 1020 (definition of Prohibited List), 3111(a).
9
15 U.S.C. §§ 3051(6), (21); Rule 1020 (definitions of “Attending Veterinarian” and “Covered Person”).
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Rules apply in Ohio, in 2022 a United States district court issued an order that, in effect,
prohibits enforcement by the Authority and HIWU in West Virginia. Although HIWU’s charges
against Dr. Shell arise from his Possession of four Banned Substances at an Ohio racetrack, he
contends that Possession was permitted as part of his providing services to horses on farms and
in West Virginia where enforcement is prohibited.
In this review decision, I first set forth the facts forming the basis for HIWU’s charges
against Dr. Shell and then summarize the Arbitrator’s ruling, which found HIWU’s charges
proven and determined the sanctions to be imposed. After that, I address the issues presented, the
scope of the review under HISA, and my analysis of the issues raised and the sanctions ordered.
B.
Dr. Shell’s Practice and HIWU’s Search
Dr. Scott Shell, a licensed Veterinarian in both Ohio and West Virginia, practices in both
States under the corporate name, Scott Shell DVM Inc. AB1 at 2012 (¶¶ 1, 3); AB2 at 6672-75,
6680 (Shell). His practice includes two other veterinarians, Dr. Barbara Hippie and Dr. Maggie
Smyth, and a head veterinary assistant, Janet Duhon. AB1 at 2012 (¶ 3); AB2 at 6756-57 (Shell).
Dr. Shell is a Covered Person under the ADMC Program, administered by the Authority. AB1 at
1784 (¶ 13); ARPFOF at 1 (¶ 2). Besides servicing Covered Horses, Dr. Shell has a farm practice
where he provides veterinary services to non-Covered Horses. AB2 at 6675, 6682-83 (Shell).
On September 28, 2023, HIWU investigators conducted searches of: (1) Dr. Shell’s
office at the JACK Thistledown Racino racetrack in Ohio (“Thistledown”); (2) Dr. Shell’s
veterinary truck; and (3) a veterinary truck registered to Dr. Shell’s practice, operated by Dr.
Hippie. AB1 at 622-37. The search uncovered four substances that the ADMC Program prohibits
as Banned Substances:
Carolina Gold (sometimes referred to as “GABA”)
Sarapin (“Pitcher Plant”)
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Isoxsuprine, and
Osphos.
AB1 at 507-08, 607-609, 642; AB2 at 6834-35. HIWU charged Dr. Shell with—and he admits—
Possession of the four Banned Substances. See HISA Rule 3214(a); AB1 at 507, 607 (EAD
Charge Letters), 1784-85. 10
C.
The Four Banned Substances Charged As Possession Violations
The four Banned Substances may be summarized as follows:
Carolina Gold (GABA): HIWU’s search found two bottles of Carolina Gold, a Category
S0 Banned Substance on the ADMC Program’s Prohibited List. Carolina Gold is also prohibited
at West Virginia racetracks under West Virginia Racing Commission Rules. AB1 at 642 (¶ 6),
1174; AB2 at 6836-37 (Shell), 7209 (Benson).
Carolina Gold contains Gamma Aminobutyric Acid (“GABA”), an endogenous
neurotransmitter, which exerts an inhibitory effect on the central nervous system and thus has a
calming effect on a horse. AB2 at 6710-11, 6837 (Shell), 7087 (Scollay). If Carolina Gold is
given to a racehorse, “it can be performance limiting, if not, potentially fatal, depending on the
severity of its effect [‘in preventing exercise induced pulmonary hemorrhage’].” AB2 at 7090
(Scollay). GABA has a half-life of approximately 22 minutes when given intravenously and
ceases to be detected between six and eight hours later. AB2 at 7524 (Benson).
Carolina Gold is not FDA-approved, which means that “[i]t is an illicitly manufactured,
illegal, unapproved new animal product.” AB2 at 7088 (Scollay), 7209 (Benson). A compounded
substance, Carolina Gold does not comply with FDA guidance for compounding. AB2 at 7091
HIWU originally charged Dr. Shell with Possession of three Banned Substances and Dr. Hippie with one, for
Possession of Pitcher Plant. After the Provisional Suspension of Dr. Hippie was lifted, HIWU added Possession of Pitcher
Plant to the charges against Dr. Shell.
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(Scollay), 7491, 7494 (Roberts). As Dr. Scollay explained:
It has not been examined by the FDA for safety, efficacy, purity, stability, any of that
stuff, and so it qualifies essentially as administering an unknown.
....
Has it been contaminated with bacteria, with fungus, with other substances? I mean,
you’d have to do a pretty serious risk benefit analysis to put that into a horse when, if
you’re trying to calm it down . . .
AB2 at 7088, 7089.
Dr. Shell’s expert veterinarian witness, Dr. Andrew Roberts, testified similarly: “what is
actually in the bottle, it would be of interest to know.” AB2 at 7492 (Roberts). Dr. Roberts has
never used Carolina Gold in his practice and has never kept it on his truck. AB2 at 7492, 7501
(Roberts).
There is no significant, legitimate use for Carolina Gold on non-Covered Horses. AB2 at
7088-90, 7112 (Scollay). Nor is it life-saving or needed for emergency use. AB2 at 6891 (Shell),
7088-89 (Scollay). FDA-approved substances having a similar calming effect are available. AB2
at 7087, 7089 (Scollay). Indeed, Dr. Roberts “agreed” that there are “no recognized medical
uses” for a product, such as Carolina Gold, that contains GABA. AB2 at 7489 (Roberts).
Pitcher Plant: HIWU investigators found a bottle of Sarapin, also known as “Pitcher
Plant,” during their search of a truck operated by Dr. Hippie, which Dr. Shell owned. AB1 at
643; AB2 at 6704 (Shell). Pitcher Plant is a Category S6 Banned Substance on the Prohibited
List and is also prohibited at West Virginia racetracks under the West Virginia Racing
Commission Rules. AB1 at 1202, 3396; AB2 7224-25 (Benson), 7505 (Roberts). Pitcher Plant is
an herbal analgesic that reduces inflammation and relieves pain. AB1 at 1202; AB2 at 6713
(Shell), 7091-92 (Scollay). Its use is not limited to emergencies. AB2 at 7092-93 (Scollay).
Pitcher Plant was, but no longer is, FDA-approved. AB2 at 7225 (Benson). There are
multiple FDA-approved analgesics that can be used instead. AB2 at 7093 (Scollay). There is no
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approved analytical method to detect administration of the substance in a horse. AB2 at 7225
(Benson), 7504-05 (Roberts).
Isoxsuprine: During their search of Dr. Shell’s truck, HIWU investigators also found a
tub of Isoxsuprine powder. AB1 at 642, 654; AB2 at 6703-04 (Shell). Isoxsuprine also is a
Category S0 Banned Substance on the Prohibited List, as well as prohibited under the West
Virginia Racing Commission Rules. AB1 at 1178; AB2 at 7231 (Benson). Dr. Shell testified he
uses Isoxsuprine to vasodilate the feet of older horses and horses that have navicular disease or
founder (lameness). AB2 at 6707 (Shell). A chronic condition, navicular disease is “a
degenerative disorder of a small bone in the horse’s foot and results in foot pain, lameness . . . .”
AB2 at 7094 (Scollay), 7223 (Benson). Isoxsuprine’s use is not limited to emergencies. AB2 at
7100 (Scollay), 7224 (Benson).
The FDA’s previous approval of Isoxsuprine for use in humans has since been withdrawn
as lacking a pain-relieving effect. AB2 at 6990 (Shell); 7094 (Scollay). To treat these conditions
in horses, there are FDA-approved, HISA-permitted Controlled Medication Substances. AB2 at
7096-97 (Scollay).
Osphos: During their search, HIWU investigators also recovered two boxes of Osphos, a
bisphosphonate, from Dr. Shell’s office located on the backside of Thistledown. AB1 at 643
(¶ 11); AB2 at 6996 (Shell). Bisphosphonates are a Category S6 Banned Substance on the
Prohibited List. AB1 at 1159. Osphos is used to strengthen bones and to treat navicular disease,
repairing bone erosion. AB2 at 6709-10 (Shell), 7223 (Benson); see also AB2 at 7098-99
(Scollay) (describing the effect of bisphosphonates to clean and rebuild bone). Since the
underlying condition is chronic, Osphos has uses in circumstances that are non-urgent and nonemergency. AB2 at 6997 (Shell), 7223-24 (Benson).
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Unlike the other three Banned Substances found, Osphos is FDA-approved for treatment
of horses that are more than four years old. AB2 at 7099 (Scollay), 7363 (Roberts). However, it
should not be administered to young, growing horses or to racehorses because it “makes the bone
too brittle” and risks fracture. AB2 at 6710 (Shell), 7099-100 (Scollay). If administered to young
horses, Osphos will remain in the body, able to act, for years. AB2 at 7100 (Scollay).
D.
The Federal Injunction Covering West Virginia
A specific issue in this case arises from Dr. Shell’s practice in West Virginia. In 2022, the
United States District Court for the Western District of Louisiana held that the Authority violated
the Administrative Procedure Act in the process of promulgating the HISA Rules. The Court
thus issued a preliminary injunction against enforcement of the Rules against the plaintiffs, one
of whom was the State of West Virginia. Louisiana v. Horseracing Integrity & Safety Auth. Inc.,
617 F.Supp.3d 478 (W.D. La. 2022), remanded, No. 22-30458, 2022 WL 17074823 (5th Cir.
2022). As a result of the district court’s injunction, the Authority and HIWU do not enforce
HISA in West Virginia. AuRPCOL ¶ 10; AB2 at 7125-26 (Scollay).
Dr. Shell thus argues that Covered Horses under HISA—those that are authorized to run
in races subject to HISA—become “non-Covered Horses” while in West Virginia. Even though
three of the four Banned Substances found in Dr. Shell’s Possession in Ohio are also prohibited
in horseracing in West Virginia (Osphos is the exception), Dr. Shell contends that he may
dispense or administer them to otherwise Covered Horses while they are in West Virginia. This
outlier circumstance, he further maintains, provides a compelling justification for his Possession
of these substances in Ohio.
