# FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 1 of 123 * PUBLIC * > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Aftc%3Aa14ed6fb7b4d8b1a ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 1 of 123 * PUBLIC * PUBLIC UNITED STATES OF AMERICA FEDERAL TRADE COMMISSION OFFICE OF ADMINISTRATIVE LAW JUDGES __________________________________________ ) In the Matter of ) ) Jason Scott, DVM, ) ) Appellant. ) __________________________________________) Docket No. 9449 ADMINISTRATIVE LAW JUDGE DECISION ON APPLICATION FOR REVIEW FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 2 of 123 * PUBLIC * PUBLIC TABLE OF CONTENTS TABLE OF CONTENTS ................................................................................................ i TABLE OF ABBREVIATIONS .................................................................................... iii I. OVERVIEW OF THOROUGHBRED HORSERACING’S REGULATORY STRUCTURE........................................................................................................ 2 II. STATEMENT OF FACTS. ................................................................................... 4 A. HIWU’s Search at Sunland Park. ............................................................ 6 B. HIWU Charges Dr. Scott with Possession Violations............................. 8 C. The Arbitrator’s Decision. ...................................................................... 10 III. ISSUES ON REVIEW. ....................................................................................... 13 IV. SCOPE OF REVIEW. ......................................................................................... 14 V. ANALYSIS OF THE ISSUES. ........................................................................... 16 A. HIWU’s Possession Charges. ................................................................. 16 1. AMP and Sarapin: What Are They? .............................................. 16 a. AMP...................................................................................... 16 b. Sarapin ................................................................................. 19 2. ADMC Rule Treatment of Sarapin and AMP: Is Each a “Banned Substance”?...................................................................... 24 a. Category S6: Sarapin........................................................... 25 b. Category S0: AMP. .............................................................. 26 B. Dr. Scott’s Compelling Justification Argument. ................................... 39 1. Dr. Scott’s Practice. ........................................................................ 40 2. Dr. Scott’s “Documentary” Proof. ................................................... 44 3. Assessment of Dr. Scott’s Data Extracts. ...................................... 52 4. Sarapin Use by Other Veterinarians. ............................................ 57 5. New Mexico Law and NMRC Enforcement................................... 60 a. Racetrack Law and Regulation. .......................................... 61 i. Compounded Substances. ......................................... 63 i FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 3 of 123 * PUBLIC * PUBLIC C. D. E. VI. ii. AMDUCA. ................................................................. 64 iii. FDA Policy GFI #256. ............................................... 67 b. NMRC Enforcement at Sunland Park. ............................... 71 c. The Parties’ Post-Search “Evidence.” ................................. 76 DR. SCOTT’S JURISDICTIONAL OBJECTIONS FAIL. .................... 80 DR. SCOTT’S RULEMAKING ARGUMENTS ARE MERITLESS. .......................................................................................... 86 1. The Possession Rule. ...................................................................... 88 2. The Compelling Justification Defense........................................... 91 3. The “WADA Alternative” Argument. ............................................ 92 4. The “Deceptive Baseline” Argument. ............................................ 93 5. The “Unexplained Deviations” Argument. .................................... 97 6. The “Covered Persons Effects” Argument. .................................... 98 Dr. Scott’s Public Nondelegation Argument Fails. ............................. 100 SANCTIONS..................................................................................................... 102 A. The Ineligibility Period. ....................................................................... 104 B. The “Backdate” Ruling. ........................................................................ 105 C. The Fine Amount.................................................................................. 106 D. Adjudication Costs................................................................................ 107 E. Relief with Respect to the Sanctions Rulings. .................................... 108 1. Whether or Not to Remand to the Arbitrator. ............................ 108 2. Remand to the Arbitrator on the Ineligibility Period and Fine. 113 3. No Remand for the Backdating Ruling. ...................................... 115 F. The Stay of Sanctions. .......................................................................... 117 VII. CONCLUSION. ................................................................................................ 117 ii FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 4 of 123 * PUBLIC * PUBLIC TABLE OF ABBREVIATIONS General ADMC – Anti-Doping and Medication Control Program AMDUCA – Animal Medicinal Drug Use Clarification Act of 1994 ARCI – Association of Racing Commissioners International Authority – Horseracing Integrity and Safety Authority HISA – Horseracing Integrity and Safety Act, 15 U.S.C. §§ 3051-60 HIWU – Horseracing Integrity & Welfare Unit BVM – New Mexico Board of Veterinary Medicine NMAC – New Mexico Administrative Code NMRC – New Mexico Racing Commission Review Proceeding AB – Appeal Book AuOBr. – Authority’s Opening Brief AuPFOF – Authority’s Proposed Findings of Fact AuPCOL – Authority’s Proposed Conclusions of Law AuPO – Authority’s Proposed Order SOBr. – Scott’s Opening Brief SPFOF – Scott’s Proposed Findings of Fact SPO – Scott’s Proposed Order iii FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 5 of 123 * PUBLIC * PUBLIC SRBr. – Scott’s Reply Brief SRPFOF – Scott’s Reply to Authority’s Proposed Findings of Fact SRPCOL – Scott’s Reply to Authority’s Proposed Conclusions of Law Tr. – Transcript of July 22, 2026 Oral Argument Hearing Other Cases McCrosky - Matter of McCrosky, No. 9448, 2026 WL 1633298 (FTC ALJ June 2, 2026) Overly - Matter of Overly, No. 9443, 2026 FTC LEXIS 61 (ALJ Jan. 27, 2026), vacated and remanded, 2026 FTC LEXIS 64 (July 21, 2026) Perez - Matter of Perez, No. 9420, 2024 FTC LEXIS 206 (ALJ Feb. 7, 2024) Scott v. HISA - Scott v. Horseracing Integrity & Safety Authority, No. 2:25-cv-632-SMD-GJF, 2025 WL 2987598 (D.N.M. Oct. 22, 2025) Scott Order - Matter of Scott, No. 9449, 2026 WL 2111924 (FTC ALJ July 16, 2026) Shell II - Matter of Shell, No. 9439, 2025 WL 1784696 (FTC ALJ Mar. 6, 2025) iv FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 6 of 123 * PUBLIC * PUBLIC This is a disciplinary case against a veterinarian, Dr. Jason Scott, who possessed two allegedly Banned Substances on his veterinary SUV while at a racetrack covered by the federal Horseracing Integrity and Safety Act (“HISA”). 1 The Possession charges were heard by an arbitrator who, after an evidentiary hearing, found liability proven and awarded sanctions against Dr. Scott that include: (1) an 18-month period of Ineligibility, during which he may not provide veterinary services at a racetrack subject to HISA; and (2) a $25,000 monetary fine and $5,000 payment of adjudication costs. As HISA authorizes, Dr. Scott seeks de novo review of the Arbitrator’s decision and the sanctions imposed. 2 He seeks to overturn the disciplinary decision for various reasons, the more significant of which are that: (1) his factual showing satisfies the defense of “compelling justification,” which if proven negates otherwise wrongful Possession of Banned Substances; and (2) in any event, there is no jurisdiction over him under HISA or its implementing rules. As set forth below, I hold that: (1) one of the Possession charges must be affirmed, while the other is reversed; and (2) the sanctions the arbitrator awarded, for the most part, must be set aside, and I am remanding them for further consideration. 1 15 U.S.C. §§ 3051-60. Capitalized terms used, but not defined, in this Decision, are from ADMC Rule 1020 of the Rules implementing HISA’s statutorily-prescribed anti-doping and medication control program, discussed below. Other abbreviations are set forth in the Table of Abbreviations. References to a “Rule” are to those promulgated under HISA, unless otherwise identified. 2 See 15 U.S.C. § 3058; FTC Rules 1.145-.148. FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 7 of 123 * PUBLIC * PUBLIC I. OVERVIEW OF THOROUGHBRED HORSERACING’S REGULATORY STRUCTURE. Congress enacted HISA in 2020 to provide national uniformity to safety and substance control in the nation’s thoroughbred racing industry. Congress charged the Horseracing Integrity and Safety Authority (the “Authority”), a private, independent, self-regulatory, nonprofit corporation, with responsibility to “develop[] and implement[] a horseracing anti-doping and medication control program” throughout the United States. 3 The Authority promulgated, and the Federal Trade Commission approved, regulatory rules creating the statutorily-required antidoping and medication control (“ADMC”) Program. HISA and its implementing Rules apply to Covered Persons, which include Veterinarians who treat Covered Horses, such as Dr. Scott. 4 Among other things, the ADMC Program Rules address: (1) the substances that are banned outright or subject to threshold presence requirements, or are regulated as controlled medications; and (2) the conduct constituting Anti-Doping Rule Violations (“ADRVs”) and their corresponding sanctions. 5 Under the ADMC Program, the more serious ADRVs involve Banned Substances, which are set out in the Prohibited List issued by the Authority. Banned Substances are “prohibited at all times” and “should never be in a horse’s system . . . as they serve no legitimate 3 15 U.S.C. § 3052(a). 4 See Rule 1020 (definition of Covered Person). 5 See generally ADMC Rule 3000 series. 2 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 8 of 123 * PUBLIC * PUBLIC treatment purpose.” 6 The Horseracing Integrity and Welfare Unit (“HIWU”), with whom the Authority has contracted, enforces the ADMC Program Rules. 7 HIWU charges to adjudicate ADRVs are heard by an Internal Adjudication Panel, which may, as here, consist of a single arbitrator. 8 ADMC Rule 3214(a) prohibits “Possession of a Banned Substance . . . unless there is compelling justification for such Possession.” The Rule imposes strict liability, regardless of knowledge or intent, absent an exception that is inapplicable here. 9 The Rule, and its defense, are comparable to Article 2.6 of the Fédération Équestre Internationale’s (“FEI’s”) Equine Anti-Doping and Controlled Medication Regulations (“EADCM Regulations”). 10 6 Rule 3010(c). 7 See also Rules 1020 (definition of ADRV), 3111(a) (Prohibited Substances). See 15 U.S.C. §§ 3054(e)(1)(B)-(E), 3055; Rules 3010(e)(1), 5720(a). 8 Rules 3360, 7020. See Matter of Shell, No. 9439, 2025 WL 1784696, at *11, n.16 (FTC ALJ Mar. 6, 2025) (“Shell II”); HIWU v. Poole, JAMS Case No. 1501000576, at ¶¶ 7.7-.8 (Aug. 8, 2023), aff’d sub nom. Matter of Poole, No. 9417, 2023 WL 8435860 (FTC ALJ Nov. 13, 2023). 9 Rule 1020 (definition of Possession). 10 FEI EADCM Regulations at 6 (4th ed. effective Jan. 1, 2025) (Article 2.6, prohibiting possession, “unless [the Person Responsible or their Support Personnel] demonstrate compelling justification”), https://inside.fei.org/sites/default/files/EADCMRs%20Final%20Draft%20effective%201%20January%202025%20-%20clean.pdf. 3 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 9 of 123 * PUBLIC * PUBLIC II. STATEMENT OF FACTS. 11 Dr. Scott is a licensed veterinarian, with over two decades of experience treating racehorses in New Mexico. 12 He practices “entirely from a mobile truck, which permits [him] to treat equine athletes where they are housed, which may be a racetrack, training facility, or farm.” 13 A majority of his practice treats quarter horses, which are not Covered Horses under HISA, while the rest are Covered Horses. 14 New Mexico’s Sunland Park racetrack is referred to as a “mixed meet” track, which means it hosts races for non-Covered quarter horses, typically during two consecutive days in the week, with Covered thoroughbred horses racing, again typically, on two other consecutive days. 15 Although HISA does not currently cover quarter horse racing, a brief description provides useful background. Quarter horse races “are decided over 220 11 Preliminarily, insofar as may be necessary, I over-rule Dr. Scott’s objections to the testimony of Dr. Dionne Benson, HIWU’s expert, and to the limited parts of the testimony of Ismael Tréjo, the New Mexico Racing Commission’s (“NMRC’s”) Executive Director, a witness called by HIWU. Scott Ruling on Objections ¶¶ 23-26. Dr. Benson, a licensed veterinarian, has had varied and extensive experience in equine health and welfare, and sport matters. See, e.g., AB 2051-61 (Benson CV), 5822-30, 5883-85 (Benson). She is qualified to testify as an expert on veterinary compounding laws, as well as on the other matters as to which her testimony was adduced. For Mr. Tréjo, Dr. Scott’s objection goes only to the weight of the evidence, not to its admissibility. 12 AB 5231, at ¶ 2 (Scott wit. stmt.), 6210-11, 6220-22 (Scott). 13 Id. 5231, at ¶ 3, 6210. 14 Id. 5231, at ¶ 4, 6226-27. See AB 135 (Scott letter), 5199, at ¶ 15 (Scott pre-hearing brief listing race dates for quarter horses in January and February 2025), 6313-14, 6283-84 (Scott). See, e.g., Sunland Park 2025 Stakes Schedule, https://sunland-park.com/wp-content/uploads/2024/09/SunlandPark_StakesSchedule _2025.pdf; 2026 Sunland Park Live Racing Schedule, https://sunland-park.com/wp-content/uploads/ 2025/09/2026_HorseRacingCalendar.pdf. 15 4 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 10 of 123 * PUBLIC * PUBLIC to 440 yards and raw explosive strength is the primary determinant of outcome.” 