# FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 1 of 205 * PUBLIC * > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Aftc%3A78b447257469bb92 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 1 of 205 * PUBLIC * PUBLIC UNITED STATES OF AMERICA BEFORE THE FEDERAL TRADE COMMISSION OFFICE OF ADMINISTRATIVE LAW JUDGES FTC DOCKET NO. 9449 ADMINISTRATIVE LAW JUDGE: JAY L. HIMES IN THE MATTER OF: DR. JASON SCOTT APPELLANT THE AUTHORITY’S BOOK OF AUTHORITIES May 4, 2026 Respectfully submitted, STURGILL, TURNER, BARKER & MOLONEY, PLLC /s/ Bryan Beauman BRYAN BEAUMAN REBECCA PRICE 333 W. Vine Street, Suite 1500 Lexington, Kentucky 40507 Telephone: (859) 255-8581 bbeauman@sturgillturner.com rprice@sturgillturner.com HISA ENFORCEMENT COUNSEL MICHELLE C. PUJALS ALLISON J. FARRELL 4801 Main Street, Suite 350 Kansas City, MO 64112 Telephone: (816) 291-1864 mpujals@hiwu.org afarrell@hiwu.org HORSERACING INTEGRITY & WELFARE UNIT, A DIVISION OF DRUG FREE SPORT, LLC FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 2 of 205 * PUBLIC * PUBLIC INDEX _________________________________________________________________________________________________ TAB DOCUMENT DESCRIPTION PAGE NO. 1. In the Matter of Dr. Larry Overly, DVM, Administrative Law Judge Decision on Application for Review (January 27, 2026) 003-102 2. In the Matter of Dr. Scott Shell, DVM, Administrative Law Judge Decision on Application for Review (March 6, 2025) 103-176 3. Scott v. Horseracing Integrity & Safety Auth., 2025 U.S. Dist. LEXIS 208979 (D.N.M. Oct. 22, 2025) 177-188 4. Oklahoma v. United States, 163 F.4th 294 (6th Cir. 2025) 189-205 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 3 of 205 *003 PUBLIC * PUBLIC TAB 1 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 4 of 205 *004 PUBLIC * PUBLIC UNITED STATES OF AMERICA FEDERAL TRADE COMMISSION OFFICE OF ADMINISTRATIVE LAW JUDGES __________________________________________ ) ) In the Matter of ) Dr. Larry Overly, DVM ) ) Appellant. ) __________________________________________) Docket No. 9443 ADMINISTRATIVE LAW JUDGE DECISION ON APPLICATION FOR REVIEW FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 5 of 205 *005 PUBLIC * PUBLIC TABLE OF CONTENTS TABLE OF CONTENTS ................................................................................................. i TABLE OF ABBREVIATIONS .................................................................................... iii I. INTRODUCTION ............................................................................................. 1 II. SUMMARY OF THE CASE ............................................................................. 4 A. The Two Banned Substances ................................................................... 4 B. HIWU’s Discovery of Testosterone and Isoxsuprine ............................... 7 C. The Possession Violations Charged ....................................................... 10 D. 1. Mixed Practice Composition: Covered and non-Covered Horses ............................................................................................. 12 2. Dr. Scollay’s Racetrack Remarks ................................................... 13 The Arbitrator’s Decision ....................................................................... 14 III. THE PARTIES’ POSITIONS ON REVIEW .................................................. 17 IV. ISSUES ON REVIEW .................................................................................... 19 V. SCOPE OF REVIEW ...................................................................................... 20 VI. ANALYSIS OF THE ISSUES ........................................................................ 22 A. Dr. Overly Failed to Prove Compelling Justification for Possession of Either Testosterone or Isoxsuprine ....................................................... 22 1. Overview of Dr. Overly’s Position on Compelling Justification: A Manufactured Defense ............................................................... 24 2. Possession of Testosterone ............................................................. 28 a. Testimony Relating to the Discovery of Testosterone During the Search ............................................................................... 28 b. Documents Offered by Dr. Overly ......................................... 33 3. Possession of Isoxsuprine ............................................................... 41 a. Testimony Relating to the Discovery of Isoxsuprine During the Search ............................................................................... 41 b. Documents Offered by Dr. Overly ......................................... 45 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 6 of 205 *006 PUBLIC * PUBLIC B. Summary of Dr. Overly’s Proof of Compelling Justification ................ 48 C. Dr. Overly’s “Mixed Practice” Argument: Another Smokescreen ........ 49 D. VII. Covered and Non-Covered Horses ................................................. 49 2. Dr. Scollay’s Will Rogers Downs Racetrack Remarks .................. 53 Dr. Overly’s Constitutional Challenge to Rule 3214(a) Fails ............... 61 SANCTIONS ISSUES AND THEIR RESOLUTION.................................... 62 A. HIWU Properly Charged Dr. Overly with Two Possession ADRVs ..... 62 B. Sanctions Should Not be Eliminated or Reduced for Either No Fault or Negligence (“NF”), or for No Significant Fault or Negligence (“NSF”) ............................................................................ 67 C. VIII. 1. 1. Overview of Dr. Overly’s NF and NSF Arguments ....................... 68 2. NF: Applying Rule 3324 ................................................................. 70 3. NSF: Applying Rule 3225............................................................... 73 a. Objective Considerations ....................................................... 75 b. Subjective Considerations ...................................................... 79 4. Sanctions Summary ....................................................................... 84 Consecutive Periods of Ineligibility and Aggregated Fines May Be Awarded .................................................................................................. 85 1. Ineligibility ..................................................................................... 86 2. Monetary Sanctions ....................................................................... 92 3. Arbitration Costs ............................................................................ 93 4. Sanctions Awarded ......................................................................... 94 CONCLUSION ............................................................................................... 95 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 7 of 205 *007 PUBLIC * PUBLIC TABLE OF ABBREVIATIONS General ADMC – Anti-Doping and Medication Control ADRV – Anti-Doping Rule Violation Authority – Horseracing Integrity and Safety Authority HISA – Horseracing Integrity and Safety Act, 15 U.S.C. §§ 3051-60 HIWU – Horseracing Integrity & Welfare Unit Review Proceeding AB – Appeal Book AuOBr. – Authority’s Opening Brief AuPCOL – Authority’s Proposed Conclusions of Law AuPFOF – Authority’s Proposed Findings of Fact AuPO – Authority’s Proposed Order AuRBr. – Authority’s Reply Brief OOBr. – Overly’s Opening Brief OPCOL – Overly’s Proposed Conclusions of Law OPFOF – Overly’s Proposed Findings of Fact ORAuPFOF – Overly’s Reply to the Authority’s Proposed Findings of Fact ORBr. – Overly’s Reply Brief FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 8 of 205 *008 PUBLIC * PUBLIC I. INTRODUCTION In 2020, Congress enacted the Horseracing Integrity and Safety Act (“HISA”), designed to provide national uniformity to safety and substance control in the nation’s thoroughbred racing industry. 1 Among other things, HISA created the Horseracing Integrity and Safety Authority (the “Authority”), a private, independent, self-regulatory, nonprofit corporation, to “develop[] and implement[] a horseracing anti-doping and medication control program and a racetrack safety program” throughout the United States. 2 The Authority promulgated, and the Federal Trade Commission approved, regulatory rules, which include the statutorily-required Anti-Doping and Medication Control (“ADMC”) Program. 3 HISA and the 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. 4 Under the ADMC Program, the more 1 See 15 U.S.C. §§ 3051-60. 2 Id. § 3052(a). 3 Id. §§ 3053, 3055, 3057. 4 See generally ADMC Rule 3000 series; 88 Fed. Reg. 5070-5201 (Jan. 26, 2023) (FTC Notice of HISA Proposed Rule and Request for Public Comment); Order Approving the ADMC Rule Proposed by HISA (Mar. 27, 2023), https://www.ftc.gov/system/files/ftc_gov/pdf/P222100CommissionOrder AntiDopingMedication.pdf; 88 Fed. Reg. 27894 (May 3, 2023) (FTC Notice of Final Rule, effective May 22, 2023), https://hisaus.org/regulations?modal-shown=true#equine-anti-doping-andcontrolled-medication-protocol-rules. FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 9 of 205 *009 PUBLIC * PUBLIC serious violations are Anti-Doping Rule Violations (“ADRVs”), which cover Banned Substances that “should never be in a horse’s system,” and which are set out in a Prohibited List of Banned Substances issued by the Authority. 5 The Authority has contracted with the Horseracing Integrity & Welfare Unit (“HIWU”) to implement and enforce the ADMC Program on behalf of the Authority. 6 HIWU charges of ADRVs are heard by an Internal Adjudication Panel, which may, as here, consist of a single arbitrator. 7 The FTC has authority to review arbitrator decisions resolving HIWU-initiated enforcement proceedings. 8 Further review is available under the Administrative Procedures Act. 9 Rules issued to implement the ADMC Program prohibit Possession of Banned Substances by individuals subject to HISA, such as trainers and veterinarians, who are known as Covered Persons. This prohibition applies regardless of whether the Covered Person administers the Banned Substance to a Covered Horse. 10 Appellant Larry Overly is a veterinarian whose practice includes Los Alamitos racetrack in Cypress, California, as well as nearby farms and other 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. 5 Rule 3010(c). 6 15 U.S.C. §§ 3054(e)(1)(B)-(E), 3055; Rules 3010(e)(1), 5720(a). 7 Rules 3360, 7020. 8 15 U.S.C. § 3058; 16 C.F.R. §§ 1.145-.148. 9 5 U.S.C. §§ 701-06. 10 Rule 3214. See 87 Fed. Reg. 60077 (Oct. 4, 2022) (Final Rule). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 10 of 205 010 * PUBLIC * PUBLIC locations where horses are stabled. Dr. Overly attends to both Covered Horses subject to HISA, and those not subject to the statute, referred to here as “nonCovered Horses.” Both Covered and non-Covered Horses race at Los Alamitos, and both groups also are stabled off-track. In July 2024, HIWU searched Dr. Overly’s veterinary truck at Los Alamitos and discovered testosterone and isoxsuprine, both of which are Banned Substances. HIWU charged Dr. Overly under Rule 3214(a) with two Possession violations, which were heard by an arbitrator under the Rules’ dispute resolution procedures. 11 Possession is undisputed, but Dr. Overly argued that he had a “compelling justification” for Possession, a defense expressly recognized by Rule 3214(a). The Arbitrator rejected Dr. Overly’s defense and awarded sanctions, detailed further below. Dr. Overly thus has brought this review proceeding. 12 I hold that HIWU proved Dr. Overly committed two ADRVs and that Dr. Overly failed to demonstrate compelling justification, or any other available defense. However, I also conclude that the Arbitrator erred in ruling that only one set of combined sanctions should be imposed and in reducing the period of Dr. Overly’s Ineligibility to 23 months. Instead, I rule that, besides requiring individual sanctions for each ADRV, the two Ineligibility periods must run consecutively, not concurrently. Therefore, the total Ineligibility period is 48 months, less a “time-served” credit. As for the monetary sanctions, I agree a 11 See Rules 3360, 7020. 12 15 U.S.C. § 3058; 16 C.F.R. §§ 1.145-.148. See 87 Fed. Reg. 60077 (Oct. 4, 2022) (Final Rule). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 11 of 205 011 * PUBLIC * PUBLIC $25,000 fine is appropriate, but that it should be imposed for each ADRV, for a total of $50,000. Last, I agree that Dr. Overly must make one $15,000 contribution towards HIWU’s arbitration costs. I set forth the basic facts first, which include a summary of the Arbitrator’s decision. After that, I discuss the issues on this review, the scope of review, and my analysis of the issues. Additional facts are presented within discussion of the individual issues. II. SUMMARY OF THE CASE A. The Two Banned Substances Dr. Overly has been a veterinarian since 1997. 13 Since he provides services to Covered Horses, Dr. Overly is a Covered Person subject to HISA, to the ADMC Program Rules, and to the enforcement system created. 14 The two Banned Substances HIWU has charged him with possessing—testosterone and isoxsuprine—may be summarized as follows: Testosterone: An anabolic steroid, testosterone is not only a Banned Substance under the Rules, but also a Schedule III Controlled Substance that the United States Drug Enforcement Agency (“DEA”) regulates. 15 Briefly, DEA classifies Scheduled Drugs from I to V, based on the degree of regulatory control. 13 AB 6075 (Overly). 14 15 U.S.C. §§ 3051(6), (21); Rule 1020 (definitions of “Attending Veterinarian” and “Covered Person”). 15 AB 2677-78, at ¶ 12 (Benson Exp. Rep.). See also id. 6366-67 (Benson). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 12 of 205 012 * PUBLIC * PUBLIC The goal “is to balance legitimate clinical use with the risk of abuse or misuse.” 16 DEA licenses veterinarians who seek to dispense DEA-Controlled Substances, and they must maintain detailed recordkeeping and drug security requirements. 