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PUBLIC
PUBLIC
UNITED
UNITED STATES
STATES OF
OF AMERICA
AMERICA
BEFORE
BEFORE THE
THE FEDERAL
FEDERAL TRADE
TRADE COMMISSION
COMMISSION
OFFICE
OFFICE OF
OF ADMINISTRATIVE
ADMINISTRATIVE LAW
LAW JUDGES
JUDGES
FTC
FTC DOCKET
DOCKET NO.
NO. D-9444
D-9444
ADMINISTRATIVE
ADMINISTRATIVE LAW
LAW JUDGE:
JUDGE:
HON.
HON. JAY
JAY L.
L. HIMES
HIMES
IN
IN THE
THE MATTER
MATTER OF:
OF:
EUSABIO
EUSABIO JUAREZ-RUFINO
JUAREZ-RUFINO
APPELLANT
APPELLANT
THE
THE AUTHORITY’S
AUTHORITY’S BOOK
BOOK OF
OF AUTHORITIES
AUTHORITIES
March
March 25,
25, 2026
2026
Respectfully
Respectfully submitted,
submitted,
STURGILL,
STURGILL, TURNER,
TURNER, BARKER
BARKER &
& MOLONEY,
MOLONEY,
PLLC
PLLC
/s/ Bryan
/s/
Bryan Beauman
Beauman
BRYAN
BRYAN BEAUMAN
BEAUMAN
REBECCA
REBECCA PRICE
PRICE
333
333 W.
W. Vine
Vine Street,
Street, Suite
Suite 1500
1500
Lexington,
Lexington, Kentucky
Kentucky 40507
40507
Telephone:
Telephone: (859)
(859) 255-8581
255-8581
bbeauman@sturgillturner.com
bbeauman@sturgillturner.com
rprice@sturgillturner.com
rprice@sturgillturner.com
HISA
HISA ENFORCEMENT
ENFORCEMENT COUNSEL
COUNSEL
MICHELLE
MICHELLE C.
C. PUJALS
PUJALS
ALLISON
J.
FARRELL
ALLISON J. FARRELL
CHRISTY
CHRISTY HEATH
HEATH
4801
4801 Main
Main Street,
Street, Suite
Suite 350
350
Kansas
Kansas City,
City, MO
MO 64112
64112
Telephone:
Telephone: (816)
(816) 291-1864
291-1864
mpujals@hiwu.org
mpujals@hiwu.org
afarrell@hiwu.org
afarrell@hiwu.org
cheath@hiwu.org
cheath@hiwu.org
HORSERACING
HORSERACING INTEGRITY
INTEGRITY &
& WELFARE
WELFARE
UNIT,
A
DIVISION
OF
DRUG
FREE
UNIT, A DIVISION OF DRUG FREE SPORT,
SPORT,
LLC
LLC
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PUBLIC
PUBLIC
INDEX
INDEX
TAB
TAB
DOCUMENT
DOCUMENT DESCRIPTION
DESCRIPTION
PG.
PG. #
#
1.1.
In
In re
re the
the Matter
Matter of
of Dr.
Dr. Scott
Scott Shell,
Shell, DVM,
DVM, Docket
Docket No.
No. 9439,
9439, ALJ
ALJ
Decision
Decision on
on Application
Application For
For Review
Review (March
(March 6,
6, 2025)
2025)
Jason
Jason Scott
Scott v.
v. HISA,
HISA, No.
No. 2:25-cv-632-SMD-GJF,
2:25-cv-632-SMD-GJF, Memorandum
Memorandum Order
Order
Denying
Denying Plaintiff’s
Plaintiff’s Motion
Motion for
for aa Preliminary
Preliminary Injunction
Injunction (D.N.M.
(D.N.M.
October
October 10,
10, 2025)
2025)
Motor
Motor Vehicle
Vehicle Mfrs.
Mfrs. Ass'n
Ass'n v.
v. State
State Farm
Farm Mut.
Mut. Auto.
Auto. Ins.
Ins. Co.,
Co., 463
463 U.S.
U.S.
29
29 (1983)
(1983)
Citizens
Citizens to
to Preserve
Preserve Overton
Overton Park,
Park, Inc.
Inc. v.
v. Volpe,
Volpe, 401
401 U.S.
U.S. 402
402 (1971),
(1971),
abrogated
abrogated on
on other
other grounds
grounds by
by Califano
Califano v.
v. Sanders,
Sanders, 430
430 U.S.
U.S. 99
99 (1977)
(1977)
FCC
FCC v.
v. Prometheus
Prometheus Radio
Radio Project,
Project, 141
141 S.
S. Ct.
Ct. 1150
1150 (2021)
(2021)
3-76
3-76
2.
2.
3.
3.
4.
4.
5.
5.
6.
6.
7.
7.
Nat’l
Nat’! Wildlife
Wildlife Fed’n
Fed’n v.
v. Nat’l
Nat’! Marine
Marine Fisheries
Fisheries Serv.,
Serv., 422
422 F.3d
F.3d 782
782 (9th
(9th
Cir.
Cir. 2005)
2005)
In
In the
the Matter
Matter of
of Luis
Luis Jorge
Jorge Perez,
Perez, Docket
Docket No.
No. 9420,
9420, ALJ
ALJ Decision
Decision on
on
Application
For
Review
(February
7,
2024)
Application For Review (February 7, 2024)
77-100
77-100
101-132
101-132
133-155
133-155
156-176
156-176
177-192
177-192
193-210
193-210
PUBLIC
PUBLIC
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7$%
TAB 1
FEDERAL
FEDERAL TRADE
TRADE COMMISSION
COMMISSION || OFFICE
OFFICE OF
OF THE
THE SECRETARY
SECRETARY || FILED
FILED 03/06/2025
03/06/2025 OSCAR
OSCAR NO.
NO. 612947
612947 -PAGE
-PAGE Page
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PUBLIC
UNITED
UNITED STATES
STATES OF
OF AMERICA
AMERICA
FEDERAL
FEDERAL TRADE
TRADE COMMISSION
COMMISSION
OFFICE
OFFICE OF
OF ADMINISTRATIVE
ADMINISTRATIVE LAW
LAW JUDGES
JUDGES
__________________________________________
)
)
)
Dr.
)
Dr. Scott
Scott Shell,
Shell, DVM
DVM
)
Appellant.
)
Appellant.
__________________________________________)
In
In the
the Matter
Matter of
of
Docket
Docket No.
No. 9439
9439
ADMINISTRATIVE
ADMINISTRATIVE LAW
LAW JUDGE
JUDGE DECISION
DECISION
ON
ON APPLICATION
APPLICATION FOR
FOR REVIEW
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TABLE OF CONTENTS
TABLE OF CONTENTS ............................................................................................................................i
TABLE OF ABBREVIATIONS................................................................................................................ii
I.
INTRODUCTION.......................................................................................................................... 1
II.
THE UNDERLYING FACTS....................................................................................................... 2
A. Summary of the Case............................................................................................................... 2
B. Dr. Shell’s Practice and HIWU’s Search................................................................................. 3
C. The Four Banned Substances Charged As Possession Violations........................................... 4
D. The Federal Injunction Covering West Virginia ..................................................................... 7
E. HIWU’s Other “Administration” Case .................................................................................... 8
F. The Arbitration Subject to this Review ................................................................................... 8
1. Compelling Justification.................................................................................................. 9
2. Sanctions........................................................................................................................ 11
III.
ISSUES ON REVIEW ................................................................................................................. 12
IV.
SCOPE OF REVIEW.................................................................................................................. 12
V.
ANALYSIS OF THE ISSUES..................................................................................................... 14
A. The Possession Violation and Compelling Justification Defense.......................................... 14
1. “Compelling Justification” ............................................................................................ 15
2. Dr. Shell’s “Non-Covered Horses” Practice as a Compelling Justification .................. 16
a. Otherwise Covered Horses Physically in West Virginia ........................................ 17
b. Dr. Shell’s Farm Practice Proof .............................................................................. 20
i. Dr. Scollay’s Mahoning Presentation............................................................... 20
ii. Dr. Shell’s Follow-up Conversation................................................................. 22
iii. The Randall Equine Email Exchange............................................................... 23
c. Inadequacy of Dr. Shell’s Proof.............................................................................. 24
i. Dr. Shell’s Records Overall.............................................................................. 24
ii. The Four Banned Substances ........................................................................... 26
d. Overall Assessment of Dr. Shell’s Compelling Justification Proof ........................ 33
B. Dr. Shell’s Estoppel Argument.............................................................................................. 35
C. Dr. Shell’s Constitutional Arguments.................................................................................... 40
1. Rule 3214 Is Not Unconstitutionally Vague..................................................................... 40
2. Prosecution of this Case by the Authority and HIWU is Not Unconstitutional................ 42
VI.
SANCTIONS ................................................................................................................................ 44
A. Single or Separate Violations Under Rule 3228(d) ............................................................... 44
B. Consecutive Ineligibility Based on the Administration Case Sanction ................................. 51
C. Applying the No Fault or Negligence (NF) and No Significant Fault or
Negligence (NSF) Analyses to the Sanctions ........................................................................ 58
1. Overview ....................................................................................................................... 58
2. NF: Applying Rule 3324................................................................................................ 58
3. NSF: Applying Rule 3225 ............................................................................................. 60
a. Objective Considerations ........................................................................................ 62
b. Subjective Considerations....................................................................................... 64
4. Sanctions Summary .......................................................................................................... 69
VII.
CONCLUSION ............................................................................................................................ 70
i
FEDERAL
FEDERAL TRADE
TRADE COMMISSION
COMMISSION || OFFICE
OFFICE OF
OF THE
THE SECRETARY
SECRETARY || FILED
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NO. 612947
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PUBLIC
TABLE
TABLE OF
OF ABBREVIATIONS
ABBREVIATIONS
AB1
AB1 –
— Appeal
Appeal Book
Book Part
Part 11
AB2
AB2 –
— Appeal
Appeal Book
Book Part
Part 22
ADMC
ADMC -– Anti-Doping
Anti-Doping and
and Medication
Medication Control
Control
ADRV
ADRV -– Anti-Doping
Anti-Doping Rule
Rule Violation
Violation
AOBr.
AOBr. —– Appellant’s
Appellant’s Opening
Opening Brief
Brief
ARBr.
ARBr. —– Appellant’s
Appellant’s Reply
Reply Brief
Brief
ARPFOF
ARPFOF –
-— Appellant’s
Appellant’s Reply
Reply to
to Authority’s
Authority’s Proposed
Proposed Findings
Findings of
of Fact
Fact
AuOBr.
AuOBr. —– Authority’s
Authority’s Opening
Opening Brief
Brief
AuRPCOL
AuRPCOL –
- Authority’s
Authority’s Reply
Reply to
to Appellant’s
Appellant’s Proposed
Proposed Conclusions
Conclusions of
of Law
Law
AuRPFOF
AuRPFOF –
-— Authority’s
Authority’s Reply
Reply to
to Appellant’s
Appellant’s Proposed
Proposed Findings
Findings of
of Fact
Fact
HISA
HISA –
— Horseracing
Horseracing Integrity
Integrity and
and Safety
Safety Act,
Act, 15
15 U.S.C.
U.S.C. §§
8§ 3051-60
3051-60
HIWU
HIWU —– Horseracing
Horseracing Integrity
Integrity &
& Welfare
Welfare Unit
Unit
The
The Authority
Authority —– Horseracing
Horseracing Integrity
Integrity and
and Safety
Safety Authority
ii
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I.
INTRODUCTION
This decision arises under the Horseracing Integrity and Safety Act (“HISA”), 15 U.S.C.
§§ 3051 et seq., and the Rules implementing the Act. Among other things, HISA created the
Horseracing Integrity and Safety Authority (the “Authority”), a private, independent, selfregulatory, nonprofit corporation, to “develop[] and implement[] a horseracing anti-doping and
medication control program and a racetrack safety program” throughout the United States. 1
The Authority promulgated, and the Federal Trade Commission approved, rules that
include the statutorily-required Anti-Doping and Medication Control (“ADMC”) Program. 2 The
HISA and ADMC Program rules address, in summary: (1) the persons and thoroughbred
racehorses the Program covers; (2) the substances that are banned outright or subject to threshold
presence requirements, or are regulated as controlled medications; (3) the conduct constituting
violations and corresponding sanctions; and (4) investigation and enforcement in furtherance of
the statute. 3 The Authority has contracted with the Horseracing Integrity & Welfare Unit
(“HIWU”) to implement and enforce the ADMC Program on behalf of the Authority. 4 HIWU
charges of ADMC Program violations are heard by an Internal Adjudication Panel, which, as
1
15 U.S.C. § 3052(a).
2
15 U.S.C. §§ 3053, 3055, 3057.
3
See generally ADMC Rule 3000 series; 88 Fed. Reg. 5070-5201 (Jan. 26, 2023) (FTC Notice of HISA Proposed
Rule and Request for Comment); Order Approving the ADMC Rule Proposed by HISA (Mar. 27, 2023)
(https://www.ftc.gov/system/files/ftc_gov/pdf/P222100CommissionOrderAntiDopingMedication.pdf); 88 Fed. Reg.
27894 (May 3, 2023) (FTC Notice of Final Rule, effective May 22, 2023) (available at https://hisaus.org/
regulations?modal-shown=true#equine-anti-doping-and-controlled-medication-protocol-rules).
4
15 U.S.C. §§ 3054(e)(1)(B) & (E), 3055; Rules 3010(e)(1), 5720(a); HISA Announces Selection of Drug Free
Sport International as Partner to Build Independent Anti-Doping and Medication Control Enforcement Agency (May
3, 2022), https://www.hiwu.org/news/hisa-announces-selection-of-drug-free-sport-international-as-partner-to-buildindependent-anti-doping-and-medication-control-enforcement-agency.
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here, may consist of a single arbitrator. 5 The FTC has authority to review civil sanctions imposed
for ADMC Program Rule violations in HIWU-initiated enforcement proceedings. 6
Under the ADMC Program, the more serious violations are Anti-Doping Rule Violations
(“ADRVs”), which include Banned Substances that “should never be in a horse’s system.” 7 To
implement the Program, the Authority issued a Prohibited List of Banned Substances. 8 Rule
3214(a), applicable to Covered Persons, prohibits “Possession of a Banned Substance . . . unless
there is a compelling justification for such Possession.”
II.
THE UNDERLYING FACTS
A.
Summary of the Case
As a veterinarian who provides services to Covered Horses, Appellant Dr. Scott Shell is a
Covered Person subject to HISA, to the ADMC Program Rules, and to the enforcement system
created. 9 HIWU has charged Dr. Shell with Possession of four Banned Substances, discussed
more fully below. Possession is undisputed. Therefore, the case turns on whether Dr. Shell had “a
compelling justification for such Possession,” as well as on other defenses asserted. Rule
3214(a). One additional wrinkle is worthy of mention at this point.
Dr. Shell practices in both Ohio and West Virginia, and services both Covered Horses,
subject to HISA, and non-Covered Horses, commonly found on farms. Also, while HISA and the
5
Rules 3360, 7020.
6
15 U.S.C. § 3058; 16 C.F.R. § 1.145 et seq.; see 87 Fed. Reg. 60077 (Oct. 4, 2022) (Final Rule).
7
Rule 3010(c). See also Rules 1020 (definition of ADRV), 3111(a) (Prohibited Substances). Capitalized terms used,
but not defined in this decision, are those defined in HISA Rule 1020 of the General Provisions. Other abbreviations
are set forth in the Table of Abbreviations.
8
Rules 1020 (definition of Prohibited List), 3111(a).
9
15 U.S.C. §§ 3051(6), (21); Rule 1020 (definitions of “Attending Veterinarian” and “Covered Person”).
2
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Rules apply in Ohio, in 2022 a United States district court issued an order that, in effect,
prohibits enforcement by the Authority and HIWU in West Virginia. Although HIWU’s charges
against Dr. Shell arise from his Possession of four Banned Substances at an Ohio racetrack, he
contends that Possession was permitted as part of his providing services to horses on farms and
in West Virginia where enforcement is prohibited.