16 The sport is “demanding,” requiring the quarter horse to “run[] at their maximum effort for the entirety of the race.” 17 This emphasis on short-term speed “creates unusually strong incentives for muscle-enhancing drugs.” 18 While quarter horse races “lack the ebb-and-flow suspense of a longer thoroughbred race, they make up for it in a pure adrenalin rush. The best quarter horses can hit nearly 50 miles an hour.” 19 An investigative report, published before Congress enacted HISA, found that, compared to thoroughbreds, “quarter horses have a nearly 29 percent greater chance of breaking down or showing signs of injury. . . . Breakdowns can be caused by a variety of factors, including poor track surface and jockey mistakes. But drugs, often used to mask existing injuries, are the prime suspect.” 20 Ismael Tréjo, NMRC Executive Director, testified here that the State’s “catastrophic injury rate was 4.3, 4.5 per 1,000 starts,” while the 16 Miles Henry, Performance-Enhancing Drugs in Horse Racing: What Trainers Use and Why It Matters, Horse Racing Sense (last updated July 28, 2026), https://horseracingsense.com/ performance-enhancing-drugs-in-horse-racing/#ped-history. 17 AB 5231, at ¶ 10 (Scott wit. stmt.). 18 Henry, Performance-Enhancing Drugs. et al., Mangled Horses, Maimed Jockeys, NYTIMES (Mar. 24, 2012), https://www.nytimes.com/2012/03/25/us/death-and-disarray-at-americas-racetracks.html. See also Patrick Battuello, Juicing via Frogs, Horseracing Wrongs (Oct. 27, 2013) (“On a single day in May 2012, 8 New Mexico Quarter Horses tested positive for dermorphin,” known as “frog juice”), https://horseracingwrongs.org/2013/10/27/juicing-via-frogs/. 19 Bogdanich, 20 Bogdanich, et al., n.19, above. 5 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 11 of 123 * PUBLIC * PUBLIC “national average is probably a hair below one per 1,000. So, we have a high rate of catastrophic injuries with the quarter horses here in New Mexico.” 21 A. HIWU’s Search at Sunland Park. During a February 2025 search of Dr. Scott’s SUV at Sunland Park, HIWU found two bottles of both: (1) Sarapin; and (2) adenosine monophosphate (“AMP”). 22 Briefly, Sarapin, an extract from Pitcher Plant, is said to reduce pain and inflammation in the spine or back area of a horse, while AMP has been considered a vasodilator, relaxing muscles to ease blood flow and reduce pain. 23 However, neither substance is FDA-approved. 24 Under the ADMC Program Rules, Sarapin is expressly identified as a category S6 Banned Substance. Although the ADMC Rules do not similarly identify AMP, HIWU contends that it also is a Banned Substance under category S0, a catch-all that covers medications that meet prescribed criteria. 25 HIWU investigators found one Sarapin bottle, labeled Pitcher Plant, in the cabinet in the rear cargo area of Dr. Scott’s SUV, and the other in a blue “tote” bag 21 AB 5757-58 (Tréjo). See also Bogdanich (discussing breakdowns at New Mexico racetracks). See generally AB 1970-72 (SUV search photos), 1996-2001, 2007-12 (Sarapin photos), 2018-23, 2029-34 (AMP photos), 5610, 5613-14, 5636-38 (Bennett), 6274-81 (Scott) (describing the search). 22 See AB 136-37 (Scott letter), 5264-65, at ¶¶ 25-27, 30-31 (Fenger Exp. Rep.), 5834-35 (Benson); Shell II, 2025 WL 1784696, at *5. 23 24 AB 243-44, 245 at ¶¶ 15, 19 (Benson Exp. Rep.), 5517-18, at ¶¶ 36-38 (Benson Supp. Exp. Rep.), 5835, 5861-64, 5866-67, (Benson); AuPFOF ¶¶ 61-63. 25 Rules 4111 & 4117(a); AB 119 (EAD Notice); AB 5840 (Benson). 6 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 12 of 123 * PUBLIC * PUBLIC located in the SUV’s folded down back seat. 26 Both AMP bottles were in the cabinet. 27 The tote bag’s items included alcohol swabs and syringes: “If you had to go in and treat an animal, he had the things that he needed to do an injection in that tote.” 28 On the day of the search, only Covered Horses were racing. 29 Prior to the search itself, Dr. Scott had treated at least one Covered Horse that day. 30 Dr. Scott testified that the Sarapin in his tote “could possibly have been in the container” when he took it to treat a Covered Horse. 31 Since AMP and Sarapin lack FDA approval, they can only be obtained in this country as compounded substances. 32 “Compounding,” in this context, refers to “combining, mixing, or altering ingredients to create a medication tailored to the needs of an individual animal or a small group of animals. . . .” 33 26 AB 172 (Photos), 5636-37 (Bennett). 27 Id. 5637. 28 Id. 5638. 29 Id. 5643. 30 Id. 6275, 6313 (Scott). 31 Id. 6312-13. 32 Id. 5839-40, 5863-64 (Benson). 33 FDA, Animal Drug Compounding, https://www.fda.gov/animal-veterinary/unapproved-animal- drugs/animal-drug-compounding. See also AB 4033 (Veterinary Compounding paper) (“Compounding that is consistent with the FDA Extra-Label Drug Use regulations is the customized manipulation of an approved drug(s) by a veterinarian, or by a pharmacist upon the prescription of a veterinarian, to meet the needs of a particular patient.”). 7 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 13 of 123 * PUBLIC * PUBLIC Currently, neither AMP nor Sarapin can be reliably identified in anti-doping testing. 34 Therefore, it’s not possible “to separate what’s exogenously administered or given to the horse versus what is endogenous or normally in the horse.” 35 Accordingly, the ADMC Rules “control [them] for possession”—by “controlling access.” 36 The Authority thus contends that Veterinarians and other Covered Persons are prohibited from having either substance while at racetracks covered by HISA unless they can show a “compelling justification” for having the substance. B. HIWU Charges Dr. Scott with Possession Violations. Following the search and seizure of the Sarapin and AMP bottles, HIWU served Dr. Scott with its EAD Notice of two Possession ADRVs. 37 Dr. Scott responded by letter to HIWU, explaining that Sunland Park was a mixed meet racetrack and that his practice involved treating both thoroughbreds covered by HISA and quarter horses that are not. 38 He further stated: I am clearly aware that Sarapin is not to be administered to covered thoroughbred horses and it is not my practice to administer Sarapin to thoroughbreds in violation of HISA rules regarding banned substances, and I have not. .... 34 AB 5830-31 (Benson). See also Shell II, 2025 WL 1784696, at *5 (discussing Sarapin). 35 AB 5831, 5836-37, 5923-27, 5993-94 (Benson). 36 Id. 5931, 5969 (Benson). See also id. 1026, at ¶ 16 (Benson Supp. Exp. Rep.). 37 Id. 118, 119-20 (EAD Notice). 38 Id. 135 (Scott letter). 8 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 14 of 123 * PUBLIC * PUBLIC In deference to HISA rules relating to treatment of covered thoroughbreds, I do not treat thoroughbred race horses with Adenosine Phosphate [AMP]. 39 He further submitted two letters from the State’s Board of Veterinary Medicine (“BVM”) to the NMRC, both of which expressed the view that New Mexico law permitted veterinarians to “administer compounded drugs as well as allow[] the practice of extra label use of drugs.” 40 Dr. Scott asked HIWU to appreciate his position, bearing in mind “the lack of guidance to enable veterinarians with practices similar to mine to follow in good faith,” while asserting his “best efforts to properly, professionally, and ethically treat the horse population” entrusted to him. 41 After reviewing Dr. Scott’s letter response, HIWU remained unconvinced and issued its EAD Charge letter asserting two ADRVs for Possession of two Banned Substances. 42 HIWU advised Dr. Scott that, “for each first-time Violation,” it would seek “[a] period of Ineligibility of two years” and “fine of $25,000 USD and payment of some or all of the adjudication costs. . . . [Y]our combined Period of Ineligibility would be four (4) years, and the combined fine would be $50,000 USD.” 43 39 Id. 136, 137. 40 Id. 140 & 142 (2014 and 2025 BVM letters). 41 Id. 138 (Scott letter). 42 Id. 145 (EAD charge letter). 43 Id. 146 (emphasis in original). 9 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 15 of 123 * PUBLIC * PUBLIC Shortly thereafter, Dr. Scott filed a federal suit in the District of New Mexico, seeking a preliminary injunction against the HIWU proceeding, which the District Court denied. 44 That case is pending, and being held in abeyance pending the decision on this review. 45 C. The Arbitrator’s Decision. An arbitration proceeding was begun to adjudicate HIWU’s charges. 46 Prehearing proceedings included four motions in which Dr. Scott sought dismissal based on: (1) alleged lack of arbitration subject matter jurisdiction; (2) the alleged invalidity of the Possession Rule; (3) the alleged invalidity of Rule 4111, the basis for the ADRV based on S0 categorization of AMP as a Banned Substance, and Rule 4117(e), listing Sarapin as a S6 Banned Substance; and (4) summary disposition for lack of arbitration jurisdiction. 47 The Arbitrator denied all the motions without prejudice to their reassertion at the arbitration hearing. 48 Insofar as issues from these motions are now germane to this review proceeding, I discuss them below. 44 Scott v. Horseracing Integrity & Safety Authority, No. 2:25-cv-632-SMD-GJF, 2025 WL 2987598 45 Id., ECF No. 59 (Order Apr. 10, 2026). (D.N.M. Oct. 22, 2025) (“Scott v. HISA”). 46 AB 7 (HIWU initiating letter), 46 (JAMS notice commencing arbitration). Id. 2721 (Notice of Objections), 5058, 5115, 5138 (Scott Supporting Briefs), 5399 (Summary Disposition Motion). 47 48 Id. 5410 (Order Denying Pre-Hearing Motions). 10 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 16 of 123 * PUBLIC * PUBLIC At the arbitration hearing itself, witnesses for both sides, including experts, testified, and documentary evidence was received. In his resulting decision, the Arbitrator made the following award: A period of ineligibility of eighteen (18) months from the date of the initial inspection (February 13, 2025) for possession of two prohibited substances. The 18 month period of ineligibility will expire on August 13, 2026. A fine of $25,000 and a payment of $5,000 in adjudication costs based upon all of the facts and evidence presented. 49 The reasoning underlying this sanctions award is opaque, however. For example: • A central focus of the parties’ evidentiary presentation was Dr. Scott’s assertion that he satisfied Rule 3214(a)’s compelling justification defense. The Arbitrator recognized the issue and, by awarding sanctions, implicitly found Dr. Scott’s evidence insufficient. But the Arbitrator did not explain why Dr. Scott’s proof fell short. 50 • Rule 3223(b) provides that, for a first offense Possession ADRV, the period of Ineligibility is “2 years.” The two-year period can be eliminated if No Fault or Negligence (“NF”) is shown, or reduced based on proof of No Significant Fault or Negligence (“NSF”). 51 Dr. Scott argued to the Arbitrator that both defenses applied. 52 However, in awarding 18 months Ineligibility, 49 Id. 7678 (Final Decision). 50 See id. at 7651-52, at ¶¶ 2.43-.51 (“Dr. Scott’s Asserted Compelling Justification at the Hearing”). 51 Rules 3224(a) and 3225(a). 52 See AB 7202, 7204, at ¶ 8, 7212-14, at ¶¶ C.1-17 (Proposed Disposition C, based on NF), 7214-17, at ¶¶ D.1-10 (Proposed Disposition D, based on NSF). 11 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 17 of 123 * PUBLIC * PUBLIC the Arbitrator did not mention either one, nor provide any explanation that accounts for the six-month Ineligibility reduction. Application of Dr. Scott’s compelling justification evidence cannot be an answer because that defense, “an exception” to Rule 3214(a), excuses Possession entirely. 53 It does not mitigate the severity of otherwise appropriate sanctions, a mission that the NSF defense performs. • The Arbitrator recognized that HIWU charged two ADRVs, one for Possession of Sarapin and the second for AMP. 54 Sanctions for each proven ADRV could have been awarded, and consecutive Ineligibility periods and aggregated fines were arguably appropriate under Matter of Overly, 55 a decision that HIWU submitted. However, the Arbitrator awarded only a single set of sanctions. There is no explanation for that determination. On this review, the Authority argues that the Arbitrator’s sanctions award is erroneous. 56 It contends that: 1. A 24-month period of Ineligibility should be awarded for each of the two Possession ADRVs, with the two periods running consecutively for a total of 48 months’ Ineligibility. 53 See Scott v. HISA, 2025 WL 2987598, at *7; Shell II, 2025 WL 1784696, at *12. See also id. 7676 (“Dr. Scott had two prohibited substances at a Covered Racetrack on a day covered Thoroughbreds were running.”). 54 AB 7651, at ¶ 2.41. 55 No. 9443, 2026 FTC LEXIS 61, at *3-4 (ALJ Jan. 27, 2026), LEXIS 64 (July 21, 2026). 56 AuPCOL ¶¶ 13-18,, 20.a & b; AuOBr. at 15, 22-23, 27. 12 vacated and remanded, 2026 FTC FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 18 of 123 * PUBLIC * PUBLIC 2. Backdating the Ineligibility’s start date to the date of HIWU’s search was erroneous. Although Rule 3223(c) authorizes backdating Ineligibility under prescribed circumstances, Dr. Scott never met the Rule’s required elements. 3. Like Ineligibility, individual fines should have been awarded for each violation. Although the fine amount is discretionary—“up to” a $25,000 maximum—two fines of $25,000 each, or $50,000, should have been awarded. By motion at the time of the merits briefing of this review, Dr. Scott argued, however, that, because the Authority’s objections, if found meritorious, would require an upward sanctions adjustment, I lacked jurisdiction to rule on them. I rejected Dr. Scott’s argument and denied his motion, while writing in pertinent part that: I am not . . . deciding whether the Authority prevails on the upward sanctions adjustments it has asserted. Nor am I deciding the appropriate relief if I were to rule in the Authority’s favor. These matters will be handled in the merits decision. 57 Accordingly, these reserved issues are resolved in this decision. III. ISSUES ON REVIEW. Below, I will discuss the following issues: 57 Matter of Scott, No. 9449, 2026 WL 2111924, at *2 (FTC ALJ July 16, 2026) (“Scott Order”). 