17 California law similarly classifies testosterone as a Schedule III substance, subject to analogous licensing, recordkeeping, and drug security requirements. 18 While the California Horse Racing Board (“CHRB”) does not prohibit testosterone, a horse receiving the steroid is barred from racing for six months. 19 Pre-2008, testosterone “had been given to almost every race horse, or a large percentage of race horses, mostly to improve performance and increase aggressiveness, increase eating.” 20 However, there are “very limited, credible [medical] justifications for using Testosterone in veterinary practice.” 21 HIWU’s expert, Dr. Barbara Benson, identified two: (a) Use on significantly debilitated horses as result of disease, prolonged anorexia, surgery recovery, and stress to promote weight gain and acceleration of recovery from disease . . .; and (b) To encourage the closing of growth plates in young horses (generally less than 1-2 years old) suffering physitis [associated inflammation] . . . . 22 16 Id. 2677-78, at ¶ 12 (Benson Exp. Rep.). 17 Id. 2678, at ¶¶ 13-15 (Benson Exp. Rep. detailing relevant regulations). 18 Id. 2679, ¶ 16 (Benson Exp. Rep. detailing California regulations). 19 Id. 6372 (Benson). 20 Id. 6367 (Benson). 21 Id. 2675, at ¶ 7(a), 2679-80, at ¶ 18 (Benson Exp. Rep.) (references omitted). 22 Id. 2680, at ¶ 18 (Benson Exp. Rep.) (citations omitted); 5606 (Benson). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 13 of 205 013 * PUBLIC * PUBLIC Neither condition arises so quickly as to require urgent use of testosterone. 23 Briefly, debilitation due to disease or prolonged anorexia “are chronic conditions” that generally are not “treated with anabolic steroids as a first line of defense.” 24 Before testosterone is prescribed to treat young horses suffering from physitis, there is typically unsuccessful treatment “with cox selective or nonselective non-steroidal anti-inflammatories and other palliative care such as managing rest and exercise.” 25 Isoxsuprine: Once considered a vasodilator, intended to improve blood circulation by increasing blood vessel size, isoxsuprine was used “to treat navicular disease or laminitis in horses. Navicular disease is a degenerative disorder in the navicular bone of a horse’s foot which results in foot pain and lameness.” 26 But “there is no evidence-based medicine to support use of Isoxsuprine for laminitis,” and it “is not a prophylactic treatment for either ailment.” 27 The FDA revoked its approval of isoxsuprine in 2020 after determining “it lacked efficacy for specific disease processes.” 28 Now a non-FDA approved drug, 23 Id. 2680, at ¶ 20, 2685, at ¶ 36 (Benson Exp. Rep.), 6372-75 (Benson). 24 Id. 2680, at ¶ 20 (Benson Exp. Rep.). Id. (“Cox selective” drugs relieve pain and inflammation. See, e.g., https://go.drugbank.com/categories/DBCAT000887.) 25 26 Id. 2685, at ¶ 36 (Benson Exp. Rep.). See generally id. 6372-75 (Benson) (discussing testosterone treatment in horses). Id. 2676, at ¶ 7(c) (Benson Exp. Rep.). See also Matter of Shell (“Shell II”), No. 9439, 2025 WL 1784696, at *5-6 (FTC ALJ Mar. 6, 2025) (discussing isoxsuprine). 27 28 AB 2685, at ¶ 34 (Benson Exp. Rep.). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 14 of 205 014 * PUBLIC * PUBLIC isoxsuprine is a Banned Substance under the Rules. 29 The CHRB prohibits isoxsuprine at tracks under its jurisdiction, such as Los Alamitos. 30 B. HIWU’s Discovery of Testosterone and Isoxsuprine On July 23, 2024, HIWU searched a Hummer Dr. Overly owned while located at Los Alamitos racetrack. HIWU investigators discovered a container of isoxsuprine. 31 Dr. Overly told the investigators that he “did not know the isoxsuprine was on [his] truck.” 32 He also said the container “looked like it [had] been . . . sitting in the back of a truck for a while.” 33 At the arbitration hearing, Dr. Overly explained further: I haven’t used isoxsuprine in 25 years. I literally don’t use it in my practice. . . . I never really saw a benefit. And after the first couple of years practicing, I just didn’t like the drug. Just chose never to use it. . . . you could run my computer, you’re not going to find a [sic] isoxsuprine for the last 25 years. It just doesn’t exist. 34 After HIWU discovered the isoxsuprine, Dr. Overly volunteered that there also was testosterone on his Hummer, and he pointed out the substance’s location for the investigators. 35 There were four vials; three were sealed, and the fourth 29 See 88 Fed. Reg. 5143 (No. 17 Jan. 26, 2023) (Appendix 1 to Rule Series 4000); AB 2676, at ¶ 7(c) (Benson Exp. Rep.). 30 AB 1173, at ¶ 56 (Overly Wit. Stmt.), 2685, at ¶ 35 (Benson Exp. Rep.), 6379 (Benson). 31 ORAuPFOF ¶ 2.b. 32 AB 6219 (Overly). 33 Id. 6127 (Overly). 34 Id. See also ORAuPFOF ¶ 12 (admitting that no records of use were produced). 35 AB 6128 (Overly). See also id. 156 (Bennett Interview Rep.), 2668, at ¶ 17 (Bennett Wit. Stmt.). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 15 of 205 015 * PUBLIC * PUBLIC was nearly empty. 36 Dr. Overly’s response is not in serious dispute, but the tenor of his remarks, and whether there was any further explanation, are. Dr. Overly testified he told the investigators that “I take [testosterone] myself every Friday,” and “all the investigators laughed . . . . I stated in nervous jest that I use the testosterone on myself and injected myself every Friday.” 37 HIWU’s investigator, Brian Bennett, asked whether Dr. Overly was simply joking, or being facetious. According to Mr. Bennett, Dr. Overly said: “No seriously . . . I can’t remember the amount of CCs. It’s either five or 10 ccs every Friday.” 38 Mr. Bennett understood “[h]e was being truthful when he made the statement.” 39 Jessica Ingram, Dr. Overly’s veterinary assistant and “girlfriend,” was also present during the search. 40 Ms. Ingram testified that, “when HIWU investigators questioned Dr. Overly about the testosterone, I advised them clearly the testosterone was to be used on older, non-covered horses outside the race track.” 41 Mr. Bennett, however, maintains that Ms. Ingram’s account is “not true. Categorically not true.” 42 Dr. Overly himself recalled her remarks as, “Ricky 36 Id. 151 (Investigative Rep. photo); id. 5832-33 (Bennett), 6240 (Overly); ORAuPFOF ¶ 2.a. 37 AB 6129, 6235 (Overly). 38 Id. 5844 (Bennett). 39 Id. 5845 (Bennett). 40 Id. 6351 (Ingram). See also id. 6281 (Overly) (“I don’t know if you’d classify Jessica as my girlfriend . . . . We have a relationship.”). 41 Id. 6344 (Ingram). 42 Id. 5871 (Bennett). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 16 of 205 016 * PUBLIC * PUBLIC [Dr. Overly], quit kidding around. Tell them the truth. We use it on over [sic] geldings on the outside.” 43 Mr. Bennett prepared a contemporaneous report of the search, which memorializes the substance of Dr. Overly’s response: “OVERLY claimed he kept the Testosterone in his veterinary truck’s medication cabinet for personal use, injecting himself with a dose every Friday.” 44 Mr. Bennett further testified that “[i]f there was any indication that Dr. Overly was joking,” he would have clarified Dr. Overly’s remarks in his report. 45 His report similarly says nothing about any remarks by Ms. Ingram or about using testosterone to treat “older horses,” or “geldings” that were non-Covered Horses. In late August 2024, five weeks after the HIWU search, Dr. Overly’s counsel sent HIWU a letter, with enclosed documents, that he offered to justify the testosterone HIWU found. Counsel stated that the documents showed “regular treatment” “for the non-covered horse ‘Cosmo’ . . . .” 46 The letter said nothing, however, about Dr. Overly’s or Ms. Ingram’s remarks during the search itself. And although counsel identified Cosmo, he did not disclose, as HIWU later would learn, that Ms. Ingram owned the horse. 47 43 Id. 6236 (Overly). 44 Id. 156 (Bennett Interview Rep.) (capitalization in original). 45 Id. 2669, at ¶ 19 (Bennett Wit. Stmt.). See also id. 5863-66 (Bennett). 46 Id. 166 (counsel’s letter). 47 Id. 177 (Bennett Interview Rep.), 6450-52 (Bennett). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 17 of 205 017 * PUBLIC * PUBLIC Counsel’s letter also said nothing about the isoxsuprine seized, which Dr. Overly had told HIWU he knew nothing about. During the arbitration, however, Dr. Overly testified that, after inquiring of his staff after the search, he learned Ms. Ingram had loaded the drug on the truck for possible use with another off-track horse, Brownie. Dr. Overly further maintained, in the arbitration, that he examined Brownie a few days before the search, discussed isoxsuprine with the horse’s owner, and rejected the drug’s use. 48 In October 2024, HIWU sent Dr. Overly an EAD Notice, which rejected Dr. Overly’s counsel’s attempt to justify Dr. Overly’s possession of testosterone. The EAD Notice stated, in relevant part: “[Y]ou have been found to be in possession of two Banned Substances,” as a result of which “you could be determined to have committed two Anti-Doping Rule Violations, with the potential for combined Consequences totaling four years of Ineligibility for you and a fine of up to $50,000 USD.” 49 Subsequently, HIWU charged Dr. Overly with two Possession violations, one for each Banned Substance. 50 C. The Possession Violations Charged Rule 3214(a) of the ADMC Program prohibits “Possession of a Banned Substance . . . unless there is compelling justification for such Possession.” Rule 1020 defines “Possession,” providing in pertinent part: 48 Id. 6135-36 (Overly). 49 Id. 103, 105 (EAD Notice). 50 Id. 122 (EAD Charge Letter). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 18 of 205 018 * PUBLIC * PUBLIC Possession means actual, physical possession, or constructive possession (which shall be found only if the Covered Person has exclusive control or intends to exercise exclusive control over the Prohibited Substance . . . or the premises in which a Prohibited Substance . . . exists). The Rule imposes strict liability, regardless of knowledge or intent, except where “constructive Possession” is charged. 51 However, there is no dispute that Dr. Overly had actual Possession of testosterone and isoxsuprine, thereby obviating any need for HIWU to prove either knowledge of possession, or intent to possess. 52 Violation of Rule 3214(a) carries a mandatory 24-month Ineligibility period for a first offender. A fine of “up to” $25,000 may also be imposed, plus other monetary sanctions. 53 HIWU has the burden of proving its Possession charges against Dr. Overly to the “comfortable satisfaction” of the factfinder—a standard of proof that “is greater than a mere balance of probability (i.e., a preponderance of the evidence) but less than clear and convincing evidence or proof beyond a reasonable doubt.” 54 If it meets that burden, then Dr. Overly may rebut HIWU’s prima facie case by Shell II, 2025 WL 1784696, at *11, n.16; HIWU v. Poole, JAMS Case 1501000576, at ¶¶ 7.7-.8 (Aug. 8, 2023), aff’d, No. 9417, 2023 WL 8435860 (FTC ALJ Nov. 13, 2023); 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.”). See also Rule 1020 (defining “constructive Possession” as including knowledge and intent elements). 51 52 See AB 1119-20, at ¶¶ 3.a-3.b (Uncontested stip. facts), 6690-91, at ¶¶ 4.2.1-2.4 & 6710-11, at ¶ 7.2 (Corrected Final Decision). 53 Rule 3223(b). 54 Rule 3121(a). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 19 of 205 019 * PUBLIC * PUBLIC proving “compelling justification” for Possession by a preponderance of the evidence. 55 He can also eliminate any sanctions by proving “No Fault or Negligence” (“NF”) on his part, or reduce the sanctions by showing he had “No Significant Fault or Negligence” (“NSF”). 56 I discuss these three defenses further below. Since Dr. Overly’s Possession of testosterone and isoxsuprine is undisputed, the case turns on whether he had “a compelling justification” for Possession,” as well as on the NF and NSF defenses he asserted. Dr. Overly’s compelling justification argument revolves around two matters: (1) the mixed nature of his practice; and (2) public remarks HIWU provided to veterinarians with a mixed practice. 1. Mixed Practice Composition: Covered and non-Covered Horses Dr. Overly’s practice at Los Alamitos and off-track includes both thoroughbred Covered Horses and non-Covered Horses: I’ll take care of primarily [non-Covered] quarter horses at Los Alamitos. However, I take care of a number of thoroughbreds as well on the outside. I’ll work rodeo horses. I’ll work on dressage horses, Hunters, jumpers, backyard riding horses. 57 55 Rules 3121(b) & 3214(a). 56 Rules 3224 & 3225. 57 AB 6084 (Overly). See also id. 6086 (At Los Alamitos, “it’s always been around . . . 70% quarter horses, 30% thoroughbreds.”) FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 20 of 205 020 * PUBLIC * PUBLIC Depending on the measure used, roughly 65-70% of his practice involves attending to non-Covered Horses. The rest involves Covered Horses. Specifically: Composition of Dr. Overly’s Practice (2024) Measure Non-Covered v. Covered Horses (%) Los Alamitos quarter horse patients 65.71 v. 34.29 Los Alamitos quarter horse treatments 79.58 v. 20.42 Outside (off-track) Los Alamitos 68.35 v. 31.65 Sources: AB 1193-94, at ¶¶ 7, 10, 12 & 2043, 2157-60 (Corbett Wit. Stmt. & Exs. 1, 3), 6013, 6055 (Corbett). The Authority and HIWU have no jurisdiction over non-Covered Horses, however. 58 Thus, the second part of Dr. Overly’s compelling justification argument relies on remarks HIWU made publicly to racing industry participants during the period leading up to the ADMC Program becoming effective in May 2023. I summarize the remarks here, leaving the fuller discussion for later in this Decision as part of my analysis of compelling justification. 2. Dr. Scollay’s Racetrack Remarks Dr. Mary Scollay was HIWU’s chief of science during 2023 and thereafter. She is also a regulatory veterinarian with 35+ years’ experience. 