In this review decision, I first set forth the facts forming the basis for HIWU’s charges
against Dr. Shell and then summarize the Arbitrator’s ruling, which found HIWU’s charges
proven and determined the sanctions to be imposed. After that, I address the issues presented, the
scope of the review under HISA, and my analysis of the issues raised and the sanctions ordered.
B.
Dr. Shell’s Practice and HIWU’s Search
Dr. Scott Shell, a licensed Veterinarian in both Ohio and West Virginia, practices in both
States under the corporate name, Scott Shell DVM Inc. AB1 at 2012 (¶¶ 1, 3); AB2 at 6672-75,
6680 (Shell). His practice includes two other veterinarians, Dr. Barbara Hippie and Dr. Maggie
Smyth, and a head veterinary assistant, Janet Duhon. AB1 at 2012 (¶ 3); AB2 at 6756-57 (Shell).
Dr. Shell is a Covered Person under the ADMC Program, administered by the Authority. AB1 at
1784 (¶ 13); ARPFOF at 1 (¶ 2). Besides servicing Covered Horses, Dr. Shell has a farm practice
where he provides veterinary services to non-Covered Horses. AB2 at 6675, 6682-83 (Shell).
On September 28, 2023, HIWU investigators conducted searches of: (1) Dr. Shell’s
office at the JACK Thistledown Racino racetrack in Ohio (“Thistledown”); (2) Dr. Shell’s
veterinary truck; and (3) a veterinary truck registered to Dr. Shell’s practice, operated by Dr.
Hippie. AB1 at 622-37. The search uncovered four substances that the ADMC Program prohibits
as Banned Substances:
Carolina Gold (sometimes referred to as “GABA”)
Sarapin (“Pitcher Plant”)
3
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Isoxsuprine, and
Osphos.
AB1 at 507-08, 607-609, 642; AB2 at 6834-35. HIWU charged Dr. Shell with—and he admits—
Possession of the four Banned Substances. See HISA Rule 3214(a); AB1 at 507, 607 (EAD
Charge Letters), 1784-85. 10
C.
The Four Banned Substances Charged As Possession Violations
The four Banned Substances may be summarized as follows:
Carolina Gold (GABA): HIWU’s search found two bottles of Carolina Gold, a Category
S0 Banned Substance on the ADMC Program’s Prohibited List. Carolina Gold is also prohibited
at West Virginia racetracks under West Virginia Racing Commission Rules. AB1 at 642 (¶ 6),
1174; AB2 at 6836-37 (Shell), 7209 (Benson).
Carolina Gold contains Gamma Aminobutyric Acid (“GABA”), an endogenous
neurotransmitter, which exerts an inhibitory effect on the central nervous system and thus has a
calming effect on a horse. AB2 at 6710-11, 6837 (Shell), 7087 (Scollay). If Carolina Gold is
given to a racehorse, “it can be performance limiting, if not, potentially fatal, depending on the
severity of its effect [‘in preventing exercise induced pulmonary hemorrhage’].” AB2 at 7090
(Scollay). GABA has a half-life of approximately 22 minutes when given intravenously and
ceases to be detected between six and eight hours later. AB2 at 7524 (Benson).
Carolina Gold is not FDA-approved, which means that “[i]t is an illicitly manufactured,
illegal, unapproved new animal product.” AB2 at 7088 (Scollay), 7209 (Benson). A compounded
substance, Carolina Gold does not comply with FDA guidance for compounding. AB2 at 7091
10
HIWU originally charged Dr. Shell with Possession of three Banned Substances and Dr. Hippie with one, for
Possession of Pitcher Plant. After the Provisional Suspension of Dr. Hippie was lifted, HIWU added Possession of Pitcher
Plant to the charges against Dr. Shell.
4
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(Scollay), 7491, 7494 (Roberts). As Dr. Scollay explained:
It has not been examined by the FDA for safety, efficacy, purity, stability, any of that
stuff, and so it qualifies essentially as administering an unknown.
....
Has it been contaminated with bacteria, with fungus, with other substances? I mean,
you’d have to do a pretty serious risk benefit analysis to put that into a horse when, if
you’re trying to calm it down . . .
AB2 at 7088, 7089.
Dr. Shell’s expert veterinarian witness, Dr. Andrew Roberts, testified similarly: “what is
actually in the bottle, it would be of interest to know.” AB2 at 7492 (Roberts). Dr. Roberts has
never used Carolina Gold in his practice and has never kept it on his truck. AB2 at 7492, 7501
(Roberts).
There is no significant, legitimate use for Carolina Gold on non-Covered Horses. AB2 at
7088-90, 7112 (Scollay). Nor is it life-saving or needed for emergency use. AB2 at 6891 (Shell),
7088-89 (Scollay). FDA-approved substances having a similar calming effect are available. AB2
at 7087, 7089 (Scollay). Indeed, Dr. Roberts “agreed” that there are “no recognized medical
uses” for a product, such as Carolina Gold, that contains GABA. AB2 at 7489 (Roberts).
Pitcher Plant: HIWU investigators found a bottle of Sarapin, also known as “Pitcher
Plant,” during their search of a truck operated by Dr. Hippie, which Dr. Shell owned. AB1 at
643; AB2 at 6704 (Shell). Pitcher Plant is a Category S6 Banned Substance on the Prohibited
List and is also prohibited at West Virginia racetracks under the West Virginia Racing
Commission Rules. AB1 at 1202, 3396; AB2 7224-25 (Benson), 7505 (Roberts). Pitcher Plant is
an herbal analgesic that reduces inflammation and relieves pain. AB1 at 1202; AB2 at 6713
(Shell), 7091-92 (Scollay). Its use is not limited to emergencies. AB2 at 7092-93 (Scollay).
Pitcher Plant was, but no longer is, FDA-approved. AB2 at 7225 (Benson). There are
multiple FDA-approved analgesics that can be used instead. AB2 at 7093 (Scollay). There is no
5
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approved analytical method to detect administration of the substance in a horse. AB2 at 7225
(Benson), 7504-05 (Roberts).
Isoxsuprine: During their search of Dr. Shell’s truck, HIWU investigators also found a
tub of Isoxsuprine powder. AB1 at 642, 654; AB2 at 6703-04 (Shell). Isoxsuprine also is a
Category S0 Banned Substance on the Prohibited List, as well as prohibited under the West
Virginia Racing Commission Rules. AB1 at 1178; AB2 at 7231 (Benson). Dr. Shell testified he
uses Isoxsuprine to vasodilate the feet of older horses and horses that have navicular disease or
founder (lameness). AB2 at 6707 (Shell). A chronic condition, navicular disease is “a
degenerative disorder of a small bone in the horse’s foot and results in foot pain, lameness . . . .”
AB2 at 7094 (Scollay), 7223 (Benson). Isoxsuprine’s use is not limited to emergencies. AB2 at
7100 (Scollay), 7224 (Benson).
The FDA’s previous approval of Isoxsuprine for use in humans has since been withdrawn
as lacking a pain-relieving effect. AB2 at 6990 (Shell); 7094 (Scollay). To treat these conditions
in horses, there are FDA-approved, HISA-permitted Controlled Medication Substances. AB2 at
7096-97 (Scollay).
Osphos: During their search, HIWU investigators also recovered two boxes of Osphos, a
bisphosphonate, from Dr. Shell’s office located on the backside of Thistledown. AB1 at 643
(¶ 11); AB2 at 6996 (Shell). Bisphosphonates are a Category S6 Banned Substance on the
Prohibited List. AB1 at 1159. Osphos is used to strengthen bones and to treat navicular disease,
repairing bone erosion. AB2 at 6709-10 (Shell), 7223 (Benson); see also AB2 at 7098-99
(Scollay) (describing the effect of bisphosphonates to clean and rebuild bone). Since the
underlying condition is chronic, Osphos has uses in circumstances that are non-urgent and nonemergency. AB2 at 6997 (Shell), 7223-24 (Benson).
6
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Unlike the other three Banned Substances found, Osphos is FDA-approved for treatment
of horses that are more than four years old. AB2 at 7099 (Scollay), 7363 (Roberts). However, it
should not be administered to young, growing horses or to racehorses because it “makes the bone
too brittle” and risks fracture. AB2 at 6710 (Shell), 7099-100 (Scollay). If administered to young
horses, Osphos will remain in the body, able to act, for years. AB2 at 7100 (Scollay).
D.
The Federal Injunction Covering West Virginia
A specific issue in this case arises from Dr. Shell’s practice in West Virginia. In 2022, the
United States District Court for the Western District of Louisiana held that the Authority violated
the Administrative Procedure Act in the process of promulgating the HISA Rules. The Court
thus issued a preliminary injunction against enforcement of the Rules against the plaintiffs, one
of whom was the State of West Virginia. Louisiana v. Horseracing Integrity & Safety Auth. Inc.,
617 F.Supp.3d 478 (W.D. La. 2022), remanded, No. 22-30458, 2022 WL 17074823 (5th Cir.
2022). As a result of the district court’s injunction, the Authority and HIWU do not enforce
HISA in West Virginia. AuRPCOL ¶ 10; AB2 at 7125-26 (Scollay).
Dr. Shell thus argues that Covered Horses under HISA—those that are authorized to run
in races subject to HISA—become “non-Covered Horses” while in West Virginia. Even though
three of the four Banned Substances found in Dr. Shell’s Possession in Ohio are also prohibited
in horseracing in West Virginia (Osphos is the exception), Dr. Shell contends that he may
dispense or administer them to otherwise Covered Horses while they are in West Virginia. This
outlier circumstance, he further maintains, provides a compelling justification for his Possession
of these substances in Ohio.
The Arbitrator rejected this argument, as do I in the analysis that follows.
7
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E.
HIWU’s Other “Administration” Case
Another matter also gives rise to an issue I must decide. Besides this Possession case,
HIWU charged Dr. Shell with administering, by injecting into many racehorses, a Banned
Substance that Dr. Shell believed was an unregulated vitamin and thus permissible to use. The
arbitrator in that case—referred to as the “Administration Case”—upheld HIWU’s charges, and,
among other things, determined that Dr. Shell should be subject to a two-year period of
Ineligibility, during which he may not offer services to Covered Horses or Covered Persons. On
review, I upheld the sanctions imposed. 11 The possible effect of the Ineligibility arising from the
Administration Case is an issue in this proceeding.
F.
The Arbitration Subject to this Review
Upon service of HIWU’s EAD Charge Letter in October 2023, a Provisional Suspension
was imposed on Dr. Shell. See Rule 3247(a)(3); AB2 at 6593. He sought to lift the Suspension
pending the arbitration hearing to resolve the merits of HIWU’s charges, but the hearing officer
denied his request. AB1 at 1136, 1138-39; AB2 at 6593-94. During the pre-hearing phase of the
arbitration, HIWU moved for an order directing Dr. Shell to produce documents relating to his
compelling justification defense. See AB1 at 2046-59, 2090-107. While the Arbitrator directed
limited production, she also wrote:
Dr. Shell has made the nature of his practice relevant, and has placed at issue
whether he had a noncovered horse practice that required the carrying of the
Targeted Banned Substances. . . . Dr. Shell opened the door to this line of inquiry
by raising the defense that the Targeted Banned Substances were only used in
non-covered horses. Accordingly, Dr. Shell has the burden of supporting that
defense with his veterinary records for covered and non-covered horses. As such,
the complete veterinary medical records for all horses in his practice from the
implementation of HIWU’s regulations until he was charged are relevant and
material to the defense.
11
AB1 at 99-136 (HIWU v. Shell, JAMS Case No. 1501000708 (June 11, 2024)), aff’d, FTC No. 9435 (ALJ Oct. 31,
2024).
8
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AB1 at 2278 (emphasis added); see also AB1 at 2044-128. In response, Dr. Shell produced
additional—albeit, still limited—documents. See AB1 at 2297.
In April 2024, a multi-day arbitration hearing was held, during which Dr. Shell and other
fact and expert witnesses testified, and numerous exhibits were received in evidence. The parties
made voluminous post-hearing submissions, and the Arbitrator heard closing arguments in
August 2024. AB2 at 3892-6567, 7528-613. After requesting additional papers on an issue
regarding sanctions, discussed further below, the Arbitrator issued her decision. See AB2 at
6571-82, 6588-622.
1.
Compelling Justification
The Arbitrator concluded that Dr. Shell failed to prove a compelling justification to
possess any of the Banned Substances, holding that Dr. Shell’s records and other evidence were
inadequate to justify Possession under Rule 3214(a). Despite the admonition from her discovery
order, the Arbitrator noted that Dr. Shell produced only “limited” records, which “showed some
dispensation of the Banned Substances to farm horses and Thoroughbreds in West Virginia, but
[these were] not complete records sufficient to justify the possession of the Banned Substances at
the Ohio racetrack.” AB2 at 6613 (¶ 7.18).
The Arbitrator rejected Dr. Shell’s “convenience” argument for Possession of Banned
Substances. Additional travel time, needed to avoid Banned Substances at an Ohio racetrack, was
unpersuasive unless the “medications [were] needed on a regular basis for time-sensitive
emergency treatment.” AB2 at 6614 (¶ 7.21). The Banned Substances found in Dr. Shell’s truck
and office at Thistledown, however, “were not emergency medications required for lifethreatening injuries . . . .” AB2 at 6614 (¶ 7.22). Analyzing each individual substance, the
9
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Arbitrator held that Dr. Shell failed to show compelling justification. AB2 at 6615-16 (¶¶ 7.2833).
The Arbitrator recognized that a federal court injunction “suspended HIWU’s operations”
in West Virginia. AB2 at 6591 (¶ 2.14); see also AB2 at 6601, 6603 (¶¶ 6.7, 6.24). Accordingly,
she agreed with Dr. Shell that the Authority and HIWU could not legally regulate the
dispensation of Banned Substances in West Virginia, or charge a Veterinarian with a HISA Rule
violation for treating a Covered Horse in West Virginia. AB2 at 6614 (¶ 7.25). However, that
“does not mean that having a clientele of Thoroughbred horse trainers in West Virginia is a
compelling justification for possessing Banned Substances at Ohio racetracks.” AB2 at 6614
(¶7.25). The Banned Substances in Dr. Shell’s Possession were not “emergency medications that
Dr. Shell needed to have at the ready to dash to West Virginia.” AB2 at 6614 (¶ 7.25). The
Arbitrator further found it significant that Dr. Shell testified that he no longer carries the four
Banned Substances on his truck and, despite this changed practice, he is able to meet his ethical
obligations as a veterinarian. AB2 at 6616 (¶ 7.34).
The Arbitrator also rejected Dr. Shell’s argument that, as a result of HISA’s nonenforcement in West Virginia, otherwise Covered Horses automatically became non-Covered
Horses while in West Virginia. The Arbitrator held that allowing Dr. Shell to possess Banned
Substances in Ohio in order to treat Covered Horses located in West Virginia would create a
“loophole” that would “undermine[] the integrity of the ADMC Program and is not justified,
much less compelling.” AB2 at 6614-15 (¶ 7.25).
Finally, Dr. Shell argued that HIWU made various statements regarding compelling
justification, as applied to Veterinarians with farm practices, such as Dr. Shell. He argued that he
relied on these statements and thus kept the substances on his trucks and at his Thistledown
10
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facility as a result. Therefore, he maintained, HIWU should be precluded (“estopped”) from
prosecuting him for Possession. Analyzing the facts, the Arbitrator rejected Dr. Shell’s argument.
AB2 at 6616-17 (¶¶ 7.37-41).
2.
Sanctions
Having concluded that Dr. Shell was liable for Possession, the Arbitrator considered the
sanctions to be imposed. The HISA Rules set forth detailed, often intricate, provisions regarding
sanctions, which include a two-year period of Ineligibility, during which a Covered Person may
not participate in HISA-covered activity, as well as fines and costs. Sanctions can, however, be
eliminated or reduced if the Covered Person establishes either No Fault or Negligence (“NF”) or
No Significant Fault or Negligence (“NSF”). Rules 3224 & 3225.