The Arbitrator rejected this argument, as do I in the analysis that follows.
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E.
HIWU’s Other “Administration” Case
Another matter also gives rise to an issue I must decide. Besides this Possession case,
HIWU charged Dr. Shell with administering, by injecting into many racehorses, a Banned
Substance that Dr. Shell believed was an unregulated vitamin and thus permissible to use. The
arbitrator in that case—referred to as the “Administration Case”—upheld HIWU’s charges, and,
among other things, determined that Dr. Shell should be subject to a two-year period of
Ineligibility, during which he may not offer services to Covered Horses or Covered Persons. On
review, I upheld the sanctions imposed. 11 The possible effect of the Ineligibility arising from the
Administration Case is an issue in this proceeding.
F.
The Arbitration Subject to this Review
Upon service of HIWU’s EAD Charge Letter in October 2023, a Provisional Suspension
was imposed on Dr. Shell. See Rule 3247(a)(3); AB2 at 6593. He sought to lift the Suspension
pending the arbitration hearing to resolve the merits of HIWU’s charges, but the hearing officer
denied his request. AB1 at 1136, 1138-39; AB2 at 6593-94. During the pre-hearing phase of the
arbitration, HIWU moved for an order directing Dr. Shell to produce documents relating to his
compelling justification defense. See AB1 at 2046-59, 2090-107. While the Arbitrator directed
limited production, she also wrote:
Dr. Shell has made the nature of his practice relevant, and has placed at issue
whether he had a noncovered horse practice that required the carrying of the
Targeted Banned Substances. . . . Dr. Shell opened the door to this line of inquiry
by raising the defense that the Targeted Banned Substances were only used in
non-covered horses. Accordingly, Dr. Shell has the burden of supporting that
defense with his veterinary records for covered and non-covered horses. As such,
the complete veterinary medical records for all horses in his practice from the
implementation of HIWU’s regulations until he was charged are relevant and
material to the defense.
AB1 at 99-136 (HIWU v. Shell, JAMS Case No. 1501000708 (June 11, 2024)), aff’d, FTC No. 9435 (ALJ Oct. 31,
2024).
11
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AB1 at 2278 (emphasis added); see also AB1 at 2044-128. In response, Dr. Shell produced
additional—albeit, still limited—documents. See AB1 at 2297.
In April 2024, a multi-day arbitration hearing was held, during which Dr. Shell and other
fact and expert witnesses testified, and numerous exhibits were received in evidence. The parties
made voluminous post-hearing submissions, and the Arbitrator heard closing arguments in
August 2024. AB2 at 3892-6567, 7528-613. After requesting additional papers on an issue
regarding sanctions, discussed further below, the Arbitrator issued her decision. See AB2 at
6571-82, 6588-622.
1.
Compelling Justification
The Arbitrator concluded that Dr. Shell failed to prove a compelling justification to
possess any of the Banned Substances, holding that Dr. Shell’s records and other evidence were
inadequate to justify Possession under Rule 3214(a). Despite the admonition from her discovery
order, the Arbitrator noted that Dr. Shell produced only “limited” records, which “showed some
dispensation of the Banned Substances to farm horses and Thoroughbreds in West Virginia, but
[these were] not complete records sufficient to justify the possession of the Banned Substances at
the Ohio racetrack.” AB2 at 6613 (¶ 7.18).
The Arbitrator rejected Dr. Shell’s “convenience” argument for Possession of Banned
Substances. Additional travel time, needed to avoid Banned Substances at an Ohio racetrack, was
unpersuasive unless the “medications [were] needed on a regular basis for time-sensitive
emergency treatment.” AB2 at 6614 (¶ 7.21). The Banned Substances found in Dr. Shell’s truck
and office at Thistledown, however, “were not emergency medications required for lifethreatening injuries . . . .” AB2 at 6614 (¶ 7.22). Analyzing each individual substance, the
9
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Arbitrator held that Dr. Shell failed to show compelling justification. AB2 at 6615-16 (¶¶ 7.2833).
The Arbitrator recognized that a federal court injunction “suspended HIWU’s operations”
in West Virginia. AB2 at 6591 (¶ 2.14); see also AB2 at 6601, 6603 (¶¶ 6.7, 6.24). Accordingly,
she agreed with Dr. Shell that the Authority and HIWU could not legally regulate the
dispensation of Banned Substances in West Virginia, or charge a Veterinarian with a HISA Rule
violation for treating a Covered Horse in West Virginia. AB2 at 6614 (¶ 7.25). However, that
“does not mean that having a clientele of Thoroughbred horse trainers in West Virginia is a
compelling justification for possessing Banned Substances at Ohio racetracks.” AB2 at 6614
(¶7.25). The Banned Substances in Dr. Shell’s Possession were not “emergency medications that
Dr. Shell needed to have at the ready to dash to West Virginia.” AB2 at 6614 (¶ 7.25). The
Arbitrator further found it significant that Dr. Shell testified that he no longer carries the four
Banned Substances on his truck and, despite this changed practice, he is able to meet his ethical
obligations as a veterinarian. AB2 at 6616 (¶ 7.34).
The Arbitrator also rejected Dr. Shell’s argument that, as a result of HISA’s nonenforcement in West Virginia, otherwise Covered Horses automatically became non-Covered
Horses while in West Virginia. The Arbitrator held that allowing Dr. Shell to possess Banned
Substances in Ohio in order to treat Covered Horses located in West Virginia would create a
“loophole” that would “undermine[] the integrity of the ADMC Program and is not justified,
much less compelling.” AB2 at 6614-15 (¶ 7.25).
Finally, Dr. Shell argued that HIWU made various statements regarding compelling
justification, as applied to Veterinarians with farm practices, such as Dr. Shell. He argued that he
relied on these statements and thus kept the substances on his trucks and at his Thistledown
10
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facility as a result. Therefore, he maintained, HIWU should be precluded (“estopped”) from
prosecuting him for Possession. Analyzing the facts, the Arbitrator rejected Dr. Shell’s argument.
AB2 at 6616-17 (¶¶ 7.37-41).
2.
Sanctions
Having concluded that Dr. Shell was liable for Possession, the Arbitrator considered the
sanctions to be imposed. The HISA Rules set forth detailed, often intricate, provisions regarding
sanctions, which include a two-year period of Ineligibility, during which a Covered Person may
not participate in HISA-covered activity, as well as fines and costs. Sanctions can, however, be
eliminated or reduced if the Covered Person establishes either No Fault or Negligence (“NF”) or
No Significant Fault or Negligence (“NSF”). Rules 3224 & 3225.
The Arbitrator held that Dr. Shell failed to establish NF. Dr. Shell admitted Possession of
the four Banned Substances and displayed a sufficient lack of appropriate care as to preclude an
NF finding. AB2 at 6617 (¶¶ 7.44-48). For NSF, the Arbitrator concluded that Dr. Shell should
receive a three-month reduction of the maximum two-year Ineligibility period, resulting in one
21-month period of Ineligibility for all four Possession violations, beginning as of the date of his
Provisional Suspension in October 2023. AB2 at 6618-20, 6622 (¶¶ 7.49-60, 8.1). The Arbitrator
further imposed a total fine of $20,000, less than $25,000 per violation permitted under the
Rules, while declining to direct Dr. Shell to bear any costs of the arbitration. AB2 at 6620-21,
6622 (¶¶ 7.65-66, 8.1).
In ruling on sanctions, the Arbitrator rejected two HIWU arguments: (1) that sanctions
should be imposed for each of the four Possession charges; and (2) that Dr. Shell’s Ineligibility
period should run consecutively after the two-year Ineligibility period arising from the
11
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Administration Case ended, and not concurrent with that other sanction. AB2 at 6621-22
(¶¶ 7.67-7.74).
III.
ISSUES ON REVIEW
The following issues are presented for review:
(1) Did Dr. Shell show compelling justification for Possession of any of the four Banned
Substances?
(2) Is HIWU, and therefore the Authority, estopped from prosecuting the Possession
charges against Dr. Shell?
(3) Does the “compelling justification” defense, recognized in Rule 3214(a), violate the
Due Process provision of the Fifth Amendment as unconstitutionally vague?
(4) Is HISA unconstitutional under the private non-delegation doctrine?
(5) Is Dr. Shell subject to either (a) individual sanctions for each of the four Possession
violations, or (b) consecutive periods of Ineligibility arising from the Administration Case?
(6) Is Dr. Shell entitled, under the No Fault or Negligence or No Significant Fault or
Negligence provisions in Rules 3224 or 3225, to elimination or reduction of the two-year
Ineligibility period applicable to Possession violations or to any other part of the sanctions?
IV.
SCOPE OF REVIEW
HISA civil sanctions, imposed for rule violations, are reviewable by an FTC
Administrative Law Judge (ALJ) upon application of the person aggrieved and thereafter by the
Commission itself on a discretionary basis. 12 The ALJ reviews:
“whether—
(i) a person has engaged in such acts or practices, or has omitted such acts or practices, as
the Authority has found the person to have engaged in or omitted;
12
15 U.S.C. §§ 3058(b) & (c); FTC Rules 1.146 & 1.147.
12
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(ii) such acts, practices, or omissions are in violation of this chapter or the anti-doping
and medication control or racetrack safety rules approved by the Commission; or
(iii) the final civil sanction of the Authority was arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.”
15 U.S.C. § 3058(b)(2)(A); see also 16 C.F.R. § 1.146(b)(1)-(3).
The ALJ’s review is de novo, as though the issue had not been heard before, and no
decision had previously been rendered. 15 U.S.C. § 3058(b)(1); FTC Rule 1.146(b)(3);
Adirondack Med. Center v. Sebelius, 740 F.3d 692, 696 (D.C. Cir. 2014), and Agyeman v. INS,
296 F.3d 871, 876 (9th Cir. 2002) (both describing scope of de novo review of agency’s
interpretations of statute). 13
Thus, the ALJ must determine the merits of the ADRV charged, and whether the
sanctions the Authority imposed were “arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law.” 14 “[T]o pass muster under the arbitrary and capricious standard,” a
court must only find a “rational connection between facts and judgment.” Motor Vehicle Mfrs.
Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 56 (1983). “To make this finding, the
court must consider whether the decision was based on a consideration of the relevant factors
and whether there has been a clear error of judgment.” Citizens to Preserve Overton Park, Inc. v.
Volpe, 401 U.S. 402, 416 (1971).
Judicial review under the arbitrary and capricious standard ensures that “the agency has
acted within a zone of reasonableness and, in particular, has reasonably considered the relevant
See also Barrientos v. Wells Fargo Bank, N.A., 633 F.3d 1186, 1188 (9th Cir. 2011), and Aquarius Marine Co. v.
Pena, 64 F.3d 82, 87 (2d Cir. 1995) (both holding that, on de novo review by an appellate court, there is no
deference to the district court); Coalition for Competitive Electricity, Dynergy Inc. v. Zibelman, 906 F.3d 41, 48 (2d
Cir. 2018), and Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006) (both describing de novo review by
an appellate court of district court dismissal of complaint under Federal Rule of Civil Procedure 12(b)(6)).
13
14
15 U.S.C. § 3058(b)(2)(A); FTC Rule 1.146(b)(1)-(3).
13
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issues and reasonably explained the decision.” FCC v. Prometheus Radio Project, 592 U.S. 414,
423 (2021). To find an abuse of discretion, there must be “a plain error, discretion exercised to
an end not justified by the evidence, a judgment that is clearly against the logic and effect of the
facts as are found.” Nat’l Wildlife Fed’n v. Nat’l Marine Fisheries Serv., 422 F.3d 782, 798 (9th
Cir. 2005).
Finally, whether the sanctions are in accordance with the law is determined with
reference to the substantive law embodied in HISA and the implementing regulations,
summarized above.
In exercising its review authority, the ALJ may “affirm, reverse, modify, set aside, or
remand for further proceedings, in whole or in part” and “make any finding or conclusion that, in
[their] judgment . . . is proper and based on the record.” 15
V.
ANALYSIS OF THE ISSUES
A.
The Possession Violation and Compelling Justification Defense
Rule 3214(a) provides that “Possession of a Banned Substance” is an “Anti-Doping Rule
Violation” “unless there is compelling justification for such Possession.” The violation imposes
strict liability. 16 Both equine sporting association codes and those in sports generally include
analogous provisions. See e.g., Federation Equestre Internationale (FEI) Equine Anti-Doping and
Controlled Medication Regulations, Article 3.1 (4th ed. 2025); World Anti-Doping Agency
(WADA) Code, Article 3.1 (2021).
15
15 U.S.C. § 3058(b)(3)(A); FTC Rule 1.146(d)(3).
See, e.g., USADA v. Drummond, Case No. AAA 01-14-000-6146, at 19 (Dec. 17, 2014) (“The Panel rejects
Drummond’s contention that actual possession requires his specific intent to have under his custody and control a
particular banned substance whose characteristics were fully known to him.”); Eder v. International Olympic
Committee (IOC), CAS 2007/A/1286, 1288 & 1289, at ¶¶ 42, 52 (Jan. 4, 2008) (possession does not require proving
“subjective intent,” or “intent to use”); Diethart v. IOC, CAS 2007/A/1290, at ¶ 40 (Jan. 4, 2008) (possession
“constitutes in itself an antidoping rules violation”).
16
14
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Dr. Shell has the burden of providing that defense “by a balance of probability (i.e., a
preponderance of the evidence) . . . .” Rule 3121(b). Since he does not dispute Possession of the
four Banned Substances, his liability turns on the defense of “compelling justification.” 17
1.
“Compelling Justification”
While a defense of “compelling justification” to possession is common in sports law antidoping codes generally, as in the HISA Rules the expression is invariably undefined. Further,
decisions considering the defense typically arise under a rule that prohibits a human athlete from
failing to provide a test sample “without compelling justification.” 18 Thus, these sports world
decisions, arising in a different factual context, offer only limited guidance. In any event,
“[w]hen interpreting a statute, we begin with the text.” Lackey v. Stinnie, No. 23-621, slip op. at
5 (U.S. Feb. 25, 2025).
Dictionaries reflecting ordinary word usage can be helpful. An authoritative dictionary’s
definition of “justification” is:
1. A lawful or sufficient reason for one’s acts or omissions; any fact that prevents an act
from being wrongful.
2. A showing, in court, of a sufficient reason why a defendant acted in a way that, in the
absence of the reason, would constitute the offense with which the defendant is charged.
BLACK’S LAW DICTIONARY (12th ed. 2024). And for that “reason” to be “compelling,” it must be
“both powerful and convincing. See [WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY OF
THE ENGLISH LANGUAGE UNABRIDGED 462] (defining ‘compelling’ as ‘forcing, impelling, [or]
driving [circumstance]’ and as ‘tending to convince or convert by or as if by forcefulness of
17
The arbitrator found that Dr. Shell has failed to prove compelling justification to her “comfortable satisfaction.”
AB2 at 6616 (¶ 7.35). That was error. On this review, the parties recognize that the preponderance standard applies.
AuRPCOL at 13 (¶ 3).
18
See, e.g., Klein v. ASADA, CAS A4/2016 (May 25, 2017), cited by both Shell and the Authority.
15
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evidence’) . . . .” United States v. Canales-Ramos, 19 F.4th 561, 567 (1st Cir. 2021) (construing
the federal “compassionate release” statute, applicable to incarcerated individuals). 19
Of necessity, this defense is fact-driven and thus case-specific. Moreover, we should not
lose sight of the forest. Rule 3214(a)’s Possession violation is part of a regulatory scheme
directed to banishing doping from thoroughbred horseracing; compelling justification, excusing
Possession, is the exception and should, accordingly “be interpreted restrictively.” WADA v.
Contreras, CAS 2013/A/3341, at 20 (¶ 116) (May 28, 2014).
2.
Dr. Shell’s “Non-Covered Horses” Practice as a Compelling
Justification
As described above, Dr. Shell practices in both Ohio and West Virginia. He provides
veterinary services not only to Covered Horses regulated under HISA, but also to farm horses
that do not run in Covered Horseraces. Dr. Shell contends that he had the Banned Substances that
HIWU seized in Ohio because he needed them in his farm practice to treat these non-Covered
Horses in both Ohio and West Virginia.
For his West Virginia practice, Dr. Shell makes still another argument. The federal
court’s preliminary injunction prevents HIWU and the Authority from enforcing the HISA Rules
in West Virginia. Accordingly, Dr. Shell maintains, any otherwise Covered Horse is “nonCovered” while in that State and, therefore, he may dispense or administer Banned Substances to
those horses in West Virginia. Since the Banned Substances are part of his practice in West
Virginia, according to Dr. Shell, he had a compelling justification to possess them at Ohio’s
Thistledown racetrack.
I consider this argument, applicable to otherwise Covered Horses in West Virginia, first.
See also https://dictionary.cambridge.org/us/dictionary/english/compelling.& /justification. I do not suggest that
dictionary definitions are always useful, much less dispositive. However, particularly where other sources of
guidance are limited, they can assist the analysis.
19
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Then, I address his other argument that the four Banned Substances are necessary for his farm
practice. 20
a.
Otherwise Covered Horses Physically in West Virginia
Rule 1020 defines “Covered Horse” to mean:
[A]ny Thoroughbred horse, or any other horse made subject to the Act by election
of the applicable State Racing Commission or the breed governing organization
for such horse under section 3054(l), during the period: (A) beginning on the date
of the horse’s first Timed and Reported Workout at a Racetrack that participates
in Covered Horseraces or at a training facility; and (B) ending on the date on
which the horse is deemed retired pursuant to Rule 3050(b).
(Emphasis added). Rule 3050(b)(1) provides that: “If an Owner wishes to retire a Covered Horse
such that it is no longer made available for Testing, the Owner must provide written notice of
such retirement to the Agency, in accordance with its procedures.” (Emphasis added). Other
subsections in Rule 3050(b) establish processes for “unretiring” a Covered Horse, and limitations
once unretirement is accomplished. See AB2 at 7101-07 (Scollay) (explaining operation of the
definition and the retirement process).
No HISA Rule recognizes an automatic change from Covered to non-Covered that occurs
if a Covered Horse is moved from a jurisdiction subject to HISA to one that is not. As Dr. Mary
Scollay, HIWU’s chief scientist since October 2022, explained:
Q: Can you help us understand exactly what a covered horse is, what the definition is?
A: Sure, it is a thoroughbred from the time that it has generated its first published work or
made its first start until it is either retired or it is deceased.
....
Q: And so if someone were to attempt to cover their horse and then uncover the horse and
then cover their horse and uncover their horse, that’s simply not permissible under the
regs., is it?
A: No.
AB2 at 7101, 7106 (Scollay).
Many records Dr. Shell produced in this case contain hand notations such as “non-covered” or “farm horse.”
Dr. Shell testified that his secretary made the notations, but did not explain why. AB2 at 6853. I infer these hand
notations were made simply for production purposes in this case, not as ordinary course business records.
20
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Although Dr. Shell testified that he met with Dr. Scollay after a presentation she made at
Mahoning racetrack in Ohio, it is undisputed that he never asked her whether he could dispense
Banned Substances to horses in West Virginia; nor is there any evidence he asked anyone else
from HIWU or the Authority. See AB2 at 6822-25 (Shell). He similarly offered no evidence that
he sought advice concerning the effect of the Western District of Louisiana preliminary
injunction. Instead, he testified, without corroboration, that trainers “unregister” and “re-register”
Covered Horses when transporting them from a State subject to HISA, such as Ohio, to one not
subject to HISA, such as West Virginia. AB2 at 6792-98 (Shell).