59 Her responsibilities at HIWU included “a large educational component that involve[d] 58 Id. 5948-49 (Scollay). 59 Id. 5916-17 (Scollay). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 21 of 205 021 * PUBLIC * PUBLIC direct outreach as well as responding to questions from horsemen.” 60 After HISA’s enactment, she made public presentations throughout the country during 2023 to educate horserace industry participants on the new, not yet effective, ADMC Program. The presentations were themselves substantially the same, and each afforded those attending an opportunity to ask questions 61 One of Dr. Scollay’s presentations took place in March 2023 at Will Rogers Downs Racetrack in Oklahoma, where an attendee recorded her remarks. 62 She stated, in summary, that since the Authority and HIWU lacked jurisdiction over non-Covered Horses, veterinarians whose practice included non-Covered Horses might be able to justify possession of Banned Substances for use in that part of their practice. 63 Like Los Alamitos, Will Rogers Downs “houses a mixed population of horses, so covered thoroughbreds and then . . . quarter horses that are not covered horses.” 64 Although he was not present at Will Rogers Downs, Dr. Overly testified he relied on these remarks in conducting his practice. 65 D. The Arbitrator’s Decision The Arbitrator heard HIWU’s charges in May 2025. Witnesses testified for both sides, and documentary exhibits were admitted into evidence, after which the 60 Id. 5918-19 (Scollay). 61 Id. 5919-20, 5922 (Scollay). 62 Id. 5922 (Scollay). See generally id. 2638-40, at ¶¶ 3-6 (Scollay Wit. Stmt.). 63 Id. 5926-28 (Scollay). 64 Id. 5926 (Scollay). 65 Id. 6108-09, 6111-12, 6170-72, 6193 (Overly). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 22 of 205 022 * PUBLIC * PUBLIC parties submitted post-hearing briefing and presented oral closing arguments. Thereafter, the Arbitrator rendered her decision. 66 Regarding Dr. Overly’s compelling justification argument, the Arbitrator noted that this defense calls for “a fact specific, case by case inquiry . . . .” 67 Dr. Overly had to prove “a legitimate and legal veterinary purpose that is not connected to Thoroughbred horseracing.” 68 Although the Arbitrator accepted as proven that 65.7% of his Los Alamitos practice, and 68.7% of his off-track practice, consisted of non-Covered Horses, that alone did not “create a compelling justification for carrying a Banned Substance at Los Alamitos.” 69 Instead, Dr. Overly had to show a need for each Banned Substance on his truck at Los Alamitos on the date of the search. The Arbitrator rejected Dr. Overly’s “impracticality” argument—that the ambulatory nature of his practice created a potentially “prophylactic need” to use the Banned Substances to treat non-Covered Horses. 70 The Arbitrator reviewed the evidence for testosterone and isoxsuprine individually, and concluded that, for both his Los Alamitos and off-track practice, Dr. Overly failed to show compelling justification. 71 66 Id. 6681 (Corrected Final Decision). 67 Id. 6711, at ¶ 7.5.1 (Corrected Final Decision). 68 Id. (footnote omitted). 69 Id. 6711-12, at ¶ 7.5.2 (Corrected Final Decision). 70 Id. 6712 at ¶¶ 7.5.4-.5.5 (Corrected Final Decision). 71 Id. 6712-15, at ¶¶ 7.5.5-.5.8 (Corrected Final Decision). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 23 of 205 023 * PUBLIC * PUBLIC The Arbitrator also rejected Dr. Overly’s NF and NSF defenses. NF, in summary, required Dr. Overly to show that “despite the exercise of utmost caution he could not have reasonably known or suspected he was committing an ADRV by having Testosterone and/or Isoxsuprine on his veterinary truck at Los Alamitos.” 72 However, he knew he had testosterone, a Banned Substance, on his Hummer and, besides learning of Dr. Scollay’s presentation remarks, took no steps to discuss his mixed practice with Dr. Scollay or anyone else at HIWU. Thus, he failed to show exercise of “utmost caution” to avoid a Possession ADRV. 73 NSF required Dr. Overly to prove that, “viewed in the totality of the circumstances and taking into account the criteria for No Fault or Negligence,” his conduct “was not significant in relationship to” the Possession ADRV charged. 74 Reviewing the evidence, the Arbitrator held Dr. Overly showed grounds for only “a very modest” reduction in the level of his fault. 75 The Arbitrator further held that HIWU “properly charged Dr. Overly with two separate ADRV’s”—“one for each of the Banned Substances”—even though HIWU discovered both “in a single search.” 76 However, still at issue was whether the two violations could result in two consecutive Ineligibility periods and 72 Id. 6718, at ¶ 7.8.4 (Corrected Final Decision). 73 Id. 6718, at ¶¶ 7.8.5-.6 (Corrected Final Decision). 74 Id. 6719, at ¶ 7.8.8 (quoting Rule 1020 (definition of NSF)) (Corrected Final Decision). Id. 6722, at ¶ 7.8.17. See generally id. 6719-22, at ¶¶ 7.8.9-.16 (discussing evidence and case law analysis) (Corrected Final Decision). 75 76 Id. 6716, at ¶ 7.6.3 (citing Shell II, 2025 WL 1784696) (Corrected Final Decision). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 24 of 205 024 * PUBLIC * PUBLIC cumulative monetary fines. The Arbitrator held that both ADRVs arose from “Dr. Overly’s professed and mistaken belief that because he had a majority of NonCovered horses in his practice, he was able to carry Banned Substances on his truck at Los Alamitos . . . without having to articulate or establish a specific need to carry that Banned Substance at Los Alamitos for any particular part of his NonCovered practice.” 77 Thus, the Arbitrator held that the sports law principle of proportionality favored a combined sanction, and not two individual ones. 78 The Arbitrator’s sanctions therefore consisted of: (a) an Ineligibility period of 23 months (the “very modest” one month reduction from the 24-month maximum); (b) $25,000 fine (the maximum allowable); and (c) a $15,000 contribution toward HIWU’s share of arbitration costs. 79 III. THE PARTIES’ POSITIONS ON REVIEW Dr. Overly contends, in summary, that the Arbitrator erred for multiple reasons. More specifically, he maintains: 1. He met his burden of proving compelling justification for Possession of both the testosterone and isoxsuprine that HIWU’s search discovered. 80 77 Id. 6717, at ¶ 7.7.5 (Corrected Final Decision). 78 Id. 6716-17, at ¶¶ 7.7.3-.7.5 (discussing Shell II, 2025 WL 1784696 and HIWU v. Puype, JAMS Case No. 1501000973 (Dec. 12, 2024)) (Corrected Final Decision). 79 Id. 6723-24, at ¶ 8.1 (Corrected Final Decision). 80 OPCOL ¶¶ 8, 9, 13. FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 25 of 205 025 * PUBLIC * PUBLIC 2. Rule 3214(a) and the Decision violate his Fifth and Fourteenth Amendment Due Process rights as unconstitutionally vague. 81 3. He proved NF and, as a result, sanctions should not have been awarded at all. 82 4. In any event, he proved NSF at the level of “insignificant,” such that sanctions should be reduced “to the minimum.” 83 In consequence, Dr. Overly argues that the Decision should be reversed and HIWU’s charges dismissed with prejudice. By contrast, the Authority contends that: 1. Dr. Overly failed to prove compelling justification for Possession of either Banned Substance. 84 2. HIWU properly charged and proved two Possession ADRVs for which “separate,” rather than combined, sanctions should be awarded. 85 3. Dr. Overly failed to prove NF. 86 81 Id. ¶¶ 14-15. 82 Id. ¶ 16. 83 Id. ¶ 18. 84 AuPCOL ¶ 1 & AuPO ¶ a. 85 AuPCOL ¶¶ 2-3 & AuPO ¶ b. 86 AuPCOL ¶¶ 4-5. FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 26 of 205 026 * PUBLIC * PUBLIC 4. On NSF, the Arbitrator correctly determined that only a “modest” one month reduction was warranted, but erred in applying the reduction to the “combined” Ineligibility period of 24 months. Instead, two 23-month Ineligibility periods should have been imposed, to run consecutively, thereby resulting in Ineligibility of 46 months, less the undisputed credit for days served. 87 5. The fine awarded should also be increased from $25,000 to $35,000. 88 IV. ISSUES ON REVIEW As framed by the parties, the following issues must be resolved: A. Did Dr. Overly show compelling justification for Possession of either of the two Banned Substances? B. Does Rule 3214(a) violate the Constitution on grounds of vagueness? C. If Dr. Overly’s compelling justification defense fails: 1. Did HIWU properly charge Dr. Overly with two Possession ADRVs? 2. Is Dr. Overly subject to individual sanctions for each of the two Possession violations? 87 AuPO ¶¶ c-d. 88 Id. ¶ e. FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 27 of 205 027 * PUBLIC * PUBLIC 3. May consecutive periods of Ineligibility, one for each ADRV, and individual fine awards, be imposed? 4. Is Dr. Overly entitled, under the NF or NSF provisions in Rules 3224 or 3225, to eliminate or reduce the 24-month Ineligibility period applicable to each of the Possession ADRVs and to comparable adjustment of any monetary sanctions? V. 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. 89 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; (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.” 90 89 15 U.S.C. §§ 3058(b)-(c); FTC Rules 1.146-.147. 90 15 U.S.C. § 3058(b)(2)(A). See also FTC Rule 1.146(b)(1)-(3). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 28 of 205 028 * PUBLIC * PUBLIC The ALJ’s review of the Arbitrator’s decision is de novo— “as if it had not been heard before, and as if no decision previously had been entered.” 91 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.” 92 “[T]o pass muster under the arbitrary-and capricious standard,” the ALJ must only find a “rational connection between facts and judgment.” 93 In doing so, “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.” 94 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 issues and reasonably explained the decision.” 95 To find an abuse of discretion, there must be “a plain error, discretion 91 Shane v. Albertson’s Inc., 504 F.3d 1166, 1168 (9th Cir. 2007) (review under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim) (quoting Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006). See also Harris v. Lincoln Nat’l Life Ins. Co., 42 F.4th 1292, 1295 (11th Cir. 2022) (“De novo means . . . a fresh, independent determination of the ‘matter’”) (quoting with approval Doe v. United States, 821 F.2d 694, 697-98 (D.C. Cir. 1987)); Reyes-Colón v. United States, 974 F.3d 56, 60 (1st Cir. 2020) (“review . . . de novo . . . is a legalistic way of saying we critique the judge’s decision without giving any deference to his views”); Amparan v. Lake Powell Car Rental Cos., 882 F.3d 943, 947 (10th Cir. 2018) (“[A] district court’s grant of summary judgment [is reviewed] de novo,” and “[i]n so doing, we need not defer to factual findings rendered by the district court.”) (internal quotation marks omitted); Aquarius Marine Co. v. Pena, 64 F.3d 82, 87 (2d Cir. 1995) (on de novo review, the appellate court “give[s] no deference to the lower court”). 92 15 U.S.C. § 3058(b)(2)(A); FTC Rule 1.146(b)(1)-(3). 93 Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 56 (1983). 94 Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971). 95 FCC v. Prometheus Radio Project, 592 U.S. 414, 423 (2021). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 29 of 205 029 * PUBLIC * PUBLIC 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.” 96 Finally, whether the sanctions are in accordance with the law is determined with reference to the substantive law embodied in HISA and the implementing Rules, 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.” 97 VI. ANALYSIS OF THE ISSUES A. Dr. Overly Failed to Prove Compelling Justification for Possession of Either Testosterone or Isoxsuprine Since Possession is not disputed, Dr. Overly’s liability for violation of Rule 3214(a) calls for analysis of whether he demonstrated a compelling justification to have either testosterone or isoxsuprine on his Hummer when HIWU searched the vehicle at Los Alamitos on July 23, 2024. This is the second time I have been asked to review the compelling justification defense and to assess the persuasiveness of a veterinarian’s claimed reliance on Dr. Scollay’s 2023 remarks at Will Rogers Downs racetrack. I defer discussing Dr. Overly’s fact-based reliance argument 96 Nat’l Wildlife Fed’n v. Nat’l Marine Fisheries Serv., 422 F.3d 782, 798 (9th Cir. 2005) (internal quotation marks omitted). 97 15 U.S.C. § 3058(b)(3)(A)(ii-iii); FTC Rule 1.146(d)(3). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 30 of 205 030 * PUBLIC * PUBLIC until later on, and here will summarize my prior discussion of the compelling justification defense generally. 98 While a defense of ‘compelling justification’ to possession is common in sports law anti-doping codes generally, as in the HISA Rules the expression is invariably undefined. However, “[w]hen interpreting a statute, we begin with the text.” 99 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. 100 For that “reason” to be “compelling,” it must be “both powerful and convincing.” 101 This defense is fact-driven and thus case-specific. Moreover, Rule 3214(a)’s Possession violation is part of a regulatory scheme directed to banishing doping from thoroughbred horseracing; compelling justification is the exception and 98 Shell II, 2025 WL 1784696, at *11-12. 99 Lackey v. Stinnie, No. 23-621, 604 U.S. 192, 199 (2025). 100 BLACK’S LAW DICTIONARY (12th ed. 2024). 101 WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY OF THE ENGLISH LANGUAGE UNABRIDGED 462; United States v. Canales-Ramos, 19 F.4th 561, 567 (1st Cir. 2021) (construing the federal “compassionate release” statute, applicable to incarcerated individuals). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 31 of 205 031 * PUBLIC * PUBLIC should, accordingly, “be interpreted restrictively.” 