The Arbitrator held that Dr. Shell failed to establish NF. Dr. Shell admitted Possession of
the four Banned Substances and displayed a sufficient lack of appropriate care as to preclude an
NF finding. AB2 at 6617 (¶¶ 7.44-48). For NSF, the Arbitrator concluded that Dr. Shell should
receive a three-month reduction of the maximum two-year Ineligibility period, resulting in one
21-month period of Ineligibility for all four Possession violations, beginning as of the date of his
Provisional Suspension in October 2023. AB2 at 6618-20, 6622 (¶¶ 7.49-60, 8.1). The Arbitrator
further imposed a total fine of $20,000, less than $25,000 per violation permitted under the
Rules, while declining to direct Dr. Shell to bear any costs of the arbitration. AB2 at 6620-21,
6622 (¶¶ 7.65-66, 8.1).
In ruling on sanctions, the Arbitrator rejected two HIWU arguments: (1) that sanctions
should be imposed for each of the four Possession charges; and (2) that Dr. Shell’s Ineligibility
period should run consecutively after the two-year Ineligibility period arising from the
11
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Administration Case ended, and not concurrent with that other sanction. AB2 at 6621-22
(¶¶ 7.67-7.74).
III.
ISSUES ON REVIEW
The following issues are presented for review:
(1) Did Dr. Shell show compelling justification for Possession of any of the four Banned
Substances?
(2) Is HIWU, and therefore the Authority, estopped from prosecuting the Possession
charges against Dr. Shell?
(3) Does the “compelling justification” defense, recognized in Rule 3214(a), violate the
Due Process provision of the Fifth Amendment as unconstitutionally vague?
(4) Is HISA unconstitutional under the private non-delegation doctrine?
(5) Is Dr. Shell subject to either (a) individual sanctions for each of the four Possession
violations, or (b) consecutive periods of Ineligibility arising from the Administration Case?
(6) Is Dr. Shell entitled, under the No Fault or Negligence or No Significant Fault or
Negligence provisions in Rules 3224 or 3225, to elimination or reduction of the two-year
Ineligibility period applicable to Possession violations or to any other part of the sanctions?
IV.
SCOPE OF REVIEW
HISA civil sanctions, imposed for rule violations, are reviewable by an FTC
Administrative Law Judge (ALJ) upon application of the person aggrieved and thereafter by the
Commission itself on a discretionary basis. 12 The ALJ reviews:
“whether—
(i) a person has engaged in such acts or practices, or has omitted such acts or practices, as
the Authority has found the person to have engaged in or omitted;
12
15 U.S.C. §§ 3058(b) & (c); FTC Rules 1.146 & 1.147.
12
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(ii) such acts, practices, or omissions are in violation of this chapter or the anti-doping
and medication control or racetrack safety rules approved by the Commission; or
(iii) the final civil sanction of the Authority was arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.”
15 U.S.C. § 3058(b)(2)(A); see also 16 C.F.R. § 1.146(b)(1)-(3).
The ALJ’s review is de novo, as though the issue had not been heard before, and no
decision had previously been rendered. 15 U.S.C. § 3058(b)(1); FTC Rule 1.146(b)(3);
Adirondack Med. Center v. Sebelius, 740 F.3d 692, 696 (D.C. Cir. 2014), and Agyeman v. INS,
296 F.3d 871, 876 (9th Cir. 2002) (both describing scope of de novo review of agency’s
interpretations of statute). 13
Thus, the ALJ must determine the merits of the ADRV charged, and whether the
sanctions the Authority imposed were “arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law.” 14 “[T]o pass muster under the arbitrary and capricious standard,” a
court must only find a “rational connection between facts and judgment.” Motor Vehicle Mfrs.
Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 56 (1983). “To make this finding, the
court must consider whether the decision was based on a consideration of the relevant factors
and whether there has been a clear error of judgment.” Citizens to Preserve Overton Park, Inc. v.
Volpe, 401 U.S. 402, 416 (1971).
Judicial review under the arbitrary and capricious standard ensures that “the agency has
acted within a zone of reasonableness and, in particular, has reasonably considered the relevant
13
See also Barrientos v. Wells Fargo Bank, N.A., 633 F.3d 1186, 1188 (9th Cir. 2011), and Aquarius Marine Co. v.
Pena, 64 F.3d 82, 87 (2d Cir. 1995) (both holding that, on de novo review by an appellate court, there is no
deference to the district court); Coalition for Competitive Electricity, Dynergy Inc. v. Zibelman, 906 F.3d 41, 48 (2d
Cir. 2018), and Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006) (both describing de novo review by
an appellate court of district court dismissal of complaint under Federal Rule of Civil Procedure 12(b)(6)).
14
15 U.S.C. § 3058(b)(2)(A); FTC Rule 1.146(b)(1)-(3).
13
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issues and reasonably explained the decision.” FCC v. Prometheus Radio Project, 592 U.S. 414,
423 (2021). To find an abuse of discretion, there must be “a plain error, discretion exercised to
an end not justified by the evidence, a judgment that is clearly against the logic and effect of the
facts as are found.” Nat’l Wildlife Fed’n v. Nat’l Marine Fisheries Serv., 422 F.3d 782, 798 (9th
Cir. 2005).
Finally, whether the sanctions are in accordance with the law is determined with
reference to the substantive law embodied in HISA and the implementing regulations,
summarized above.
In exercising its review authority, the ALJ may “affirm, reverse, modify, set aside, or
remand for further proceedings, in whole or in part” and “make any finding or conclusion that, in
[their] judgment . . . is proper and based on the record.” 15
V.
ANALYSIS OF THE ISSUES
A.
The Possession Violation and Compelling Justification Defense
Rule 3214(a) provides that “Possession of a Banned Substance” is an “Anti-Doping Rule
Violation” “unless there is compelling justification for such Possession.” The violation imposes
strict liability.16 Both equine sporting association codes and those in sports generally include
analogous provisions. See e.g., Federation Equestre Internationale (FEI) Equine Anti-Doping and
Controlled Medication Regulations, Article 3.1 (4th ed. 2025); World Anti-Doping Agency
(WADA) Code, Article 3.1 (2021).
15
15 U.S.C. § 3058(b)(3)(A); FTC Rule 1.146(d)(3).
16
See, e.g., USADA v. Drummond, Case No. AAA 01-14-000-6146, at 19 (Dec. 17, 2014) (“The Panel rejects
Drummond’s contention that actual possession requires his specific intent to have under his custody and control a
particular banned substance whose characteristics were fully known to him.”); Eder v. International Olympic
Committee (IOC), CAS 2007/A/1286, 1288 & 1289, at ¶¶ 42, 52 (Jan. 4, 2008) (possession does not require proving
“subjective intent,” or “intent to use”); Diethart v. IOC, CAS 2007/A/1290, at ¶ 40 (Jan. 4, 2008) (possession
“constitutes in itself an antidoping rules violation”).
14
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Dr. Shell has the burden of providing that defense “by a balance of probability (i.e., a
preponderance of the evidence) . . . .” Rule 3121(b). Since he does not dispute Possession of the
four Banned Substances, his liability turns on the defense of “compelling justification.” 17
1.
“Compelling Justification”
While a defense of “compelling justification” to possession is common in sports law antidoping codes generally, as in the HISA Rules the expression is invariably undefined. Further,
decisions considering the defense typically arise under a rule that prohibits a human athlete from
failing to provide a test sample “without compelling justification.” 18 Thus, these sports world
decisions, arising in a different factual context, offer only limited guidance. In any event,
“[w]hen interpreting a statute, we begin with the text.” Lackey v. Stinnie, No. 23-621, slip op. at
5 (U.S. Feb. 25, 2025).
Dictionaries reflecting ordinary word usage can be helpful. An authoritative dictionary’s
definition of “justification” is:
1. A lawful or sufficient reason for one’s acts or omissions; any fact that prevents an act
from being wrongful.
2. A showing, in court, of a sufficient reason why a defendant acted in a way that, in the
absence of the reason, would constitute the offense with which the defendant is charged.
BLACK’S LAW DICTIONARY (12th ed. 2024). And for that “reason” to be “compelling,” it must be
“both powerful and convincing. See [WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY OF
THE ENGLISH LANGUAGE UNABRIDGED 462] (defining ‘compelling’ as ‘forcing, impelling, [or]
driving [circumstance]’ and as ‘tending to convince or convert by or as if by forcefulness of
17
The arbitrator found that Dr. Shell has failed to prove compelling justification to her “comfortable satisfaction.”
AB2 at 6616 (¶ 7.35). That was error. On this review, the parties recognize that the preponderance standard applies.
AuRPCOL at 13 (¶ 3).
18
See, e.g., Klein v. ASADA, CAS A4/2016 (May 25, 2017), cited by both Shell and the Authority.
15
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evidence’) . . . .” United States v. Canales-Ramos, 19 F.4th 561, 567 (1st Cir. 2021) (construing
the federal “compassionate release” statute, applicable to incarcerated individuals).19
Of necessity, this defense is fact-driven and thus case-specific. Moreover, we should not
lose sight of the forest. Rule 3214(a)’s Possession violation is part of a regulatory scheme
directed to banishing doping from thoroughbred horseracing; compelling justification, excusing
Possession, is the exception and should, accordingly “be interpreted restrictively.” WADA v.
Contreras, CAS 2013/A/3341, at 20 (¶ 116) (May 28, 2014).
2.
Dr. Shell’s “Non-Covered Horses” Practice as a Compelling
Justification
As described above, Dr. Shell practices in both Ohio and West Virginia. He provides
veterinary services not only to Covered Horses regulated under HISA, but also to farm horses
that do not run in Covered Horseraces. Dr. Shell contends that he had the Banned Substances that
HIWU seized in Ohio because he needed them in his farm practice to treat these non-Covered
Horses in both Ohio and West Virginia.
For his West Virginia practice, Dr. Shell makes still another argument. The federal
court’s preliminary injunction prevents HIWU and the Authority from enforcing the HISA Rules
in West Virginia. Accordingly, Dr. Shell maintains, any otherwise Covered Horse is “nonCovered” while in that State and, therefore, he may dispense or administer Banned Substances to
those horses in West Virginia. Since the Banned Substances are part of his practice in West
Virginia, according to Dr. Shell, he had a compelling justification to possess them at Ohio’s
Thistledown racetrack.
I consider this argument, applicable to otherwise Covered Horses in West Virginia, first.
19
See also https://dictionary.cambridge.org/us/dictionary/english/compelling.& /justification. I do not suggest that
dictionary definitions are always useful, much less dispositive. However, particularly where other sources of
guidance are limited, they can assist the analysis.
16
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Then, I address his other argument that the four Banned Substances are necessary for his farm
practice. 20
a.
Otherwise Covered Horses Physically in West Virginia
Rule 1020 defines “Covered Horse” to mean:
[A]ny Thoroughbred horse, or any other horse made subject to the Act by election
of the applicable State Racing Commission or the breed governing organization
for such horse under section 3054(l), during the period: (A) beginning on the date
of the horse’s first Timed and Reported Workout at a Racetrack that participates
in Covered Horseraces or at a training facility; and (B) ending on the date on
which the horse is deemed retired pursuant to Rule 3050(b).
(Emphasis added). Rule 3050(b)(1) provides that: “If an Owner wishes to retire a Covered Horse
such that it is no longer made available for Testing, the Owner must provide written notice of
such retirement to the Agency, in accordance with its procedures.” (Emphasis added). Other
subsections in Rule 3050(b) establish processes for “unretiring” a Covered Horse, and limitations
once unretirement is accomplished. See AB2 at 7101-07 (Scollay) (explaining operation of the
definition and the retirement process).
No HISA Rule recognizes an automatic change from Covered to non-Covered that occurs
if a Covered Horse is moved from a jurisdiction subject to HISA to one that is not. As Dr. Mary
Scollay, HIWU’s chief scientist since October 2022, explained:
Q: Can you help us understand exactly what a covered horse is, what the definition is?
A: Sure, it is a thoroughbred from the time that it has generated its first published work or
made its first start until it is either retired or it is deceased.
....
Q: And so if someone were to attempt to cover their horse and then uncover the horse and
then cover their horse and uncover their horse, that’s simply not permissible under the
regs., is it?
A: No.
AB2 at 7101, 7106 (Scollay).
20
Many records Dr. Shell produced in this case contain hand notations such as “non-covered” or “farm horse.”
Dr. Shell testified that his secretary made the notations, but did not explain why. AB2 at 6853. I infer these hand
notations were made simply for production purposes in this case, not as ordinary course business records.
17
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Although Dr. Shell testified that he met with Dr. Scollay after a presentation she made at
Mahoning racetrack in Ohio, it is undisputed that he never asked her whether he could dispense
Banned Substances to horses in West Virginia; nor is there any evidence he asked anyone else
from HIWU or the Authority. See AB2 at 6822-25 (Shell). He similarly offered no evidence that
he sought advice concerning the effect of the Western District of Louisiana preliminary
injunction. Instead, he testified, without corroboration, that trainers “unregister” and “re-register”
Covered Horses when transporting them from a State subject to HISA, such as Ohio, to one not
subject to HISA, such as West Virginia. AB2 at 6792-98 (Shell).
The Arbitrator concluded that holding otherwise Covered Horses located in West
Virginia as no longer covered would “undermine[] the integrity of the ADMC Program and is
not justified, much less compelling.” AB2 at 6614-15 (¶ 7.25). I agree.
If accepted, Dr. Shell’s position would permit evasion of the ADMC Program. Covered
Persons, such as owners or trainers, who may be in West Virginia could receive and use Banned
Substances with otherwise Covered Horses, or have them administered in West Virginia. Their
racehorses could then be transported to run out of the State in Covered Horseraces. Any such
result would fly in the face of a core principle of the ADMC Program: “Covered Horses should
compete only when they are free from the influence of medications, other foreign substances,
and treatment methods that affect their performance.” Rule 3010(d)(1). And, since three of the
four Banned Substances here also are prohibited by the West Virginia Racing Commission,
permitting their dispensation in West Virginia could impair the integrity of races in that State as
well.
This case illustrates the potential for evasion of the ADMC Program. Dr. Shell dispensed
Carolina Gold—often identified in his records as for “farm use”—to various West Virginia
18
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trainers, who ran thoroughbred racehorses throughout the country in HISA-covered States. Lack
of individual horse identification in the records Shell produced makes it impossible to determine
whether—or which of—those horses had received Carolina Gold in West Virginia. See AB1 at
3451-98; AB2 at 6868-74, 6920-30 (Shell). Moreover, Dr. Shell dispensed the Carolina Gold in a
vial, sometimes with instructions to the trainer for its use, rather than treating the horse himself.
See AB2 at 6761-62, 6852 (Shell). For example:
x
Dr. Shell dispensed Carolina Gold to a Covered Trainer in West Virginia for a
thoroughbred racehorse that thereafter raced at Mahoning Valley in Ohio, and
previously at Monmouth Park in New Jersey. AB1 at 3451-52; AB2 at 6878-83
(Shell).
x
Dr. Shell dispensed Carolina Gold to Covered Trainers for thoroughbred racehorses
with the instructions:
¾ “Give 5cc IM [in the muscle] before race at Mountaineer [in West Virginia]
for calming/relaxation.” AB1 at 3426-27; AB2 at 6845-47, 6853-55 (Shell).
¾ “Give 5cc IM night before race or work for nerves Give IM.” AB1 at 342930; AB2 at 7214 (Benson).
¾ “Give 5cc IM night before training or race for nerves.” AB1 at 3442-43; AB2
at 6872-73 (Shell).
x
Dr. Shell dispensed Carolina Gold to a Covered Trainer in Ohio for a thoroughbred
racehorse stabled in West Virginia that raced at Mountaineer. AB1 at 3445, 3447;
AB2 6874-77 (Shell).