13 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 19 of 123 * PUBLIC * PUBLIC 1. Did HIWU prove the two ADRVs charged? This requires discussing: (a) the nature of AMP and Sarapin; (b) their treatment under the ADMC Program; (c) their use by Dr. Scott; and (d) HIWU’s contention that both are Banned Substances. 2. Did Dr. Scott prove he had a compelling justification for Possession of either Sarapin or AMP at the time HIWU searched his SUV? 3. In view of Dr. Scott’s practice treating non-Covered quarter horses, was there jurisdiction under HISA for HIWU to charge Possession ADRVs against him and to require that he prove, as a defense, compelling justification? 4. Did Dr. Scott demonstrate that Rule 3214(a), covering Possession, was not properly approved by the FTC? 5. Does HISA violate the public non-delegation doctrine? 6. What relief, if any, with respect to sanctions should be ordered? IV. SCOPE OF REVIEW. HISA-imposed sanctions for ADRVs, arising as here from an arbitration, are reviewable by an FTC Administrative Law Judge (“ALJ”), and thereafter by the Commission itself on a discretionary basis. 58 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; 58 15 U.S.C. §§ 3058(b)-(c); FTC Rules 1.146-.147. 14 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 20 of 123 * PUBLIC * PUBLIC (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.” 59 The ALJ’s review of the Arbitrator’s decision is de novo, which means that “the [ALJ] does not defer to the [Arbitrator’s] ruling but freely considers the matter anew, as if no decision had been rendered below.” 60 The ALJ must determine the merits of the charged ADRVs, and whether the sanctions the Authority imposed were “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 61 In exercising 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.” 62 59 15 U.S.C. § 3058(b)(2)(A). See also FTC Rule 1.146(b)(1)-(3). Bartolome v. Sessions, 904 F.3d 803, 812 (9th Cir. 2018) (construing de novo review by an immigration judge). 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”). 60 61 15 U.S.C. § 3058(b)(2)(A)(iii); FTC Rule 1.146(b)(1)-(3). 62 15 U.S.C. § 3058(b)(3)(A)(ii)-(iii); FTC Rule 1.146(d)(3). 15 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 21 of 123 * PUBLIC * PUBLIC V. ANALYSIS OF THE ISSUES. The crux of this case is whether HIWU proved the two Possession ADRVs charged, and if it did, whether Dr. Scott demonstrated compelling justification as a defense. Other issues Dr. Scott has raised are mostly distractions. Accordingly, I begin with discussion of HIWU’s Possession charges and Dr. Scott’s contention that he has satisfied Rule 3214(a)’s compelling justification defense. After that, I address the other defenses Dr. Scott raises. A. HIWU’s Possession Charges. 1. AMP and Sarapin: What Are They? a. AMP AMP was initially marketed as a vasodilator with anti-inflammatory effects. 63 Some have also suggested that “it creates energy and energy is a currency for race horses. . . . [B]ut we don’t know that.” 64 However, in 1973, the FDA found that AMP was “neither safe nor effective for its intended uses” and directed its “removal . . . from the market.” 65 The FDA has stated publicly that AMP is 63 AB 2043, at ¶ 19 (Benson Exp. Rep.), 5834-35 (Benson). 64 Id. 5970 (Benson). See also id. 2043, at ¶ 19 (Benson Exp. Rep.), 5964 (Benson). Id. 268-69 (FDA Briefing Document). See id. 269 (clarifying that removal applies to “mono-, di- and tri- phosphate. . . .”), 322, at ¶ 6 (2015 FDA review memo summarizing evaluation), 5843-44 (Benson). 65 16 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 22 of 123 * PUBLIC * PUBLIC “basically like giving a placebo. . . .” 66 Dr. Dionne Benson, HIWU’s expert, explained further: [W]hat [the FDA] said is the benefit of using AMP was so low because it had such a short half-life when given intramuscularly, that it was outweighed by the risk, because if it got injected by accident, aiming for an artery, it could potentially be very much like adenosine, which you only get in a hospital setting. 67 More specifically, if “accidentally given intravenously,” AMP could lead to “potentially fatal cardiac dysrhythmias and bronchospasm [heartbeat irregularity and contraction of the bronchial tubes].” 68 As Wedgewood Pharmacy, a manufacturer, wrote in nominating AMP for addition to the FDA’s List of Bulk Drug Substances for Compounding: “Accidental injection into the vein may result in rapid decrease in blood pressure, resulting in death.” 69 The FDA denied Wedgewood’s nomination: The nomination did not contain sufficient information to establish that urgent treatment with a drug compounded from adenosine monophosphate 66 Id. 343 (Pharmacy Advisory Committee proceedings). See also id. 2043, at ¶¶ 19, 20 (Benson Exp. Rep.), 5834-35, 7483 (Benson). 67 Id. 5838 (Benson). 68 Id. 2043, at ¶ 20 (Benson Exp. Rep.). Id. 7383 (Wedgewood AMP nomination to the bulk drug list). See also id. 2095 (FDA Advisory Committee proceeding) (The substance “does have severe side effects if not used properly. . . .”); Ceva Austl., AMP 5 Injection, https://www.ceva.com.au/Products/Products-list/AMP-5-Injection (“AMP-5 must ONLY be administered by intramuscular injection, or paste formulation. Do not administer AMP-5 injection by the intravenous route under any circumstances. This may lead to a profound rapid drop in blood pressure, with collapse, and even death.”) (capitalization in original). 69 17 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 23 of 123 * PUBLIC * PUBLIC BDS is necessary to avoid animal suffering or death, or to protect public safety. 70 With the FDA’s 1973 removal directive, AMP ceased to be marketed in the United States. 71 And because AMP is not FDA-approved, “you don’t have information on safety, stability, efficacy, purity,” while the risks remain. 72 Currently “[t]here are no FDA approved veterinary manufactured products containing [AMP] as a sole active ingredient available in the United States.” 73 Dr. Scott uses AMP as a prophylactic to treat the risk that a quarter horse patient may experience “exertional rhabdomyolysis”—the breakdown of muscle tissue from extreme physical exertion—which manifests itself in cramping, referred to as “tying up.” 74 The condition can be “life-threatening for a horse.” 75 He therefore testified, “[o]bviously” he had to have AMP on his SUV when he was at a racetrack: “how could you treat a quarter horse if you didn’t have the medication available?” 76 Scientific literature supporting AMP’s use for tying up does not exist, while 70 FDA, Bulk Drug Substances Reviewed and Not Listed, https://www.fda.gov/animal- veterinary/animal-drug-compounding/bulk-drug-substances-reviewed-and-not-listed; AB 7381 (Wedgewood AMP nomination), 7359 (Bulk Substances Currently Under Review). See also id. 2084 (FDA Review Document) (“FDA has never approved an NDA or ANDA containing any adenosine phosphate.”). 71 AB 2043, at ¶ 19 (Benson exp. report), 5843-44 (Benson). 72 AB 5839 (Benson). 73 Id. 7382 (Wedgewood AMP nomination). 74 Id. 5231-32, ¶¶ 10-12 (Scott wit. stmt.), 5264, at ¶¶ 26-27 (Fenger Exp. Rep.), 6317-18 (Scott). Id. 6082 (Fenger). See also Matter of Kriple, No. 9446, 2026 FTC LEXIS 25 (ALJ Mar. 4, 2026) (disciplinary proceeding against a trainer whose horse died from tying up). 75 76 AB 6240-41 (Scott). 18 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 24 of 123 * PUBLIC * PUBLIC alternative treatments are available. 77 Nevertheless, despite AMP’s risks and its characterization as a placebo, the substance’s use at racetracks seemingly persists, Mr. Tréjo testified, “to stave off fatigue.” 78 Since AMP is not FDA-approved, it can be obtained in the United States only as a compounded substance. 79 The bottle label on the AMP found on Dr. Scott’s SUV states “Manufactured by Equine Pharmaco, Inc., Seattle, WA 98107.” 80 b. Sarapin Dr. Scott’s expert, Dr. Clare Fenger, maintains that Sarapin “mitigates the sensation of pain transmission to the central nervous system for lumbar facet [lower back] pain in humans. Sarapin [is used] for similar purposes in horses, including impingement of dorsal spinous processes [mid-spinal vertebrae rubbing], articular facet arthritis [inflammation and degeneration of spinal joints] and sacroiliac arthritis [inflammation at the hip/leg joint].” 81 By mitigating pain, Sarapin can be 77 Id. 2044, at ¶¶ 24-25 (Benson Exp. Rep.). 78 Id. 5764 (Tréjo). 79 Id. 5839 (Benson). 80 Id. 220-22 (Photos). See also Shell II, 2025 WL 1784696, at *5 (Sarapin “is an herbal analgesic that reduces inflammation and relieves pain.”). 81 AB 5265, at ¶ 30 (Fenger Exp. Rep.) (footnotes omitted). 19 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 25 of 123 * PUBLIC * PUBLIC used in horses to treat such chronic conditions as “lameness or poor performance.” 82 Its use “is not limited to emergencies.” 83 Sarapin was marketed in the United States until 2016, but “it was never in the FDA-approved list. It was just merely grandfathered in, and once [the manufacturer, High Chemical] stopped making the actual label drug, the only way you can get it is compounding.” 84 “Grandfathering” refers to exempting pre-existing substances not subject to regulation from restrictions taking effect upon the FDA’s enactment or amendment. 85 Dr. Scott uses Sarapin, “alone or in combination with other drugs,” to treat back pain or back bone tissue inflammation. 86 He considers it “a helpful alternative to anti-inflammatory medications to treat osseus [spinal bone] and soft-tissue issues 82 Leanda Livesey, et al., The efficacy of injecting a distillate of the pitcher plant (Sarraceniaceae) adjacent to the palmar digital nerves of horses to ameliorate lameness caused by digital pain, 133 J. EQUINE VET. SCIENCE 1 (2024). 83 Shell II, 2025 WL 1784696, at *5, 46. See also id. 5197, at ¶ 4 (Scott pre-hearing brief) (“After [sarapin] was discontinued, it became available in a compounded formulation.”) (footnote omitted), 5520, at ¶ 44 (Benson Supp. Exp. Rep.); National Drug Codes (“NDC”) 10541-0012, https://ndclist.com/ndc/105410012 (High Chemical sold a Sarapin product during the period “1-31-1935” to “6-10-2016,” and it was “primarily utilized in pharmaceutical processing or compounding.”); SRPFOF ¶ 61. 84 AB 5864 (Benson). See, e.g., Charles F. Hagan, Grandfather Protections Under the Drug Amendments of 1962, 19 FOOD DRUG COSM. L.J. 119, 122 (1964); Compounding Today, International Journal of Pharmaceutical Compounding, https://compoundingtoday.com/Compliance/FDAPre1938Drugs.cfm (“Technically, these products have never been approved by the FDA and do not appear in the ‘Orange Book’ because they are not approved drug products with therapeutic equivalence evaluations.”); AB 5866-67 (Benson). 85 See also id. 5265, at ¶ 30 (Fenger Exp. Rep.) (describing back or spinal conditions), 5871 (Benson) (use for “back injuries, back arthritis”). 86 AB 136 (Scott letter). 20 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 26 of 123 * PUBLIC * PUBLIC during training.” 87 Dr. Scott’s routine, pre-race protocol involves injecting quarter horses with Sarapin at 48 hours before their race, along with AMP 24 hours beforehand. 88 While Dr. Scott maintains he injects Sarapin as a prophylactic measure, he offered no testimony or other evidence that demonstrates Sarapin, if routinely injected, has any preventative impact on the conditions he identified as indicating its use. 89 Although Dr. Scott argued the two Banned Substances together as part of his pre-race protocol, unlike AMP, there is no evidence that connects Sarapin to tying up. 90 By contrast, his witness statement explicitly does so for AMP: “In my experience, I have found the use of adenosine monophosphate [AMP] to be an efficacious prophylactic and acute remedy to treat rhabdomyolysis in Quarter Horses.” 91 Dr. Scott said nothing similar about Sarapin, however. 92 87 AB 5232, at ¶ 18 (Scott wit. stmt.). See also SOBr. at 3; AB 5233, at ¶¶ 21-23 (Scott wit. stmt.), 5238-UN (Horses 1-3) (data extracts), 5590 (Scott closing). 88 SPFOF ¶ 3. See, e.g., AB 5590 (Scott opening) (“[T]he objective of these protocols is to prevent the development of a medical condition. That’s what prophylactic treatment is.”). 89 Compare AB 7169-70 (Scott post-hearing brief) (“Dr. Scott presented overwhelming evidence that the seized medications were part of a pre-race treatment protocol for Quarter Horses . . . stabled at Sunland Park. . . . Dr. Scott explained his reasoning and his belief in the need for prophylactic treatment of Quarter Horses before a race.”), 5590 (Scott opening) (Dr. Scott’s “protocol included the use of Sarapin 48 hours out and the use of AMP 24 hours out.”), with AB 5232, at ¶¶ 12, 15-17 (Scott wit. stmt.) (discussing AMP and tying up), 6317-18, 6320-21 (Scott) (discussing tying up only with reference to AMP). 90 91 AB 5232, at ¶ 12 (Scott wit. stmt.). See id. at ¶ 18 (“I have also found, in my clinical judgment, that Sarapin is a helpful alternative to anti-inflammatory medications to treat osseus and soft-tissue issues during training.”). 92 21 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 27 of 123 * PUBLIC * PUBLIC Dr. Fenger testified at length concerning tying up and developing treatment to protect against its risk. 93 But she never included Sarapin in that discussion. She also did not express any opinion on what conditions, if any, Sarapin might prevent, if injected routinely. Dr. Fenger maintains that Sarapin “does not cause a ‘blocking’ or anesthetic effect, and therefore does not risk ‘numbing’ of extremities such as occurs with local anesthetics.” 94 Dr. Benson, concurred in part, testifying that Sarapin “doesn’t have the same effect of blocking that, for example, a lidocaine or an FDA approved drug would have.” 95 She added, however, “we don’t know exactly what it is used or why it is used in the way that it’s used, . . . .” 96 A trade report Dr. Scott introduced states: “The stuff doesn’t work. . . . Multiple laboratory studies . . . have shown that Sarapin has absolutely no effect on mitigating pain, in either horses or humans.” 