102 Further guidance is found in recent federal District Court remarks: Permitting possession when there is a compelling justification for doing so is an exception to the rule. Veterinarians can always comply with Rule 3214 by not possessing the substances it prohibits. Because Rule 3214 imposes strict liability for possession, the scenarios where the “compelling justification” exemption applies will be a small minority. . . . Moreover, the definition of “compelling” excludes a vast array of justifications, such as a covered person merely wanting to possess the substance, thinking they should be able to, or forgetting that they have it on hand. 103 Against this backdrop, I consider Dr. Overly’s proof. 1. Overview of Dr. Overly’s Position on Compelling Justification: A Manufactured Defense I will cut to the chase. In asserting he had a compelling justification to have both testosterone and isoxsuprine on his Hummer when the HIWU investigators discovered the substances during their search, Dr. Overly is trifling with the Authority—and with this Court. Testosterone: An anabolic steroid, testosterone “is not a medication used on a regular basis and does not need to be ethically carried by veterinarians for ‘prophylactic’ use.” 104 Thus, Dr. Overly’s compelling justification argument for having four vials of this Banned Substance—three of which were sealed—when 102 WADA v. Contreras, CAS 2013/A/3341, at ¶ 116 (May 28, 2014). Scott v. Horseracing Integrity & Safety Authority, No. 2:25-cv-632-SMD-GJF, 2025 WL 2987598, at *7 (D.N.M. Oct. 22, 2025) (emphasis added). 103 104 AB 2675, at ¶ 7(a), 2677-78, at ¶ 12 (Benson Exp. Rep.). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 32 of 205 032 * PUBLIC * PUBLIC HIWU searched his Hummer at Los Alamitos begins from a position of weakness and goes downhill from there. 105 On Dr. Overly’s best version of the facts, over the one-year period preceding HIWU’s search, he injected Cosmo three times; the injections were two and five months apart, and the most recent one had been for 8cc, the equivalent of 8ml. 106 According to a document that his counsel provided with his August 2024 letter and introduced at the arbitration hearing, Dr. Overly gave Cosmo a fourth injection, this time of 10cc, during an off-track appointment on July 30, 2024, a week after the search. 107 That was more than four months after the previous injection. Assuming continued 10cc injections after the July 30 injection, administered to Cosmo roughly four months apart, Dr. Overly had enough testosterone on his Hummer to inject the horse for roughly the next eight months. He would not have needed to reorder testosterone for another injection for four more months after that. Dr. Overly offered no proof that he treated any horse other than Cosmo with testosterone, but if one surfaced during the ensuing eight months, Dr. Overly could have re-ordered at any point. 108 See id. 151 (vial photo), 170-71 (invoices for testosterone), 1120, at ¶ 3.b (Uncontested stip. facts), 5832-33 (Bennett), 6240 (Overly). 105 106 Id. 166 (counsel’s letter, quoted above), 172-73 (Controlled Substance logs). 107 Id. 174 (Controlled Substance log). 108 See id. 5980, 6051, 6053 (Corbett) (Practice manager Cassandra Corbett’s search of office records disclosed no testosterone treatments). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 33 of 205 033 * PUBLIC * PUBLIC Thus, Dr. Overly had no justification, much less a compelling one, for having the quantity of testosterone HIWU’s investigators found when they searched his Hummer. This alone suffices to hold that Dr. Overly failed to meet his burden of proving compelling justification. Isoxsuprine: A non-FDA-approved substance, “isoxsuprine is banned at Los Alamitos” under CHRB rules. 109 Isoxsuprine’s past uses were to treat navicular bone degeneration and ringbone in horses. Since both are “chronic conditions,” a veterinarian doesn’t need to have isoxsuprine readily at hand to use. 110 Moreover, early in his practice, Dr. Overly “never really saw a benefit” from isoxsuprine, “just didn’t like the drug,” and “chose never to use it. . . .” 111 He further testified he was “really shocked and surprised that that was even in [his Hummer], because I had no knowledge that was there.” 112 For Dr. Overly to argue he had compelling justification to keep a Banned Substance he never used is oxymoronic. Again, Dr. Overly has failed to satisfy his burden of proof. Non-Covered Horse Practice: Dr. Overly contends that the need to treat non-Covered Horses at both Los Alamitos and off-track show compelling 109 Id. 2685, at ¶ 35 (Benson Exp. Rep.). 110 Id. 2685, at ¶ 36 (Benson Exp. Rep.). See also ORAuPFOF ¶ 13 (Dr. Overly agrees isoxsuprine “could not be used on non-Covered Horses at Los Alamitos.”). 111 AB 6127 (Overly) (emphasis added). isoxsuprine use were produced). See also ORAUPFOF ¶ 12 (Dr. Overly agrees no records of 112 AB 6127-28 (Overly). See also id. 6518 (Overly) (Dr. Overly “didn’t” know the isoxsuprine was there), 6533 (Overly) (“I had no idea it was on the truck.”). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 34 of 205 034 * PUBLIC * PUBLIC justification for having his Hummer loaded with testosterone and isoxsuprine on any given day’s trip to Los Alamitos. As part of his proof, Dr. Overly introduced evidence showing that, in 2024 alone, he administered 15,857 treatments to 573 non-Covered quarter horses at Los Alamitos, and also made 167 off-track visits to see 73 non-Covered Horses. 113 Yet, the entirety of the testosterone and isoxsuprine evidence he offered involving Covered or non-Covered Horses consisted of: (1) Cosmo, an off-track horse that allegedly received three testosterone injections over a roughly one-year period preceding the HIWU search, and one more a week after; and (2) Brownie, also an off-track horse, for which treatment with isoxsuprine allegedly was discussed and rejected. How much weaker could proof of compelling justification be? And if a more granular analysis of Dr. Overly’s compelling justification defense for each Banned Substance were needed, there are facts aplenty. They thoroughly discredit even the limited evidence Dr. Overly offered. Accordingly, as alternative grounds for my compelling justification rulings, I will review the evidence relating to testosterone and isoxsuprine individually. After that, I will address further the nature of Dr. Overly’s mixed practice, attending to both Covered and non-Covered Horses, and his professed reliance on Dr. Scollay’s Will Rogers Downs racetrack remarks. As this discussion will show, Dr. Overly’s evidence is smoke and mirrors, offered simply to divert attention. 113 Id. 1193, at ¶¶ 7, 10 (Corbett Wit. Stmt.), 2043, 2157-60 (Corbett Exs. 1 & 3). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 35 of 205 035 * PUBLIC * PUBLIC 2. Possession of Testosterone a. Testimony Relating to the Discovery of Testosterone During the Search The discussion that transpired upon HIWU finding testosterone on Dr. Overly’s Hummer is disputed. At the time of HIWU’s search, Dr. Overly supposedly “stated in nervous jest that I use the testosterone on myself and injected myself every Friday . . . . That is the statement I made.” 114 Dr. Overly testified further: Q [counsel for HIWU]: You would agree with me that you made no statements to the investigators about using . . . having the testosterone or having it on your truck for non-covered horses, correct? A: No, as I stated earlier, it was said in jest, and they laughed, and then they made their statements as well. Q: But my question to you just now was you made no other statements or offered no other explanations other than personal use to investigators on the day of the search. Correct? A: I did not, but as soon as I said it, Ms. Ingram actually said “Ricky, quit kidding around. Tell them the truth. We use it on over geldings [castrated male horses] on the outside.” .... Q: So you didn’t think it was important to tell investigators the purported real reason you kept a banned substance on your truck at the backside, even after your assistant allegedly said it? 114 Id. 6235 (Overly) (adopting id. 1166, at ¶ 23 (Overly Wit. Stmt.)) (internal quotation marks omitted). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 36 of 205 036 * PUBLIC * PUBLIC A: Correct, I said nothing else. 115 Dr. Overly’s testimony is not credible. After the explanation Dr. Overly said Ms. Ingram offered, Dr. Overly should have been highly motivated to walk back his “joke.” He knew his personal use of testosterone could have “serious implications for both his DEA-issued license and his California State veterinary license. 116 With his very practice at risk, silence was not an option. But that is what Dr. Overly testified transpired. Ms. Ingram, Dr. Overly’s only witness on the search and the treatment of Cosmo, did not help matters. Ms. Ingram is Dr. Overly’s “girlfriend”—a description that she admitted, but that Dr. Overly himself evaded: “I don’t know if you’d classify Jessica as my girlfriend. . . . We have a relationship.” 117 Ms. Ingram’s bias towards Dr. Overly is, of course, a factor in assessing her credibility and the weight to give her testimony. 118 So too was her reluctance to testify, which Dr. Overly’s counsel reported at the arbitration hearing after Dr. Overly’s testimony concluded: I’ve spoken to Ms. Ingram, given the tenor, where things have gone, she stands by her witness statement. I’m not calling her . . . . [G]iven the fact 115 Id. 6235-37 (Overly). 116 Id. 6237-38 (Overly). 117 Id. 6281 (Overly). See id. 6351 (Ingram). 118 See, e.g., United States v. Williams, 985 F.2d 634, 639 (1st Cir. 1993) (The trial court appropriately permitted defense counsel “ample opportunity to undermine [the girlfriend of a defendant’s] credibility by probing her bias and motive for testifying.”). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 37 of 205 037 * PUBLIC * PUBLIC that her personal life has been entered into this proceeding, she is uncomfortable testifying, and says she won’t. 119 Ms. Ingram appeared only after the Arbitrator directed that “[s]he has to testify. . . . [I]t’s not a question . . . . There’s a huge prejudice to your client, if she does not testify.” 120 Testifying did not help, however. For starters, Ms. Ingram never confirmed the words Dr. Overly put in her mouth during his own testimony. Her silence on this subject impeaches Dr. Overly’s testimony. Instead, at the hearing Ms. Ingram adopted her witness statement explanation: “when HIWU investigators questioned Dr. Overly about the testosterone, I advised them clearly that testosterone was to be used on older, non-covered horses outside the race track. . . .” 121 But Ms. Ingram’s explanation, attributing the testosterone’s presence to treating “older, non-covered horses,” also lacks credulity. She did not mention her own horse, Cosmo, although that was the only horse she had in mind. 122 Equally important, Ms. Ingram’s explanation casts further doubt on Dr. Overly’s own credibility. Dr. Overly heard Ms. Ingram’s explanation in response to his own “flippant statement,” which included her statement “[w]e use See, e.g., Baltazar v. Lewis, No. CV 14–01299–DOC (VBK), 2015 WL 300490, at *11 (C.D. Calif. Jan. 21, 2015) (A witness’s “reluctance to testify could be helpful to the jury’s assessment of her credibility.”). Cf. Rule 3122(f) (permitting an adverse inference to be drawn against a “Covered Person’s refusal to cooperate”). As an employee of Dr. Overly, Ms. Ingram is a Covered Person. Rule 1020 (definition). 119 AB 6313, 6315. 120 AB 6313, 6315, 6318 (the Arbitrator). 121 Id. 6344-45, 6346 (Ingram) (adopting id. 1189, at ¶ 8 (Ingram Wit. Stmt.)). 122 Id. 6347, 6349-50 (Ingram). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 38 of 205 038 * PUBLIC * PUBLIC it on over [sic] geldings on the outside.” 123 As of the time of the search, Dr. Overly supposedly had treated Cosmo, which he knew was a gelding, with testosterone for as long as two years. 124 If so, it strains credulity to believe Dr. Overly would have failed to connect Ms. Ingram’s remarks with Cosmo—supposedly his only testosterone horse-patient—and have refrained from confirming the explanation she gave. The “Cosmo explanation” rings hollow for still another reason. Not until five weeks after the HIWU search did Dr. Overly, through his counsel, tell HIWU about Cosmo’s testosterone injections. Counsel’s disclosure was limited, however. First, he did not provide any account of what either Dr. Overly or Ms. Ingram supposedly said during the search. Second, Dr. Overly’s counsel never disclosed that Ms. Ingram herself owned Cosmo. HIWU’s investigator, Mr. Bennett, had to figure that out on his own. 125 Mr. Bennett followed up by interviewing Ms. Ingram, who was circumspect in providing information: INGRAM advised COSMO began receiving testosterone treatments from Dr. LARRY OVERLY . . . approximately 2 years ago. The treatments were in response to the horse’s perceived lack of energy. INGRAM was unable to provide specific details concerning the frequency of these treatments and 123 Id. 6236, 6237, 6280 (Overly), 6344-47 (Ingram). Id. 1188, at ¶ 7 (Ingram Wit. Stmt.); id. 6264 (Overly) 6324-30 (Ingram). But see id. 172-74 (Controlled Substance records showing treatment of Cosmo no earlier than July 20, 2023, and not in January 2023). 124 Id. 166 (counsel’s letter), 6238 (Overly). See id. 5858-66 (Bennett) (describing his investigation to establish Cosmo’s ownership). 125 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 39 of 205 039 * PUBLIC * PUBLIC advised, ‘They varied depending on the need,’ and claimed they were currently ongoing.” 126 One might infer that, at the point of the interview, Ms. Ingram wasn’t sure of the account Dr. Overly would eventually decide had to be told. As noted earlier, HIWU investigator Bennett disputes both Dr. Overly’s and Ms. Ingram’s accounts of what was said during the search. He testified that after Dr. Overly’s “joke,” Ms. Ingram “started blushing,” and Mr. Bennett “assume[d] they probably had a . . . personal relationship . . . .” 