Once the Banned Substance is dispensed in West Virginia to a trainer with administration
instructions, the opportunity to inject the Covered Horse for races elsewhere is obvious. I reject
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Dr. Shell’s loophole argument: that he was entitled to provide Banned Substances to
thoroughbred racehorse trainers in West Virginia to use as they pleased. Covered Horses that are
not “retired” in accordance with Rule 3050(b)(1) remain Covered Horses while in West Virginia
for purposes of Rule 3214(a) charges of Possession of Banned Substances at HISA-covered
locations in Ohio.
b.
Dr. Shell’s Farm Practice Proof
Dr. Shell also argues that his farm practice, often involving non-Covered Horses,
required his Possession of the Banned Substances that HIWU seized. The factual backdrop for
his defense revolves around remarks by HIWU’s Dr. Scollay to educate industry participants on
the HISA Rules during the period after the law’s enactment, but prior to the ADMC Program
taking effect in May 2023. Dr. Scollay’s remarks, Dr. Shell argues, informed his view of the
proof he would need to demonstrate compelling justification.
i.
Dr. Scollay’s Mahoning Presentation
Besides serving as HIWU’s chief scientist, Dr. Scollay is a regulatory veterinarian with
37 years of industry experience. AB2 at 7056-57 (Scollay). After HISA’s enactment, she made
public presentations throughout the country to educate horserace industry participants on the
new, not yet effective, ADMC Program. AB2 at 7059-60 (Scollay). The presentations were
themselves substantially the same, and each afforded those attending an opportunity to ask
questions. AB2 at 7060-62, 7065 (Scollay). Discussion of compelling justification as a defense to
Banned Substance possession charges under Rule 3214(a) typically arose in response to audience
questions:
I’d had several questions at different presentations about non-covered horses or
mixed populations in some race tracks, trainers have populations of
thoroughbreds which are covered horses and quarter horses which are not under
HISA jurisdiction. And so they asked questions about a trainer possessing a
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banned substance in his barn if it were prescribed for a non-covered horse. And I
explained that HISA regulations do not have authority over non covered horses.
AB2 at 7066 (Scollay); see also ARPFOF at 9 (¶ 34).
One of Dr. Scollay’s presentations took place in March 2023 at the Will Rogers Downs
Racetrack in Oklahoma, where an audience member recorded her remarks. AB2 at 7062-63
(Scollay). During discussion of Banned Substances, an audience member asked whether the
“banned possession” rule applied to veterinarians. 21 Dr. Scollay replied that veterinarians were
covered and “you don’t need that on your truck.” 22 She continued: the “caveat I will tell you is:
… [i]f the veterinarians are practicing also on a population of non-Covered
horses, they’re taking care of quarter horses or they’ve got a country practice parttime they are able to possess a Banned Substance because we don’t have control
over those horses, and so to the extent that they want to use bisphosphonates on a
Non-Covered horse, we can’t ban them from possessing them … we can’t
penalize people for something that we don’t have control over so, you know, let’s
just say because we have the ability to investigate, if the story starts to get a little
weird or a little extreme, you’re going to get more than a raised eyebrow. But at
the end of the day if someone is practicing out in the country, we don’t have the
authority to control the medications they administer or carry for Non-Covered
Horses … the regulation addresses if there is justification for them to be in
Possession of a Banned Substance and certainly a practice that incorporates NonCovered horses.
AuRPFOF at 3 (¶ 9) (emphasis added); AB1 at 1547-48; AB2 at 7117-18 (Scollay) (the recorded
remarks “[s]ound[] exactly like what I said.”). 23
Although Dr. Shell did not attend the Will Rogers Downs presentation, he testified to
attending one at Mahoning racetrack in Ohio, where Dr. Scollay spoke. AB2 at 6687, 6789,
21
https://www.facebook.com/Traoracing/videos/891125828812595/?extid=CL-UNK-UNK-UNK-AN_GK0TGK1C&mibextid=2Rb1fB&ref=sharing 9LGHR0DUN§ -50). See also AB1 at 2576 (Scollay witness
statement).
22
Id.
23
See also HIWU v. Perez, JAMS Case No. 1501000589, aff’d, FTC No. 9420 (ALJ Decision on Application for
Review, Feb. 7, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/609612_d09420administrative_law_judge_decision_on_application_for_review_-_public.pdf, review denied, 2024 WL 3824065
(F.T.C. Aug. 8, 2024).
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6813-15 (Shell). Dr. Scollay gave substantially the same prepared remarks as at other racetracks,
“absent the spontaneous exchanges that occur[red] at each racetrack . . . .” AB2 at 7083
(Scollay). According to Dr. Shell, Dr. Scollay made “it clear that it was prohibited to possess or
prescribed [sic] banned substances to a covered horse.” AB2 at 6815 (Shell). The subject of
compelling justification, as applied to veterinarians, again came up. Dr. Scollay’s response
echoed those given at Will Rogers Downs. AB2 at 6693-94 (Shell). Dr. Shell further testified:
[Dr. Scollay] said that we were allowed to carry banned substances on our vehicles. In
fact, she said you do not have to unload and reload your truck every time you leave the
track to go to a farm.
....
She said, as long as you have a farm practice, that with justification, you are allowed to
carry them.
AB2 at 6693, 6816 (Shell).
During her Mahoning presentation or those at other racetracks, Dr. Scollay “did not” say
that “veterinarians have carte blanche to carry banned substances on their trucks at racetracks if
they claim to have a farm practice.” AB2 at 7083, 7144-45 (Scollay). She also made “it clear that
HIWU would have the ability to investigate any possession of a banned substance,” and said
“you have to be able to support why you had medication on your truck.” AB2 at 6821 (Shell).
Thus, as the parties agree:
[During her presentations] Dr. Scollay would confirm that the ADMC Program
has no authority over non-Covered Horses but explain[ed] that Possession needed
to be justified and would be further investigated where suspicions or
inconsistencies arose.
ARPFOF at 9 (¶ 34).
ii.
Dr. Shell’s Follow-up Conversation
Having heard Dr. Scollay’s Mahoning remarks, Dr. Shell was, nevertheless, “a little
antsy.” AB2 at 6694, 6822 (Shell). He testified that, after the presentation had concluded, he
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spoke to Dr. Scollay. Dr. Shell sought further information regarding his practice of servicing
non-Covered horses. According to Dr. Shell: “She reassured me . . . after the meeting that there
were [sic] absolutely no reason that I would have to remove banned substances and put them
back on my truck every time I drove off the racetrack.” AB2 at 6694 (Shell). Dr. Shell further
testified:
Q: And you never asked her the question of whether or not you could have
banned substances on your truck to provide to race horses in West Virginia on a
farm or otherwise, you never asked her, right?
A: No, I did not ask her.
AB2 at 6823 (Shell).
Dr. Shell had no other contacts with Dr. Scollay after the Mahoning racetrack
presentation and follow-up, nor any further “guidance” on compliance with Rule 3214(a). AB2
at 6695-69 (Shell), 7070 (Scollay). Dr. Scollay, who did not know Dr. Shell, did not recall any
conversation with him at Mahoning, although she did not deny it could have occurred; nor did
she have any calls or emails with him. AB2 at 7071, 7084-85, 7153-54 (Scollay).
iii.
The Randall Equine Email Exchange
After the Mahoning presentation, Dr. Meghan Naylor, who practices with Randall Equine
Vet Group, emailed Dr. Scollay “to confirm that banned substances legal in non-covered horses
such as thyro l were allowed to be carried by veterinarians that practice off track as well.” AB1
at 2601; AB2 at 7070-71 (Scollay). After quoting Rule 3214, Dr. Scollay wrote:
The regulation above provides for the ability to justify the possession of Banned
Substances. To the extent that your practice provides veterinary care to non-Covered
horses—and can demonstrate (through records, day sheets, etc.) the need to carry those
substances you can establish compelling justification.
AB1 at 2601 (emphasis added); see also AB2 at 7072-73 (Scollay). Dr. Shell reviewed this email
exchange in June 2023. AB2 at 6804, 6806-07 (Shell). There is no evidence that he thereafter
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made any outreach to Dr. Scollay, or anyone. See AB2 at 6824-25, 6827-28 (Shell).
Dr. Shell argues that Dr. Scollay’s Mahoning remarks and response to Dr. Naylor guided
him in accommodating his practice servicing non-Covered Horses to the requirements of the
HISA’s Rules. More specifically, he came away with the view that “compelling justification”
would be met if he “show[ed] through any records, need to carry the Charged Banned
Substances for use or intended in Non-Covered practice.” AOBr. at 5 (emphasis added); see also
ARBr. at 1. That “need,” Dr. Shell maintains, “resides in Non-Covered use,” without more.
ARBr. at 3.
This argument, however, disregards that compelling justification calls for strong proof by
Dr. Shell. He must demonstrate, through veterinarian practice records or other evidence, that his
non-Covered Horse practice requires him to keep Banned Substances on his truck while at
racetracks in Ohio, a HISA-covered jurisdiction.
c.
Inadequacy of Dr. Shell’s Proof
Whether considered overall or for the four Banned Substances individually, Dr. Shell’s proffered
proof fails to establish compelling justification.
i.
Dr. Shell’s Records Overall
In Discovery Order No. 1, the Arbitrator made clear that, by undertaking to prove
compelling justification, Dr. Shell “opened the door” to showing Banned Substances were “only
used in non-covered horses . . . . [T]he complete veterinary medical records for all horses in his
practice . . . are relevant and material to the defense.” AB2 at 5974 (emphasis added). Dr. Shell
read and understood the Order. AB2 at 6831-32. Instead of heeding the Arbitrator’s advice, his
compelling justification proof consisted of a self-selected slice of documents. See, e.g., AB2 at
6893 (Arbitrator), 6959-62, 6964-65 (Shell). Even then, many documents reflect shoddy
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recordkeeping practices, often lacking the information Ohio and West Virginia law require
veterinarians to keep, include inaccurate entries, and fail to show diagnosed conditions
appropriate for dispensing Banned Substances. See pp. 27-33, below.
A veterinary medical record should contain the thoughts and impressions of a
veterinarian, including any examination, diagnosis, or treatment administered to a specific horse.
AB2 at 7184-85 (Benson). It should have sufficient detail so that “somebody else with
appropriate training could pick up that record, read it, review it, understand all that had been
done, and whether they agreed with it or not, they could carry on with care for that patient
because they had the full history on the animal up to the point where they received it.” AB2 at
7076 (Scollay); see also AB2 at 7075-81 (Scollay) (describing recordkeeping generally). A
properly created and maintained veterinary record is, therefore, distinct from a billing record.
AB2 at 7184-85 (Benson).
Yet, the documents Dr. Shell produced to show the medications he prescribed to horses
“were mostly billing records . . . they didn’t have the detail that would be required of a medical
record.” AB2 at 7181-82 (Benson). The records typically would not enable continuity of care,
indicating only the substance Dr. Shell billed for, often without any medical justification for
using the substance. AB2 at 5631, 6096-97, 7181-82, 7188-92, 7205-07, 7212, 7249-50
(Benson).
Licensed in both Ohio and West Virginia, and an Attending Veterinarian under HISA
Rules, Dr. Shell is obliged to follow prescribed recordkeeping provisions. AB1 at 2728 (Ohio
requirements), 2729-30 (West Virginia requirements); HISA Rules 1020 (definitions), 2251, and
3040(d). Dr. Shell knows these rules. See AB2 at 6780-83 (Shell). However, overall, records
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relating to the four Banned Substances that he offered pale by comparison to those expected of
veterinary professionals.
Dr. Shell’s frequent argument—that HIWU has not charged him with a recordkeeping
violation—misses the point. Both the absence of complete medical documentation, and the state
of many records Dr. Shell did produce, impeach the reliability of the documents he relies on to
meet his burden to demonstrate compelling justification for possessing Banned Substances.
What is more, HIWU’s review of medical records required under HISA Rule 3040(d)
casts further doubt on the probative value of Dr. Shell’s proffered evidence. Rule 3040(d)
requires Dr. Shell to input all records of treating Covered Horses into an electronic database
designated by the Authority. HIWU’s comparison of Dr. Shell’s inputted records with his
practice records disclosed “[p]retty consistent lack of information being inputted into the HISA
portal.” AB2 at 7289-90 (Wallace); see also AB1 at 2499, 2502, 2537, 2568; AB2 at 7291-03,
7307-12 (Wallace). Compared to the input deficiencies of other Attending Veterinarians, “there
were more for Dr. Shell’s practice.” AB2 at 7303 (Wallace). These missing records, too, confirm
that Dr. Shell’s lack of attention to recordkeeping render his documentary proof too unreliable to
demonstrate compelling justification.
Dr. Shell regularly provided trainers with prescriptions—including those for, Carolina
Gold and Pitcher Plant—that lacked specific horse names, and instead listed “Farm Use” as the
horse name. AB2 at 5999, 6002, 6013, 6016, 6018, 6023, 6087, 6094. Many of Dr. Shell’s
documents also fail to indicate whether Dr. Shell examined the horse for which he prescribed
medication. AB2 at 7211, 7213-20 (Benson).
ii.
The Four Banned Substances
Considered individually for each of the four Banned Substances, Dr. Shell’s proof comes
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up well short of demonstrating compelling justification.
Carolina Gold: Dr. Shell testified he used Carolina Gold “on farms in both Ohio
and West Virginia,” largely on young horses. AB2 at 6891 (Shell). Yet, the evidence,
including Dr. Shell’s own testimony, is much the contrary. Dr. Shell often provided
Carolina Gold to thoroughbred racehorse trainers in West Virginia. AB2 at 6856-59,
6862-63 (Shell). Although Dr. Shell maintained he dispensed this Banned Substance for
races in West Virginia, many of his records identify the “Patient” as “Farm Use.” AB1 at
3426-43, 3460-92; AB2 at 6845-66, 6868, 6874 (Shell). Dr. Shell did not have permission
from the West Virginia Racing Commission to possess or dispense Carolina Gold in that
State. AB2 at 7209-10 (Benson).
More specifically:
x
The prescription labels on the Carolina Gold bottles HIWU seized in September 2023
identified Dr. Shell as the prescribing doctor and the patient as “Snazzy Horse,” a
“Covered Horse at Thistledown Race Track in Ohio,” trained by Michael Rone, a
Covered Person. AB1 at 481, 642 (¶ ¶ 4, 7), 647, 652; AB2 at 6005, 6757-58, 6838-39,
6841-42 (Shell). The Snazzy Horse identification is said to illustrate Dr. Shell’s office
practice when ordering non-FDA approved compounded substances, such as Carolina
Gold: “just give [the supplier pharmacy] a name so that we can get the medication
ordered, not necessarily the name of that particular horse that is being ordered for.”
AB2 at 6759-60 (Shell). The Carolina Gold was intended for “[m]ultiple injections.”
AB2 at 6761 (Shell)
x
According to Dr. Shell, the vials of Carolina Gold that HIWU seized were in fact
intended for Eddie Clouston, Bill Howard, and John Michael Baird—all thoroughbred
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racehorse trainers in West Virginia—based on what Dr. Shell testified were earlier
examinations of their horses. AB2 at 6842-45 (Shell). Dr. Shell produced no medical
records of the examinations. AB2 at 6844 (Shell).
x
The day after HIWU’s September 2023 search, Dr. Shell re-stocked his veterinary
truck with a vial of Carolina Gold and delivered it to Timothy Collins, a thoroughbred
racehorse trainer and Covered Person. AB2 at 5999, 6856-59 (Shell). Dr. Shell
dispensed the vial to Collins for use with “two or more thoroughbred racehorses in West
Virginia.” AB2 at 6862-63 (Shell).
x
In August 2023, Dr. Shell dispensed a vial of Carolina Gold to Christopher Logston, a
thoroughbred racehorse trainer and Covered Person, in West Virginia for use on
“thoroughbred racehorses mares.” AB2 at 6853-54 (Shell). There is no prescription;
according to Dr. Shell, Logston “had several [horses] that were requiring treatment.”