97 The report also quotes Dr. Benson: Benson . . .said that trainers often ask for race day treatments that the veterinarian knows will have no impact on the horse’s physiology or performance. The veterinarian gets to bill for the administration of the substance—often under the table—and no one gets caught. Meanwhile, the See also id. 5264-65, at ¶¶ 26-29 & 5268, at ¶¶ 52-53 (Fenger Exp. Rep.) (no discussion of using Sarapin to prevent or treat tying up). 93 AB 6077-87, 6154-57, 6187-88, 6190-91 (Fenger). 94 AB 5265, at ¶ 31 (Fenger Expert Rep.), 6096 (Fenger). 95 Id. 5865 (Benson). 96 Id. See also id. at 5519, at ¶ 40 (Benson Exp. Rep.) (“Arguably, Pitcher Plant is not an approved human or animal drug because it has no efficacy as a treatment.”) (footnote omitted). 97 AB 5325 (Daily Racing Form report). 22 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 28 of 123 * PUBLIC * PUBLIC trainer doesn’t want to give up on something that competitors might also be using, so the cycle repeats itself. We used to say those things were for the trainer, not for the horse, Benson said. 98 Yet, Sarapin is “not at all” innocuous. 99 It “is marketed as a pain block.” 100 So, while experts can parse the substance at a scientific level—such as whether its effect reaches “extremities” or improves horse performance—it’s reasonable to infer that individuals such as trainers and owners may not make those distinctions. 101 Their belief, perhaps erroneous, that Sarapin can somehow shave a fraction of second in a race may be enough. As NMRC Executive Director Tréjo testified: [F]rom my understanding, pitcher plant [Sarapin] is a blocking agent, and that could lead to a horse not feeling the injury that he may have just to get a race out of the horse. So they may be running very numb ignoring the pain that they really had prior to the administration of this drug. 102 Thus, Sarapin has captured regulatory attention. 103 As noted, it is expressly prohibited under ADMC Rule 4117(e), and, Executive Director Tréjo’s asserts, barred by NRMC Rules as well, absent compliance with regulatory conditions. 104 98 AB 5325 (Daily Racing Form report). 99 Id. 5865 (Benson). 100 Id. 5325 (Daily Racing Form report). See AB 5265, at ¶ 31 (Fenger Exp. Rep.), 6096 (Fenger) (in “backside racetrack commentary, [Sarapin] got the name of being a block. . . .”), 5970-71 (Benson) (not aware that Sarapin affects performance), 6096-97 (Fenger) (Sarapin does not affect racing performance). 101 102 AB 5758 (Tréjo). 103 Id. 6096 (Fenger). Id. 1959 (Tréjo letter), 5766, 5802-03 (Tréjo) (under the compound substance rules, Sarapin is prohibited). See New Mexico Administrative Code (“NMAC”) § 15.2.6.8(B)(10), pp. 25-26, below. 104 23 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 29 of 123 * PUBLIC * PUBLIC Nevertheless, where the trainer agrees, Dr. Scott asserts that, for decades, his prerace protocol has included injecting Sarapin two days before a horse’s race. 105 There are alternative FDA and HISA-approved products: “Neuropathic pain control in horses is better accomplished through FDA approved substances such as gabapentin, lidocaine, and/or ketamine,” each of which is a “controlled substances allowed to be used and possessed by veterinarians under HISA.” 106 2. ADMC Rule Treatment of Sarapin and AMP: Is Each a “Banned Substance”? Under the ADMC Program Rules, Banned Substances are “prohibited at all times” and “should never be in a horse’s system.” 107 Rules 4111 through 4117 further group Banned Substances into categories, designated S0 through S6. Subject to FTC approval, the Authority is empowered to revisit classification decisions, and it has done so from time to time. 108 105 See, e.g., AB 5233, at ¶¶ 21-23 (Scott wit. stmt.), 5238-UN (Horses 1-3) (data extracts). See also id. 5509, at ¶ 4 (Benson Supp. Exp. Rep.), 5908-09 (Benson), 5590 (Scott closing). 106 AB 5519, at ¶ 40 (Benson Supp. Exp. Rep.) (footnotes omitted). 1784696, at *5. 107 Rule 3010(c). See also Shell II, 2025 WL See also Rules 3111(a) (Prohibited Substances) & 4010-4117 (Banned Substances); 88 Fed. Reg. 5124 (Jan. 26, 2023) (Appendix 1 to Rule Series 4000: Technical Document—Prohibited Substances). Strictly speaking, the Prohibited List also includes Banned Methods. However, this branch of the Prohibited List is not implicated in this case. See, e.g., 15 U.S.C. §§ 3053(c)(2), 3055(c)(5), (e) and (g)(3); Press Release, HISA Seeks Public Comment on Proposed Anti-Doping and Medication Control Rule Modifications (Nov. 18, 2025) (including “[c]reation of a Class D Controlled Medication category,” and “[r]eclassification of certain Banned Substances”); Press Release, Enforcement of Rule Modification Regarding Iron Dextran Begins December 27, 2023 (Nov. 28, 2023) (announcing a pre-enforcement “educational period” after the FTC’s “approval to add iron dextran to the Banned Substances list”). 108 24 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 30 of 123 * PUBLIC * PUBLIC a. Category S6: Sarapin. Rule 4117, which covers S6 Miscellaneous Substances, provides that “[t]he following substances . . . are prohibited at all times . . . (e) pitcher plant extract (Sarapin). . . .” There is no dispute that HIWU seized Sarapin during its search of Dr. Scott’s SUV at Sunland Park. 109 However, Dr. Scott asserts such factual propositions as: (1) Sarapin has “been used as routine pre-race medications for over four decades by virtually all racetrack veterinarians in New Mexico”; (2) “Sarapin is a naturally occurring (endogenous) substance used as an adjunct to NSAIDs [nonsteroidal anti-inflammatory drugs] and can serve the same purposes as NSAIDs”; (3) Sarapin lacks “the capacity to change the normal physiological performance of a racehorse”; and (4) NMRC “never treated . . . Sarapin as [a] ‘prohibited substance[]’ or restricted a veterinarian’s possession or use” of it. 110 Insofar as Dr. Scott offers this and similar evidence to challenge Sarapin’s classification as an S6 Banned Substance, that ship has sailed. None of the facts is relevant. Rule 3113, which I will refer to as an “incontestability” provision, provides that the Authority’s decision to classify a substance as a Prohibited Substance is “final” and not “subject to any challenge by any Covered Person. . . .” 111 “If [Dr. Scott is] unhappy with the contents of the Prohibited List, [he] must persuade [the 109 SRPFOF ¶ 14. See also SOBr., at 3-4, 5, 9; AB 136 (Scott letter), 5595 (Scott opening), 6232-33 (Scott), 6432-33, 6432 (Scott closing). 110 SPFOF ¶¶ 8, 10, 12, 16. 111 Rule 3113. 25 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 31 of 123 * PUBLIC * PUBLIC Authority] to change the list. It is not within the jurisdiction of this [Court] to make that decision.” 112 HIWU has shown, prima facie, a Rule 3214(a) Possession ADRV. AMP’s classification as an S0 Banned Substance is not so straightforward, however. b. Category S0: AMP. AMP is not expressly listed as banned, but—the Authority contends—instead falls within Rule 4111’s S0 category. A “catch-all,” the S0 category is designed to reach substances not otherwise expressly covered in the other Banned Substance categories. Under Rule 4111, the S0 category reaches: Any pharmacological substance that (i) is not addressed by Rules 4112 through 4117, (ii) has no current approval by any governmental regulatory health authority for veterinary or human use, and (iii) is not universally recognized by veterinary regulatory authorities as a valid veterinary use, is prohibited at all times. An S0 approach is commonplace in equine regulation and in sports law anti-doping codes generally. 113 As Dr. Benson testified: “[I]t is impossible to categorize every WADA v. USADA, CAS OG 06/001, at ¶ 17 (Feb. 10, 2006). See also WADA v. de Oliveira, CAS 2010/A/2307, at ¶ 123 (Sept. 14, 2011) (“The Panel is bound by . . . the fact that cocaine was included in the Prohibited List. . . . [I]t cannot re-classify cocaine as a ‘specified substance’. . . regardless of . . . whether it has performance-enhancing effects.”) (citations omitted); FINA v. Kreuzmann, CAS 2005/A/921, at ¶ 32 (Jan. 18, 2006) (Since the substance is on the Prohibited List, there is “no room for a counter-analysis to determine whether a substance was effectively used as a masking agent or not.”). Cf. United States v. Amalfi, 47 F.4th 114, 124-25 (2d Cir. 2022) (rejecting a constitutional challenge to including marijuana as a Schedule I drug). 112 113 See AB 3401 (ARCI guidelines), 3749, at ¶¶ 5 & 6 (Comparable BHA Rule), 3850 (WADA Code). 26 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 32 of 123 * PUBLIC * PUBLIC substance. . . . There are more substances than we could ever do, and they’re always coming up with new substances. So you have this kind of catch all.” 114 The Panel in Carter v. IOC 115 similarly wrote: “There is a great number of stimulants, and they cannot all be listed by name. Therefore, the list of prohibited stimulants provides a list of named stimulants, which are typically the ones often detected, as well as a ‘hold all basket’.” The “basket” also recognizes that “the dopers are always one step ahead of the regulators,” who, together with “the chemists are forced to play catch-up, developing tests to detect whatever new drugs start to show up at racetracks.” 116 Rule 4111, however, also has carve-out language, which applies even though a substance would otherwise be barred under the Rule’s three-factor analysis: For the avoidance of doubt, compounded products compliant with the Animal Medicinal Drug Use Clarification Act (AMDUCA) and the FDA Guidance for Industry (GFI) #256 (also known as Compounding Animal Drugs from Bulk Drug Substances) are not prohibited under this section S0. Unlike Sarapin, Rule 3113’s incontestability provision does not apply to AMP. Rule 4111’s S0 category ban requires that specific criteria be met, and even if they are, the carve-out can negate banned status. Thus, both the applicability of Rule 114 AB 5840-41 (Benson). See generally Matter of Shell, No. 9435, 2024 WL 5078311, at *18-19 (FTC ALJ Oct. 31, 2024) (“Shell I”) (discussing authorities). 115 CAS 2017/A/4984, at ¶ 152 (May 31, 2018). See also Battuello, n.19, above (“[B]ad trainers will inject practically any substance to make their horses move faster. Cobra venom, cocaine, Viagra, [and] . . . dermorphin, but owing to its amphibian origin, ‘frog juice’”; also reporting that “[o]n a single day in May 2012, 8 New Mexico Quarter Horses tested positive for dermorphin. . . .”). 116 Milton C. Toby, UNNATURAL ABILITY 181 (2023). 27 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 33 of 123 * PUBLIC * PUBLIC 4111’s criteria for coverage, and that of the carve-out for exclusion, must be proven. Otherwise, Rule 4111 could be vulnerable to invalidation under the fair notice requirement of due process. 117 Williams v. IOC 118 is instructive. Williams tested positive for isometheptene, a substance not expressly covered in the International Olympic Committee’s Prohibited List. 119 The IOC, however, sought: (1) to include isometheptene under its own catch-all language, applicable to any substance “with similar chemical structure or similar pharmacological effect(s)” to those expressly listed on its Prohibited List; and (2) to assert its own incontestability rule, providing that substances “on the Prohibited List . . . shall not be subject to challenge by an Athlete. . . .” 120 The Panel rejected the IOC’s argument based on the incontestability provision: “the wording of section 4.2 of the IOC Rules [the catch-all language] does not lend itself to an interpretation which exempts from challenge the classification of a substance as ‘similar’ to listed substances. . . .” 121 Instead, similarity was an 117 HISA and FTC Rules require due process in de novo review proceedings. See 15 U.S.C. §§ 3057(c)(3), 3058(b)(2)(B) (importing Administrative Procedure Act requirements in 5 U.S.C. § 556); HISA Rule 3122(e); FTC Rule 1.146(c)(1)(ii). 118 CAS 2004/A/726 (Oct. 19, 2005). 119 Id. at ¶¶ 5-6 (italicization omitted). Id. at ¶¶ 5, 8 (quoting the Prohibited List language and the incontestability language, respectively) (italicization omitted). 120 121 Id. at ¶¶ 10, 11. 28 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 34 of 123 * PUBLIC * PUBLIC issue of fact, which the Panel had to resolve in the case at hand, with the burden of proof on the IOC. 122 So too here: for AMP to be prohibited under the S0 classification, HIWU and on review the Authority have the burden of showing it meets all three requirements in Rule 4111. 123 AMP must: (1) not otherwise be “addressed” in Rules 4112-17; (2) have “no current approval by any governmental regulatory health authority for veterinary or human use”; and (3) “not [be] universally recognized by veterinary regulatory authorities as a valid veterinary use.” 124 If this burden is satisfied, Dr. Scott has the burden of showing that the carve-out, an exception, applies to AMP, thereby rendering it not a Banned Substance; Dr. Scott’s assertion to the contrary is without merit. 125 Rule 4111’s first requirement is not in controversy. Rules 4112-17 do not expressly cover AMP. However, the other two requirements are disputed. The Authority contends that requirement (ii) should be read to imply no approval by the FDA, or perhaps by any other government regulatory health 122 Id. at ¶ 34. See id. at ¶¶ 31, 34, 40 (The regulator had the burden of proving the catch-all’s applicability); Tr. at 17 (Counsel for the Authority conceding its burden). 123 124 Rule 4111. See, e.g., FTC v. Morton Salt Co., 334 U.S. 37, 44-45 (1948) (“[T]he burden of proving justification or exemption under a special exception to the prohibitions of a statute generally rests on one who claims its benefits. . . .”); United States v. Regenerative Sciences, LLC, 741 F.3d 1314, 1322 (D.C. Cir. 2014) (In an enforcement action, the defendant had the burden of demonstrating the applicability of an exemption under stem cell research regulations.) (citing authorities). 125 Tr. 35-36 (Counsel for Dr. Scott). 29 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 35 of 123 * PUBLIC * PUBLIC authority in the United States: “it’s the Authority’s position that we would look to U.S. law for determining whether and how to interpret . . . a U.S. federal regulation.” 