127 Further, when he questioned Dr. Overly regarding his “joke,” Dr. Overly said “[n]o seriously,” which Bennett took to mean “[h]e was being truthful.” 128 Mr. Bennett also testified Dr. Overly “[n]ever” said he was “just kidding,” or that the testosterone was “really for my non-covered horse practice.” 129 In addition, Mr. Bennett testified that besides asking for the testosterone lot numbers on the four vials seized, Ms. Ingram made no other statements. 130 Shown Ms. Ingram’s witness statement account—that the testosterone was for “older noncovered horses outside the racetrack”—Mr. Bennett testified: “That is not true. Categorically not true.” 131 He confirmed his own witness statement remarks: Id. 177 (Interview Rep.) (capitalization in original). See also id. 5866-67 (Ms. Ingram said she had no purchase records for Cosmo, and that Dr. Overly would have any medical records). 126 127 Id. 5846 (Bennett). 128 Id. 5844-45 (Bennett). 129 Id. 5848 (Bennett). 130 Id. 5853-54 (Bennett). 131 Id. 5871 (Bennett). See id. 1189, at ¶ 8 (Ingram Wit. Stmt.). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 40 of 205 040 * PUBLIC * PUBLIC I have no recollection of Ms. Ingram offering any explanation for Dr. Overly’s use of Testosterone during the Search. In fact, I do not recall Ms. Ingram providing any statements, comments, or explanations on the Testosterone at any time during the Search. If Ms. Ingram had offered any such contemporaneous statements, it would have been my standard practice to record any such comments in my Interview/Intelligence Report. 132 Mr. Bennett’s account is more believable, particularly since he memorialized in writing the conversations during the search. An experienced investigator, Mr. Bennett states: “If there was any indication that Dr. Overly was joking, it would have been my standard practice to ask him follow up questions, clarify his explanation, and record his comments in my Interview/Intelligence Report.” 133 And, if there were any reason to doubt how to resolve the conflicting accounts of who said what during the search, documents offered by Dr. Overly dispel it. b. Documents Offered by Dr. Overly The letter Dr. Overly’s counsel sent to HIWU five weeks after the search included records relating to Dr. Overly’s testosterone treatments. Counsel wrote, in relevant part, that the enclosed materials “document[ed] treatment for the . . . quarter horse ‘Cosmo,’ which demonstrates that Dr. Overly administered the Id. 2670, at ¶ 21 (Bennett Wit. Stat.). See also id. 5874-75 (Bennett) (adopting his witness statements). 132 133 Id. 2669, at ¶ 19 (Bennett Wit. Stmt.). See also id. 5807-08, 5829-31 (Bennett) (describing his practice regarding memorializing statements made), 5847-48 (Bennett) (if Dr. Overly had clarified, Bennett “would have included more, probably, context to the statement.”). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 41 of 205 041 * PUBLIC * PUBLIC testosterone to this horse with regularity, including pre-and-post [HIWU] seizure, on July 20, 2023, September 20, 2023, March 1, 2024, and July 30, 2024.” 134 Dr. Overly testified “[t]his is the only testosterone that was ordered for the practice.” 135 The records included three pages (Controlled Substance logs) purporting to show Cosmo’s four testosterone injections, which were “the sum total of the testosterone injections” given to Cosmo over the “year period [July 2023-July 2024].” 136 The handwritten entries on the records were all made by Ms. Ingram. 137 Dr. Overly testified that the documents were “normal course of business” records, “original and proper,” and he relied on them at the arbitration hearing to establish injection of Cosmo on dates shown. 138 Parts of the three Controlled Substance logs are obvious copies of each other, with only lot numbers and expiration dates changed 139: 134 Id. 166 (counsel’s letter). 135 Id. 6251 (Overly). 136 Id. 6266 (Overly). See id. 172-74 (Controlled Substance logs). 137 Id. 6144 (Overly), 6330-32 (Ingram). Id. 6144, 6164-66 (Overly). See generally id. 6159-66 (Overly); id. 6331-37 (Ingram) (vouching for the accuracy of the records). 138 139 Respectively, id. 172 (July 20 and September 20, 2023 injections), 173 (March 1, 2024 injection), 174 (July 30, 2024 injection). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 42 of 205 042 * PUBLIC * PUBLIC The last of these images purports to memorialize a July 30, 2024 injection of Cosmo—after the HIWU search itself. An inference of fabrication is irrepressible. And it gets still worse. The injection entries on the Controlled Substance logs don’t reconcile to the supply invoices Dr. Overly introduced. By way of illustration: • The document memorializing Cosmo injections on 7/20/23 and 9/20/23, is sourced to lot 10014351444924. 140 There is no supplier invoice reflecting delivery of testosterone from that lot number. 141 • The document memorializing the 3/1/24 injection is sourced to lot 2302161.1, with an expiration of 08/2026. 142 The only invoice sourced to lot 23021611 is dated 03/04/24—three days after the claimed injection, and has multiple expiration dates, none of which are the same as that on the 140 Id. 172 (Controlled Substance log). 141 See id. 169-71 (Supplier invoices). 142 Id. 173 (Controlled Substance log). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 43 of 205 043 * PUBLIC * PUBLIC injection record. 143 The only supplier invoice before the injection, dated 2/28/24, similarly has different expiration dates. 144 The only lot information on that supplier invoice is 23021231—different than that on the injection record. 145 • The record for the July 30, 2024 injection of Cosmo identifies the vial lot number as 2402020.1, having an expiration date of 01/2027. 146 Dr. Overly introduced only one relevant invoice, for a testosterone order placed on July 23, 2024 to replace the testosterone HIWU seized. 147 But that invoice does not show either a lot number or an expiration date. 148 Thus, Ms. Ingram had to get her handwritten information on the injection record from some other source that was never produced. Perhaps not surprisingly, the labels on the vials HIWU seized also “don’t match” those on the supply invoices Dr. Overly produced. 149 This table summarizes the mismatch: 143 Id. 170 (Supplier invoice). 144 Id. 171 (Supplier invoice). 145 Id. 146 Id. 174 (Controlled Substance log). 147 Id. 169 (Supplier invoice), 6266-68 (Overly). 148 Id. 169 (Supplier invoice). 149 Id. 6249 (Overly’s counsel’s statement). See also id. 6250-51 (Overly) (“Until this moment, I did not know they didn’t match . . . . Why . . . whether or not the numbers match, I have no idea.”) (second ellipse in original), 6255 (“I have no idea.”). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 44 of 205 044 * PUBLIC * PUBLIC Vial Labels Supplier Invoices Lot Number Expiration Lot Number Expiration 2302161.1 2026/08 23021231 11/30/2025 (three vials) 12/31/2026 23021231 11/30/2025 23021611 05/31/2024 (one vial showing two lot numbers) 12/31/2026 (three vials) 2302123.1 2026/06 (one vial) Sources: AB 170, 171, 5840-41 (Bennett), 6245-46, 6248 (Overly). There are yet more facts that discredit Dr. Overly’s explanation for possessing testosterone. First, Dr. Overly testified that, after returning from rounds at Los Alamitos, he devoted Wednesday afternoons to his off-track practice. 150 But based on the injection entries in the Controlled Substance logs, Cosmo’s four alleged off-track injections took place on the following days of the week: July 20, 2023: Thursday September 20, 2023: Wednesday March 1, 2024: Friday July 30, 2024: Tuesday Dr. Overly never accounted for supposedly injecting Cosmo on dates that don’t jibe with his Wednesday afternoon off-track practice. 150 Id. 6092-93, 6203-04, 6310-11 (Overly). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 45 of 205 045 * PUBLIC * PUBLIC Second, Dr. Overly also testified that, before leaving for his Wednesday afternoon off-track appointments, a member of his staff “will actually give me a report of what scheduled clients I’m going to see on the outside . . . .” 151 No such reports were produced for any of the four alleged injections of Cosmo. Third, HIWU’s search occurred the morning of July 23, 2024, a Tuesday. 152 There is no evidence that Dr. Overly intended to treat Cosmo that Tuesday afternoon or on a regular Wednesday afternoon trip. But even if that were intended, it would not have justified having the steroid at Los Alamitos. Dr. Overly’s office is “adjacent” to Los Alamitos, and his staff typically load and unload his truck “every morning” and “in the middle of the day. We are constantly loading the truck”—generally, 10 times a week. 153 Any testosterone needed for a July 23 or 24 appointment could have been added to the Hummer once Dr. Overly had finished at Los Alamitos. And, if Cosmo were to be injected on July 30 during an atypical Tuesday trip off-track, Dr. Overly’s staff certainly did not need to add testosterone to the Hummer a week beforehand. Nor, as noted earlier, did they need to load multiple vials of testosterone—enough to treat Cosmo for the next eight months or so. Finally, Dr. Overly failed to produce medical records corresponding to the claimed injections of Cosmo. Dr. Benson testified: 151 Id. 6311 (Overly). 152 Id. 140, at ¶ 5 (Bennett Wit. Stmt.), 148 (Investigative Rep.), 5852, 5876 (Bennett). 153 Id. 6226 (Overly). See also id. 6094, 6124-25, 6226-27, 6228-29, 6309-10 (Overly). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 46 of 205 046 * PUBLIC * PUBLIC [T]hat’s a very important thing, . . . you have to have . . . these checks and balances. So you should have a medical record that . . . is supposed to include that the medication was administered, and so it's like you have half of the information, but you don’t have the confirmation that it went into the horse . . . . [T]his is the perfect storm of what could happen if you had someone who was trying to, like, hide drug use. 154 Dr. Overly testified he had—but did not produce—“veterinary medical record[s], documenting the examination, diagnosis, prognosis, a SOAP for Cosmo, relating to the four injections of testosterone . . . .” 155 His pre-hearing witness statement similarly implies document selectivity: “I have provided all the records I have for Cosmo and the use of the Testosterone for that horse, which in my opinion is proper and sufficient to document the treatment of Cosmo and Non-Covered use of Testosterone and intended use shortly after it was seized.” 156 Ms. Ingram, Cosmo’s owner also testified there were more testosterone injection records than the four produced, as well as corresponding “veterinary medical records” that were “in [her] possession.” 157 Although some of these records may pre-date July 2023, when the first documented treatment was given, the treatment dates are not what matters. 154 Id. 6377-78 (Benson). Id. 6269-70 (Overly). “SOAP” is the acronym for “subjective, objective assessment, and plan,” referring to medical records veterinarians typically maintain. Id. 5997-98 (Corbett), 6341, 6576 (Ingram). 155 Id. 1168, at ¶ 29 (Overly Wit. Stmt.) (emphasis added; bold-face emphasis deleted). See also id. 6557 (Overly) (“There could have been some earlier [injections, before July 2023] as well.”) 156 157 Id. 6341 (Ingram). See generally id. 6339-41 (Ingram). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 47 of 205 047 * PUBLIC * PUBLIC Both the DEA and California, among others, require detailed recordkeeping to assure proper management and dispensation of testosterone. 158 As Dr. Benson explained: You have to have all sorts of information on your DEA logs, such as the lot number, the concentration, the number of MLs, the drug that it is, and then, as you use it, you are required to account for any use, any waste, any loss . . . the patient, the person, how it's dispensed. So is it administered or actually given? And if it’s administered, how is it administered? The person who enters the log information has to put in their initials, so you can track not just who it went to, but who entered that information. So you really have a whole kind of history of that drug. 159 Despite his record-keeping obligations, Dr. Overly has offered only a handful of selective testosterone-related documents. Cassandra Corbett, Dr. Overly’s practice manager, testified she was never asked to look for relevant material in the office’s DEA treatment logs, which were maintained in a binder in her office. 160 The selective quality of the documents offered, the inconsistences among the produced materials, and the inattention to regulatory obligations—as well as the testimony given—all undermine the integrity and reliability of the evidence Dr. Overly provided on a defense where he bears the burden of proof. 161 Dr. Overly’s evidence on isoxsuprine fares no better. 158 Id. 2678, at ¶13, 2679, at ¶ 16 (Benson Exp. Rep.). 159 Id. 6369-70 (Benson). 160 Id. 6030-32 (Corbett). 161 See Shell II, 2025 WL 1784696, at *18 (documentary proof lacked probative value on compelling justification defense). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 48 of 205 048 * PUBLIC * PUBLIC 3. Possession of Isoxsuprine a. Testimony Relating to the Discovery of Isoxsuprine During the Search Dr. Overly looked again to Ms. Ingram to explain isoxsuprine’s presence in his Hummer. She testified that Ms. Chantal, the owner of an off-track, nonCovered Horse named Brownie, spoke by phone with Dr. Overly’s (unidentified) office receptionist. According to Ms. Ingram, Ms. Chantal told the receptionist that isoxsuprine might be used to treat Brownie’s ringbone, a condition that can cause lameness. A July 17, 2024 appointment was arranged. 162 Ms. Ingram “was kind of concerned, because isoxuprine isn’t something that we typically keep in stock at the clinic anymore.” 163 However, she found “a tub” of isoxsuprine in Dr. Overly’s office and loaded it onto the Hummer so that it would be available to dispense. 