AB2 at 6852 (Shell). See also AB1 at 3426-27; AB2 at 6002, 6007, 6846-48, 6852-53,
6863 (Shell).
x
In December 2023—after HIWU’s search—Dr. Shell dispensed Carolina Gold for
thoroughbred racehorse Resvalon, which ran in Covered Races, both before and after
this date. AB2 at 6032, 6879-83 (Shell); AB1 at 2109, 2300. Dr. Shell offered no
medical record for dispensing Carolina Gold to Resvalon, only billing record with the
notation “Give 5ccs IM as needed for training to calm nerves, Dispensed.” AB2 at
6032, 6880-81 (Shell).
x
In 2023, Dr. Shell dispensed Carolina Gold to the following thoroughbred racehorse
trainers, all of whom are Covered Persons:
¾ Timothy Collins
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¾ Christopher Logston
¾ Dennis Van Meter
¾ Shannon Simpson
¾ Gregory Eidschun
¾ Annette McCoy
See AB2 at 6845-74 (Shell).
Of the eight records dispensing Carolina Gold that Dr. Shell produced to establish
administering the substance to non-Covered Horses, six do not have a particular horse’s name,
and erroneously list “Farm Use” as the patient name. AB2 at 5521, 5999-6000, 6002-03, 6007,
6013-14, 6016, 6018, 6023-24. Dr. Shell produced no records showing the horses that received
Carolina Gold from the vials HIWU seized. AB2 at 6959, 6961-62 (Shell).
Except for two records that postdate HIWU’s search, none of the records showing
Dr. Shell’s dispensation of Carolina Gold contain examination findings or diagnostic assessment
of need (in veterinary terms, “differential diagnosis”). See AB2 at 5631 (Benson), 6026, 6032.
Nor do they include other basic identifying information, such as the patient date of birth, sex,
weight, and breed, that a medical record should memorialize. AB2 at 5521, 5999-6000, 6002-03,
6007, 6013-14, 6016, 6018, 6023-24.
To the documents Dr. Shell prepared after HIWU’s search, I attach limited weight.
Created post-search, this proof is subject to manipulation to bolster his litigation position. Such
post-event evidence has been called “all-but-meaningless.” FTC v. Whole Foods Market, Inc.,
548 F.3d 1028, 1047 (D.C. Cir. 2008) (Tatel, J., concurring). 24
24
See also Chicago Bridge & Iron Co. v. FTC, 534 F.3d 410, 435 (5th Cir. 2008) (“The probative value of such
evidence is deemed limited not just when evidence is actually subject to manipulation, but rather is deemed of
limited value whenever such evidence could arguably be subject to manipulation.”) (emphasis in original); Hosp.
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Pitcher Plant: Dr. Shell contends that he uses Pitcher Plant for his farm practice, and in
West Virginia where he regarded all thoroughbred racehorses as non-Covered Horses, regardless
of whether they ran at tracks subject to HISA. The records he offered show the following:
x
The prescription label on the seized bottle of Pitcher Plant identified Dr. Shell as the
prescribing doctor and the patient as “Totally Obsessed.” AB1 at 484, 643-44, 650.
Totally Obsessed is a Covered Horse “stabled at Thistledown,” trained by Gary
Johnson, a Covered Person. AB2 at 6953-54 (Shell). The Totally Obsessed
identification allegedly is another “administrative error” resulting from Dr. Shell’s
office practice. AB2 at 6954-55 (Shell).
x
In June 2023, Dr. Shell dispensed Pitcher Plant to trainer Mark Tomczak, a Covered
Person, using as the patient name “Farm Use.” AB1 3590; AB2 6980-84 (Shell).
Tomczak has an Ohio billing address and regularly raced horses in Covered Races in
2023, including Laurel Park in Maryland and Colonial Downs in Virginia. AB1 at
3590, 3592; AB2 at 6982-83 (Shell). Dr. Shell offered no records identifying the
horses who received the Pitcher Plant dispensed to Tomczak. AB2 at 6981-82, 6984
(Shell).
x
In September 2023, Dr. Shell dispensed Pitcher Plant to “Venezuelan Dreamer,” a
thoroughbred racehorse trained by Juan Gotera, a Covered Person. AB1 at 3587.
Venezuelan Dreamer ran in a Covered Race a few days later. AB2 at 6978 (Shell);
AB1 at 2491, 3587-88.
x
In October 2023, Dr. Shell dispensed Pitcher Plant to trainer Larry Reed, a Covered
Corp. of Am. v. FTC, 807 F.2d 1381, 1384 (7th Cir.1986) (“Post-acquisition evidence that is subject to manipulation
by the party seeking to use it is entitled to little or no weight.”); United States v. Bazaarvoice, Inc., No. 13-cv00133, 2014 WL 203966, at *57 (N.D. Cal. Jan. 8, 2014).
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Person, for the thoroughbred racehorse “High Rolling Dude.” AB1 at 3596; AB2 at
6984-88 (Shell); AB1 at 3596-600. Although Reed has a farm in West Virginia, Dr.
Shell billed him at an Ohio address, where Reed lives. AB1 at 3596; AB2 6986
(Shell). Reed raced High Rolling Dude at Mahoning racetrack in Ohio on several
occasions. AB1 at 3598-99; AB2 6987 (Shell).
x
After the ADMC Program became effective in May 2023, Dr. Shell dispensed Pitcher
Plant repeatedly in 2023 to the following additional thoroughbred racehorse trainers, all
Covered Persons, in West Virginia, using the Patient Name “Farm Use”:
¾ Eddie Clouston
¾ Greg Eidschun
¾ Dennis Van Meter
AB1 at 3578-85; AB2 6977-79 (Shell).
Three of the seven records produced for Pitcher Plant erroneously list “Farm Use” as the
patient name. AB2 at 6087-89, 6094, 6099. All seven records, including the four with a specific
horse name, lack key identifying information; one postdates the search and thus has limited
probative value. AB1 at 2389; AB2 at 6092, 6096, 6105. See pp. 29-30 & n.24. Moreover, none
of the Pitcher Plant records Dr. Shell offered contain any examination findings or differential
diagnoses, making them deficient as medical records, and akin to billing records.
Isoxsuprine: The tub of Isoxsuprine found in Dr. Shell’s truck had his prescription label,
but no horse listed as a patient. AB1 at 430, AB2 at 6992 (Shell). The records Dr. Shell offered for
this Banned Substance are limited.
For Isoxsuprine, Dr. Shell produced only four records memorializing his dispensation.
One record, covering an older horse named “Cat,” is largely a billing record covering many
unexplained dispensations of the substance, most of which took place before the ADMC program
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took effect in May 2023. AB1 at 3797. For one post-effective date entry, there are notes of a
physical examination by Dr. Hippie, which state that Cat is “acutely lame,” and which include
additional medical information. The Hippie notes do not include Isoxsuprine as recommended
treatment; nor are they a fulsome medical record. See generally AB2 at 7232-36 (Benson). The
same billing record further shows Dr. Shell prescribed Isoxsuprine the next day, as well as a
month later, with no explanation.
A second record, from October 2023, shows dispensation to Cool Stance, along with a
brief diagnosis (“laminitis both front feet”) and administration instructions by Dr. Shell. AB2 at
6081. But the record does not disclose he contemporaneously examined Cool Stance. Dr. Shell
testified that Cool Stance’s founder (lameness) prevented his racing. AB2 at 6750 (Shell). As a
post-search record, it is, again, of minimal probative value.
A billing record produced by Dr. Shell shows that Isoxsuprine was dispensed to Michael
J. Baird, a West Virginia trainer who raced Covered Horses in Covered Races. AB1 at 3799-800;
see also AB1 at 2478 (HIWU schedule), 2720 (Benson reply report). Another billing record,
apparently for a quarter horse, also was produced. AB1 at 3798. However, Dr. Shell offered no
corresponding medical records.
There are FDA-approved, HISA-permitted substances to treat lameness, and the
condition, although discomforting, does not require urgent treatment. AB2 at 7096-97, 7100
(Scollay), 7223-24 (Benson). Dr. Shell’s proof regarding Isoxsuprine is insufficient to establish
compelling justification for carrying this Banned Substance at a covered racetrack in Ohio.
Osphos: The boxes of Osphos recovered from Dr. Shell’s office did not contain
prescription information. AB1 at 662. The only documentary record of Dr. Shell directly
dispensing Osphos, is to a quarter horse named “Hornet.” AB2 at 6083. Dr. Shell billed Mike
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Roberts, a blacksmith. AB2 at 6742 (Shell). This record, too, postdated the HIWU search, and is
thus lacking probative value. AB2 at 6083. Perhaps unsurprisingly, the contents of this postsearch billing record improves on those from the pre-search period, where comparable
information is absent. AB2 at 6083 (“Navicular disease short striding, both front, uncomfortable
on turns, preparing for barrel race in two weeks”), 7222 (Benson). Dr. Shell has also treated the
horse Cat with Osphos, as has Dr. Hippie, for several years. AB1 at 528-37; AB2 at 7043, 704546 (Schulman).
This minimal proof is insufficient to demonstrate a compelling need for Dr. Shell to carry
Osphos on an Ohio covered racetrack. Osphos simply is not needed on an emergency basis. AB1
at 528; AB2 at 6997 (Shell), 7100 (Scollay), 7223-24 (Benson).
d.
Overall Assessment of Dr. Shell’s Compelling Justification
Proof
Dr. Shell attempted to minimize incorrect document entries, such as “farm use,” as
“ministerial” errors made by Janet Duhon, his head veterinary technician. See, e.g., AB1 at 647,
686; AB2 at 6932-33 (Shell). However, Dr. Shell admitted that he knew Ms. Duhon “pulled” the
horse’s name “out of her hat” when restocking substances in bulk, and that he was ultimately
responsible for his employees’ conduct. AB2 at 6956 (Shell); see also AB2 at 6759-61, 6933-38
(Shell). Worse still, he admitted often failing to provide her with specific horse information for
the reorders. AB2 at 6937-38. Dr. Shell’s own expert witness, Dr. Roberts, conceded that these
types of error should not regularly occur. AB2 at 7510-11, 7515 (Roberts).
The frequency of the claimed errors is too great to accept Dr. Shell’s clerical or
scrivener’s miscue explanation. And, to reiterate, the practice records Dr. Shell offered, some of
which he referred to as “cliff notes,” are not comprehensive to begin with. AB2 at 6748, 6750
(Shell). The errors are all the more unacceptable in view of both State regulatory and HISA Rule
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obligations. A veterinarian may be able to prove compelling justification despite imperfect
recordkeeping, of course. But wherever the line may be drawn in an individual case, the records
Dr. Shell offered were insufficient to establish that he had a compelling justification to possess
the Banned Substances seized in Ohio only, or even primarily, for use in his Ohio or West
Virginia farm practice or to supply trainers in West Virginia. Besides lacking medical records
that Dr. Shell is required to keep, the mostly billing records offered are too incomplete and too
riddled with claimed errors to find Dr. Shell to have discharged his burden of proof. See
generally AB2 at 7181-83, 7187-96, 7205-07, 7250 (Benson); AB1 at 2722 (Benson Expert
Report ¶¶ 51-52).
Adopting the standard of proof for compelling justification that Dr. Shell advocates and
attempted—showing need “through any records”—would so dilute Rule 3214(a)’s compelling
justification requirement as to render Possession charges against a veterinarian with a nonCovered Horse practice effectively illusory.
Dr. Shell also sought support for his compelling justification defense from Christine
Schulman, the owner of Cat, one of the Ohio farm horses he serviced. Cat received two of the
four Banned Substances, Isoxsuprine and Osphos. AB2 at 7036-54 (Schulman). Both can be used
to treat lameness, but neither is required on an urgent basis. Although Ms. Schulman was
complimentary of Dr. Shell’s care generally, she had no experience with Dr. Shell’s use of
Carolina Gold or Pitcher Plant and lacked any knowledge of his conduct with racehorses or their
trainers. AB2 at 7052 (Schulman).
To be sure, the testimony of fact witnesses can be probative of compelling justification.
But here, the incremental support from this single witness is minimal, especially when evaluated
in relation to the evidence at large. It is insufficient to show compelling justification for
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Dr. Shell’s Possession in Ohio of Isoxsuprine and Osphos, much less for that of Carolina Gold
and Pitcher Plant.
Dr. Shell has not met his burden of proving compelling justification.
B.
Dr. Shell’s Estoppel Argument
Dr. Shell contends that estoppel precludes HIWU from prosecuting him for possessing
the four Banned Substances in Ohio. He bases his argument on the same conduct by HIWU’s Dr.
Scollay that informed Dr. Shell’s views on proving his farm practice defense. 25
The elements of estoppel are not controversial: “the party claiming the estoppel must
have relied on its adversary’s conduct in such a manner as to change his position for the worse,
and that reliance must have been reasonable in that the party claiming the estoppel did not know
nor should it have known that its adversary’s conduct was misleading.” Heckler v. Community
Health Services of Crawford Cty., Inc., 467 U.S. 51, 59 (1984) (internal quotation marks
omitted). See also, e.g., Ohio State Bd. of Pharmacy v. Frantz, 555 N.E.2d 630, 633 (Ohio 1990).
In sports law specifically, “the doctrine of estoppel, which primarily prevents sports
federations from taking explicit contradictory positions, . . . has a very limited scope in
disciplinary proceedings.” Sport Lisboa e Benfica SAD v. FIFA, CAS 2021/A/8076, at ¶ 58 (Oct.
10, 2002) (citing authorities). Broader application, leading to “the (temporary) non-enforcement
of legitimate and binding provisions[,]” could mean that “many sports and state provisions would
run the risk of no longer achieving their goals due to previous unpunished violations. . . .” Id.
¶ 58. See also New Zealand Olympic Committee (NZOC) v. The Salt Lake Organizing Committee
25
The Authority, the opposing party here, is, of course, bound by Dr. Scollay’s acts. HIWU implements and
enforces the ADMC Program on behalf of the Authority. Rule 3010(e) (“The Protocol will be implemented and
enforced on behalf of the Authority by: (1) an anti-doping and controlled medication enforcement agency known as
the Horseracing Integrity and Welfare Unit”); see also 15 U.S.C. § 3054(e)(1)(E)(i) (directing the Authority to enter
an agreement to “implement[] the anti-doping and medication control program on behalf of the Authority”); AB1 at
313, 315-16 (HIWU response), 324, 326-27, 329 (Authority response).
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for the Olympic Winter Games of 2002 (SLOC), CAS OG/02/006, at ¶ 18 (Feb. 20, 2002)
(recognizing “[a]n estoppel that arises when one makes a statement or admission that induces
another person to believe something and that results in that person’s reasonable and
detrimental reliance on the belief” (quoting BLACKS LAW DICTIONARY, 7th ed. 1999)).
Dr. Shell bases his estoppel argument on his reliance on the farm practice statements
detailed above, which arise from: (1) Dr. Scollay’s substantially similar industry presentations,
given at the Will Rogers Downs and Mahoning racetracks; (2) the follow-up conversation
Dr. Shell testified he had with Dr. Scollay that same day; and (3) the subsequent email exchange
between Dr. Scollay and the Randall Equine veterinarian group. These facts are simply
insufficient to demonstrate estoppel.
Dr. Shell admits there was no other “guidance” forthcoming from either Dr. Scollay, the
Authority, or HIWU. AB2 at 6695-96 (Shell). The information that Dr. Scollay did impart would
not reasonably be understood to suggest that possession of a Banned Substance would be
excused whenever a veterinarian had a non-Covered Horse practice for which the Banned
Substance might be useful, so long as there were some supporting records or other evidence,
however incomplete or unreliable.