The Arbitrator concluded that holding otherwise Covered Horses located in West
Virginia as no longer covered would “undermine[] the integrity of the ADMC Program and is
not justified, much less compelling.” AB2 at 6614-15 (¶ 7.25). I agree.
If accepted, Dr. Shell’s position would permit evasion of the ADMC Program. Covered
Persons, such as owners or trainers, who may be in West Virginia could receive and use Banned
Substances with otherwise Covered Horses, or have them administered in West Virginia. Their
racehorses could then be transported to run out of the State in Covered Horseraces. Any such
result would fly in the face of a core principle of the ADMC Program: “Covered Horses should
compete only when they are free from the influence of medications, other foreign substances,
and treatment methods that affect their performance.” Rule 3010(d)(1). And, since three of the
four Banned Substances here also are prohibited by the West Virginia Racing Commission,
permitting their dispensation in West Virginia could impair the integrity of races in that State as
well.
This case illustrates the potential for evasion of the ADMC Program. Dr. Shell dispensed
Carolina Gold—often identified in his records as for “farm use”—to various West Virginia
18
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trainers, who ran thoroughbred racehorses throughout the country in HISA-covered States. Lack
of individual horse identification in the records Shell produced makes it impossible to determine
whether—or which of—those horses had received Carolina Gold in West Virginia. See AB1 at
3451-98; AB2 at 6868-74, 6920-30 (Shell). Moreover, Dr. Shell dispensed the Carolina Gold in a
vial, sometimes with instructions to the trainer for its use, rather than treating the horse himself.
See AB2 at 6761-62, 6852 (Shell). For example:
•
Dr. Shell dispensed Carolina Gold to a Covered Trainer in West Virginia for a
thoroughbred racehorse that thereafter raced at Mahoning Valley in Ohio, and
previously at Monmouth Park in New Jersey. AB1 at 3451-52; AB2 at 6878-83
(Shell).
•
Dr. Shell dispensed Carolina Gold to Covered Trainers for thoroughbred racehorses
with the instructions:
“Give 5cc IM [in the muscle] before race at Mountaineer [in West Virginia]
for calming/relaxation.” AB1 at 3426-27; AB2 at 6845-47, 6853-55 (Shell).
“Give 5cc IM night before race or work for nerves Give IM.” AB1 at 342930; AB2 at 7214 (Benson).
“Give 5cc IM night before training or race for nerves.” AB1 at 3442-43; AB2
at 6872-73 (Shell).
•
Dr. Shell dispensed Carolina Gold to a Covered Trainer in Ohio for a thoroughbred
racehorse stabled in West Virginia that raced at Mountaineer. AB1 at 3445, 3447;
AB2 6874-77 (Shell).
Once the Banned Substance is dispensed in West Virginia to a trainer with administration
instructions, the opportunity to inject the Covered Horse for races elsewhere is obvious. I reject
19
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Dr. Shell’s loophole argument: that he was entitled to provide Banned Substances to
thoroughbred racehorse trainers in West Virginia to use as they pleased. Covered Horses that are
not “retired” in accordance with Rule 3050(b)(1) remain Covered Horses while in West Virginia
for purposes of Rule 3214(a) charges of Possession of Banned Substances at HISA-covered
locations in Ohio.
b.
Dr. Shell’s Farm Practice Proof
Dr. Shell also argues that his farm practice, often involving non-Covered Horses,
required his Possession of the Banned Substances that HIWU seized. The factual backdrop for
his defense revolves around remarks by HIWU’s Dr. Scollay to educate industry participants on
the HISA Rules during the period after the law’s enactment, but prior to the ADMC Program
taking effect in May 2023. Dr. Scollay’s remarks, Dr. Shell argues, informed his view of the
proof he would need to demonstrate compelling justification.
i.
Dr. Scollay’s Mahoning Presentation
Besides serving as HIWU’s chief scientist, Dr. Scollay is a regulatory veterinarian with
37 years of industry experience. AB2 at 7056-57 (Scollay). After HISA’s enactment, she made
public presentations throughout the country to educate horserace industry participants on the
new, not yet effective, ADMC Program. AB2 at 7059-60 (Scollay). The presentations were
themselves substantially the same, and each afforded those attending an opportunity to ask
questions. AB2 at 7060-62, 7065 (Scollay). Discussion of compelling justification as a defense to
Banned Substance possession charges under Rule 3214(a) typically arose in response to audience
questions:
I’d had several questions at different presentations about non-covered horses or
mixed populations in some race tracks, trainers have populations of
thoroughbreds which are covered horses and quarter horses which are not under
HISA jurisdiction. And so they asked questions about a trainer possessing a
20
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banned substance in his barn if it were prescribed for a non-covered horse. And I
explained that HISA regulations do not have authority over non covered horses.
AB2 at 7066 (Scollay); see also ARPFOF at 9 (¶ 34).
One of Dr. Scollay’s presentations took place in March 2023 at the Will Rogers Downs
Racetrack in Oklahoma, where an audience member recorded her remarks. AB2 at 7062-63
(Scollay). During discussion of Banned Substances, an audience member asked whether the
“banned possession” rule applied to veterinarians. 21 Dr. Scollay replied that veterinarians were
covered and “you don’t need that on your truck.” 22 She continued: the “caveat I will tell you is:
… [i]f the veterinarians are practicing also on a population of non-Covered
horses, they’re taking care of quarter horses or they’ve got a country practice parttime they are able to possess a Banned Substance because we don’t have control
over those horses, and so to the extent that they want to use bisphosphonates on a
Non-Covered horse, we can’t ban them from possessing them … we can’t
penalize people for something that we don’t have control over so, you know, let’s
just say because we have the ability to investigate, if the story starts to get a little
weird or a little extreme, you’re going to get more than a raised eyebrow. But at
the end of the day if someone is practicing out in the country, we don’t have the
authority to control the medications they administer or carry for Non-Covered
Horses … the regulation addresses if there is justification for them to be in
Possession of a Banned Substance and certainly a practice that incorporates NonCovered horses.
AuRPFOF at 3 (¶ 9) (emphasis added); AB1 at 1547-48; AB2 at 7117-18 (Scollay) (the recorded
remarks “[s]ound[] exactly like what I said.”). 23
Although Dr. Shell did not attend the Will Rogers Downs presentation, he testified to
attending one at Mahoning racetrack in Ohio, where Dr. Scollay spoke. AB2 at 6687, 6789,
https://www.facebook.com/Traoracing/videos/891125828812595/?extid=CL-UNK-UNK-UNK-AN_GK0TGK1C&mibextid=2Rb1fB&ref=sharing (Video Mark ≈24:40-50). See also AB1 at 2576 (Scollay witness
statement).
21
22
Id.
See also HIWU v. Perez, JAMS Case No. 1501000589, aff’d, FTC No. 9420 (ALJ Decision on Application for
Review, Feb. 7, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/609612_d09420administrative_law_judge_decision_on_application_for_review_-_public.pdf, review denied, 2024 WL 3824065
(F.T.C. Aug. 8, 2024).
23
21
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6813-15 (Shell). Dr. Scollay gave substantially the same prepared remarks as at other racetracks,
“absent the spontaneous exchanges that occur[red] at each racetrack . . . .” AB2 at 7083
(Scollay). According to Dr. Shell, Dr. Scollay made “it clear that it was prohibited to possess or
prescribed [sic] banned substances to a covered horse.” AB2 at 6815 (Shell). The subject of
compelling justification, as applied to veterinarians, again came up. Dr. Scollay’s response
echoed those given at Will Rogers Downs. AB2 at 6693-94 (Shell). Dr. Shell further testified:
[Dr. Scollay] said that we were allowed to carry banned substances on our vehicles. In
fact, she said you do not have to unload and reload your truck every time you leave the
track to go to a farm.
....
She said, as long as you have a farm practice, that with justification, you are allowed to
carry them.
AB2 at 6693, 6816 (Shell).
During her Mahoning presentation or those at other racetracks, Dr. Scollay “did not” say
that “veterinarians have carte blanche to carry banned substances on their trucks at racetracks if
they claim to have a farm practice.” AB2 at 7083, 7144-45 (Scollay). She also made “it clear that
HIWU would have the ability to investigate any possession of a banned substance,” and said
“you have to be able to support why you had medication on your truck.” AB2 at 6821 (Shell).
Thus, as the parties agree:
[During her presentations] Dr. Scollay would confirm that the ADMC Program
has no authority over non-Covered Horses but explain[ed] that Possession needed
to be justified and would be further investigated where suspicions or
inconsistencies arose.
ARPFOF at 9 (¶ 34).
ii.
Dr. Shell’s Follow-up Conversation
Having heard Dr. Scollay’s Mahoning remarks, Dr. Shell was, nevertheless, “a little
antsy.” AB2 at 6694, 6822 (Shell). He testified that, after the presentation had concluded, he
22
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spoke to Dr. Scollay. Dr. Shell sought further information regarding his practice of servicing
non-Covered horses. According to Dr. Shell: “She reassured me . . . after the meeting that there
were [sic] absolutely no reason that I would have to remove banned substances and put them
back on my truck every time I drove off the racetrack.” AB2 at 6694 (Shell). Dr. Shell further
testified:
Q: And you never asked her the question of whether or not you could have
banned substances on your truck to provide to race horses in West Virginia on a
farm or otherwise, you never asked her, right?
A: No, I did not ask her.
AB2 at 6823 (Shell).
Dr. Shell had no other contacts with Dr. Scollay after the Mahoning racetrack
presentation and follow-up, nor any further “guidance” on compliance with Rule 3214(a). AB2
at 6695-69 (Shell), 7070 (Scollay). Dr. Scollay, who did not know Dr. Shell, did not recall any
conversation with him at Mahoning, although she did not deny it could have occurred; nor did
she have any calls or emails with him. AB2 at 7071, 7084-85, 7153-54 (Scollay).
iii.