126 On the other hand, Dr. Scott argues that the “any” language in requirement (ii) means that a government regulatory health authority somewhere has approved AMP for veterinary or human use, then AMP cannot be an S0 Banned Substance: [T]he lack of FDA approval can’t prohibit its use, can’t disqualify it from use. There was a decision made that instead of referencing that it’s not approved by the FDA in S0, they said “any” governmental regulatory authority. .... If [the Authority] intended “any” to mean just the one agency, that’s what they should have said. But they didn’t. They said “any.” And . . . to give effect to the word “any,” it has to have a reach beyond the United States. 127 To support his construction of Rule 4111, Dr. Scott submitted a document, apparently from the Australian Pesticides and Veterinary Medicines Authority, 126 Tr. 18 (Counsel for the Authority). See also AB 6001 (Benson) (“I think when you’re interpreting laws in the US, we’re not going to follow Australian laws, but that’s me.”), 6400-01 (HIWU closing) (“When they’re wondering whether any governmental regulatory Health Authority has approved it, they're not caring whether it was approved in Morocco or Australia or China. This is clearly designed, and any reasonable interpretation of it is designed to address the fact that no governmental authority here in the United States has approved it. . . .”); AuPFOF ¶ 25 (“[N]o . . . governmental authority in the United States has approved AMP for veterinary or human use.”) (footnote omitted). See also AB 5591 (Scott closing) (Requirement (ii) “says any . . . . Not the FDA. . . .”); SRPCOL ¶ 6 (denying that AMP is an S0 Banned Substance). 127 Tr. 34, 35 (Counsel for Dr. Scott). 30 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 36 of 123 * PUBLIC * PUBLIC reciting a 1998 registration for AMP issued to CEVA Animal Health Pty Ltd. 128 CEVA has a public presence, which includes a website for “AMP 5 Injection.” 129 This Australian government regulatory action, Dr. Scott argues, prevents AMP from meeting requirement (ii). 130 Dr. Scott also introduced evidence that the New Mexico BVM and the NMRC, in effect, acquiesced for years in veterinary use of AMP. 131 However, there is no evidence of the BVM’s actual approval of AMP. Therefore, these facts fail to refute requirement (ii)’s applicability. Dr. Scott further established that, in April 2024, Wedgewood nominated AMP to the FDA’s list of bulk drugs, a request the FDA rejected in August 2025. 132 Strictly speaking, with the nomination pending, AMP could be used “until the FDA has made a decision on whether they will allow it to [be] use[d] permanently as a compounded bulk drug.” 133 And HIWU seized Dr. Scott’s AMP during the time that AMP’s use was permitted. However, this temporary condition, subsequently 128 AB 7404, 7454, 7455 (Approval documents). 129 https://www.ceva.com.au/Products/Products-list/AMP-5-Injection. 130 See, e.g., Tr. 29-30 (Counsel for Dr. Scott). See, e.g., AB 140 (BVM 2014 letter), 5236 (List of compounded substances), 6232-33, 6241-45, 6253-56 (Scott), 7274, ¶¶ 3-4 (Pickard letter). 131 132 AB 7382 (Wedgewood AMP nomination); FDA, Bulk Drug Substances Reviewed and Not Listed, n.70, above. See generally FDA, Bulk Drug Substances Used in Compounding Under Section 503A of the FD&C Act, https://www.fda.gov/drugs/human-drug-compounding/bulk-drugsubstances-used-compounding-under-section-503a-fdc-act. 133 AB 5829 (Benson). 31 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 37 of 123 * PUBLIC * PUBLIC inoperative, seems to me too slender a reed to find regulatory “approval” for requirement (ii) purposes. 134 Analysis under requirement (ii) thus turns on the Australian approval. On balance, I agree with Dr. Scott’s position. First, “[w]hen interpreting a statute, we begin with the text.” 135 For a substance to be banned under the S0 category, requirement (ii) mandates that there be “no current approval by any governmental regulatory health authority for veterinary or human use. . . .” 136 The requirement is unambiguous. As the Supreme Court said in United States v. Gonzales, “the word ‘any’ has an expansive meaning, that is, ‘one or some indiscriminately of whatever kind’. . . .” 137 The Authority “did not add any language limiting the breadth of that word. . . .” 138 The Authority reinforced the lack of limitation when it used the word “no”—here, meaning “none,” or “not any”—to modify the “approval” the absence of which would have to be met. 139 134 At oral argument of this point, counsel for Dr. Scott stated that “[t]here were several applications for AMP under that [FDA] docket number” for Wedgewood—“about a hundred applications for AMP”—but counsel “didn’t think . . . it was necessary” to offer them as evidence. Tr. 23-24, 25. Since this alleged material is not in evidence, I give no weight to counsel’s assertion. 135 Lackey v. Stinnie, 604 U.S. 192, 199 (2025). 136 Rule 4111. 137 520 U.S. 1, 5 (1997) (quoting Webster’s Third New International Dictionary 97 (1976)). 138 Id. at 5. See, e.g., Merriam-Webster Dictionary/Thesaurus (“none” as a synonym), https://www.merriamwebster.com/thesaurus/no; https://dictionary.cambridge.org/dictionary/english/no. 139 32 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 38 of 123 * PUBLIC * PUBLIC Thus, requirement (ii) simply cannot be construed to mean “no FDA approval,” or “no approval in the United States.” And here, there is veterinary regulatory approval in Australia. Second, were there any claimed ambiguity, the Authority is the drafter of the ADMC Rules. Therefore, requirement (ii) should generally be construed against the Authority. 140 Significantly, when the Authority drafted and proposed the ADMC Rules, the very scenario here—approval by a single non-U.S. governmental veterinary authority—was not an unknown unknown. Rather, it was relatively foreseeable given the sheer number of global governmental bodies. Indeed, during the FTC approval proceedings, the Authority said that the S0 “designation can be revised based on [a substance’s] evolving use as recognized by international regulators, colleges of veterinary medicine, and individual Board-Certified specialists.” 141 Further, in proposing the ADMC Rules, the Authority reviewed the Association of Racing Commissioners International’s (“ARCI’s”) “standards and protocols in its the Model Rule of Racing. . . .” 142 The 2022 version of the ARCI Rules included an S0 designation in the group’s Prohibited Substances, which covered: Cf., e.g., United States v. Seckinger, 397 U.S. 203, 210 (1970) (discussing “the general maxim that a contract should be construed most strongly against the drafter”); Town of Vinton v. Indian Harbor Ins. Co., 161 F.4th 282, 287 (5th Cir. 2025) (“[A]ny textual ambiguity in a contract is generally construed against the drafter.”). 140 141 AB 5018 (Authority response to comments) (emphasis added). Order). 142 88 Fed. Reg. 5073. 33 See also id. at 2761 (FTC Approval FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 39 of 123 * PUBLIC * PUBLIC “[a]ny pharmacologic substance that is not approved by any governmental regulatory health authority for human or veterinary use within the jurisdiction. . . .” 143 The Authority’s rule-approval comment and the ARCI’s S0 counterpart description not only suggest that the risk of non-U.S. approval was foreseeable, but also that the Authority declined to adopt “FDA” or other limiting language when it proposed ADMC Rule 4111. Dr. Scott’s argument—“You have to presume that decision [not to limit the Rule’s language] was deliberate”—is well-grounded. 144 Third, under the principle of lenity in construing statutes that carry a penalty—such as the Ineligibility or fine that Dr. Scott faces—doubt generally should be resolved in favor of, not against, those subject to sanction. 145 This common law principle is also in sports law. As the Panel wrote in Omeragik v. FFM, 146 sports law “offences . . . must be clearly and previously defined by law and 143 AB 3401 (ARCI Rules, Annex I) (emphasis added). 144 Tr. 35 (Counsel for Dr. Scott). 145 See Bittner v. United States, 598 U.S. 85, 101, 103 (2023) (“[T]he rule of lenity”—construing “statutes imposing penalties . . . strictly . . . in favor of individuals”—“not to mention a dose of common sense, favors a strict construction” in a civil action involving penalties under the Bank Secrecy Act) (citing authorities; plurality opinion by Gorsuch, J. joined by Jackson, J.); United States v. Thompson/Center Arms Co., 504 U.S. 505, 517-18 (1992) (applying the rule of lenity in a civil tax case for penalties); Doe v. Eating Recovery Ctr. LLC, 806 F. Supp. 3d 1109, 1118 (N.D. Cal. 2025) (“A similar principle applies to civil statutes that impose punitive civil penalties.”). See also BC Arsenal v. RBF, CAS 2019/A/6636, at ¶ 139 (August 3, 2020) (“[I]nconsistencies/ambiguities in the rules must be construed against the legislator. . . . .”) (citing authorities). 146 CAS 2011/A/2670, at ¶ 8.13 (Jan. 25, 2013) (emphasis added). 34 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 40 of 123 * PUBLIC * PUBLIC must preclude the ‘adjustment’ of existing rules to enable an application of them to situations or conduct that the legislator did not clearly intend to penalize.” I reach the conclusion that the Authority has failed to satisfy requirement (ii) with reluctance, as an array of facts otherwise tip against permitting AMP at racetracks subject to HISA. • The FDA directed AMP’s removal from the market 50+ years ago. The FDA not only concluded that AMP lacks therapeutic effect, but also there are potentially fatal risks associated with the substance’s incorrect use. So, this is not an emerging substance that medical and scientific communities haven’t fully vetted. Moreover, in its recent 2025 action, the FDA rejected Wedgewood’s nomination to add AMP to the Bulk Drug List. • There is no evidence Dr. Scott knew about, much less relied on, approval in Australia in using AMP as part of his alleged practice. To the contrary, the bottle label on the AMP found on Dr. Scott’s SUV states “Manufactured by Equine Pharmaco, Inc., Seattle, WA 98107.” 147 Thus, the AMP seized from Dr. Scott “is not the same product” as that manufactured by CEVA, although it has the “same formulation.” 148 • There is no evidence of Equine Pharmaco’s bonafides as a responsible product supplier. Dr. Scott testified that he has never called the company, and his 147 AB 222 (Photo). 148 Id. 6002-03 (Benson). 35 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 41 of 123 * PUBLIC * PUBLIC counsel admitted “we just didn’t look into that. . . .[I]t wasn’t really important, in our view. . . .” 149 The company is not included in the FDA’s database for registered drug establishments. 150 Nor have my own searches of Washington State government websites for business registration turned up any information for the company. • Moreover, if Washington State is the source of the product and it is shipped outside that State, thereby enabling Dr. Scott to receive AMP in New Mexico, the product’s distribution could well violate federal law, absent compounding in compliance with GFI #256. 151 Receipt via importation from abroad would be equally problematic. 152 • Alternatives to AMP to address tying up exist and include “FDA-approved tranquilizers and non-steroidal anti-inflammatories combined with fluid 149 Conference audio at 5:47-55 (Nov. 20, 2025) (not transcribed at AB 6345 (Scott)); Tr. 27 (Counsel for Dr. Scott). See also AB 6247 (Scott) (admitting he did not have “any direct contact with the manufacturer”). See FDA, Drug Establishments Current Registration Site (Aug. 2026), https://www.accessdata.fda .gov/scripts/cder/drls/. 150 151 See 21 U.S.C. §§ 331(d), 351(a)(5), 355(a), 360(a)(1); AB 5342 (GFI #256) (“[D]rugs compounded from bulk drug substances violate the FD&C Act because they are not approved or indexed, are not made according to CGMP, and cannot satisfy the FD&C Act’s adequate directions for use provision (which requires, among other things, that a prescription drug have FDA-approved labeling). However, FDA has generally refrained from taking enforcement action against animal drugs compounded from bulk drug substances under certain circumstances when no other medically appropriate treatment options exist.”), 5835, 5994, 5995-96 (Benson). See, e.g., In re Canadian Import Antitrust Litig., 470 F.3d 785, 790 (8th Cir. 2006) (“This closed system ensures that approved prescription drugs are subject to FDA oversight and are continuously under the custody of a U.S. manufacturer or authorized distributor, thus helping to ensure that the quality of drugs used by American consumers is consistent and predictable.”) (internal quotation marks omitted). 152 36 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 42 of 123 * PUBLIC * PUBLIC therapy. . . . Preventative medications can include FDA-approved medications such as phenytoin and dantrolene.” 153 • If AMP were injected into a Covered Horse, there presently is no known test to detect its presence. 154 Even putting facts aside, significant policy considerations also counsel against ruling that S0 category coverage must be rejected whenever approval by a single governmental regulatory body, somewhere, can be found. That means that Rule 4111 invites a race to the bottom: S0 categorization can depend on the action by a risk-tolerant regulatory body—or worse still, a corrupt one. That would run counter to Congress’s objective to elevate national standards of safety and welfare in thoroughbred horseracing. More generally and equally important, since federal law prohibits interstate sale and importation of non-FDA approved drugs, the more likely it is that a relevant non-U.S. regulatory approval exists, the greater the opportunities for thoroughbred racing participants to attempt to circumvent federal law. See also id. 5873 (Benson) (“You could use Acepromazine, Dantrolene. . . . [B]ut a lot of it comes down to changing how you’re feeding the horse, changing how you’re training the horse, changing how you’re managing the horse to start.”) (emphasis omitted), 6018 (“At our race tracks, we treat horses with dantrolene.”); 6077-80, 6083 (Fenger) (agreeing that dantrolene was “absolutely . . . effective medication for prophylactic treatment . . . in Standardbreds and Thoroughbreds,” although she did not know about quarter horses, which, she testified are more prone to tying up during or shortly after racing). 