During her racetrack presentations, Dr. Scollay noted that the HISA Rule on Possession
of Banned Substance applied to Veterinarians, who should not have the substances on their
trucks. As “a caveat”—that is, as a caution or exception—she explained during her Will Rogers
Downs presentation that, if a veterinarian’s practice included non-Covered Horses, the Authority
and HIWU could not sanction the veterinarian for possession “because we don’t have control
over those horses . . . [. W]e can’t penalize people for something that we don’t have control
over,” AuRPFOF at 3 (¶ 9); see also AB1 at 1114; AB2 at 7117-18 (Scollay). However, she
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expressly qualified these remarks, stating that Possession would not be excused based on the
mere assertion that a veterinarian’s practice included “non-Covered Horses . . . or . . . a country
practice.” Rather, HIWU had “the ability to investigate, [and] if the story starts to get a little
weird or a little extreme, you’re going to get more than a raised eyebrow.” AuRPFOF at 3 (¶ 9).
Dr. Shell also testified that, during Dr. Scollay’s follow-up remarks to him at Mahoning,
she said, in substance, that Dr. Shell did not have to reload his truck “every time [he] drove off
the racetrack.” This essentially impromptu comment neither detracts from nor materially
enhances the thrust of her “caveated” public guidance. Dr. Shell could not reasonably have
understood Dr. Scollay’s comment to mean he could possess Banned Substances whenever he
drove his truck to an Ohio racetrack. He similarly could not reasonably have thought his West
Virginia practice would excuse possession in Ohio. Indeed, in talking with Dr. Scollay, Dr. Shell
knew his practice extended to West Virginia. But he admittedly did not raise the topic with
Dr. Scollay, who did not even know him. AB2 at 6727-28 (Shell), 7084, 7085-86 (Scollay). And
Dr. Shell offered no proof that the Authority or anyone else at HIWU knew anything about his
West Virginia activity.
Dr. Scollay’s response to the Randall Equine email from Ms. Naylor similarly reiterated
that merely having a practice that included “non-Covered horses” did not provide a defense to
possession. Instead, “to the extent” that a veterinarian “can demonstrate”—“through records, day
sheets, etc.”—a need “to carry” Banned Substances, the veterinarian “can establish compelling
justification.” AB1 at 2601.
Fairly considered overall, Dr. Scollay’s guidance acknowledged that, if a veterinarian’s
practice included non-Covered Horses, to meet the burden of showing compelling justification,
the veterinarian had to offer reliable proof. Further, with Dr. Scollay’s response to the Randall
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Equine email exchange, if not earlier, Dr. Shell should reasonably have understood that simply
having a non-Covered Horse practice did not entitle him to keep Banned Substances in his truck;
he had to have adequate practice records as proof of need. AB2 at 6807-08, 6812 (Shell).
One other estoppel consideration should be discussed. It is undisputed that Dr. Scollay’s
remarks at both the Will Rogers Downs and Mahoning presentations concerning the Possession
ADRV, its applicability to Veterinarians, and the compelling justification defense were
substantially the same. And thus far throughout this decision, I have assumed Dr. Shell’s best
version of the facts relating to Dr. Scollay’s presentation remarks and to her follow-up
conversation with him. However, I have serious reservations concerning at least parts of
Dr. Shell’s testimony on these matters.
In pre-arbitration hearing filings—including Dr. Shell’s two pre-hearing briefs, his
witness statement, and the synopsis of his testimony—he referred—repeatedly and
consistently—only to Dr. Scollay’s remarks at Will Rogers Downs in Oklahoma and to her
response to the Randall Equine email, both of which he quoted and otherwise cited. For example,
his pre-hearing brief stated:
It cannot be disputed that on March 24, 2023, Dr. Mary Scollay gave a presentation at
Will Rogers Downs in Oklahoma, about the HISA program . . . .
....
Dr. Scollay confirmed her position in an email dated June 16, 2023, at 10:46:24 a.m.,
EDT, to Randall Equine Vet group . . . .
....
Dr. Shell objectively, and reasonably relied on an objective statement of HIWU’s Chief
of Science, made . . . at an Oklahoma presentation . . . .
....
Dr. Scollay elaborated in an email . . . to Randall Equine Vet Group . . . .
....
[H]e relied on an objective statement from Dr. Scollay. 26
26
AB1 at 1513 (¶¶ 27, 28), 1520 (¶¶ 49, 50), 1527 (¶ 75), (emphasis added). See also AB1 at 1522-23 (¶¶ 55, 5758), 1523-24 (¶ 61), 1534-35 (¶¶ 108-10, 114), 1537-38 (¶ 123).
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Dr. Shell made similar representations in his other pre-hearing filings. 27
In these filings, Dr. Shell never said he attended the Mahoning presentation and heard
Dr. Scollay say substantially the same thing there as she had at Will Rogers Downs. Dr. Shell
similarly never mentioned a follow-up conversation with Dr. Scollay at Mahoning. Moreover, at
the arbitration hearing, although Dr. Shell testified he “took notes” of Dr. Scollay’s Mahoning
remarks, he offered no notes to corroborate his Mahoning testimony. AB2 at 6689 (Shell).
Further, while Dr. Shell testified that Randall Equine’s Ms. Naylor participated in the follow-up
conversation, he never called Dr. Naylor to testify.
The absence of both Dr. Shell’s own notes or testimony from Dr. Naylor to corroborate
the public and follow-up remarks attributed to Dr. Scollay cast significant doubt on Dr. Shell’s
own testimony. I attach limited weight to it in evaluating his asserted estoppel argument. 28 In all
events, however, Dr. Shell was admittedly on notice that, if he sought to rely on a compelling
justification defense, he would have to prove it with fulsome evidence. There is no basis for
estopping the Authority from imposing sanctions for his violations of Rule 3214(a).
27
See AB1 at:
1. Amended pre-hearing brief: 1779-81 (¶¶ 2-4), 1785-86 (¶¶ 21-22), 1788 (¶ 27), 1791-92 (¶¶ 37-38),
1793-94 (¶¶ 41-42), 1795 (¶ 45), 1798 (¶ 56), 1805 (¶ 79), 1806 (¶ 82), 1808 (¶ 88);
2. Witness statement: 2014-15 (¶¶ 15-16, 18-20), 2016 (¶ 22), 2019 (¶ 38), 2021-23 (¶¶ 49-52, 54); and
3. Synopsis of testimony: 2040-41.
28
See, e.g., Interstate Circuit, Inc. v. United States, 306 U.S. 208, 226 (1939) (“The production of weak evidence
when strong is available can lead only to the conclusion that the strong would have been adverse”); Graves v. United
States, 150 U.S. 118, 121 (1893) (“[I]f a party has it peculiarly within his power to produce witnesses whose
testimony would elucidate the transaction, the fact that he does not do it creates the presumption that the testimony,
if produced, would be unfavorable.”); Gass v. United States, 416 F.2d 767, 775 (D.C. Cir. 1969) (“An adverse
inference is permitted from the failure of the accused to call witnesses peculiarly within his power to produce when
their testimony would elucidate the transaction.”) (cleaned up); Gumbs v. Int’l Harvester, Inc., 718 F.2d 88, 96 (3d
Cir. 1983) (“The unexplained failure or refusal of a party to judicial proceedings to produce evidence that would
tend to throw light on the issues authorizes, under certain circumstances, an inference or presumption unfavorable to
such party.”).
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C.
Dr. Shell’s Constitutional Arguments
1.
Rule 3214 Is Not Unconstitutionally Vague
Dr. Shell contends that Rule 3214(a) violates due process, as overly vague. He argues
that, “no Covered Person of reasonable intelligence could know what facts must be proved to
demonstrate ‘compelling justification,’ or how to comport their behavior.” AOBr. at 11.
According to Dr. Shell, without more content, “compelling justification is always/was subject to
the adjudicator’s arbitrary and capricious whim.” AOBr. at 11 (internal quotation marks deleted).
As applied to him specifically, Dr. Shell maintains that he “reasonably relied on Dr. Scollay’s
guidance,” but that the Arbitrator arbitrarily and capriciously “credited post-hoc requirements to
show Compelling Justification . . . .” AOBr. at 11.
Dr. Shell’s argument is unpersuasive.
To satisfy the Constitution’s Due Process requirement of fair notice, a regulation must be
“reasonably comprehensible to people acting in good faith.” MobileTel, Inc. v. FCC, 107 F.3d
888, 896 (D.C. Cir. 1997) (cleaned up); see also, e.g., United States v. Ancient Coin Collectors
Guild, 899 F.3d 295, 321-22 (4th Cir. 2018). This inquiry includes examining “the particular
situation of the defendant,” and whether, as one to whom the regulation is directed, “it lacked
reasonable notice.” Gen. Elec. Co. v. EPA, 53 F.3d 1324, 1330 (D.C. Cir. 1995). “Words or
phrases having a technical or other special meaning” may be “well enough known to enable
those within its reach to correctly apply them.” United States v. Weitzenhoff, 35 F.3d 1275, 1289
(9th Cir. 1993) (cleaned up). Thus, the understanding and practice among those subject to
regulation are relevant considerations. See, e.g., Ohio Cast Prods., Inc. v. Occupational Safety &
Health Review Comn’n, 246 F.3d 791, 799 (6th Cir. 2001).
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Moreover, the Supreme Court has “expressed greater tolerance of enactments with civil
rather than criminal penalties because the consequences of imprecision are qualitatively less
severe.” Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 498-99
(1982) (footnote omitted). Finally, vagueness challenges to laws “which do not involve First
Amendment freedoms must be examined in the light of the facts of the case at hand.” United
States v. Mazurie, 419 U.S. 544, 550 (1975).
As discussed above, Dr. Shell’s contacts with Dr. Scollay at the Mahoning racetrack
presentation and via her email exchange with Randall Equine put Dr. Shell on notice that a
“compelling justification” could arise from a veterinarian practice that HISA did not reach, such
as “if veterinarians are practicing also on a population of non-Covered Horses, . . . or they’ve got
a country practice . . . .” AuRPFOF at 2-3 (¶¶ 8, 9); AB2 at 7117-18 (Scollay). At the same time,
Dr. Scollay cautioned that HIWU had “the ability to investigate,” and that if a veterinarian’s
“story starts to get a little weird or a little extreme, you’re going to get more than a raised
eyebrow.” AuRPFOF at 2-3 (¶¶ 8, 9); AB2 at 7117-18 (Scollay).
A veterinarian subject to HISA, such as Dr. Shell, would reasonably understand that a
practice that included non-Covered horses could provide a “justification” for a defense to a
charge of possessing a Banned Substance. Dr. Shell himself clearly had this understanding, as
this is, itself, the basis for his defense. But as Rule 3214(a) expressly states, Dr. Shell’s proof had
to be “compelling”—strongly persuasive—and on this score, he failed. See Village of Hoffman
Estates, 455 U.S. at 489 (rejecting a vagueness challenge to the constitutionality of a local
ordinance that prescribed civil penalties and including licensing guidelines).
Because Dr. Shell was on notice that a non-Covered horse practice could, depending on
the proof offered, satisfy Rule 3124(a)’s “compelling justification” element, the Rule is not
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unconstitutional as applied to him. And since a litigant “who engages in some conduct that is
clearly proscribed cannot complain of the vagueness of the law as applied to the conduct of
others,” I need not reach Dr. Shell’s facial challenge to Rule 3124. Village of Hoffman Estates,
455 U.S. at 495 & n.7; Broadrick v. Oklahoma, 413 U.S. 601, 610 (1973) (“Embedded in the
traditional rules governing constitutional adjudication is the principle that a person to whom a
statute may constitutionally be applied will not be heard to challenge that statute on the ground
that it may conceivably be applied unconstitutionally to others, in other situations not before the
Court.”) (citing authorities); United States v. Nassif, 97 F.4th 968, 981-82 (D.C. Cir. 2024)
(rejecting defendant’s vagueness challenge where the law “clearly proscribed his own conduct”).
My determination regarding Dr. Shell’s Due Process argument is fully consistent with my
also rejecting Dr. Shell’s estoppel argument. Dr. Scollay’s guidance was sufficient to provide
reasonable notice to Dr. Shell that his practice, which included non-Covered horses, could—if
adequately proven—be a “justification” that Rule 3214(a) recognizes. That disposes of
Dr. Shell’s argument that the Rule is unconstitutionally vague. The reasonable import of
Dr. Scollay’s guidance does not, however, enable Dr. Shell to satisfy the elements of an estoppel
sufficient to defeat HIWU’s Possession charges.
2.
Prosecution of this Case by the Authority and HIWU is Not
Unconstitutional
Relying on the Fifth Circuit’s decision in National Horsemen’s Benevolent and
Protective Ass’n v. Black, 107 F.4th 415 (5th Cir.), cert. pet’s filed, Nos. 24-429, 24-433 & 24472 (Oct. 15, 16, and 22, 2024), Dr. Shell argues that HIWU’s enforcement proceeding here
violates the private nondelegation doctrine and thus is unconstitutional. AOBr. at 14. The Sixth
Circuit, however, rejected this same argument and upheld HISA’s constitutionality, as did an
Eighth Circuit majority in a recent decision affirming denial of a preliminary injunction.
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Oklahoma v. United States, 62 F.4th 221 (6th Cir. 2023), cert. denied, 144 S.Ct. 2679 (2024);
Walmsley v. FTC, 117 F.4th 1032 (8th Cir.), cert. pet. filed, No. 24-420 (Oct. 15, 2024). In the
prior Administration Case involving Dr. Shell, I also rejected this constitutional argument, and
the Authority’s opposition in this case is based substantially on my earlier ruling. In re Shell,
Docket No. 9345 (Oct. 31, 2024); AuOBr. at 11. Although I again reject Dr. Shell’s argument, I
believe further discussion is warranted.
As my prior decision noted, the Sixth Circuit’s geographic scope includes Ohio, and
Dr. Shell is himself an Ohio-based and licensed veterinarian. He also is licensed in West
Virginia, and he practices in both States. AB1 at 2012 (¶ 1); AB2 at 6672, 6677 (Shell). The
HIWU search giving rise to this case involved his two trucks and storage facility at Thistledown,
located near Cleveland, Ohio. AB1 at 168-69, 452 (¶ 4), 2012 (¶ 8), 2018 (¶ 34), 3612; AB2 at
6996 (Shell). Both trucks, registered to Dr. Shell, bore an Ohio tag number. AB1 at 168-69, 2018
(¶ 35). Dr. Scollay’s remarks, which form a substantial part of Dr. Shell’s defense in this case,
took place during a presentation, which Dr. Shell testified he attended, at Mahoning racetrack in
Ohio. AB2 at 6687-89, 6693-94, 6813-16, 6822-23 (Shell). Thus, the contacts with the Sixth
Circuit predominate. By contrast, this case has no connection whatsoever to horseracing within
the States covered by the Fifth Circuit.
Although not located within the Fifth Circuit, West Virginia’s connection to this case
should be addressed—a consideration that did not arise in Dr. Shell’s earlier case. As described
above, in 2022 the District Court for the Western District of Louisiana issued a preliminary
injunction that enjoins HISA’s operation in the State of West Virginia. Louisiana v. Horseracing
Integrity & Safety Auth. Inc., 617 F.Supp.3d 478 (W.D. La. 2022). The Western District based its
ruling on the Authority’s non-compliance with the Administrative Procedure Act during
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adoption of various HISA rules, and “not [on] the constitutionality of the Act.” Id. at 501.
However, in another case, begun in federal district court in Texas, the Fifth Circuit issued its
National Horsemen’s decision. The Fifth Circuit thereafter remanded an appeal from the
Western District’s preliminary injunction, and the Western District has since stayed proceedings.
Louisiana v. Horseracing Integrity & Safety Auth. Inc., No. 22-30458, 2022 WL 17074823 (5th
Cir. Nov. 18, 2022); Order, 6:22-CV-01934 (W.D. La. Sept. 14, 2023).