The Randall Equine Email Exchange
After the Mahoning presentation, Dr. Meghan Naylor, who practices with Randall Equine
Vet Group, emailed Dr. Scollay “to confirm that banned substances legal in non-covered horses
such as thyro l were allowed to be carried by veterinarians that practice off track as well.” AB1
at 2601; AB2 at 7070-71 (Scollay). After quoting Rule 3214, Dr. Scollay wrote:
The regulation above provides for the ability to justify the possession of Banned
Substances. To the extent that your practice provides veterinary care to non-Covered
horses—and can demonstrate (through records, day sheets, etc.) the need to carry those
substances you can establish compelling justification.
AB1 at 2601 (emphasis added); see also AB2 at 7072-73 (Scollay). Dr. Shell reviewed this email
exchange in June 2023. AB2 at 6804, 6806-07 (Shell). There is no evidence that he thereafter
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made any outreach to Dr. Scollay, or anyone. See AB2 at 6824-25, 6827-28 (Shell).
Dr. Shell argues that Dr. Scollay’s Mahoning remarks and response to Dr. Naylor guided
him in accommodating his practice servicing non-Covered Horses to the requirements of the
HISA’s Rules. More specifically, he came away with the view that “compelling justification”
would be met if he “show[ed] through any records, need to carry the Charged Banned
Substances for use or intended in Non-Covered practice.” AOBr. at 5 (emphasis added); see also
ARBr. at 1. That “need,” Dr. Shell maintains, “resides in Non-Covered use,” without more.
ARBr. at 3.
This argument, however, disregards that compelling justification calls for strong proof by
Dr. Shell. He must demonstrate, through veterinarian practice records or other evidence, that his
non-Covered Horse practice requires him to keep Banned Substances on his truck while at
racetracks in Ohio, a HISA-covered jurisdiction.
c.
Inadequacy of Dr. Shell’s Proof
Whether considered overall or for the four Banned Substances individually, Dr. Shell’s proffered
proof fails to establish compelling justification.
i.
Dr. Shell’s Records Overall
In Discovery Order No. 1, the Arbitrator made clear that, by undertaking to prove
compelling justification, Dr. Shell “opened the door” to showing Banned Substances were “only
used in non-covered horses . . . . [T]he complete veterinary medical records for all horses in his
practice . . . are relevant and material to the defense.” AB2 at 5974 (emphasis added). Dr. Shell
read and understood the Order. AB2 at 6831-32. Instead of heeding the Arbitrator’s advice, his
compelling justification proof consisted of a self-selected slice of documents. See, e.g., AB2 at
6893 (Arbitrator), 6959-62, 6964-65 (Shell). Even then, many documents reflect shoddy
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recordkeeping practices, often lacking the information Ohio and West Virginia law require
veterinarians to keep, include inaccurate entries, and fail to show diagnosed conditions
appropriate for dispensing Banned Substances. See pp. 27-33, below.
A veterinary medical record should contain the thoughts and impressions of a
veterinarian, including any examination, diagnosis, or treatment administered to a specific horse.
AB2 at 7184-85 (Benson). It should have sufficient detail so that “somebody else with
appropriate training could pick up that record, read it, review it, understand all that had been
done, and whether they agreed with it or not, they could carry on with care for that patient
because they had the full history on the animal up to the point where they received it.” AB2 at
7076 (Scollay); see also AB2 at 7075-81 (Scollay) (describing recordkeeping generally). A
properly created and maintained veterinary record is, therefore, distinct from a billing record.
AB2 at 7184-85 (Benson).
Yet, the documents Dr. Shell produced to show the medications he prescribed to horses
“were mostly billing records . . . they didn’t have the detail that would be required of a medical
record.” AB2 at 7181-82 (Benson). The records typically would not enable continuity of care,
indicating only the substance Dr. Shell billed for, often without any medical justification for
using the substance. AB2 at 5631, 6096-97, 7181-82, 7188-92, 7205-07, 7212, 7249-50
(Benson).
Licensed in both Ohio and West Virginia, and an Attending Veterinarian under HISA
Rules, Dr. Shell is obliged to follow prescribed recordkeeping provisions. AB1 at 2728 (Ohio
requirements), 2729-30 (West Virginia requirements); HISA Rules 1020 (definitions), 2251, and
3040(d). Dr. Shell knows these rules. See AB2 at 6780-83 (Shell). However, overall, records
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relating to the four Banned Substances that he offered pale by comparison to those expected of
veterinary professionals.
Dr. Shell’s frequent argument—that HIWU has not charged him with a recordkeeping
violation—misses the point. Both the absence of complete medical documentation, and the state
of many records Dr. Shell did produce, impeach the reliability of the documents he relies on to
meet his burden to demonstrate compelling justification for possessing Banned Substances.
What is more, HIWU’s review of medical records required under HISA Rule 3040(d)
casts further doubt on the probative value of Dr. Shell’s proffered evidence. Rule 3040(d)
requires Dr. Shell to input all records of treating Covered Horses into an electronic database
designated by the Authority. HIWU’s comparison of Dr. Shell’s inputted records with his
practice records disclosed “[p]retty consistent lack of information being inputted into the HISA
portal.” AB2 at 7289-90 (Wallace); see also AB1 at 2499, 2502, 2537, 2568; AB2 at 7291-03,
7307-12 (Wallace). Compared to the input deficiencies of other Attending Veterinarians, “there
were more for Dr. Shell’s practice.” AB2 at 7303 (Wallace). These missing records, too, confirm
that Dr. Shell’s lack of attention to recordkeeping render his documentary proof too unreliable to
demonstrate compelling justification.
Dr. Shell regularly provided trainers with prescriptions—including those for, Carolina
Gold and Pitcher Plant—that lacked specific horse names, and instead listed “Farm Use” as the
horse name. AB2 at 5999, 6002, 6013, 6016, 6018, 6023, 6087, 6094. Many of Dr. Shell’s
documents also fail to indicate whether Dr. Shell examined the horse for which he prescribed
medication. AB2 at 7211, 7213-20 (Benson).
ii.
The Four Banned Substances
Considered individually for each of the four Banned Substances, Dr. Shell’s proof comes
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up well short of demonstrating compelling justification.
Carolina Gold: Dr. Shell testified he used Carolina Gold “on farms in both Ohio
and West Virginia,” largely on young horses. AB2 at 6891 (Shell). Yet, the evidence,
including Dr. Shell’s own testimony, is much the contrary. Dr. Shell often provided
Carolina Gold to thoroughbred racehorse trainers in West Virginia. AB2 at 6856-59,
6862-63 (Shell). Although Dr. Shell maintained he dispensed this Banned Substance for
races in West Virginia, many of his records identify the “Patient” as “Farm Use.” AB1 at
3426-43, 3460-92; AB2 at 6845-66, 6868, 6874 (Shell). Dr. Shell did not have permission
from the West Virginia Racing Commission to possess or dispense Carolina Gold in that
State. AB2 at 7209-10 (Benson).
More specifically:
•
The prescription labels on the Carolina Gold bottles HIWU seized in September 2023
identified Dr. Shell as the prescribing doctor and the patient as “Snazzy Horse,” a
“Covered Horse at Thistledown Race Track in Ohio,” trained by Michael Rone, a
Covered Person. AB1 at 481, 642 (¶ ¶ 4, 7), 647, 652; AB2 at 6005, 6757-58, 6838-39,
6841-42 (Shell). The Snazzy Horse identification is said to illustrate Dr. Shell’s office
practice when ordering non-FDA approved compounded substances, such as Carolina
Gold: “just give [the supplier pharmacy] a name so that we can get the medication
ordered, not necessarily the name of that particular horse that is being ordered for.”
AB2 at 6759-60 (Shell). The Carolina Gold was intended for “[m]ultiple injections.”
AB2 at 6761 (Shell)
•
According to Dr. Shell, the vials of Carolina Gold that HIWU seized were in fact
intended for Eddie Clouston, Bill Howard, and John Michael Baird—all thoroughbred
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racehorse trainers in West Virginia—based on what Dr. Shell testified were earlier
examinations of their horses. AB2 at 6842-45 (Shell). Dr. Shell produced no medical
records of the examinations. AB2 at 6844 (Shell).
•
The day after HIWU’s September 2023 search, Dr. Shell re-stocked his veterinary
truck with a vial of Carolina Gold and delivered it to Timothy Collins, a thoroughbred
racehorse trainer and Covered Person. AB2 at 5999, 6856-59 (Shell). Dr. Shell
dispensed the vial to Collins for use with “two or more thoroughbred racehorses in West
Virginia.” AB2 at 6862-63 (Shell).
•
In August 2023, Dr. Shell dispensed a vial of Carolina Gold to Christopher Logston, a
thoroughbred racehorse trainer and Covered Person, in West Virginia for use on
“thoroughbred racehorses mares.” AB2 at 6853-54 (Shell). There is no prescription;
according to Dr. Shell, Logston “had several [horses] that were requiring treatment.”
AB2 at 6852 (Shell). See also AB1 at 3426-27; AB2 at 6002, 6007, 6846-48, 6852-53,
6863 (Shell).
•
In December 2023—after HIWU’s search—Dr. Shell dispensed Carolina Gold for
thoroughbred racehorse Resvalon, which ran in Covered Races, both before and after
this date. AB2 at 6032, 6879-83 (Shell); AB1 at 2109, 2300. Dr. Shell offered no
medical record for dispensing Carolina Gold to Resvalon, only billing record with the
notation “Give 5ccs IM as needed for training to calm nerves, Dispensed.” AB2 at
6032, 6880-81 (Shell).
•
In 2023, Dr. Shell dispensed Carolina Gold to the following thoroughbred racehorse
trainers, all of whom are Covered Persons:
Timothy Collins
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Christopher Logston
Dennis Van Meter
Shannon Simpson
Gregory Eidschun
Annette McCoy
See AB2 at 6845-74 (Shell).
Of the eight records dispensing Carolina Gold that Dr. Shell produced to establish
administering the substance to non-Covered Horses, six do not have a particular horse’s name,
and erroneously list “Farm Use” as the patient name. AB2 at 5521, 5999-6000, 6002-03, 6007,
6013-14, 6016, 6018, 6023-24. Dr. Shell produced no records showing the horses that received
Carolina Gold from the vials HIWU seized. AB2 at 6959, 6961-62 (Shell).