153 AB 2044, at ¶ 25 (Benson Exp. Rep.) (footnotes citing authorities omitted). 154 Id. 5831, 5836-37, 5923-27, 5993 (Benson). 37 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 43 of 123 * PUBLIC * PUBLIC I am also mindful that my ruling may have effects beyond this case. However, if the Authority considers this result unsatisfactory, it is authorized to propose modification of Rule 4111 to the FTC for approval. 155 For these reasons, I hold that HIWU failed to establish that requirement (ii) in Rule 4111 applies to AMP. 156 Because the S0 categorization directs that all three requirements must apply, there is no need to consider requirement (iii)’s applicability. There also is no need to consider, for purposes of S0 classification, whether AMP meets either of the AMDUCA or GFI #256 carve-outs. The Arbitrator’s decision states that “Dr. Scott had two prohibited substances at a Covered Racetrack on a day covered Thoroughbreds were running.” 157 The Arbitrator, however, did not analyze whether AMP met the requirements of Rule 4111. To the extent that the Arbitrator implicitly held that it does, the decision is arbitrary, capricious, and not in accordance with law, and will be reversed. * * * In consequence, HIWU proved Dr. Scott’s Possession in violation of Rule 3214(a) only for Sarapin—subject, of course, to the Rule’s compelling justification 155 See 15 U.S.C. § 3053(a) & (c) (recognizing proposed rule modifications). 156 Rule 3121(a) provides, in pertinent part, that “The Agency [HIWU] shall have the burden of establishing that a violation of the Protocol has occurred to the comfortable satisfaction of the hearing panel. . . .” (emphasis added). I refrain from deciding whether this heightened burden of proof applies to demonstrating the applicability of Rule 4111 S0 categorization. Even assuming, for argument’s sake, that a lesser burden applies, HIWU has not met it. 157 AB 7676 (Final Decision). 38 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 44 of 123 * PUBLIC * PUBLIC defense. I turn, next, to this defense, limiting discussion, insofar as feasible, only to Dr. Scott’s Possession of Sarapin. B. Dr. Scott’s Compelling Justification Argument. Rule 3214(a)’s “compelling justification” defense, and the case law construing it, recognize that, to be “compelling,” the “justification” must be “powerful and convincing.” 158 As an exception to the prohibition against Possession, the defense should “be interpreted restrictively.” 159 The District Court in Dr. Scott’s own case wrote that “the scenarios where the ‘compelling justification’ exemption applies will be a small minority.” 160 Dr. Scott has the burden of showing compelling justification by a preponderance of the evidence.” 161 Compelling justification is, necessarily, “fact-driven and thus case-specific.” 162 But neither having a veterinarian practice that includes non-Covered Horses, nor practice convenience, standing alone, establish compelling justification. 163 Instead, Dr. Scott must “demonstrate, through veterinarian practice records or other 158 Shell II, 2025 WL 1784696, at *11. See also id. at 17 (the proof must be “strong”); Klein v. ASADA, CAS A4/2016, at ¶ 128 (May 25, 2017) (“[T]he word ‘compelling’ qualifies the word ‘justification’” and “must be given its ordinary natural meaning of forcing, driving or constraining. . . . As a matter of language the two words in combination set the bar at a substantial height for the Athlete to clear.”). 159 Shell II, 2025 WL 1784696, at *12 (internal quotation marks omitted). 160 Scott v. HISA, 2025 WL 2987598, at *7. 161 Rule 3121(b). 162 Shell II, 2025 WL 1784696, at *12. See Matter of McCrosky, No. 9448, 2026 WL 1633298, at *8-11 (FTC ALJ June 2, 2026); Shell II, 2025 WL 1784696, at *14-17; Overly, 2026 FTC LEXIS 61, at *49-52, 58-60, vacated and remanded on other grounds, 2026 FTC LEXIS 64. 163 39 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 45 of 123 * PUBLIC * PUBLIC evidence,” that his practice “require[d] him to keep Banned Substances” on his SUV when HIWU searched it in February 2025. 164 Dr. Scott argues that he has satisfied this defense based on proof of: (1) his routine use of Sarapin as part of his pre-race protocol for quarter horses, a practice that he contends his documentary proof corroborates; (2) additional evidence regarding racetrack veterinary practice generally in New Mexico; (3) Sarapin’s treatment under New Mexico law, specifically, an alleged claimed absence of prohibition of possession; and (4) the NMRC’s similarly-alleged lack of enforcement of any prohibition. I consider these categories of Dr. Scott’s proof. 1. Dr. Scott’s Practice. Sarapin’s classification as a Banned Substance under the ADMC Rules is explicit, and Dr. Scott admittedly was “clearly aware Sarapin [was] not to be administered to covered thoroughbred horses” that were subject to HISA. 165 However long-standing his treatment protocol of injecting quarter horses 48 hours before their races may have been, the ADMC Rules that took effect in May 2023 marked a point of change in thoroughbred racing. 166 Attuned to the likely change, Dr. Scott himself urged the FTC to reject the proposed Rules. 167 164 Shell II, 2025 WL 1784696, at *17. 165 AB 136 (Scott letter). 166 See id. 6297-98 (Scott). 167 Id. 7086 (Scott comment). 40 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 46 of 123 * PUBLIC * PUBLIC Sunland Park, a mixed meet track, hosts Covered Horse races, often, in the two-day period before non-Covered quarter horses race—in other words, on the very days Dr. Scott gives his Sarapin injections. 168 Despite practicing at this mixed track, Dr. Scott offered no evidence that he took stock of his pre-ADMC practices to assess whether adjustments might be prudent to accommodate the new regulation prohibiting Possession. The ADMC Rule’s prohibition was, however, unlike what Dr. Scott understood to be New Mexico racetrack law, which exempts track veterinarians from certain possession rules. 169 Yet, there is no evidence that Dr. Scott considered, much less made, any practice change that might have helped him distinguish his use and Possession of Banned Substances to treat quarter horses, and not Covered Horses, if an issue arose. However, after HIWU’s 2025 search, Dr. Scott implemented “a different pre-race routine that does not involve the use of [Sarapin].” 170 Dr. Scott testified that, on the day of HIWU’s search, he intended, as his “routine pre-race [treatment] protocol,” to administer Sarapin to eight identified quarter horses that were each “scheduled to race” within the next two days. 171 Because the injections were preventative, Dr. Scott admits he did not need Sarapin See AB 6313-14 (Scott). See generally id. 5199, at ¶¶ 15, 16 (Scott pre-hearing brief) (listing quarter horse race days, mostly Saturdays and Sundays, in January and February 2025). 168 Compare NMAC § 15.2.6.8(B)(4) (excluding licensed veterinarians from possession restrictions) & AB 140 (BVM 2014 letter), 6256-58, 6264-65 (Scott) with ADMC Rule 3214(a). 169 170 SRAuPFOF ¶ 47. 171 AB 7222, 7224-25, at ¶¶ 7, 31 (Scott wit. stmt.), 7187, at ¶2.b (Scott proposed findings of fact). 41 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 47 of 123 * PUBLIC * PUBLIC that day to “save a horse’s life.” 172 The Authority contends this is dispositive. “[C]ompelling justification,” it maintains “cannot be established by the desire to use Banned Substances for non-exigent, routine, pre-race administration in nonCovered Horses.” 173 That, the Authority further argues, would be “an exception that would swallow the rule [against Possession]. . . . [I]f accepted, veterinarians could carry Banned Substances with impunity at a Covered Racetrack by simply claiming it was routine to give those Banned Substances to non-Covered Horses.” 174 But the Authority over-states. Whether the possessed Banned Substance may be used in non-exigent circumstances is simply one fact in the constellation of facts that informs compelling justification analysis. Here, for example, evidence was offered that prophylactic pre-race injection of AMP arguably can mitigate the risk of a quarter horse tying up—a potentially life-threatening condition. 175 Having AMP on hand in case that emergency materializes during or on conclusion of a quarter horse race is one thing. 176 For Sarapin, however, Dr. Scott offered no comparable 172 Id. 6318 (Scott). See also AuOBr. at 17-18 (“Generally, those [exceptional] scenarios will involve emergency situations.”) (footnote omitted). 173 AuPCOL ¶ 9. 174 AuOBr. at 19. See pp. 16-19, above; AB 136, 137 (Scott letter) (AMP is a “necessary and effective” treatment for tying up, and Dr. Scott keeps it on his SUV “for exigency treatment of quarter horses), 5213, at ¶ 55 (Scott pre-hearing brief). 175 See AB 6077-80, 6143 (Fenger) (describing differences in tying up for quarter horses compared to thoroughbreds). 176 42 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 48 of 123 * PUBLIC * PUBLIC proof, and, while not dispositive, that weighs against his compelling justification argument. In the little that Dr. Scott has said about his Sarapin treatments, he admitted to using it “alone or in combination with other drugs. . . .” 177 He admits that, in allegedly reducing pain, Sarapin can be “an adjunct to NSAIDs [nonsteroidal anti-inflammatory drugs] and can serve the same purposes as NSAIDs.” 178 Restrictions on use of NSAIDs can be “important to prevent injury to a horse that is enabled to perform because of . . . drug-induced pain relief when it otherwise could not.” 179 One such NSAID is bute, which—for Covered Horses—is a Controlled Medication under the ADMC Program, and may be given 48 hours before a race— the same pre-race period Dr. Scott assertedly uses for Sarapin. 180 Dr. Scott has himself used bute “together” with Sarapin.” 181 And he introduced data entries showing that, during January and February 2025, he injected 17 quarter horses with bute—as well as robaxin, a muscle relaxant and also a Controlled 177 Id. 136 (Scott letter). 178 SPFOF ¶ 10. See also AB 7187, at ¶ 2.e (Scott proposed findings of fact in the arbitration). 179 AB 4056-57 (Keegan et al. paper). See AB 6304-05 (“phenylbutazone” = “bute”), 6311-12 (Scott), 6408-10 (HIWU closing); 88 Fed. Reg. 5139, 5143, 5152 (Appendix 1 to Rule Series 4000). 180 181 AB 6311-12 (Scott). 43 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 49 of 123 * PUBLIC * PUBLIC Medication—seemingly in violation of an NMRC Rule. 182 Dr. Scott attributed the entries to “mistakes. Clerical.” 183 From the limited evidence, a permissible—but by no means necessary— inference is that Dr. Scott routinely uses Sarapin as an anti-inflammatory, painrelieving treatment, with, or perhaps as an alternative to, bute. His veterinary practice records should help illuminate both: (1) how “routine” his injections of both Sarapin and bute together are; and (2) whether, contrary to his denial, Dr. Scott injects not only quarter horses with Sarapin, but also Covered Horses. Therefore, I next consider the documentary evidence Dr. Scott offered to support his compelling justification defense. 2. Dr. Scott’s “Documentary” Proof. Where, as here, a Veterinarian contends that a non-Covered Horse practice provides compelling justification, medical records should be highly probative. Thus, in Shell II, where Dr. Shell raised this defense, the arbitrator wrote: Dr. Shell has made the nature of his practice relevant, and has placed at issue whether he had a noncovered horse practice that required the carrying of the Targeted Banned Substances. . . . Dr. Shell opened the door to this line of inquiry by raising the defense that the Targeted Banned Substances were only used in non-covered horses. Accordingly, Dr. Shell has the burden of supporting that defense with his veterinary records for covered and noncovered horses. As such, the complete veterinary medical records for all Id. 5238-43 (extracts with phenylbutazone (bute) and robaxin entries); NMAC § 15.2.6.9.N(1) & (2); 88 Fed. Reg. 5146 (Appendix 1 to Rule Series 4000). See also AB 7126 (ARCI NSAID guidelines). 182 183 AB 6309 (Scott). See generally id. 6305-11, 6346. 44 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 50 of 123 * PUBLIC * PUBLIC horses in his practice from the implementation of HIWU’s regulations until he was charged are relevant and material to the defense. 184 Despite this pre-hearing ruling, instead of introducing “complete veterinary records” at the hearing itself, Dr. Shell produced what he called “cliff notes,” some with “clerical or scrivener’s” errors. 185 On review, I held that “the mostly billing records offered are too incomplete and too riddled with claimed errors to find Dr. Shell to have discharged his burden of proof.” 186 Against the backdrop of the Shell decision, I consider the documentary evidence Dr. Scott introduced to corroborate his asserted treatment protocol. Procedural Order No. 1 set forth the date on which he was required to submit to the Arbitrator and provide to HIWU his hearing exhibits. 187 He should have at his disposal a body of documents that, either individually or in summary form, detail his multi-year, routine use of Sarapin on only non-Covered quarter horses. Yet, his documentary practice information covers 46 quarter horses, handled by four trainers, during the January-February 2025 period. 188 This material shows 184 2025 WL 1784696, at *7 (quoting HIWU v. Shell, JAMS Case No. 1501000653, Discovery Order No. 1 (Jan. 16, 2024) (emphasis added). 185 2025 WL 1784696, at *23. 186 Id. See also id. 2712-13 (Procedural Order No. 3) (providing the re-scheduled date), 5228-29 (Dr. Scott’s witness and exhibit list). 187 AB 105, at ¶ 1.b. 188 The records identify the horses numerically from 1 through 49, but the data for three horses purports to reflect treatment in different months, thus resulting in 46 “unique” horses. See Horse 37 and Horse 45 (AB 5249 & 5252), Horse 39 and Horse 47 (AB 5249 & 5252), and Horse 44 and Horse 48 (AB 5250 & 5253). 45 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 51 of 123 * PUBLIC * PUBLIC Sarapin injections, typically two days before race dates, along with post-race treatments and a small number of other substances administered. 