As a result of the Western District’s injunction, the Authority and HIWU do not enforce
HISA in West Virginia. AuRPCOL ¶ 10; AB2 at 7125-26 (Scollay). This position, however, is
not based on the Fifth Circuit’s later constitutional ruling, which does not apply outside the
States covered by the Fifth Circuit. Therefore, the Western District’s injunction, issued for APA
non-compliance, does not factor into my deciding whether the overall case contacts warrant
reaching the same conclusion as the Fifth Circuit on HISA’s constitutionality.
The “presumption of constitutionality” instructs that a federal law may be invalidated
“only upon a plain showing that Congress has exceeded its constitutional bounds.” United States
v. Morrison, 529 U.S. 598, 607 (2000); see also Turner Broadcasting System, Inc. v. FCC, 507
U.S. 1301, 1301 (1993) (A federal statute “is presumptively constitutional.”) (Rehnquist, C.J., in
chambers). Bearing in mind both the presumption and the particular facts here, I follow the Sixth
and Eighth Circuit’s rulings upholding the Authority and HIWU’s authority. Thus, Dr. Shell’s
argument fails.
VI.
SANCTIONS
A.
Single or Separate Violations Under Rule 3228(d)
HIWU charged Dr. Shell with Possession of each of the four Banned Substances as
separate Rule 3214 violations. AB1 at 439 (EAD Charge Letter, covering Isoxsuprine, Carolina
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Gold (GABA), and Osphos (Bisphosphonate)), 607 (EAD Notice Letter, covering Sarapin
(Pitcher Plant)). In doing so, it relied on Rule 3228(d):
(d) Violations involving both a Banned Substance or Method and a Controlled
Medication Substance or Method.
Where a Covered Person is found, based on a common set of facts, to have committed a
(1) violation involving one or more Banned Substance(s) or Banned Method(s), and (2) a
violation involving one or more Controlled Medication Substance(s) or Controlled
Medication Method(s), they shall be treated as separate violations, but shall be
adjudicated together in consolidated proceedings pursuant to the procedure that applies to
Anti-Doping Rule Violations under the Arbitration Procedures.
(Emphasis added).
Dr. Shell challenged HIWU’s resort to Rule 3228(d), arguing that, to assert “separate
violations,” HIWU had to allege violations involving:
“(1) . . . one or more Banned Substance(s) . . . , and
(2) . . . one or more Controlled Medication Substance(s) . . . .”
Since HIWU alleged four Banned Substance violations, but no Controlled Medication violations,
Rule 3328(d), Dr. Shell argued, did not apply. See, e.g., AB1 at 1510 (Shell Pre-Hearing Brief).
The Arbitrator agreed with Dr. Shell. By virtue of the “and” conjunction, the Arbitrator
concluded that, to trigger Rule 3328(d), there needed to be at least one Controlled Medication
violation charged along with at least one Banned Substance violation. And here there was no
Controlled Medication charge. AB2 at 6612 (¶¶ 7.7-7.9). Accordingly, the Arbitrator rejected
HIWU’s use of Rule 3228(d).
On this review, the Authority maintains that the Arbitrator misconstrued Rule 3228(d).
AuOBr. at 7, 14-16. Dr. Shell contends that the Arbitrator’s ruling was correct. AOBr. at 14-15;
ARBr. at 6. Resolution of this issue can affect the sanctions potentially imposed, including the
calculation of the length of any period of Ineligibility. I can review the construction of Rule
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3228(d) de novo. I conclude that the Arbitrator erred as a matter of law.
The alternative construction here is that, where HIWU asserts (a) one or more Banned
Substances violations, or (b) one or more Controlled Medications violations, or (c) one or more
of both, then Rule 3228(d) authorizes separate charges, which are consolidated for arbitration. In
effect, this alternative requires construing “and” as though it were “or.” If perhaps countertextual, this result is, indeed, judicially-recognized in appropriate circumstances: “In the
construction of statutes, it is the duty of the court to ascertain the clear intention of the
legislature. In order to do this, courts are often compelled to construe ‘or’ as meaning ‘and,’ and
again ‘and’ as meaning ‘or.’” United States v. Fisk, 70 U.S. 445, 447 (1865).
Pulsifer v. United States, 601 U.S. 124 (2024) is a much more recent example. There, the
Supreme Court construed a “safety valve” provision of federal sentencing law, which exempted a
defendant from mandatory minimum penalties. To qualify, the defendant had to meet specified
criteria. One was that the defendant did not have what the Court summarized as “A, B, and C,”
which “refer[red] to three ways in which past criminality may suggest future dangerousness
. . . .” Id. at 127. The defendant argued that safety valve relief was available unless all three
criteria were met (here, “A, B, and C”). The government argued that if any one of the three
applied, safety valve relief was unavailable. The Court agreed with the government.
Writing for the majority, Justice Kagan explained:
There are two grammatically permissible ways to read Paragraph (f)(1). Yes, one is
Pulsifer’s [the defendant’s]. But the other is the Government’s—that a defendant is
ineligible for relief unless he can satisfy each of the paragraph’s three conditions. The
choice between the two . . . is not a matter of grammatical rules. It can sensibly be made
only by examining . . . the paragraph’s content, as read in conjunction with the
Guidelines. Or, as we usually say in statutory construction cases, by reviewing text in
context.
Id. at 132-33.
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In a lengthy discussion, Justice Kagan provided numerous examples of the need to
consider the conjunctions “and” and “or” in context. To illustrate:
Article III provides that “[t]he judicial Power shall extend to all Cases ... arising under
this Constitution, the Laws of the United States, and Treaties.” § 2. That statement
means—but says more concisely—that the judicial power extends to cases arising under
the Constitution; extends to cases arising under federal law; and extends to cases arising
under treaties. The provision does not (as Pulsifer’s view might suggest) limit judges to
hearing the few cases arising simultaneously under all three kinds of law.
Id. at 134-35.
Here, specifically, the alternative is more consistent with the overall structure and intent
of the Rules, which treat Banned Substances and Controlled Medications separately. “Banned
Substances” are those identified on the “Prohibited List,” and “are . . . (1) prohibited at all times
. . . .” Rule 3110(a)(1); 88 Fed. Reg. 5085 (definition in Rule 1020). A “Controlled Medication
Substance” is one “so described on the Prohibited List or the Technical Document—Prohibited
Substances.” 88 Fed. Reg. 5086 (definition in Rule 1020), 5124 (Appendix 1 to Rule Series
4000). The “Prohibited List” is set forth in the Rule 4000 Series, which distinguishes, in separate
Rules, between: (a) “Banned Substances” “that are prohibited at all times” (Rules 4010, 410017); and (b) “Controlled Medication Substances” that are prohibited “during the Race Period and
. . . in a Post-Race Sample or Post-Work Sample, except as otherwise specified . . . .” (Rules
4200-25). 88 Fed. Reg.5086 (definition in Rule 1020).
In short, Banned Substance violations are more serious, and thus carry more severe
sanctions, than Controlled Medication violations. See Rules 3221-23, 3228-33 (Anti-Doping
violations), 3321-23, 3327-31 (Controlled Medications), 4310 and 4330 (Covered Horses).
Therefore, a Covered Person charged with possessing, for example, two Banned Substance
violations ought to be exposed to more severe sanctions than one charged with possession of one
Banned Substance and one Controlled Medication violation. Yet, under the Arbitrator’s
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construction, HIWU could charge the latter with two violations, but the former with only one.
That is plainly illogical; it cannot be the likely intent of Rule 3228(d). Cf. Holy Trinity
Church v. United States, 143 U.S. 457, 460 (1892) (“If a literal construction of the words of a
statute be absurd, the act must be so construed as to avoid the absurdity. . . . The object designed
to be reached by the act must limit and control the literal import of the terms and phrases
employed.”); Dupuch-Carron v. Secretary of HHS, 969 F.3d 1318, 1330-31 (Fed. Cir. 2020)
(citing authorities).
The very structure of the HISA Rules demonstrates that the Arbitrator’s ruling on Rule
3228(d) was erroneous:
The Protocol has intentionally divided the regulation of Anti-Doping Rule Violations [§§
3210-60] and Controlled Medication Rule Violations [§§ 3310-3360] into separate
chapters to reflect the Authority’s view that the treatment of such violations should be
separate and distinct from each other. Anti-Doping Rule Violations involve Banned
Substances or Banned Methods, which are substances/methods that should never be in a
horse’s system or used on a horse as they serve no legitimate treatment purpose.
Conversely, Controlled Medication Rule Violations involve Controlled Medication
Substances or Controlled Medication Methods, which are substances/methods that have
been determined to have appropriate and therapeutic purposes, and so may be used
outside the Race Period, except if specified otherwise.
...
[T]his is a vital distinction, and the Protocol recognizes the distinction in the penalty
structure and other provisions throughout the Protocol.
88 Fed. Reg. 5071, 5082 (emphasis added); see also id. at 5073.
In consequence, after finding four Banned Substances in Dr. Shell’s possession, HIWU
had the authority to charge separate violations under Rule 3228(d). As discussed further below,
HIWU prosecuted the case on this basis. Contrary to Dr. Shell’s argument, this is not a “new”
argument or theory, raised by the Authority only “after the close of the record.” AOBr. at 15. See
pp. 53-55 below; AB2 at 5961, 5962, 5963-66 (HIWU’s Closing Written Submissions), 6611-12
(¶ 7.6).
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Despite Rule 3228(d)’s charging authority, however, an over-arching consideration is
inescapable. HIWU’s September 2023 search, identifying four Banned Substances in Dr. Shell’s
possession, arises from a single course of conduct; it does not reflect multiple violations carried
out at different times. On these facts, whether each of the four alleged ADRVs can properly be
charged and proven individually needs to be assessed.
HIWU v. Puype, JAMS Case No. 1501000973 (Dec. 12, 2024), is instructive. As here, a
single HIWU search at a Santa Anita Park barn disclosed two Banned Substances in the
possession of Puype, a trainer and Covered Person. HIWU charged Puype with two ADRVs,
which it proved at the arbitration hearing. Id. ¶ 8.9. The arbitrator, however, declined to sanction
Puype for “two violations that arose from the same investigation . . . .” Id. ¶ 8.36. Although the
arbitrator reached this conclusion in rejecting HIWU’s request to impose consecutive periods of
ineligibility under Rule 3223(2)(c), the arbitrator applied it generally, imposing only one set of
sanctions. Id. ¶ 9.1(a). I consider the matter of consecutive sanctions, which the Authority seeks
against Dr. Shell, below. Suffice it here to say that Puype’s ruling accords with many decisions
in the sports world globally.
“[I]t is a widely accepted general principle of sports law that the severity of a penalty
must be in proportion with the seriousness of the infringement.” W. v. FEI, CAS 99/A/246, at
¶ 31 (May 11, 2000). Thus, “the substance and the possible application of the [proportionality]
principle are not in doubt.” Klein v. ASADA, CAS A4/2016, at ¶ 232 (May 25, 2017). 29
Accordingly, multiple ADRVs, based on a common set of facts, are often treated as a single
29
See also Sport Lisboa e Benfica SAD v. FIFA, CAS 2021/A/8076, at ¶ 131 (Oct. 10, 2022) (reducing a “manifestly
disproportionate” sanction); I. v. FIA, CAS 2010/A/2268, at ¶¶ 133-43 (Sept. 15, 2011) (discussing arbitration
proportionality rulings); Puerta v. ITF, CAS 2006/A/1025, at ¶ 88 (July 12, 2006) (“[T]he war against doping . . . is
a hard war, and to fight it requires eternal vigilance, but no matter how hard the war, it is incumbent on those who
wage it to avoid, so far as is possible, exacting unjust and disproportionate retribution.”).
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violation for sanctions purposes. See, e.g., World Athletics v. Oduduru, SR/171/2023, ¶ 117
(Sept. 18, 2023) (possession, and use or attempted use, of multiple prohibited substances found
during an apartment search); Decision of The Athletics Integrity Unit in the Case of Khamidova
¶ 24 (Mar. 6, 2024) (multiple violations involving different drugs “were committed
simultaneous”). 30
Dr. Shell has practiced veterinary medicine for more than 37 years. When HIWU
discovered Banned Substances in his Possession, it charged him as a “first-time” offender. AB1
at 440. There is no dispute that, until these proceedings, he had never been sanctioned by a
veterinary board or racing authority in either Ohio or West Virginia. AB2 at 6677-68 (Shell).
The four ADRVs here arise from his professed, but mistaken, belief concerning his ability to
possess Banned Substances for his farm practice or use in West Virginia. Imposing consecutive
Ineligibility periods and cumulative fines on him for each of the four Possession violations
would be grossly disproportionate to the misconduct underlying this case. For Dr. Shell, a
longtime veterinarian nearing retirement, cumulative Ineligibility of eight years would be
tantamount to permanent expulsion from practicing in the HISA-covered racing industry. A
$100,000 fine, for possessing four Banned Substances discovered during a single search, would
similarly inflict undue financial burden.
The Arbitrator rejected HIWU’s effort to impose individual sanctions for each ADRV,
and so do I.
30
See also Salazar and Brown v. USADA, CAS 2019/A/6530 & 6531, at ¶¶ 444, 466 (Sept. 15, 2021) (multiple
tampering violations); IWF v. Beytula, 2022/ADD/49, at ¶¶ 115 & 117 (Nov. 7, 2023) (tampering and failure to
submit to sample collection were “considered together as one single violation”); Matter of Vogg, FEI 2022/HD02, at
¶ xxvi, n.16 (Dec. 20, 2022) (presence and use of single substance “considered together as one single first
violation”) (heavily redacted); FINA Proceedings against Villanueva, ¶¶ 5.11-.13 (Aug. 19, 2020) (six presence
violations involving the same substance, collection on different days, were treated as a single violation).
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B.
Consecutive Ineligibility Based on the Administration Case Sanction
The Arbitrator ruled that Dr. Shell’s 21-month Ineligibility period should begin on
October 3, 2023, the date his Provisional Suspension began. AB2 at 6621 (¶ 7.64). This
determination means, in effect, that Dr. Shell’s Ineligibility period runs concurrently with—not
consecutive to—the Ineligibility period imposed in the Administration Case. The Authority
asserts this was “a clear error of judgment,” as it did not account for the fact that, as a result of
the Administration Case, Dr. Shell “is already serving a period of ineligibility that ends on
January 7, 2026 . . . .” AuOBr. at 13; see AB1 at 138. Dr. Shell contends that HIWU raised this
argument after the arbitration hearing had closed, and that it may not properly be raised in this
review proceeding. AOBr. at 15. I agree with Dr. Shell.
As support for its “consecutive Ineligibility” argument, the Authority cites Rule
3223(c)(2), which provides: “Where a Covered Person is already serving a period of Ineligibility
for another violation of the Protocol, any new period of Ineligibility shall start to run the day
after the original period of Ineligibility ends.” In resolving whether the Authority’s argument is
reviewable, additional discussion of HIWU’s position in the arbitration proceedings is
appropriate.
HIWU’s EAD Charge Letter, issued in October 2023, stated its position on sanctions:
Our records indicate that you have no prior Anti-Doping Rule Violations. Therefore,
HIWU is seeking imposition of the following proposed Consequences for three first-time
Violations of ADMC Program Rule 3214(a):
x
A period of Ineligibility of six years (two years per violation), for you as a
Covered Person, beginning on October 5, 2023, the date you received notice of
your Provisional Suspension (ADMC Program Rule 3223) (Protocol);
x
A fine of USD $75,000 ($25,000 per violation) and payment of some or all of the
adjudication costs and HIWU’s legal costs (ADMC Program Rule 3223)
(Protocol) . . . .
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AB1 at 439, 440 (emphasis added). Thus, HIWU sought sanctions for each individual charge,
including consecutive Ineligibility periods and cumulative fines. HIWU’s position was based on
Rule 3228(d), discussed above. See AB1 at 453 (¶ 7). The Charge Letter referred only to three
ADRVs, although later HIWU charged and consolidated for hearing the fourth violation for
Possession of Pitcher Plant. See AB1 at 607, 6497 (¶ 3.3).