164 And off she went to the scheduled appointment, along with Dr. Overly and one of his newer veterinarian colleagues, Dr. Chaparro. Ms. Ingram supposedly did not tell Dr. Overly or Dr. Chaparro about the loaded isoxsuprine. 165 During the July 17 examination, Dr. Overly discussed with Ms. Chantal treating Brownie with isoxsuprine: “She brought up the isoxsuprine. I told her isoxsuprine was old and antiquated, and I didn’t use it [in] my practice.” 166 He 162 AB 6354-55 (Ingram). 163 Id. 6355 (Ingram). 164 Id. 6355-56(Ingram). See also id. 6131-33, 6229-30 (Overly) (giving his hearsay account, based on his post-search inquiry). 165 Id. 6356-57 (Ingram). 166 Id. 6135 (Overly). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 49 of 205 049 * PUBLIC * PUBLIC further advised Ms. Chantal that treating Brownie with isoxsuprine “will have no benefit.” 167 A few weeks later, after trying other substances, Dr. Overly prescribed osphos to treat Brownie. 168 During the six days after Brownie’s appointment before HIWU’s search, and despite twice a day loading and unloading the Hummer, no one removed the isoxsuprine—a drug that Ms. Ingram and the rest of Dr. Overly’s staff surely knew he never used. 169 Other than testifying that “this particular drug fell through the cracks,” Dr. Overly had no explanation for failure to unload the isoxsuprine. 170 Throughout the discussion of Brownie with Ms. Chantal, Dr. Overly maintains that he was ignorant of the isoxsuprine on his Hummer. Only after the search disclosed it did Dr. Overly query his staff and learn how isoxsuprine came to be there. 171 But Dr. Overly’s explanation for having isoxsuprine on his Hummer lacks credibility for many reasons. 1. Of those with personal knowledge of the facts, Ms. Ingram is the only one to testify or to submit a witness statement. Neither Ms. Chantal, Dr. Chaparro, nor the unidentified office receptionist offered any evidence corroborating either Chantal’s alleged request or even the alleged July 17, 2024 appointment to 167 Id. 168 Id. 6136 (Overly). See also id. 6062 (Corbett). 169 Id. 6226-27, 6230, 6547-48 (Overly). See id. 6357 (Ingram). 170 Id. 6231 (Overly). 171 Id. 6131-34, 6208-09 (Overly). See also id. 1165, at ¶ 18 (Overly Wit. Stmt.). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 50 of 205 050 * PUBLIC * PUBLIC examine Brownie. Dr. Overly’s failure to produce witnesses with first-hand knowledge of the facts—other than his girlfriend— and his failure to produce corroborating documents permit an adverse inference to be drawn. 172 2. Dr. Overly’s own testimony accounting for the isoxsuprine’s availability is implausible. He claimed: “I literally don’t use [isoxsuprine] in my practice. . . . [Y]ou could run my computer, you’re not going to find a [sic] isoxsuprine for the last 25 years.” 173 However, Ms. Ingram found a container of isoxsuprine at Dr. Overly’s office. Dr. Overly attributes the isoxsuprine to an order by Dr. Stephanie Smith, “another practitioner in my practice.” 174 Predictably, Dr. Smith never testified, and Dr. Overly offered no documents to corroborate the order he asserts she placed. 3. Likewise, Ms. Ingram’s testimony lacks credulity. Because isoxsuprine was a special order “red bin” item, Ms. Chantal’s request to consider treating Brownie with isoxsuprine “concerned” Ms. Ingram. 175 She would be expected to 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.”). 172 173 AB 6127 (Overly). 174 Id. 6132 (Overly). 175 Id. 6355 (Ingram). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 51 of 205 051 * PUBLIC * PUBLIC have informed Dr. Overly—if not before loading it, then certainly during the 45 to 60 minute drive to Brownie’s stable. 176 Her explanation for not doing so—“I didn’t think I needed to”—defies common sense. 177 Significantly, Ms. Ingram’s witness statement says nothing at all about the isoxsuprine found during HIWU’s search. 178 Indeed, Ms. Ingram’s testimony is doubly implausible. The isoxsuprine that Ms. Ingram found had a July 2023 expiration date—one year before the Brownie appointment. Dr. Overly’s staff knew that an expired substance could not be administered to a horse, and Ms. Ingram did not testify she missed the expiration information. 179 It is unlikely she would have neglected to bring to Dr. Overly’s attention the expiration of the isoxsuprine she’d found, either before loading it or during the trip to examine Brownie. 4. Dr. Overly’s isoxsuprine comments during the HIWU search similarly lack believability. Dr. Overly testified that, during the July 17 examination, he and Ms. Chantal discussed treating Brownie with isoxsuprine. A few days after that, when HIWU’s investigators asked about the isoxsuprine found in Dr. Overly’s Hummer, Dr. Overly said that he “didn’t know the drug was in the truck, but the tub was older looking. It looked like it been beat up, sitting in the 176 Id. 6093, 6209-10, 6219 (Overly). 177 Id. 6357 (Ingram). 178 Id. 1188-89 (Ingram Wit. Stmt.). 179 Id. 6230-31 (Overly). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 52 of 205 052 * PUBLIC * PUBLIC back of a truck for a while.” 180 Although the isoxsuprine had a distinctive look, and although the Brownie discussion with Ms. Chantal must have been relatively fresh in Dr. Overly’s mind, he did not “mention the July 17, 2024 appointment or offer any reason why the Isoxsuprine was on his truck during the Search.” 181 5. Ms. Ingram, of course, knew exactly how the isoxsuprine came to be on the Hummer. But she did not explain its presence to the HIWU investigators either. Asked why not, Ms. Ingram answered: “They didn’t ask.” 182 However, Ms. Ingram had worked for Dr. Overly since 2016, and she doubtless understood the seriousness of his possessing a Banned Substance at Los Alamitos. 183 She also knew isoxuprine was “a red bin item”—used at most infrequently. 184 If, as she maintains, Dr. Overly knew nothing about the isoxsuprine on his Hummer, Ms. Ingram could reasonably be expected to explain its presence to HIWU’s investigators, regardless of whether they asked. Her testimony is not believable. b. Documents Offered by Dr. Overly Similar to his testosterone proof, the documents Dr. Overly introduced regarding isoxsuprine fail to meet his burden of proof. Those he never introduced themselves discredit the produced material. 180 Id. 6127 (Overly). See also id. 6219-20 (Overly) (The tub of isoxuprine “[l]ooked like it [had] been somewhere for a long time . . .”). 181 Id. 2671, at ¶ 25 (Bennett Wit. Stmt.). 182 Id. 6357 (Ingram). 183 Id. 1188, at ¶ 3 (Ingram Wit. Stmt.). 184 Id. 6355 (Ingram). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 53 of 205 053 * PUBLIC * PUBLIC 1. As with testosterone, the report listing off-track patients, regularly provided for Dr. Overly’s Wednesday afternoon trips, is missing in action for the Brownie appointment. 185 Worse still, Dr. Overly offered no documents at all memorializing the alleged July 17, 2024 appointment and examination of Brownie. 186 The limited documentary evidence regarding Brownie reflects treatment on January 11 and 17, and September 26, 2024. Osphos is listed for the September 26 entry. 187 The absence of any record covering the claimed July 17, 2024 visit is significant. Although Brownie apparently is a non-Covered Horse, California law requires Dr. Overly to prepare and maintain written records for every horse he examines or treats. 188 Dr. Overly testified the relevant records, allegedly prepared by Dr. Chaparro, exist; “Have I seen the record where we saw Brownie and it’s on the medical record at the clinic? Yes.” 189 But Dr. Overly never offered them into evidence despite knowing full-well that he has the burden of proof on compelling justification. 190 Dr. Overly’s explanation—because he did not bill for Brownie’s 185 Id. 6311 (Overly). 186 See id. 6134 (Overly). Id. 2157 (Corbett treatment exhibit), 6062-63 (Corbett). See also id. 2176 (record of Brownie’s treatment with osphos on Sept. 25, 2024), 2686-87, at ¶¶ 39-40 (Benson Exp. Rep. with prints of Brownie treatment records). 187 Id. 6216 (Overly). See id. 2680-81 (Benson Exp. Rep.) (detailing California recordkeeping requirements). 188 Id. 6214 (Overly). See also id. 6133 (Overly) (Dr. Chaparro “actually wrote the case up as she saw the case with me.”). 189 190 Id. 6215 (Overly). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 54 of 205 054 * PUBLIC * PUBLIC examination, the visit is undocumented—is a distraction, not an explanation. 191 California law’s recordkeeping calls for documenting diagnosis and treatment, regardless of billing. 192 And while not applicable to non-Covered Horses, the recordkeeping requirements under HISA, reflecting sound professional practice, cover examination. 193 2. Cassandra Corbett, Dr. Overly’s practice manager, introduced detailed records of horses examined. 194 In preparing this summary evidence, Ms. Corbett “looked for records [of administration of isoxsuprine] and was unable to locate any, because that’s a more unusual treatment . . . . I actually did pull a report on that one and did not find anything.” 195 Isoxsuprine, she further testified, “is not something that we give at the track. . . . I can’t remember if I’ve ever seen isoxsuprine on the track.” 196 If, as Dr. Overly testified, Dr. Smith ordered the tub of isoxsuprine seized in the search, Ms. Corbett found no record of it. In any event, Ms. Corbett’s evidence confirmed that Dr. Overly had no need for isoxsuprine when HIWU discovered it during its search. 191 Id. 6136-37 (Overly). 192 Id. 2679, at ¶ 16 (Benson Exp. Rep.). See Rule 2251(b) (recordkeeping applies to “every Veterinarian who examines or treats a Covered Horse”). 193 194 AB 2045-55 (sample veterinary records for horses treated at Los Alamitos), 2157-91 (records of horses treated off-track). 195 Id. 6051, 6067 (Corbett). 196 Id. 6051, 6053 (Corbett). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 55 of 205 055 * PUBLIC * PUBLIC B. Summary of Dr. Overly’s Proof of Compelling Justification For both testosterone and isoxsuprine, the evidence from Dr. Overly and Ms. Ingram—testimony and witness statement alike—may appropriately “be taken with a grain of salt.” 197 Dr. Overly’s documentary evidence similarly is unreliable; some of it is more likely than not fabricated. As the Court of Appeals wrote in Garcia v. Berkshire Life Ins. Co. Of America, 198 “[a] party’s willingness to fabricate evidence bears on character and credibility, which often is broadly at issue in a given case.” I attach no weight to the evidence from either Dr. Overly or Ms. Ingram, which I find unworthy of belief. 199 Dr. Overly failed to prove he had a compelling justification for Possession of testosterone or isoxsuprine at Los Alamitos on July 23, 2024. I turn now to his “practice mix” argument, for which he seeks support in Dr. Scollay’s Will Rogers Downs racetrack remarks. 197 De Vargas v. Brownell, 251 F.2d 869, 871 (5th Cir. 1958). 198 569 F.3d 1174, 1181 (10th Cir. 2009). See generally The Santissima Trinidad, 20 U.S. 283, 339 (1822) (explaining that “where the party speaks to a fact in respect to which he cannot be presumed liable to mistake,” the principle false in one, false in all, applies with strongest force); Siewe v. Gonzales, 480 F.3d 160, 170 (2d Cir. 2007) (“[A] single instance of false testimony may . . . infect the balance of the [party’s] uncorroborated . . . evidence.”); Parker v. United States, 801 F.2d 1382, 1385 (D.C. Cir. 1986) (Scalia, J.) (upholding a jury instruction that “[i]f you believe that any witness has willfully testified falsely with respect to any material fact which the witness can not reasonably be mistaken about, then you may, if you deem fit to do so, disregard all or any part of the testimony of that witness or you may accept such portion of his testimony as you find worthy of belief”). 199 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 56 of 205 056 * PUBLIC * PUBLIC C. Dr. Overly’s “Mixed Practice” Argument: Another Smokescreen 1. Covered and Non-Covered Horses As detailed above, depending on the measure used, roughly 65-70% of Dr. Overly’s practice involves attending to non-Covered Horses, while the rest are Covered Horses. The ratio doesn’t differ materially between horses serviced at Los Alamitos and those serviced off-track. That said, the breakdown itself takes us nowhere. It tells us nothing about: (1) whether or not Dr. Overly needed to have either testosterone or isoxsuprine on his Hummer at Los Alamitos on July 23, 2024 when HIWU’s search discovered the Banned Substances, and thus was “justified”; or (2) whether or not that “need” was uncommonly pressing, and hence “compelling.” Dr. Overly offered no proof that he ever treated any non-Covered Horse at Los Alamitos with either testosterone or isoxsuprine. 200 By contrast, the evidence refutes a likely need for using either Banned Substance there. Under California law, a non-Covered Horse treated with testosterone “cannot race for six months. So, it’s a very . . . seriously addressed medication. It’s not something you give out on a daily basis.” 201 And for isoxsuprine, besides being banned at Los Alamitos, Dr. Overly himself claimed not to use it at all in his practice because he “never See ORAuPFOF ¶ 5 (Admitting there are “no records to show that he had ever administered Testosterone to a non-Covered Horse at Los Alamitos.”), ¶ 12 (Admitting there are “no records to show that he had ever administered Isoxsuprine to a non-Covered Horse, at Los Alamitos or offtrack.”). 200 201 AB 6372 (Benson). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 57 of 205 057 * PUBLIC * PUBLIC really saw a benefit”—essentially the conclusion the FDA itself reached years ago. 202 Dr. Overly, however, argues what might be called a “better safe than sorry” (or prophylactic) theory of compelling justification. Since a majority of his practice involves non-Covered Horses, on any given day, whether at Los Alamitos or offtrack, he had a better than even chance of attending to a non-Covered Horse for some veterinary reason. 