189 This is the only non-testimonial practice evidence that Dr. Scott offered as probative of his compelling justification defense relating to Sarapin. Although during the arbitration hearing, the parties referred to these documents as “invoices,” they are not that at all. 190 They simply set forth extracts of entries, seemingly from invoices themselves, identified by number and date in this “prepared-for-litigation” exhibit. As Dr. Scott explained in his witness statement: “Using my billing software, I have generated a summary of the treatments provided to horses on this protocol, which is attached. . . .” 191 The extracts apparently come from billing records that Dr. Scott never produced or made available for inspection and that, one would expect, are themselves populated from his veterinary medical records. NMAC § 16.25.9.21 is titled “Minimum Standards for Veterinary Medicine Practitioners – Record Keeping.” The Code provision requires licensed veterinarians to “prepare” “client record[s] . . . which shall contain the following information: (1) name, address, and phone number of the animal's owner or agent; and (2) name or identity of animal(s), including species, breed, age, sex, weight, and color where appropriate 189 AB 5238-54 (data extracts). See AB 7229-45 (Scott production), 7247-48 (summary list), 5868-69 (Benson), 6406-08 (HIWU closing). 190 191 AB 5233, at ¶ 25 (Scott wit. stmt.). 46 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 52 of 123 * PUBLIC * PUBLIC (3) The medical record shall contain: (a) a history of pertinent information as it pertains to the animal’s medical status; (b) notation of the physical examination findings; (c) treatment or intended treatment plans or both, including medications, medication strengths and amounts administered, dispensed or prescribed and frequency of use as well as method of administration including those medications used for sedation, induction and maintenance of anesthesia; (d) data and interpretation(s) of diagnostic procedures including but not limited to radiographs, laboratory, ultrasound and ECG; (e) a diagnosis or tentative diagnosis; (f) when pertinent, a prognosis; (g) progress notes and disposition of the case; (h) beginning and ending dates of custody of the animal with daily notations; (i) in the case of vaccination clinics, a certificate including the information required by Subsections (1) and (2) above may serve as the medical record; (j) name or initials of the veterinarian responsible for entries; and (k) name or initials of all ancillary and authorized individuals responsible for entries. NMRC regulations also include recordkeeping and submission requirements: Every veterinarian who treats a race horse at any location under the jurisdiction of the commission shall, in writing on a form approved by the commission, report to the official veterinarian the name of the horse treated, any medication, drug or substance administered or prescribed or 47 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 53 of 123 * PUBLIC * PUBLIC administered, the name of the trainer of the horse, the date and time of treatment and any other information requested by the official veterinarian. 192 Yet, when asked about his medical records, Dr. Scott testified as follows: Q [counsel for HIWU]: Do you keep medical records, Dr. Scott? Something other than invoices. A: I use the invoices as medical records. 193 I will assume, for argument’s sake (and lawfulness aside), that a veterinarian might “relax” their compliance with NMAC’s requirements where treatment is, for example, routinized. 194 But as I wrote in McCrosky in response to similar testimony: “It strains credulity for Dr. McCrosky to claim he keeps no veterinary records at all for his own horses.” 195 It similarly strains credulity for Dr. Scott to claim that, other than invoices—themselves not produced—he keeps no medical veterinary records in his entire practice for any of the horses he treats. Bills commonly are prepared monthly, and their explanatory entries must come from some source; Dr. Scott can’t possibly keep all the necessary names, dates, and treatment information in his head. 196 192 NMAC § 15.2.6.8(D)(1). 193 AB 6318-19 (Scott). See id. 6072-73 (Fenger) (Although a billing record can serve as a medical record, “it should include the relevant information,” such as the condition observed or otherwise diagnosed, with “a comment . . . [that] can be very brief, but most medical record programs give you the ability to write something in if there is something to say.”). 194 195 McCrosky, 2026 WL 1633298, at *18. See, e.g., AB 5238-40, 5244-46, 5249-50 (referring to differently numbered “Jan-31-25” invoices), 5242-43, 5247-48, 5252-53 (referring to multiple “Feb-28-25” invoices). 196 48 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 54 of 123 * PUBLIC * PUBLIC Equally important, after Rules implementing HISA became effective in 2022, Veterinarians treating Covered Horses became similarly obligated to maintain and upload to an Authority-created web portal within 24 hours medical record information comparable to that called for under New Mexico law. 197 For Covered Horses in his practice, Dr. Scott testified that his billing agent handles the required upload to the Authority’s portal and, so far as he knows, he is “fully compliant” with the HISA reporting requirements. 198 Dr. Scott’s billing agent has to get the treatment information that it uploads for Covered Horses from some source—presumably either a document or an individual communicating with the billing agent based on a document. It is reasonable to infer that there is also available source material for non-Covered quarter horses. But Dr. Scott never offered any such documents. Shown the series of invoice extracts that Dr. Scott did provide, Dr. Benson, gave this testimony: Q [counsel for HIWU]: Are these medical records? A: No. 199 See generally AB 5319 (HISA 2024 Handbook covering treatment recording options); Matter of Galvin, No. 9445, 2026 FTC LEXIS 31, at *2, 69-70 (ALJ Mar. 19, 2026), app. for review, 2026 WL 1456131 (FTC Apr. 20, 2026). 197 HISA Rule 2251(b). See also id. 5198, at ¶ 10 (Scott pre-hearing brief) (“Dr. Scott uploads his treatments [of] Covered Horses through the HIWU veterinarian portal.”). 198 AB 6269-70 (Scott). 199 AB 5869 (Benson). See generally id. 5509-11, at ¶¶ 4-9 (Benson Supp. Exp. Rep.). 49 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 55 of 123 * PUBLIC * PUBLIC Explaining the difference between billing entries and medical records, Dr. Benson continued: [T]he whole point of a medical record is you should be able to understand why the horse was given the sarapin. This [the invoice extract] is more like just the conclusion. So, what was the diagnosis? What were the symptoms? What was the objective . . . what were the objective findings? Were there radiographs that they felt at the back to find out that the horse had arthritis or something that they wanted to treat with Sarapin, and whether we can argue whether it’s effective, you know, at least they had a medical basis for using the treatment. . . . We don’t even really know the breed of the horse technically. 200 Dr. Benson added that the invoice extracts lack sufficient information to determine whether Sarapin should have been administered, and if so, for what purpose: [T]he only indication I can see is that the horses were entered to race, and that’s not a medical diagnosis. .... [E]ven if it is preventative, you have to have a reason. What are you preventing? Where is the history of having needed to prevent? . . . Dr. Fenger [Dr. Scott’s expert] in her expert report said Sarapin was used for back injuries, back arthritis, and so you’ve got a bunch of horses that both have back arthritis and tie up. Now, certainly those two can look alike, but you don’t know which one is which, so it’s almost impossible to tell from these while you’re doing one or both.” 201 Similarly asked about the billing extracts, Dr. Fenger, testified: Q [counsel for Dr. Scott]: Are billing records medical records? 200 AB 5869-70 (Benson). 201 Id. 5870-71. 50 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 56 of 123 * PUBLIC * PUBLIC A: In many cases, they are. A lot of veterinary practices, the billing records serve as their medical records. .... If a billing record is used as a medical record, then it should include the relevant information. So I’ve seen, for example, billing records . . . I mean, almost all veterinary programs . . . give you a spot where you can put something so like radiographs left front ankle, for example. So I already know that there’s . . . the horse has indicated something. . . . And then there may be a comment, clean, NSF [no significant findings]. So they can be very brief, but most medical record programs give you the ability to write something in if there’s something to say. Dr. Fenger agreed in some circumstances, “there might not be something to say,” but then used as an example a case involving estrone sulfate: [A]s a veterinarian familiar with racetrack practice, I know exactly what the estrone was for. So the issue being, it’s repeatedly included in the records, estrone, estrone, estrone. And what that tells me is this horse is bleeding through Lasix. . . . I know that at some point in this horse’s history, it has bled through Lasix. So that is one example of something where I can infer the history, the medical, the finding. Now, the horse may not ever be scoped again to tell whether it’s working or not . . . a follow-up wouldn’t necessarily be required. . . . But I can infer from the record that the horse did indeed bleed through Lasix and require estrone. 202 This case, however, is not about records kept for estrone, used to treat a recognized recurring condition. According to Dr. Scott himself, Sarapin is used to reduce inflammation and pain in spinal and soft tissue. Dr. Fenger never expressed an opinion on whether the limited injection extracts Dr. Scott produced support his Sarapin treatment regime. 202 Id. 6072-75 (Fenger). 51 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 57 of 123 * PUBLIC * PUBLIC 3. Assessment of Dr. Scott’s Data Extracts. Dr. Scott’s data extracts—the only non-testimonial evidence that Dr. Scott offered to corroborate his asserted practice protocol—barely rise to the “cliff notes” level of those in Dr. Shell’s case. And, just as errors in Dr. Shell’s records rendered them unreliable, so too here Dr. Scott’s extracts fare no better. I noted earlier that Dr. Scott seemingly injected 17 horses with bute and robaxin—data extracts that Dr. Scott says are “mistakes. Clerical. . . . wrong date.” 203 But all 17 quarter horses had the same trainer, thus raising the question whether the claimed “error” was in disclosing in this case the injection data from Dr. Scott’s records, and not in memorializing the date the injections were in fact given. In addition, the extracts for Horse 47 reflect two Sarapin and two AMP injections on January 30 and 31, 2025, respectively. 204 Again, Dr. Scott says “[t]hat is most likely clerical error.” 205 These are but the tip of the iceberg, however. Dr. Scott’s data extracts can also be compared to public Equibase racing data for each quarter horse. 206 203 Id. 6309, 6310 (Scott). 204 Id. 7243 (Scott invoice). 205 Id. 6338 (Scott). See Rule 1020 (definition) (recognizing Equibase as “the official database for Thoroughbred horseracing.”). See also Galvin, 2026 FTC LEXIS 31, at *73 & n.257 (taking official notice of Equibase data); AQHA Press Release, Equibase Launches Quarter Horse Stats (May 16, 2016), https://www.aqha.com/-/equibase-launches-qh-stats; Equibase, https://www.equibase.com/profiles/ Results.cfm?type=Horse&refno=10898245®istry=T; https://www.equibase.com/ (portal offering access to database, searchable by, for example, horse or trainer, and reporting, for example, race performance and workout days). 206 52 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 58 of 123 * PUBLIC * PUBLIC • Equibase reports reveal that 13 quarter horses, covered in Dr. Scott’s extracts, raced twice in January and February 2025, but were treated with Sarapin only once according to the extracted entries. 207 • For another horse, Dr. Scott reports a Sarapin injection, along with “Oral Electrolytes-Post Race,” but Equibase does not report the horse as racing. 208 • For still another, Dr. Scott reports injections preceding a race day, and Equibase reports the horse as racing on the next race day. But Dr. Scott’s extracts show no post-race treatment, which the extracts show he routinely administered post-race. 209 There similarly are limited data extracts for the eight quarter horses Dr. Scott testified he intended to treat with Sarapin at the time of HIWU’s search. 210 According to Equibase, all eight raced at Sunland Park as scheduled in February. But there are no Sarapin injections preceding those races, seemingly because the HIWU search disrupted Dr. Scott’s protocol. 211 See AB 5238 (Horse 1 & Horse 3), 5238-39 (Horse 4), 5239 (Horse 6 & Horse 8), 5240 (Horse 12), 5242-43 (Horse 17), 5245 (Horse 21 & Horse 22), 5249 (Horse 36), 5250 (Horse 41 & Horse 43), 5252 (Horse 47). 207 208 AB 5244 (Horse 18). 209 Id. 5250 (Horse 40). 210 AB 7222, 7224-25, at ¶¶ 7, 31 (Scott wit. stmt.). Compare AB 5238-53-UN with id. 7224-25, at ¶ 31. See id. 5224, at ¶ 33 (Scott wit. stmt.) (“Because Mr. Bennett [HIWU’s investigator] seized the medications, I was unable to provide these treatments. I obviously cannot generate a record of treatment that never occurred.”). 211 53 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 59 of 123 * PUBLIC * PUBLIC Equibase reports, however, that three of the eight also raced in January 2025, and the extracts have Sarapin injections preceding those races. 212 Although the other five quarter horses raced in February, according to Equibase none raced in January, but all five had workouts during this period at either Sunland Park or the nearby Frontera training facility as did one other among the eight and 15 of the 46 horses identified in the extracts. 213 There are no extracts covering these horses on workout days, although Dr. Scott states that he uses Sarapin to “treat osseus and soft-tissue issues during training.” 