Except for two records that postdate HIWU’s search, none of the records showing
Dr. Shell’s dispensation of Carolina Gold contain examination findings or diagnostic assessment
of need (in veterinary terms, “differential diagnosis”). See AB2 at 5631 (Benson), 6026, 6032.
Nor do they include other basic identifying information, such as the patient date of birth, sex,
weight, and breed, that a medical record should memorialize. AB2 at 5521, 5999-6000, 6002-03,
6007, 6013-14, 6016, 6018, 6023-24.
To the documents Dr. Shell prepared after HIWU’s search, I attach limited weight.
Created post-search, this proof is subject to manipulation to bolster his litigation position. Such
post-event evidence has been called “all-but-meaningless.” FTC v. Whole Foods Market, Inc.,
548 F.3d 1028, 1047 (D.C. Cir. 2008) (Tatel, J., concurring). 24
See also Chicago Bridge & Iron Co. v. FTC, 534 F.3d 410, 435 (5th Cir. 2008) (“The probative value of such
evidence is deemed limited not just when evidence is actually subject to manipulation, but rather is deemed of
limited value whenever such evidence could arguably be subject to manipulation.”) (emphasis in original); Hosp.
24
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Pitcher Plant: Dr. Shell contends that he uses Pitcher Plant for his farm practice, and in
West Virginia where he regarded all thoroughbred racehorses as non-Covered Horses, regardless
of whether they ran at tracks subject to HISA. The records he offered show the following:
•
The prescription label on the seized bottle of Pitcher Plant identified Dr. Shell as the
prescribing doctor and the patient as “Totally Obsessed.” AB1 at 484, 643-44, 650.
Totally Obsessed is a Covered Horse “stabled at Thistledown,” trained by Gary
Johnson, a Covered Person. AB2 at 6953-54 (Shell). The Totally Obsessed
identification allegedly is another “administrative error” resulting from Dr. Shell’s
office practice. AB2 at 6954-55 (Shell).
•
In June 2023, Dr. Shell dispensed Pitcher Plant to trainer Mark Tomczak, a Covered
Person, using as the patient name “Farm Use.” AB1 3590; AB2 6980-84 (Shell).
Tomczak has an Ohio billing address and regularly raced horses in Covered Races in
2023, including Laurel Park in Maryland and Colonial Downs in Virginia. AB1 at
3590, 3592; AB2 at 6982-83 (Shell). Dr. Shell offered no records identifying the
horses who received the Pitcher Plant dispensed to Tomczak. AB2 at 6981-82, 6984
(Shell).
•
In September 2023, Dr. Shell dispensed Pitcher Plant to “Venezuelan Dreamer,” a
thoroughbred racehorse trained by Juan Gotera, a Covered Person. AB1 at 3587.
Venezuelan Dreamer ran in a Covered Race a few days later. AB2 at 6978 (Shell);
AB1 at 2491, 3587-88.
•
In October 2023, Dr. Shell dispensed Pitcher Plant to trainer Larry Reed, a Covered
Corp. of Am. v. FTC, 807 F.2d 1381, 1384 (7th Cir.1986) (“Post-acquisition evidence that is subject to manipulation
by the party seeking to use it is entitled to little or no weight.”); United States v. Bazaarvoice, Inc., No. 13-cv00133, 2014 WL 203966, at *57 (N.D. Cal. Jan. 8, 2014).
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Person, for the thoroughbred racehorse “High Rolling Dude.” AB1 at 3596; AB2 at
6984-88 (Shell); AB1 at 3596-600. Although Reed has a farm in West Virginia, Dr.
Shell billed him at an Ohio address, where Reed lives. AB1 at 3596; AB2 6986
(Shell). Reed raced High Rolling Dude at Mahoning racetrack in Ohio on several
occasions. AB1 at 3598-99; AB2 6987 (Shell).
•
After the ADMC Program became effective in May 2023, Dr. Shell dispensed Pitcher
Plant repeatedly in 2023 to the following additional thoroughbred racehorse trainers, all
Covered Persons, in West Virginia, using the Patient Name “Farm Use”:
Eddie Clouston
Greg Eidschun
Dennis Van Meter
AB1 at 3578-85; AB2 6977-79 (Shell).
Three of the seven records produced for Pitcher Plant erroneously list “Farm Use” as the
patient name. AB2 at 6087-89, 6094, 6099. All seven records, including the four with a specific
horse name, lack key identifying information; one postdates the search and thus has limited
probative value. AB1 at 2389; AB2 at 6092, 6096, 6105. See pp. 29-30 & n.24. Moreover, none
of the Pitcher Plant records Dr. Shell offered contain any examination findings or differential
diagnoses, making them deficient as medical records, and akin to billing records.
Isoxsuprine: The tub of Isoxsuprine found in Dr. Shell’s truck had his prescription label,
but no horse listed as a patient. AB1 at 430, AB2 at 6992 (Shell). The records Dr. Shell offered for
this Banned Substance are limited.
For Isoxsuprine, Dr. Shell produced only four records memorializing his dispensation.
One record, covering an older horse named “Cat,” is largely a billing record covering many
unexplained dispensations of the substance, most of which took place before the ADMC program
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took effect in May 2023. AB1 at 3797. For one post-effective date entry, there are notes of a
physical examination by Dr. Hippie, which state that Cat is “acutely lame,” and which include
additional medical information. The Hippie notes do not include Isoxsuprine as recommended
treatment; nor are they a fulsome medical record. See generally AB2 at 7232-36 (Benson). The
same billing record further shows Dr. Shell prescribed Isoxsuprine the next day, as well as a
month later, with no explanation.
A second record, from October 2023, shows dispensation to Cool Stance, along with a
brief diagnosis (“laminitis both front feet”) and administration instructions by Dr. Shell. AB2 at
6081. But the record does not disclose he contemporaneously examined Cool Stance. Dr. Shell
testified that Cool Stance’s founder (lameness) prevented his racing. AB2 at 6750 (Shell). As a
post-search record, it is, again, of minimal probative value.
A billing record produced by Dr. Shell shows that Isoxsuprine was dispensed to Michael
J. Baird, a West Virginia trainer who raced Covered Horses in Covered Races. AB1 at 3799-800;
see also AB1 at 2478 (HIWU schedule), 2720 (Benson reply report). Another billing record,
apparently for a quarter horse, also was produced. AB1 at 3798. However, Dr. Shell offered no
corresponding medical records.
There are FDA-approved, HISA-permitted substances to treat lameness, and the
condition, although discomforting, does not require urgent treatment. AB2 at 7096-97, 7100
(Scollay), 7223-24 (Benson). Dr. Shell’s proof regarding Isoxsuprine is insufficient to establish
compelling justification for carrying this Banned Substance at a covered racetrack in Ohio.
Osphos: The boxes of Osphos recovered from Dr. Shell’s office did not contain
prescription information. AB1 at 662. The only documentary record of Dr. Shell directly
dispensing Osphos, is to a quarter horse named “Hornet.” AB2 at 6083. Dr. Shell billed Mike
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Roberts, a blacksmith. AB2 at 6742 (Shell). This record, too, postdated the HIWU search, and is
thus lacking probative value. AB2 at 6083. Perhaps unsurprisingly, the contents of this postsearch billing record improves on those from the pre-search period, where comparable
information is absent. AB2 at 6083 (“Navicular disease short striding, both front, uncomfortable
on turns, preparing for barrel race in two weeks”), 7222 (Benson). Dr. Shell has also treated the
horse Cat with Osphos, as has Dr. Hippie, for several years. AB1 at 528-37; AB2 at 7043, 704546 (Schulman).
This minimal proof is insufficient to demonstrate a compelling need for Dr. Shell to carry
Osphos on an Ohio covered racetrack. Osphos simply is not needed on an emergency basis. AB1
at 528; AB2 at 6997 (Shell), 7100 (Scollay), 7223-24 (Benson).
d.
Overall Assessment of Dr. Shell’s Compelling Justification
Proof
Dr. Shell attempted to minimize incorrect document entries, such as “farm use,” as
“ministerial” errors made by Janet Duhon, his head veterinary technician. See, e.g., AB1 at 647,
686; AB2 at 6932-33 (Shell). However, Dr. Shell admitted that he knew Ms. Duhon “pulled” the
horse’s name “out of her hat” when restocking substances in bulk, and that he was ultimately
responsible for his employees’ conduct. AB2 at 6956 (Shell); see also AB2 at 6759-61, 6933-38
(Shell). Worse still, he admitted often failing to provide her with specific horse information for
the reorders. AB2 at 6937-38. Dr. Shell’s own expert witness, Dr. Roberts, conceded that these
types of error should not regularly occur. AB2 at 7510-11, 7515 (Roberts).
The frequency of the claimed errors is too great to accept Dr. Shell’s clerical or
scrivener’s miscue explanation. And, to reiterate, the practice records Dr. Shell offered, some of
which he referred to as “cliff notes,” are not comprehensive to begin with. AB2 at 6748, 6750
(Shell). The errors are all the more unacceptable in view of both State regulatory and HISA Rule
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obligations. A veterinarian may be able to prove compelling justification despite imperfect
recordkeeping, of course. But wherever the line may be drawn in an individual case, the records
Dr. Shell offered were insufficient to establish that he had a compelling justification to possess
the Banned Substances seized in Ohio only, or even primarily, for use in his Ohio or West
Virginia farm practice or to supply trainers in West Virginia. Besides lacking medical records
that Dr. Shell is required to keep, the mostly billing records offered are too incomplete and too
riddled with claimed errors to find Dr. Shell to have discharged his burden of proof. See
generally AB2 at 7181-83, 7187-96, 7205-07, 7250 (Benson); AB1 at 2722 (Benson Expert
Report ¶¶ 51-52).