203 Dr. Overly explained the idea this way: Q [counsel for Dr. Overly]: And is it fair to say that it would be inconceivable for you to run a practice where you could get to Rolling Hills [off track] and not have what you needed on the truck? A: I carry all the drugs that I need on my truck all the time in order to practice. . . . [T]here’s no way I could practice. If I don’t have the things I need, then I’m not a very good veterinarian. 204 This is obfuscation. Dr. Overly’s evidence proves nothing about whether this hypothetical treatment of a non-Covered Horse on any given day would require administering either testosterone or isoxsuprine essentially immediately upon 202 Id. 2685, at ¶ 35 (Benson Exp. Rep.), 6127 (Overly), 6379 (Benson) (The FDA “found it had no efficacy.”). 203 See id. 1166, ¶ 21, 1170, at ¶ 42 (Overly Wit. Stmt.). 204 Id. 6176 (Overly). See also id. 1170, at ¶ 43 (Overly Wit. Stmt.) (“Perhaps HISA/HIWU did not think this through, but there is always a need (and what the Rules refer to as compelling justification) for veterinarians like me, to carry substances deemed banned by HISA/HIWU at Los Alamitos prophylactically and in preparation for possible or intended use in Non-Covered practice.”) (emphasis added); OOBr. at 5 (Because a majority of his practice involves non-Covered Horses, Dr. Overly “had compelling justification to carry and possess legal medications at Los Alamitos for use or intended use in his Non-Covered practice.”). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 58 of 205 058 * PUBLIC * PUBLIC diagnosing the condition requiring treatment. Again, the evidence overwhelmingly refutes his argument. Testosterone and isoxsuprine have limited, if any, uses in an equine veterinary practice, and even where indicated, treat chronic, not exigent, conditions. 205 Testosterone, for example, can be administered “the next day, and it won’t . . . necessarily affect the outcome for that horse.” 206 Moreover, Dr. Overly’s own evidence shows no use of testosterone at all at Los Alamitos in 2024. 207 And the testosterone injections that Dr. Overly gave Cosmo were “incredibly sporadic” —four times over roughly a one year period. 208 As Dr. Benson testified: “The testosterone could [have] been picked up at the end of . . . the Los Alamitos day and brought to Cosmos, if that was the intended purpose.” 209 Regarding isoxsuprine, as noted, Dr. Overly dismissed the substance as ineffective and consequently didn’t use it anyway. In all events, Dr. Overly’s office is “adjacent” to Los Alamitos. 210 If there were a need, however unlikely, to administer testosterone or isoxsuprine to a horse 205 AB 2675-76, at ¶¶ 7(a) & (c), 2679-80, at ¶¶ 18-20, 2685, at ¶ 36 (Benson Exp. Rep.), 6367, 6374- 75 (Benson). 206 Id. 6375 (Benson). See id. 1197-2043 (Corbett Ex. 1 listing 19,927 treatments at Los Alamitos in 2024), 5994-95, 6028 (Ex. 1 is “all strictly racetrack. All of these treatments are just racetrack . . . Los Alamitos[.]”), 6052 (Corbett did not “recall seeing any” records of testosterone treatment. “[I]f I found anything, I was going to just highlight it.”) (Corbett). 207 208 Id. 6381 (Benson). 209 Id. 6382 (Benson). 210 Id. 6094, 6124-25 (Overly). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 59 of 205 059 * PUBLIC * PUBLIC at Los Alamitos, Dr. Overly could obtain the substance from his office with minimal inconvenience. Besides that, Dr. Overly regularly services his off-track patients on Wednesday afternoons, after returning from Los Alamitos. 211 So, loading his Hummer specifically for those off-track visits, based on the appointments for the trip, should be a routine practice: “it is possible, yes.” 212 In fact, the day of the search here—July 23, 2024—was a Tuesday; Dr. Overly could have added either testosterone or isoxsuprine to his Hummer if there had been any genuine need to use either substance off-track on Wednesday afternoon. Finally, despite ceasing to include testosterone and isoxsuprine on his trips to Los Alamitos since HIWU’s search in July 2024, Dr. Overly is “able to nonetheless meet [his] ethical obligations as a veterinarian at Los Alamitos.” 213 Dr. Overly’s better-safe-than-sorry argument is meritless. The mixed nature of his practice does not demonstrate any “justification”—much less a “compelling” one—that could excuse his Possession of testosterone and isoxsuprine at Los Alamitos on July 23, 2024. Although Dr. Overly’s mixed practice evidence fails to satisfy his burden of proof, I do not reject this approach altogether. 214 A veterinarian’s practice might skew so heavily to non-Covered Horses that demonstrated use of a Banned 211 Id. 6093, 6203-04, 6310-11 (Overly). 212 Id. 6311 (Overly) (“[W]e always go back” to the office from Los Alamitos so that Dr. Overly can receive “a report of what scheduled clients I’m going to see on the outside . . . .”). 213 Id. 6277 (Overly). 214 See id. 5964 (Scollay). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 60 of 205 060 * PUBLIC * PUBLIC Substance, together with other evidence of diligent compliance efforts, could permit finding compelling justification. Dr. Scollay herself admitted as much, positing the practices of two different veterinarians. One had “almost exclusively racetrack practice[]”—“90 plus percent”—“but d[id] the odd pet horse, backyard horse for friends or neighbors.” 215 The other had “one or two [racetrack] clients, but the majority of the practice is out in the country . . . .” 216 The veterinarians thus have “very different practices, and what they need/should carry in their vehicles is largely based on the population of horses that they’re caring for.” 217 This is not such a case, however. Dr. Overly’s patient base of Covered Horses, both at Los Alamitos and off-track, is roughly 30%—a sizable share of his practice population—and other factors point against his need for either testosterone or isoxsuprine—as does the veracity of his evidence itself. This, then, takes us to Dr. Scollay’s remarks. As will be seen, however, they do not move the needle in favor of compelling justification. 2. Dr. Scollay’s Will Rogers Downs Racetrack Remarks To reiterate, Will Rogers Downs racetrack in Oklahoma was the site of one of Dr. Scollay’s 2023 presentations to educate industry participants on HISA’s soon-to-be-effective ADMC Program. An audience member recorded Dr. Scollay’s 215 Id. 5933 (Scollay). See also ORAuPFOF ¶ 23 (admitting Dr. Scollay’s testimony “that the specific intended use of Banned Substances must be considered in every context to determine if there is a need to have it at the racetrack”). 216 AB 5933 (Scollay). 217 Id. See also id. 5972-73 (Scollay) (proof of justification is “practice-specific”). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 61 of 205 061 * PUBLIC * PUBLIC remarks. Dr. Overly did not attend the presentation, or even know there was a video of Dr. Scollay’s remarks. 218 However, he seeks to rely on them as part of his compelling justification proof. While researching HISA’s impact and reading the new Rules, Dr. Overly was “[d]efinitely” concerned about the Possession prohibition in Rule 3214(a) and the “banned substance aspect of HISA regulations.” 219 He explained further: “[T]hey’re talking about drugs being banned that had never been banned before, and . . . can be used on uncovered horses, but can’t be used on covered horses. I mean, it gets a little tricky.” 220 At the arbitration hearing, Dr. Overly testified that this “research” brought to his attention “statements made by Dr. Mary Scollay.” 221 He learned “[b]asically that HISA/HIWU had no jurisdiction over the veterinarian that was practicing on uncovered horses.” 222 That said, he testified to nothing else about the contents of what it was he supposedly saw. His counsel then had him read the following excerpts of Dr. Scollay’s Will Rogers Downs remarks, quoted in HIWU v. Perez, a prior HISA case. Her remarks came in response to a question about veterinarians whose practice included “farm work or non-Covered Horses”: 218 Id. 6193-94 (Overly); ORAuPFOF ¶¶ 19-20. 219 AB 6104-05, 6512 (Overly). 220 Id. 6105 (Overly). 221 Id. 6106 (Overly). 222 Id. 6107 (Overly). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 62 of 205 062 * PUBLIC * PUBLIC If the veterinarians are practicing also on a population of non-covered horses, they are taking care of quarter horses, or they’ve got a country practice part time, they’re able to possess banned substances 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 you don’t have control over. 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’s practice is out in the country, we don’t have the authority to control the medications they administer or carry . . . carry for non-covered horses, the regulation addresses is there is a justification for them to be in possession of a banned substance, and certainly a practice incorporates noncovered horses. 223 After reading from Perez, Dr. Overly testified that the “statement applied” to him. 224 Elaborating, he testified that, because non-Covered Horses were the “predominance of my practice. . . if I was working on non-covered horses, I was entitled to carry the medication that I’m allowed to legally have.” 225 There are several reasons for discounting the veracity of Dr. Overly’s testimony, however: First, Dr. Overly “think[s]” he may have read about remarks by Dr. Scollay remarks in an unidentified blog at some point before the HIWU search in 2024. 226 He recalled no details concerning the blog or how it came to his attention. Id. 6108-09 (Overly) (reading from HIWU v. Perez, JAMS Case No. 1501000589, at ¶ 2.29(2) (Oct. 9, 2023) (AB 528)). See also OOBr. at 4; AuPFOF ¶ 20; AB 5944 (Scollay). 223 224 AB 6109 (Overly). 225 Id. 6111-12 (Overly). 226 Id. 6189-90 (Overly). See also id. 6193 (“I believe that I read it on a blog at some point in time.”). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 63 of 205 063 * PUBLIC * PUBLIC Second, Dr. Overly testified he did not see the excerpts of Dr. Scollay’s recorded remarks, quoted in Perez, until his counsel had “brought [them] to his attention,” and that was not “before July 2024.” 227 But his testimony is inconsistent with his pre-hearing witness statement: In the course of my due diligence and through my review of industry blogs and general industry discussions, prior to July 2024, I became aware of educational presentations given by Dr. Mary Scollay and statements made by Dr. Scollay, including a statements [sic] made on March 24, 2023, at Will Roger’s [sic] Downs. 228 Third, in seeking to explain the testosterone found in Dr. Overly’s Hummer, his counsel’s follow-up letter to HIWU referred to “educational policy guidance” from Dr. Scollay. 229 But despite Dr. Overly’s witness statement claim to have read about Dr. Scollay’s remarks before the HIWU search, his counsel’s letter did not assert his client relied on those remarks. Fourth, at the time of his research, Dr. Overly himself testified: I was actually excited for HISA to come in existence. . . . I thought it was a great idea, and championed it . . . when I was asked about it. Matter of fact, I felt like getting rid of some of the CHRB rules and having a more concise data would be actually advantageous. 230 227 Id. 6108 (Overly). 228 Id. 1163, at ¶ 7 (emphasis added) (Overly Wit. Stmt.). 229 Id. 167 (counsel’s letter). 230 Id. 6097 (Overly). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 64 of 205 064 * PUBLIC * PUBLIC Dr. Overly also knew the position Dr. Scollay had at HIWU, and he considered her an authoritative source of information: “If I couldn’t trust the scientific director for HISA, who can I trust,” he asked rhetorically. 231 Despite this, Dr. Overly never reached out directly to Dr. Scollay or anyone else at HIWU to discuss his mixed practice. 232 As Dr. Overly put it: “I felt like that I was in compliance. I felt like that. I never had an issue so I didn’t feel the need to have to reach out at any point in time.” 233 At the same time, however, Dr. Overly testified he looked to the CHRB’s chief veterinary officer for guidance. 234 With the new ADMC Program taking effect, Dr. Overly could reasonably have figured out—if he did not already know—how to reach Dr. Scollay or others at HIWU to discuss compliance. 235 His explanation for not contacting Dr. Scollay directly—“I didn’t know that Dr. Scollay was approachable”—is not believable. 236 It is also inconsistent with earlier testimony. Asked why he put “so much weight” on Dr. Scollay’s Will Rogers Downs remarks, Dr. Overly answered: “She’s the director of science for HISA/HIWU. She’s supposed to be the person that you ask.” 237 231 Id. 6107 (Overly). See also id. 6110, 6195-96 (Overly). 232 Id. 6197-98 (Overly). See also id. 6470 (Scollay) (Scollay did not recall any contact with Overly). 233 Id. 6201 (Overly) 234 Id. 6198-200 (Overly). 235 Id. 6097-98, 6191-92, 6198-99 (Overly). 236 Id. 6197-98 (Overly). 237 Id. 6171-72 (Overly) (emphasis added). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 65 of 205 065 * PUBLIC * PUBLIC Fifth, describing the action he took in anticipation of the ADMC Program becoming effective, Dr. Overly testified he removed “bisphosphonates . . . from the truck,” but could not recall any other substance similarly removed. 238 Bisphosphonates, which can be used to clean and rebuild bone, are among the substances prohibited under the ADMC Program. 239 They are the one substance Dr. Scollay mentioned in the excerpted remarks that Dr. Overly was asked to read at the arbitration. 240 Coincidence? I am skeptical. The totality of the evidence suggests that Dr. Overly’s testimony concerning Dr. Scollay’s public remarks is unworthy of belief. I give no weight to his testimony. 241 In all events, Dr. Overly over-reads Dr. Scollay’s remarks in arguing they meant that any Veterinarian whose practice included non-Covered Horses would be entitled to possess Banned Substances. 