214 Dr. Scott further states that, of the four trainers for the horses in the data extracts he produced, “two . . . stable[d] their horses at an off-site training facility” and “had horses on a protocol that included Sarapin. . . .” 215 Again, there are no records whether these horses received Sarapin in connection with off-track workouts. Thus, limitations on the disclosed data call into question the regularity of Dr. Scott’s claimed practice, while extract irregularities erode the reliability of the 212 AB 5239 & 5245-UN. See: (1) Raced in January 2025, AB 5239 (Kool Kue Blue) & 5245 (Chicks Comanchee & Chimes Efforts); (2) Had one or more workouts, according to Equibase: Prince of Fast, Tren Ra, FS Stars and Stripes, Scoot Over Baby, Jess A Bug N D Ocean, and Chicks Comanchee; and (3) Others with workouts, according to Equibase: AB 5238-39 (Horse 1 & Horse 4), 5240 (Horse 13), 5242 (Horse 14 & Horse 16), 5245 (Horse 21), 5246 (Horse 26 & Horse 28), 5247 (Horse 29, Horse 30, Horse 31 & Horse 32), 5248 (Horse 33 & Horse 35), 5249 (Horse 39). See AB 165, at ¶ 8 (Bennett wit. stmt.) (“Frontera is located approximately 1.6 miles and a five-minute drive from Sunland Park.”), 5634 (Bennett). 213 214 AB 5232, at ¶ 18 (Scott wit. stmt.) (emphasis added). 215 Id. 5233, at ¶ 24. 54 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 60 of 123 * PUBLIC * PUBLIC data introduced. Dr. Scott made the decision to offer only self-selected, extracted information—seemingly twice removed from ordinary course veterinary records. So, there is no way to know whether other non-disclosed practice records corroborate or refute Dr. Scott’s compelling justification defense. Dr. Scott dismisses attention to the extracts as a “nitpiks.” 216 Not so. His only documentary proof is comparable to that held insufficient in Shell II. This material does not weigh in favor of his proving compelling justification. To the contrary, “[t]he production of weak evidence when strong is available can lead only to the conclusion that the strong would have been adverse.” 217 This concern is real. On those days that Dr. Scott is at the Sunland Park racetrack to inject Sarapin into quarter horses, Covered Horses can be racing. 218 Although Dr. Scott maintains that he has never injected a Covered Horse with Sarapin, his 216 SRPFOF ¶ 7. See generally id. ¶¶ 6-9. Interstate Circuit, Inc. v. United States, 306 U.S. 208, 226 (1939). See also Int’l Union v. NLRB, 459 F.2d 1329, 1335-36 (D.C. Cir. 1972) (“[W]hen a party has relevant evidence within his control which he fails to produce, that failure gives rise to an inference that the evidence is unfavorable to him.”) (citing authorities); 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.”). See also Roger J. Spott, D.D.S., P.A. v. CIR, 1989 WL 54065, at *5 (4th Cir. May 22, 1989) (Where the taxpayer had the burden of proving error in the IRS deficiency determination, by producing “boxes of documentary evidence. . . , he was taking the risk that in their disorganized state the documents would fail to disprove the IRS’s determinations of a deficiency. . . .”). 217 218 AB 6313-14 (Scott). 55 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 61 of 123 * PUBLIC * PUBLIC self-selected disclosure of quarter horse treatment extracts precludes inquiry into the veracity of his testimony. 219 State confidentiality regulations, on which Dr. Scott has relied to object to being called on to defend, cannot excuse his failure to introduce more probative evidence. 220 Before the arbitration hearing, he “obtained a limited waiver of confidentiality for the identity of the horse and the intended treatment on [February] 13th only,” and that enabled him to provide his data extracts to HIWU with redactions. 221 He also produced to HIWU an unredacted version of this previously-redacted material under a “verbal” confidentiality agreement. 222 I further granted the data extracts in camera treatment in this proceeding. 223 So, when it suited his interest, Dr. Scott found work-arounds for arguable state law confidentiality obligations. It is reasonable to infer that he could have made comparable arrangements for additional records, thus allowing a more fulsome inquiry into his practice. Where a Veterinarian asserts compelling justification, based on their mixed practice, the Shell II arbitrator’s standard—calling for the availability of “the complete veterinary medical records for all horses in his practice”—is a guidepost to 219 See id. 136 (Scott letter), 6233-34, 6271 (Scott). 220 See id. 5212-13, at ¶ 54 (Scott pre-hearing brief). 221 AB 7225, at ¶ 32 (Scott wit. stmt.). 222 SRPFOF ¶ 54; 223 See id. 7190, at ¶ 13 (Scott proposed findings of fact). Matter of Scott, No. 9449, 2026 WL 1678525, at *1 (FTC ALJ June 5, 2026). See Matter of Scott, No. 9449, FTC LEXIS 53 (ALJ June 9, 2026). 56 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 62 of 123 * PUBLIC * PUBLIC aid in determining where the truth lies. 224 Although HISA cases are heard in arbitrations that do not import the full array of civil litigation tools, over-arching litigation principles can still inform analysis of the compelling justification defense. Offering limited, self-selected veterinary records to prove compelling justification risks distorting or garbling the true nature of the veterinarian’s practice. 225 I do not pre-judge whether something less than “complete” records may be sufficient proof, depending on the facts. Regardless of where the line might have to be drawn, the limited material Dr. Scott introduced is not enough to move the needle significantly toward, much less to satisfy, compelling justification. 4. Sarapin Use by Other Veterinarians. Dr. Scott maintains that Sarapin use at Sunland Park “was widespread, open, notorious, and known to NMRC at all relevant times.” 226 During his testimony, he identified other veterinarians who, he said, used Sarapin. However, his sole percipient supporting witness is Dr. Tony Pickard, another longtime New 224 Shell II, 2025 WL 1784696, at *7. 225 See, e.g., Beech Aircraft Corp. v. Rainey, 488 U.S. 153, 171 (1988) (The rule of completeness, applicable to communications, promotes “a complete understanding of the total tenor and effect of the utterance.”) (internal quotation marks omitted); United States v. Procter & Gamble Co., 356 U.S. 677, 682 (1958) (Disclosure “make[s] a trial less a game of blindman’s buff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent.”); In re Halkin, 598 F.2d 176, 192 (D.C. Cir. 1979) (“[L]iberal discovery. . . contributes to a full and fair airing of all material facts in controversy.”) (footnote omitted); United States v. St. Pierre, 132 F.2d 837, 840 (2d Cir. 1942) (privileges entitle the holder “to suppress the truth, but . . . not . . . to garble it” or to present “false evidence and deprive the other of any means of detecting the imposition.”). 226 SPFOF ¶ 15. 57 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 63 of 123 * PUBLIC * PUBLIC Mexico veterinarian whose practice includes racetrack horses. Dr. Pickard maintained that “over 99% of racetrack veterinarians in New Mexico would have [Sarapin] on their truck for Quarter Horses.” 227 But he offered that statement without elaboration, and the basis for it is not self-evident. I thus give it little weight. Also relevant in assessing Dr. Pickard’s evidence: his son, John, and Dr. Scott “work together,” with Dr. John Pickard “appear[ing] in [extracts allegedly sourced to Dr. Scott’s] invoices.” 228 No other racetrack veterinarian testified or otherwise provided evidence to support Dr. Scott. Moreover, although the arbitration hearing was held at Sunland Park, no trainer testified or otherwise corroborated Dr. Scott. The data extracts, discussed above, come from only four trainers, two of whom handled nearly 3/4’s of the quarter horses for which Dr. Scott submitted data. 229 For a third, data on only one horse is reported, although Equibase reports the trainer racing a dozen other horses at Sunland Park in January and February 2025. 230 None of the four trainers offered evidence explaining their apparent willingness to allow Dr. Scott to inject their quarter horses with Sarapin. There also is no evidence: (1) whether these trainers are representative of those whose horses 227 Pickard Stipulated Testimony, at ¶ 2. opinion). 228 AB 6304 (Scott). 229 See also AB 6240 (Dr. Scott agrees with Dr. Pickard’s “99%” See also id. 6341. See AB 5238-51 (Trainers 1 and 2 handled 35 of 46 horses). 230 AB 5254 (Trainer 4 & Horse 49). 58 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 64 of 123 * PUBLIC * PUBLIC Dr. Scott treats, much less of those trainers who race regularly at Sunland Park; or (2) whether three of the trainers raced other horses during the relevant period; one (Trainer 4) clearly did. Dr. Scott himself admitted that “[f]or some trainers, only a few horses are treated in accordance with the [Sarapin] protocol. For other trainers, I may place most or even all of their horses on the protocol. . . .” 231 His witness statement further suggests that the four trainers covered by his data extracts are the only ones receiving routine pre-race Sarapin injections in January-February 2025. 232 Dr. Scott’s expert, Dr. Fenger, said nothing about Sarapin’s prevalence at Sunland Park. 233 She commented only that Sarapin was “historically . . . commonplace.” 234 However, she also testified to having “Sarapin on [her] truck up until May 22 of 2023 [when the ADMC Program took effect] at which point [she] removed it.” 235 She explained why: “whether I thought it was legal or not, . . . I didn’t want to be in Dr. Scott’s seat at the table like he is today.” 236 Regardless of the practice of Dr. Scott and other Sunland Park veterinarians before the ADMC 231 Id. 5233, at ¶¶ 22-23 (Scott wit. stmt.). Id. at ¶ 24 (“During the 2025 Sunland meet, [Dr. Scott’s Sarapin protocol] was the case for two trainers who stable their horses at the racetrack. From my review and recollection, two other trainers who stable their horses at an off-site training facility also had horses on a protocol that included Sarapin. . . .”). 232 See generally AB 5265, at ¶¶ 30-31 (Fenger Exp. Rep.), 6095-108, 6144, 6162-64 (Fenger) (testimony regarding Sarapin). 233 234 Id. 5265, at ¶ 32 (Fenger exp. report). 235 Id. 6144 (Fenger). 236 Id. 6163. 59 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 65 of 123 * PUBLIC * PUBLIC Program became effective, Dr. Fenger’s “better safe than sorry” response cuts against Dr. Scott’s compelling justification argument. To reiterate, FDA and HISAapproved alternatives to Sarapin exist. 237 Dr. Scott maintains that Sunland Park veterinarians considered Sarapin “the standard of care to treat quarter horses. . . , very common.” 238 But his supporting evidence, all told, is insubstantial. If Sarapin were so important for soft tissue or bone injuries—and if its use were as widespread as Dr. Scott claims it to be—it is reasonable to expect more corroboration for Dr. Scott’s defense. This consideration, too, weighs against finding compelling justification. 5. New Mexico Law and NMRC Enforcement. Dr. Scott’s evidence concerning New Mexico law and NMRC enforcement at Sunland Park has some, albeit limited, probative value in assessing his compelling justification defense. Dr. Scott introduced evidence designed to show that: (1) New Mexico law did not prohibit possession of Sarapin at Sunland Park, and even if it did (2) for years, NMRC enforcement was lax, if not non-existent. I consider, first, New Mexico State law and regulations. After that, I discuss the evidence regarding NMRC enforcement. Because I have held that the Authority 237 AB 5519, at ¶ 40 (Benson supp. rep.) (footnotes omitted). *5. 238 AB 6232-33 (Scott). See also Shell II, 2025 WL 1784696, at See generally id. 6227-34, 6237-6240 (Scott), 7274 (Pickard letter); Pickard Stipulated Testimony, at ¶¶ 2-4. 60 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 66 of 123 * PUBLIC * PUBLIC has failed to demonstrate that AMP is a Banned Substance, I deal only with Sarapin. a. Racetrack Law and Regulation. Preliminarily, I find it helpful to keep in mind the continuum needed in analyzing state law as a compelling justification factor. At one end is prohibition: if State or racetrack regulation prohibit Sarapin’s possession, that would refute, not support, Rule 3214(a)’s defense. It seems implausible to argue there could be a compelling justification to have a substance that State law or track regulation does not allow. At the other end of the continuum, possession might simply go unaddressed, and therefore veterinarians probably would not assume any prohibition of possession or use. Then, the probative value of this factor in supporting compelling justification is highest. And, in between, the capacity of state law and regulation to inform compelling justification argument weakens, even if not susceptible to calibration. Sarapin seems to me, at best, in the middle area, but tilting toward prohibition. New Mexico law authorizes the NMRC to license racetrack veterinarians, who are subject to NMRC-issued regulations. 239 Under NMRC regulations, the presence of a “Prohibited substance” in a racehorse can give rise to sanctions. 240 239 See N.M. Stat. Ann. § 60-1A-5 (repealed effective July 1, 2028); NMAC § 16.47.1.3. See generally NMAC § 15.2.6.9. A “Prohibited substance” is “any drug, chemical, or other substance which, when administered to a horse can create a change in the normal physiological performance of the horse’s racing ability. . . .” Id. § 15.2.1.7.P(16). 240 61 FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 08/31/2026 OSCAR NO. 616193 -PAGE Page 67 of 123 * PUBLIC * PUBLIC The Code does not prohibit a veterinarian from possessing a Prohibited substance. 241 However, NMRC’s regulations provide that, “[i]f a licensed veterinarian is administering or prescribing a drug not listed in the association of racing commissioners international [“ARCI”] uniform classification guidelines for foreign substances, the identity of the drug shall be forwarded to the New Mexico racing commission de [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%3Aa14ed6fb7b4d8b1a. Public record. Not legal advice.