Adopting the standard of proof for compelling justification that Dr. Shell advocates and
attempted—showing need “through any records”—would so dilute Rule 3214(a)’s compelling
justification requirement as to render Possession charges against a veterinarian with a nonCovered Horse practice effectively illusory.
Dr. Shell also sought support for his compelling justification defense from Christine
Schulman, the owner of Cat, one of the Ohio farm horses he serviced. Cat received two of the
four Banned Substances, Isoxsuprine and Osphos. AB2 at 7036-54 (Schulman). Both can be used
to treat lameness, but neither is required on an urgent basis. Although Ms. Schulman was
complimentary of Dr. Shell’s care generally, she had no experience with Dr. Shell’s use of
Carolina Gold or Pitcher Plant and lacked any knowledge of his conduct with racehorses or their
trainers. AB2 at 7052 (Schulman).
To be sure, the testimony of fact witnesses can be probative of compelling justification.
But here, the incremental support from this single witness is minimal, especially when evaluated
in relation to the evidence at large. It is insufficient to show compelling justification for
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Dr. Shell’s Possession in Ohio of Isoxsuprine and Osphos, much less for that of Carolina Gold
and Pitcher Plant.
Dr. Shell has not met his burden of proving compelling justification.
B.
Dr. Shell’s Estoppel Argument
Dr. Shell contends that estoppel precludes HIWU from prosecuting him for possessing
the four Banned Substances in Ohio. He bases his argument on the same conduct by HIWU’s Dr.
Scollay that informed Dr. Shell’s views on proving his farm practice defense. 25
The elements of estoppel are not controversial: “the party claiming the estoppel must
have relied on its adversary’s conduct in such a manner as to change his position for the worse,
and that reliance must have been reasonable in that the party claiming the estoppel did not know
nor should it have known that its adversary’s conduct was misleading.” Heckler v. Community
Health Services of Crawford Cty., Inc., 467 U.S. 51, 59 (1984) (internal quotation marks
omitted). See also, e.g., Ohio State Bd. of Pharmacy v. Frantz, 555 N.E.2d 630, 633 (Ohio 1990).
In sports law specifically, “the doctrine of estoppel, which primarily prevents sports
federations from taking explicit contradictory positions, . . . has a very limited scope in
disciplinary proceedings.” Sport Lisboa e Benfica SAD v. FIFA, CAS 2021/A/8076, at ¶ 58 (Oct.
10, 2002) (citing authorities). Broader application, leading to “the (temporary) non-enforcement
of legitimate and binding provisions[,]” could mean that “many sports and state provisions would
run the risk of no longer achieving their goals due to previous unpunished violations. . . .” Id.
¶ 58. See also New Zealand Olympic Committee (NZOC) v. The Salt Lake Organizing Committee
The Authority, the opposing party here, is, of course, bound by Dr. Scollay’s acts. HIWU implements and
enforces the ADMC Program on behalf of the Authority. Rule 3010(e) (“The Protocol will be implemented and
enforced on behalf of the Authority by: (1) an anti-doping and controlled medication enforcement agency known as
the Horseracing Integrity and Welfare Unit”); see also 15 U.S.C. § 3054(e)(1)(E)(i) (directing the Authority to enter
an agreement to “implement[] the anti-doping and medication control program on behalf of the Authority”); AB1 at
313, 315-16 (HIWU response), 324, 326-27, 329 (Authority response).
25
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for the Olympic Winter Games of 2002 (SLOC), CAS OG/02/006, at ¶ 18 (Feb. 20, 2002)
(recognizing “[a]n estoppel that arises when one makes a statement or admission that induces
another person to believe something and that results in that person’s reasonable and
detrimental reliance on the belief” (quoting BLACKS LAW DICTIONARY, 7th ed. 1999)).
Dr. Shell bases his estoppel argument on his reliance on the farm practice statements
detailed above, which arise from: (1) Dr. Scollay’s substantially similar industry presentations,
given at the Will Rogers Downs and Mahoning racetracks; (2) the follow-up conversation
Dr. Shell testified he had with Dr. Scollay that same day; and (3) the subsequent email exchange
between Dr. Scollay and the Randall Equine veterinarian group. These facts are simply
insufficient to demonstrate estoppel.
Dr. Shell admits there was no other “guidance” forthcoming from either Dr. Scollay, the
Authority, or HIWU. AB2 at 6695-96 (Shell). The information that Dr. Scollay did impart would
not reasonably be understood to suggest that possession of a Banned Substance would be
excused whenever a veterinarian had a non-Covered Horse practice for which the Banned
Substance might be useful, so long as there were some supporting records or other evidence,
however incomplete or unreliable.
During her racetrack presentations, Dr. Scollay noted that the HISA Rule on Possession
of Banned Substance applied to Veterinarians, who should not have the substances on their
trucks. As “a caveat”—that is, as a caution or exception—she explained during her Will Rogers
Downs presentation that, if a veterinarian’s practice included non-Covered Horses, the Authority
and HIWU could not sanction the veterinarian for possession “because we don’t have control
over those horses . . . [. W]e can’t penalize people for something that we don’t have control
over,” AuRPFOF at 3 (¶ 9); see also AB1 at 1114; AB2 at 7117-18 (Scollay). However, she
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expressly qualified these remarks, stating that Possession would not be excused based on the
mere assertion that a veterinarian’s practice included “non-Covered Horses . . . or . . . a country
practice.” Rather, HIWU had “the ability to investigate, [and] if the story starts to get a little
weird or a little extreme, you’re going to get more than a raised eyebrow.” AuRPFOF at 3 (¶ 9).
Dr. Shell also testified that, during Dr. Scollay’s follow-up remarks to him at Mahoning,
she said, in substance, that Dr. Shell did not have to reload his truck “every time [he] drove off
the racetrack.” This essentially impromptu comment neither detracts from nor materially
enhances the thrust of her “caveated” public guidance. Dr. Shell could not reasonably have
understood Dr. Scollay’s comment to mean he could possess Banned Substances whenever he
drove his truck to an Ohio racetrack. He similarly could not reasonably have thought his West
Virginia practice would excuse possession in Ohio. Indeed, in talking with Dr. Scollay, Dr. Shell
knew his practice extended to West Virginia. But he admittedly did not raise the topic with
Dr. Scollay, who did not even know him. AB2 at 6727-28 (Shell), 7084, 7085-86 (Scollay). And
Dr. Shell offered no proof that the Authority or anyone else at HIWU knew anything about his
West Virginia activity.
Dr. Scollay’s response to the Randall Equine email from Ms. Naylor similarly reiterated
that merely having a practice that included “non-Covered horses” did not provide a defense to
possession. Instead, “to the extent” that a veterinarian “can demonstrate”—“through records, day
sheets, etc.”—a need “to carry” Banned Substances, the veterinarian “can establish compelling
justification.” AB1 at 2601.
Fairly considered overall, Dr. Scollay’s guidance acknowledged that, if a veterinarian’s
practice included non-Covered Horses, to meet the burden of showing compelling justification,
the veterinarian had to offer reliable proof. Further, with Dr. Scollay’s response to the Randall
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Equine email exchange, if not earlier, Dr. Shell should reasonably have understood that simply
having a non-Covered Horse practice did not entitle him to keep Banned Substances in his truck;
he had to have adequate practice records as proof of need. AB2 at 6807-08, 6812 (Shell).
One other estoppel consideration should be discussed. It is undisputed that Dr. Scollay’s
remarks at both the Will Rogers Downs and Mahoning presentations concerning the Possession
ADRV, its applicability to Veterinarians, and the compelling justification defense were
substantially the same. And thus far throughout this decision, I have assumed Dr. Shell’s best
version of the facts relating to Dr. Scollay’s presentation remarks and to her follow-up
conversation with him. However, I have serious reservations concerning at least parts of
Dr. Shell’s testimony on these matters.
In pre-arbitration hearing filings—including Dr. Shell’s two pre-hearing briefs, his
witness statement, and the synopsis of his testimony—he referred—repeatedly and
consistently—only to Dr. Scollay’s remarks at Will Rogers Downs in Oklahoma and to her
response to the Randall Equine email, both of which he quoted and otherwise cited. For example,
his pre-hearing brief stated:
It cannot be disputed that on March 24, 2023, Dr. Mary Scollay gave a presentation at
Will Rogers Downs in Oklahoma, about the HISA program . . . .
....
Dr. Scollay confirmed her position in an email dated June 16, 2023, at 10:46:24 a.m.,
EDT, to Randall Equine Vet group . . . .
....
Dr. Shell objectively, and reasonably relied on an objective statement of HIWU’s Chief
of Science, made . . . at an Oklahoma presentation . . . .
....
Dr. Scollay elaborated in an email . . . to Randall Equine Vet Group . . . .
....
[H]e relied on an objective statement from Dr. Scollay. 26
AB1 at 1513 (¶¶ 27, 28), 1520 (¶¶ 49, 50), 1527 (¶ 75), (emphasis added). See also AB1 at 1522-23 (¶¶ 55, 5758), 1523-24 (¶ 61), 1534-35 (¶¶ 108-10, 114), 1537-38 (¶ 123).
26
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Dr. Shell made similar representations in his other pre-hearing filings. 27
In these filings, Dr. Shell never said he attended the Mahoning presentation and heard
Dr. Scollay say substantially the same thing there as she had at Will Rogers Downs. Dr. Shell
similarly never mentioned a follow-up conversation with Dr. Scollay at Mahoning. Moreover, at
the arbitration hearing, although Dr. Shell testified he “took notes” of Dr. Scollay’s Mahoning
remarks, he offered no notes to corroborate his Mahoning testimony. AB2 at 6689 (Shell).
Further, while Dr. Shell testified that Randall Equine’s Ms. Naylor participated in the follow-up
conversation, he never called Dr. Naylor to testify.