242 Dr. Scollay did not offer any such “blanket exception” in her Will Rogers Downs remarks or in any other public 238 Id. 6221-22, 6224 (Overly). 239 Rule 4117(a). See Shell II, 2025 WL 1784696, at *6. 240 AB 6109 (Overly). See, e.g., Runyon v. United States, No. 4:15cv108, 2024 WL 2992712, at *29 (E.D. Vir. June 14, 2024) (testimony that is “incredible” and “unreliable” is entitled to “little to no weight”); United States v. Granado, Crim. No. 09-471-6, 2012 WL 12888670, at *7 (E.D. Pa. Feb. 9, 2012) (where an expert’s diagnosis was “utterly incredible,” “no weight” was given to his testimony); Massachusetts Medical Soc. v. Dukakis, 637 F. Supp. 684, 696 (D. Mass. 1986) (testimony was so patently incredible” that it was given “no weight whatsoever”), aff’d, 815 F.2d 790 (1st Cir. 1987). See also Robinson v. Colvin, No. 11 C 0584, 2013 WL 1914317, at *20 (N.D. Ill. May 8, 2013) (Of course, lies and inconsistent statements provide a valid basis for finding a witness not credible.”). 241 242 See, e.g., ORBr. at 2-3. FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 66 of 205 066 * PUBLIC * PUBLIC presentation. 243 Much the contrary, she caveated her guidance: “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.” 244 As she also testified, “you might get more than a raised eyebrow. You might get charged with a doping violation.” 245 Explaining further, Dr. Scollay stated that, whether Possession of a Banned Substance can be excused is “specific to that [veterinary] practice . . . because no two practices are exactly alike . . . . So each practice has its own client base, and it is unique to that practice.” 246 Dr. Overly protests nonetheless that neither the Authority nor HIWU issued any guidance on “compelling justification” or any further discussion of the defense beyond Dr. Scollay’s remarks. 247 But that complaint rings hollow. As the District Court for the District of New Mexico recently wrote: [T]o comport with Rule 3214(a) is by refraining from the conduct it proscribes, i.e. possessing banned substances or banned methods. Those substances are enumerated in the Authority’s “Prohibited List,” leaving scant room for confusion over what can and cannot be possessed. See HISA Rule Series 4000. .... The Authority’s decision not to define “compelling justification” does not alter the Court’s conclusion. Permitting possession when there is a compelling justification for doing so is an exception to the rule. 243 See AB 5929 (Scollay). 244 Id. 5949, 6109 (Scollay). 245 Id. 5929 (Scollay); ORAuPFOF ¶ 21. See AB 5953-54, 5956-57 (Scollay). See also id. 5935-36 (Scollay) (discussing specific considerations Scollay considers if asked for guidance). 246 247 Id. 6474-75 (Scollay). See, e.g., ORBr. at 7-8 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 67 of 205 067 * PUBLIC * PUBLIC Veterinarians can always comply with Rule 3214 by not possessing the substances it prohibits. Because Rule 3214 imposes strict liability for possession, the scenarios where the “compelling justification” exemption applies will be a small minority. 248 The District Court’s intuitive conclusion—that compelling justification cases “will be a small minority”—accords with the facts in this case. Dr. Scollay, who regularly responds to veterinarian questions, testified: “I have yet to have a veterinarian tell me that any one of [the Banned Substances the veterinarian raised] constitutes an emergency drug that they have to have immediately on hand.” 249 In sum, nothing Dr. Scollay said publicly can reasonably be read to suggest Dr. Overly had—or reasonably could believe he had—any entitlement to escape Rule 3214(a)’s Possession prohibition just because he treated non-Covered Horses. Instead, he has the burden of proving, by a preponderance of the evidence, that he had a compelling justification to have testosterone and isoxsuprine when HIWU searched his Hummer on July 23, 2024. On that score, he has failed. I turn next to Dr. Overly’s constitutional argument, which requires only brief treatment. After that, I discuss sanctions, including the defenses of No Fault or Negligence (“NF”) and No Significant Fault or Negligence (“NSF”). 248 Scott, 2025 WL 2987598, at *7. 249 AB 5968 (Scollay). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 68 of 205 068 * PUBLIC * PUBLIC D. Dr. Overly’s Constitutional Challenge to Rule 3214(a) Fails Dr. Overly argues that Rule 3214(a)’s “compelling justification” defense is “vague on its face” and “void,” thereby violating his “Fifth and Fourteenth Amendment Due Process rights . . . .” 250 This argument is not properly raised on this review, and in any event lacks merit. FTC Rule 1.146(a)(1) provides that, “[e]xcept for good cause shown, no assignment of error by the aggrieved party may rely on any question of fact or law not presented to the Authority.” 251 Neither Dr. Overly’s pre-hearing or posthearing papers before the Arbitrator raised the constitutional arguments now asserted. 252 Likewise, Dr. Overly never argued it in the arbitration hearing. No good cause for these failures is argued in his briefing on this review. Regardless, the argument also fails on the merits. In Shell II, I rejected this same argument—that the compelling justification defense was unconstitutionally vague. 253 Nothing that Dr. Overly now asserts persuades me that I should revisit that ruling. The Scott court has since similarly rejected the argument in denying the veterinarian’s preliminary injunction 250 OOBr. at 1, 9-10; OPCOL ¶¶ 14-15. see Matter of Juarez-Rufino, No. 9444, 2025 FTC Lexis 122, at *29 n.120 (ALJ Dec. 2, 2025). 251 Regarding the need to construe “the Authority” to refer here to the “Arbitral Body,” 252 See AB 1123 (pre-hearing brief), 3112 (post-hearing brief). 253 2025 WL 1784696, at *27-28. FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 69 of 205 069 * PUBLIC * PUBLIC motion: “Plaintiffs are not likely to succeed on the merits of their vagueness claim.” 254 VII. SANCTIONS ISSUES AND THEIR RESOLUTION A. HIWU Properly Charged Dr. Overly with Two Possession ADRVs HIWU charged Dr. Overly with Possession of two Banned Substances, for which it sought individual sanctions “for each first-time Violation of ADMC Program Rule 3214(a).” 255 Dr. Overly argues that, although HIWU discovered two Banned Substances during its search, the principle of proportionality—requires that only a single, combined sanction could be imposed. 256 This sports law principle counsels that “the severity of a penalty must be in proportion with the seriousness of the infringement.” 257 The Authority, however, maintains that: (1) HIWU properly charged two Possession ADRVs: (2) the proportionality principle does not apply on the facts here; and (3) per violation sanctions may be imposed, resulting in consecutive periods of Ineligibility and aggregated fines. 258 The parties’ dispute revolves around my decision in Shell II, where I construed HIWU’s charging authority under Rule 3228(d). The Rule provides as follows: 254 2025 WL 2987598, at *7. 255 AB 123 (Charge Letter). See, e.g., OPCOL ¶ 19 (citing to AB 6716-17, ¶¶ 7.7.1.-.5, (Corrected Final Decision), where the issue is discussed); ORBr. at 4-6. 256 257 W. v. FEI, CAS 99/A/246, at ¶ 31 (May 11, 2000). 258 AuPFOF ¶¶ 26-29; AuOBr. at 25-26. FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 70 of 205 070 * PUBLIC * PUBLIC (d) Violations involving both a Banned Substance or Method and a Controlled Medication Substance or Method. Where a Covered Person is found, based on a common set of facts, to have committed a (1) violation involving one or more Banned Substance(s) or Banned Method(s), and (2) a violation involving one or more Controlled Medication Substance(s) or Controlled Medication Method(s), they shall be treated as separate violations, but shall be adjudicated together in consolidated proceedings pursuant to the procedure that applies to AntiDoping Rule Violations under the Arbitration Procedures. In Shell II, I construed Rule 3228(d) to permit HIWU to charge, as “separate violations,” a Veterinarian’s Possession of four Banned Substances arising from “a common set of facts”—there, as here, a single search. 259 While anchored in Rule 3228(d), this construction finds support in sports law generally. 260 But I also held, based on the facts of Shell II, that the proportionality principle precluded imposing sanctions for each of the four proven ADRVs, and instead permitted issuance of single, combined sanction award. 261 In Dr. Overly’s case, the Arbitrator ruled that the Shell II analysis applied and thus awarded a combined sanction. 262 I disagree. I adhere to the construction of Rule 3228(d) that I reached in Shell II. HIWU has authority to bring two Possession charges, which were adjudicated in a 259 2025 WL 1784696, at *33-34. See also Rules 3226(c), 3228, 3323(d), 3328. 260 See, e.g., Matter of Vogg, FEI 2022/HD02, at ¶ xxvi, n.16 (Dec. 20, 2022) (two violations, presence and use of single substance, were “considered together as one single first violation”); Decision of The Athletics Integrity Unit in the Case of Ms Sitora Khamidova ¶ 24 (Mar. 6, 2024) (multiple violations involving different drugs “were committed simultaneous” and were “considered together as a single first” violation). 261 2025 WL 1784696, at *34. 262 AB 6717, at ¶ 7.7.5 (Corrected Final Decision). FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 71 of 205 071 * PUBLIC * PUBLIC single arbitration. Shell II, however, does not, as Dr. Overly contends, mean that the proportionality principle automatically applies and thus resolves whether combined or separate sanctions may be imposed when, as here, multiple ADRVs are proven. “Two” is, after all, the least number of multiple ADRVs that can trigger subsection (d) to begin with. And the proportionality principle is a case lawderived exception. As such, it should not become the norm. Much the contrary, facts matter. There is a meaningful difference between: (1) four consecutive Ineligibility periods, each of 24 months, imposed as a career servicing Covered Horses sunsets—facts in Shell II—and (2) two potentially consecutive periods earlier in a Veterinarian’s career, where the practice involves mostly non-Covered Horses—facts in this case. While that alone may not be enough, whether to apply the proportionality principle may also take account of the facts overall. First, Dr. Overly maintains that, although he had multiple vials of testosterone—a Banned Substance—on his truck when HIWU searched it at Los Alamitos, he did nothing wrong even though: (1) he had last used testosterone to treat non-Covered Horse Cosmo four months earlier; (2) he had no imminent treatment appointment for Cosmo, but instead would not again treat the horse for another week; (3) during that time his staff repeatedly attended to the substances on his Hummer; and (4) the testosterone found on his Hummer far exceeded that needed for Cosmo’s next treatment. FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 72 of 205 072 * PUBLIC * PUBLIC Second, Dr. Overly similarly contends that he did nothing wrong by having on his truck a tub of isoxsuprine—also a Banned Substance—that: (1) he did not use in his practice and did not know was on his truck; but that (2) his girlfriend had put there without telling Dr. Overly; (3) supposedly, for an appointment to examine Brownie, another non-Covered horse; (4) for which no appointment or examination records were introduced; and that (5) was never used to treat Brownie anyway. For each Banned Substance, Dr. Overly’s defense is incredulous. Taken as a whole, his evidence simply diverts attention from these two implausible scenarios. Third, Dr. Overly’s lack of candor includes trying to whitewash his past. His witness statement asserts: “prior to the Horseracing Integrity and Safety Act of 2020 . . . coming into effect, in approximately 27 years of practice, I had never been charged for any violation at Los Alamitos Racecourse in Cypress, California.” 263 However, in 2018, he was adjudicated to have violated CHRB “Rules #1843(A) & (D) (Medication, Drugs and Other Substances), #1843.1(B) (Prohibited Drug Substances) and #1844(F)(1) (Authorized Medication-Betamethasone (66pg/mL) in Excess of Authorized Level (10.0pg/mL).” 264 He has three other adjudicated CHRB Rule violations. 265 Dr. Overly further has been charged in a 15-count proceeding 263 Id. 1162, at ¶ 5 (Overly Wit. Stmt.) (emphasis added). See also id. 6075, 6079 (Overly) (Dr. Overly has practiced as a veterinarian since 1997). 264 Id. 3099 (2018 CHRB Stewards Ruling), 6294-95 (Overly). Id. 3101, 3103, 3105 (2009 and 2011 CHRB Stewards Rulings). See generally id. 6284-95 (Overly). 265 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 05/04/2026 OSCAR NO. 615393 -PAGE Page 73 of 205 073 * PUBLIC * PUBLIC before the California Veterinary Medical Board, which includes a count alleging administration of Ritalin to 25 horses between September 2019 and July 2020, arising from conduct at Los Alamitos. 266 Dr. Overly’s witness statement is untrue. He not only has been “charged,” but also adjudged liable, for violations arising from his Los Alamitos practice. Taking account of all the evidence in this case, the basis for applying the proportionality principle to favor Dr. Overly escapes me. I will not do so. This proceeding calls for de novo review of the record. 267 An ALJ is authorized to “affirm, reverse, modify, set aside, or remand for further proceedings, in whole or in part” the sanctions imposed, and to “make any finding or conclusion that, in [its] judgment . . . is proper and based on the record.” 268 This authority includes determining whether the sanctions are “an abuse of discretion, or otherwise not in accordance with law.” 269 Applying these review criteria to the facts here, I cannot uphold awar [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Aftc%3A78b447257469bb92. Public record. Not legal advice.