The absence of both Dr. Shell’s own notes or testimony from Dr. Naylor to corroborate
the public and follow-up remarks attributed to Dr. Scollay cast significant doubt on Dr. Shell’s
own testimony. I attach limited weight to it in evaluating his asserted estoppel argument. 28 In all
events, however, Dr. Shell was admittedly on notice that, if he sought to rely on a compelling
justification defense, he would have to prove it with fulsome evidence. There is no basis for
estopping the Authority from imposing sanctions for his violations of Rule 3214(a).
27
See AB1 at:
1. Amended pre-hearing brief: 1779-81 (¶¶ 2-4), 1785-86 (¶¶ 21-22), 1788 (¶ 27), 1791-92 (¶¶ 37-38),
1793-94 (¶¶ 41-42), 1795 (¶ 45), 1798 (¶ 56), 1805 (¶ 79), 1806 (¶ 82), 1808 (¶ 88);
2. Witness statement: 2014-15 (¶¶ 15-16, 18-20), 2016 (¶ 22), 2019 (¶ 38), 2021-23 (¶¶ 49-52, 54); and
3. Synopsis of testimony: 2040-41.
See, e.g., Interstate Circuit, Inc. v. United States, 306 U.S. 208, 226 (1939) (“The production of weak evidence
when strong is available can lead only to the conclusion that the strong would have been adverse”); Graves v. United
States, 150 U.S. 118, 121 (1893) (“[I]f a party has it peculiarly within his power to produce witnesses whose
testimony would elucidate the transaction, the fact that he does not do it creates the presumption that the testimony,
if produced, would be unfavorable.”); Gass v. United States, 416 F.2d 767, 775 (D.C. Cir. 1969) (“An adverse
inference is permitted from the failure of the accused to call witnesses peculiarly within his power to produce when
their testimony would elucidate the transaction.”) (cleaned up); Gumbs v. Int’l Harvester, Inc., 718 F.2d 88, 96 (3d
Cir. 1983) (“The unexplained failure or refusal of a party to judicial proceedings to produce evidence that would
tend to throw light on the issues authorizes, under certain circumstances, an inference or presumption unfavorable to
such party.”).
28
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C.
Dr. Shell’s Constitutional Arguments
1.
Rule 3214 Is Not Unconstitutionally Vague
Dr. Shell contends that Rule 3214(a) violates due process, as overly vague. He argues
that, “no Covered Person of reasonable intelligence could know what facts must be proved to
demonstrate ‘compelling justification,’ or how to comport their behavior.” AOBr. at 11.
According to Dr. Shell, without more content, “compelling justification is always/was subject to
the adjudicator’s arbitrary and capricious whim.” AOBr. at 11 (internal quotation marks deleted).
As applied to him specifically, Dr. Shell maintains that he “reasonably relied on Dr. Scollay’s
guidance,” but that the Arbitrator arbitrarily and capriciously “credited post-hoc requirements to
show Compelling Justification . . . .” AOBr. at 11.
Dr. Shell’s argument is unpersuasive.
To satisfy the Constitution’s Due Process requirement of fair notice, a regulation must be
“reasonably comprehensible to people acting in good faith.” MobileTel, Inc. v. FCC, 107 F.3d
888, 896 (D.C. Cir. 1997) (cleaned up); see also, e.g., United States v. Ancient Coin Collectors
Guild, 899 F.3d 295, 321-22 (4th Cir. 2018). This inquiry includes examining “the particular
situation of the defendant,” and whether, as one to whom the regulation is directed, “it lacked
reasonable notice.” Gen. Elec. Co. v. EPA, 53 F.3d 1324, 1330 (D.C. Cir. 1995). “Words or
phrases having a technical or other special meaning” may be “well enough known to enable
those within its reach to correctly apply them.” United States v. Weitzenhoff, 35 F.3d 1275, 1289
(9th Cir. 1993) (cleaned up). Thus, the understanding and practice among those subject to
regulation are relevant considerations. See, e.g., Ohio Cast Prods., Inc. v. Occupational Safety &
Health Review Comn’n, 246 F.3d 791, 799 (6th Cir. 2001).
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Moreover, the Supreme Court has “expressed greater tolerance of enactments with civil
rather than criminal penalties because the consequences of imprecision are qualitatively less
severe.” Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 498-99
(1982) (footnote omitted). Finally, vagueness challenges to laws “which do not involve First
Amendment freedoms must be examined in the light of the facts of the case at hand.” United
States v. Mazurie, 419 U.S. 544, 550 (1975).
As discussed above, Dr. Shell’s contacts with Dr. Scollay at the Mahoning racetrack
presentation and via her email exchange with Randall Equine put Dr. Shell on notice that a
“compelling justification” could arise from a veterinarian practice that HISA did not reach, such
as “if veterinarians are practicing also on a population of non-Covered Horses, . . . or they’ve got
a country practice . . . .” AuRPFOF at 2-3 (¶¶ 8, 9); AB2 at 7117-18 (Scollay). At the same time,
Dr. Scollay cautioned that HIWU had “the ability to investigate,” and that if a veterinarian’s
“story starts to get a little weird or a little extreme, you’re going to get more than a raised
eyebrow.” AuRPFOF at 2-3 (¶¶ 8, 9); AB2 at 7117-18 (Scollay).
A veterinarian subject to HISA, such as Dr. Shell, would reasonably understand that a
practice that included non-Covered horses could provide a “justification” for a defense to a
charge of possessing a Banned Substance. Dr. Shell himself clearly had this understanding, as
this is, itself, the basis for his defense. But as Rule 3214(a) expressly states, Dr. Shell’s proof had
to be “compelling”—strongly persuasive—and on this score, he failed. See Village of Hoffman
Estates, 455 U.S. at 489 (rejecting a vagueness challenge to the constitutionality of a local
ordinance that prescribed civil penalties and including licensing guidelines).
Because Dr. Shell was on notice that a non-Covered horse practice could, depending on
the proof offered, satisfy Rule 3124(a)’s “compelling justification” element, the Rule is not
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unconstitutional as applied to him. And since a litigant “who engages in some conduct that is
clearly proscribed cannot complain of the vagueness of the law as applied to the conduct of
others,” I need not reach Dr. Shell’s facial challenge to Rule 3124. Village of Hoffman Estates,
455 U.S. at 495 & n.7; Broadrick v. Oklahoma, 413 U.S. 601, 610 (1973) (“Embedded in the
traditional rules governing constitutional adjudication is the principle that a person to whom a
statute may constitutionally be applied will not be heard to challenge that statute on the ground
that it may conceivably be applied unconstitutionally to others, in other situations not before the
Court.”) (citing authorities); United States v. Nassif, 97 F.4th 968, 981-82 (D.C. Cir. 2024)
(rejecting defendant’s vagueness challenge where the law “clearly proscribed his own conduct”).
My determination regarding Dr. Shell’s Due Process argument is fully consistent with my
also rejecting Dr. Shell’s estoppel argument. Dr. Scollay’s guidance was sufficient to provide
reasonable notice to Dr. Shell that his practice, which included non-Covered horses, could—if
adequately proven—be a “justification” that Rule 3214(a) recognizes. That disposes of
Dr. Shell’s argument that the Rule is unconstitutionally vague. The reasonable import of
Dr. Scollay’s guidance does not, however, enable Dr. Shell to satisfy the elements of an estoppel
sufficient to defeat HIWU’s Possession charges.
2.
Prosecution of this Case by the Authority and HIWU is Not
Unconstitutional
Relying on the Fifth Circuit’s decision in National Horsemen’s Benevolent and
Protective Ass’n v. Black, 107 F.4th 415 (5th Cir.), cert. pet’s filed, Nos. 24-429, 24-433 & 24472 (Oct. 15, 16, and 22, 2024), Dr. Shell argues that HIWU’s enforcement proceeding here
violates the private nondelegation doctrine and thus is unconstitutional. AOBr. at 14. The Sixth
Circuit, however, rejected this same argument and upheld HISA’s constitutionality, as did an
Eighth Circuit majority in a recent decision affirming denial of a preliminary injunction.
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Oklahoma v. United States, 62 F.4th 221 (6th Cir. 2023), cert. denied, 144 S.Ct. 2679 (2024);
Walmsley v. FTC, 117 F.4th 1032 (8th Cir.), cert. pet. filed, No. 24-420 (Oct. 15, 2024). In the
prior Administration Case involving Dr. Shell, I also rejected this constitutional argument, and
the Authority’s opposition in this case is based substantially on my earlier ruling. In re Shell,
Docket No. 9345 (Oct. 31, 2024); AuOBr. at 11. Although I again reject Dr. Shell’s argument, I
believe further discussion is warranted.
As my prior decision noted, the Sixth Circuit’s geographic scope includes Ohio, and
Dr. Shell is himself an Ohio-based and licensed veterinarian. He also is licensed in West
Virginia, and he practices in both States. AB1 at 2012 (¶ 1); AB2 at 6672, 6677 (Shell). The
HIWU search giving rise to this case involved his two trucks and storage facility at Thistledown,
located near Cleveland, Ohio. AB1 at 168-69, 452 (¶ 4), 2012 (¶ 8), 2018 (¶ 34), 3612; AB2 at
6996 (Shell). Both trucks, registered to Dr. Shell, bore an Ohio tag number. AB1 at 168-69, 2018
(¶ 35). Dr. Scollay’s remarks, which form a substantial part of Dr. Shell’s defense in this case,
took place during a presentation, which Dr. Shell testified he attended, at Mahoning racetrack in
Ohio. AB2 at 6687-89, 6693-94, 6813-16, 6822-23 (Shell). Thus, the contacts with the Sixth
Circuit predominate. By contrast, this case has no connection whatsoever to horseracing within
the States covered by the Fifth Circuit.
Although not located within the Fifth Circuit, West Virginia’s connection to this case
should be addressed—a consideration that did not arise in Dr. Shell’s earlier case. As described
above, in 2022 the District Court for the Western District of Louisiana issued a preliminary
injunction that enjoins HISA’s operation in the State of West Virginia. Louisiana v. Horseracing
Integrity & Safety Auth. Inc., 617 F.Supp.3d 478 (W.D. La. 2022). The Western District based its
ruling on the Authority’s
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