HIWU’s position did not change. In its pre-hearing brief to the arbitrator, HIWU sought:
a. A period of Ineligibility of six (6) years for Dr. Shell as a Covered Person, beginning
on October 5, 2023, the date the Provisional Suspension was imposed;
b. A fine of USD $75,000.00 and payment of some or all of the adjudication costs . . . .”
AB1 at 449, 469 (¶ 54). HIWU’s pre-hearing reply brief (after the Pitcher Plant consolidation)
was similar, seeking:
a. A period of Ineligibility of ten (10) years for Dr. Shell as a Covered Person (two (2)
years for each violation and two (2) years for Aggravating Circumstances), beginning on
the date a decision is rendered in this case;
b. A Fine of USD $110,000.00 ($25,000.00 for each violation and $10,000 for
Aggravating Circumstances) and payment of some or all of the adjudication costs . . . .
AB1 at 2453, 2474.
The arbitration hearing was held during April 2024. AB2 at 5922 (¶ 12), 6636, 7035,
7338. HIWU’s closing submissions were filed with the Arbitrator in late June 2024. AB2 at
5916.
Meanwhile, weeks earlier in June, the arbitrator in the Administration Case against Dr.
Shell issued his decision, which resulted in a single two-year Ineligibility period, despite Dr.
Shell’s multiple injections of the same substance. AB2 at 6494, 6530. HIWU’s subsequent
closing submissions made no explicit mention of consecutive periods of Ineligibility, although
HIWU did write that the sanctions “for a first ADRV of ADMC Program Rule 3214(a)
(Possession) for the Banned Substances each include: (i) a period of Ineligibility of two (2) years
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for the Covered Person, [and] (ii) a fine of up to $25,000, . . . .” AB2 at 5958 (emphasis added).
In its closing submissions, HIWU discussed the Administration Case decision for
purposes unrelated to whether the Ineligibility period in that case triggered operation of Rule
3223(c)(2)’s consecutive sanctions provision—the very point the Authority now seeks to argue
in this review proceeding. See AB2 at 5958-62 (¶¶ 85, 87, 93, 94 & nn.77-79, 84). HIWU also
submitted the full decision in the Administration Case in its closing book of evidence and
authorities. AB2 at 6494.
Following the parties’ post-hearing submissions, in August 2024 the Arbitrator heard the
parties’ closing statements. HIWU did not raise consecutive sanctions at all; nor was the decision
in the Administration Case—issued two months earlier—mentioned. AB2 at 7603-12. A few
days later, the Arbitrator issued a Request for Additional Authority:
HIWU asserts that under ADMC Program Rule 3228(d), possession of each of the
Banned Substances at issue in this proceeding constitutes a separate ADRV and,
therefore, seeks the imposition of the Consequences [i.e., sanctions] as set out in ADMC
Program Rule 3223, for each separate ADRV, i.e., four times the period of ineligibility
and financial penalty.”
AB2 at 6571 (emphasis added). That was, to reiterate, HIWU’s consistent argument in the
arbitration.
The Arbitrator sought further guidance on Rule 3228(d) applicability. She:
(a) emphasized Dr. Shell’s argument that “Rule 3228(d) does not permit HIWU to charge
several counts, for several substances recovered at the same time, as part of one
incident”;
(b) noted HIWU’s post-hearing discussion of the decision in the Administration Case,
which, HIWU “cite[d] . . . for a different proposition, namely a situation in which the
multiple administrations were all with regard to the same substance”; and
(c) questioned whether “that decision appl[ies] to this case . . . .”
AB2 at 6571-72. The Arbitrator’s Request did not mention Rule 3223(c)(2) or any issue of
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consecutive Ineligibility periods arising from the Ineligibility sanction in the Administration
Case. HIWU still hadn’t raised the issue.
HIWU responded to the Arbitrator’s Request, arguing that “each Banned Substance
constitutes a separate ADRV . . . .” AB2 at 6577. Again, HIWU said nothing about consecutive
Ineligibility periods, based on the Administration Case decision. AB2 at 6577.
During the closing statements and throughout the post-hearing briefing and Request for
Additional Authorities, Dr. Shell did not address whether Rule 3223(c)(2) permitted imposing a
consecutive Ineligibility period resulting from the decision in the Administration Case. HIWU
simply had not raised any such issue.
The Arbitrator then issued her final decision. AB2 at 6588. Referring to HIWU’s
contentions, the Arbitrator quoted from HIWU’s pre-hearing reply brief:
HIWU now seeks the imposition of the following Consequences:
a. A period of Ineligibility of ten (10) years for Dr. Shell as a Covered Person (two (2)
years for each violation and two (2) years for Aggravating Circumstances), beginning on
the date a decision is rendered in this case;
b. A Fine of USD $110,000.00 ($25,000.00 for each violation and $10,000 for
Aggravating Circumstances) and payment of some or all of the adjudication costs . . . .
AB2 at 6611 (¶ 6.81). The Arbitrator reiterated the point in her analysis:
HIWU relied upon Rule 3228(d) in prosecuting this case, treating the charged Banned
Substances as separate violations, and seeking separate the imposition of the
Consequences, as set out in ADMC Program Rule 3223, for each separate ADRV, i.e.,
four times the period of ineligibility and financial penalty, to run sequentially.
AB2 at 6621 (¶ 7.67).
The Arbitrator rejected HIWU’s argument that each Banned Substance ADRV gave rise
to a consecutive period of Ineligibility:
7.72 HIWU also relies upon Rule 3223(c)(2) to support consecutive punishments for
the four violations. Rule 3223(c)(2) provides: “Ineligibility and Financial Penalties for
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Covered Persons . . . (c) Commencement of the period of Ineligibility for a Covered
Person. . . . (2) Where a Covered Person is already serving a period of Ineligibility for
another violation of the Protocol, any new period of Ineligibility shall start to run the day
after the original period of Ineligibility ends.”
7.73 The Arbitrator is not convinced by HIWU’s argument that Rule 3223(c)(2)
supports consecutive punishments based on its language. HIWU did not introduce
evidence that Dr. Shell was “already” serving a period of Ineligibility that pre-dated the
imposition of the subsequent period of Ineligibility to which it refers. The date of the
Provisional Suspension in this case was October 5, 2023, and HIWU identified these
charges as first-time antidoping violations.
7.74 Accordingly, these are charged and ruled upon as first-time anti-doping violations
for Dr. Shell that will issue simultaneously when this Final Decision issues.
AB2 at 6621-22 (ellipses in original). Not surprisingly, the Arbitrator’s ruling did not mention
consecutive Ineligibility based on the sanction in the Administration Case. HIWU had never
raised the issue.
After the Arbitrator’s decision, HIWU made a written request, citing Rule 7380, “to
address a computational error . . . with respect to the period of Ineligibility to be imposed on Dr.
Shell.” AB2 at 6624. 31 The “computational error,” HIWU argued, was the Arbitrator’s
determination to impose a concurrent, rather than consecutive, Ineligibility period on Dr. Shell.
HIWU based its request to modify on the decision in the Administration Case, which “declared
Dr. Shell Ineligible from January 8, 2024 through January 7, 2026. The award in the
Administration Case was issued after the evidentiary hearing in this matter closed, but before
closing submissions.” AB2 at 6624. HIWU therefore argued—for the very first time—that:
The start date for Dr. Shell’s period of Ineligibility in the present matter should be
January 8, 2026, and he should receive credit for the two-day and three-month
Provisional Suspension (“Credit Period”) he has served against the 21-month period of
Ineligibility, such that his period of Ineligibility expires on July 5, 2027.
AB2 at 6625. In other words, HIWU sought—and in this review proceeding the Authority
31
In pertinent part, Rule 7380 provides that, within seven days, “any party . . . may request the [arbitrator] to correct
any clerical, typographical, or computational errors in the final decision.”
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seeks—to add another roughly 18 months to Dr. Shell’s period of Ineligibility—the so-called
“computational error.”
Dr. Shell opposed HIWU’s proposed lengthening of the Ineligibility period, and the
Arbitrator rejected HIWU’s modification request as untimely:
HIWU raises this Rule [3323(c)(2)] for the first time in this arbitration, in this Request,
submitted after the Final Decision, notwithstanding that HIWU was aware of the
potential applicability of the Rule prior to submitting its post-Hearing briefing (June 28,
2024) and closing argument (August 7, 2024).
AB2 at 6631. The Arbitrator also noted that, while HIWU’s post-closing submissions referred to
the Administration Case decision:
HIWU did not cite the Shell Administration Case for the position that Dr. Shell was
already serving a period of Ineligibility. Had that issue been timely raised, the Parties
could have briefed it.
…
HIWU had not raised the fact that it had imposed a period of Ineligibility, and the
Arbitrator has no way of knowing whether the period of Ineligibility had actually begun,
or had been appealed, or otherwise was or was not in effect.
AB2 at 6631, 6632.
The Arbitrator’s decision to decline to modify the sanctions imposed so as to permit a
consecutive, instead of concurrent, period of Ineligibility on Dr. Shell does not bind me on this
de novo review. An ALJ is authorized to “affirm, reverse, modify, set aside, or remand for
further proceedings, in whole or in part” and “make any finding or conclusion that, in [its]
judgement [sic] . . . is proper and based on the record.” 15 U.S.C. § 3058(b)(3)(A); FTC Rule
1.146(d)(3). However, ALJ de novo review authority should also be considered in reference to
FTC Rule 1.146(a)(1), which provides that, “[e]xcept for good cause shown, no assignment of
error . . . may rely on any question of fact or law not presented to the Authority [in the
arbitration].”
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Certainly, once the arbitrator in the Administration Case issued his June 2024 decision,
HIWU was well-aware that Dr. Shell was subject to a period of Ineligibility, and that Rule
3223(c)(2) could be applicable (or perhaps not) to any sanction of Ineligibility imposed in this
case. Yet, while calling attention to the Administration Case decision in its post-closing
submissions, and arguing that decision on other points, HIWU did not raise its applicability
under Rule 3223(c)(2). Thereafter, it closed to the Arbitrator, again without arguing the decision
in the Administration Case, issued months earlier, as a basis for consecutive periods of
Ineligibility. In sum, HIWU did not raise the consecutive Ineligibility issue until after the
Arbitrator had issued her decision. And, indeed, it then did so “based upon a Rule not previously
cited or briefed or argued,” and despite the Arbitrator’s decision “in reliance upon HIWU’s
positions taken throughout th[e] arbitration . . . .” AB2 at 6632.
HIWU’s omissions are inexcusable. Throughout the arbitration, HIWU repeatedly took
the position that consecutive sanctions for each of the four charges of Possession it had asserted
were appropriate under Rule 3228(d). Then, after the arbitration decision issued, HIWU changed
course, asserting that the Administration Case decision required consecutive sanctions in this
case under Rule 3223(c)(2). Fundamental fairness to Dr. Shell—as well as to the arbitration
process itself—dictates that HIWU should have presented this changed position promptly to the
Arbitrator before her decision issued.
Again, HIWU’s conduct binds the Authority on this review, as “both HIWU and the
Authority are bound by [the arbitrator’s decision] . . . . Both entities are . . . legally bound to
impose the resulting sanctions and have no discretion otherwise.” AB1 at 318. See also AB1 at
331 (“The Authority is legally bound to impose civil sanctions determined through arbitration.”).
The Authority has failed to show “good cause,” required under Rule 1.146(d)(3), to secure
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review of the applicability of the Administration Case decision to the Ineligibility period
imposed on Dr. Shell. Equally and independently important, estoppel against the Authority is
properly applied here. HIWU repeatedly took a consistent position in the arbitration, on which
Dr. Shell and the Arbitrator both relied—only to belatedly change it. See pp. 53-54.
Therefore, in my discretion, I decline the Authority’s invitation to revisit the Arbitrator’s
ruling imposing a concurrent period of Ineligibility.
C.
Applying the No Fault or Negligence (NF) and No Significant Fault or
Negligence (NSF) Analyses to the Sanctions
1.
Overview
To eliminate entirely the sanctions that may be imposed for an ADRV, Dr. Shell has the
burden of proving “no fault or negligence” (“NF”) on his part. Rule 3224(a). Failing proof of
NF, Dr. Shell may reduce the sanctions by proving “no significant fault or negligence” (“NSF”).
Rule 3225(a); See In re Poole, FTC No. 9417 at 10-11 (ALJ Decision on Application for
Review, Nov. 13, 2023), https://www.ftc.gov/system/files/ftc_gov/pdf/d09417administrative_law_judge_decision_on_application_for_review_-_public.pdf); In re Lewis, FTC
No. 9434 at 12-13 (https://www.ftc.gov/system/files/ftc_gov/pdf/611976.2024.10.17_
administrative_law_judge_decision_on_application_for_review.pdf).
2.
NF: Applying Rule 3324
To establish no fault or negligence for a Possession ADRV, the ADMC Rules require that
the Covered Person establish “that he or she did not know or suspect, and could not reasonably
have known or suspected, even with the exercise of utmost caution,” that he or she had
committed the violation. Rule 1020 (definitions). Under Rule 3224(b), an NF finding “only
applies in exceptional circumstances.”
It is undisputed that Dr. Shell knew each of the substances that HIWU’s search found
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were Banned Substances under the ADMC Program. Dr. Shell was also aware, in contrast to
HIWU, that besides practicing in Ohio, he also practiced in West Virginia, and that his practice
in both States included non-Covered Horses on farms. He also testified that, after hearing Dr.
Scollay’s Mahoning presentation, he understood that:
(1) He “was prohibited to possess or prescribed [sic] banned substances to a covered
horse.” AB2 at 6815 (Shell).
(2) The prohibition on Possession “was a really important rule because it was new and it
was a change to the way things had been done.” AB2 at 6815.
(3) Even though he had a farm practice, “HIWU would have the ability to investigate any
possession of a banned substance,” and that he would “have to be able to support why [he] had
medication on [his] truck,” which mean relying on records from his practice. AB2 at 6821, 682526.
Dr. Shell also knew of the federal court order barring enforcement of HISA in West
Virginia, but never sought advice on whether it might be problematic for him to possess Banned
Substances in his trucks, or at HISA-covered facilities, in Ohio to treat thoroughbred racehorses
located in West Virgina. AB2 at 6697-98, 6820-21, 6823, 6824-25, 6827-28 (Shell).
Nonetheless, Dr. Shell had Possession of three Banned Substances—Carolina Gold,
Pitcher Plant, and Isoxsuprine—on his trucks and in his storage facility at Thistledown even
though each of them:
(1) was not needed for urgent or emergency use;
(2) was not FDA-approved;
(3) was not essential to treat even non-Covered Horses, inasmuch as FDA-approved
substitutes were available; and
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(4) was prohibited at locations regulated by the West Virginia Racing Rules, as well as by
the HISA Rules.
On these facts alone, Dr. Shell has failed to meet his burden of showing he exercised the
“utmost caution” that a finding of NF requires. This is not a “truly exceptional” case. See, e.g.,
FIS v. Johaug, CAS 2017/A/5015 & 5110, ¶ 190 (Aug. 21, 2017) (“[A]thletes have a duty to
cross-check assurances given by a doctor even where such a doctor is a sports specialist.”); D. v.
FINA, CAS 2002/A/432, at ¶ 43 (May 27, 2003) (athlete “clearly acted with negligence” by
failing to “quer[y] both his physician and his coach” regarding an injected food supplement). 32
Rule 3224 does not apply. Elimination of any sanction is unwarranted.
3.
NSF: Applying Rule 3225
The stringent “utmost caution” standard that Dr. Shell must meet to show NF is relaxed
when the focus shifts to NSF. To demonstrate NSF, the Covered Person must establish that “his
or her fault or negligence, when viewed in the totality of the circumstances and taking into
account the criteria for No Fault or Negligence, was not significant in relationship to the
[ADRV] . . . in question.” HISA Rule 1020 (Definitions) (emphasis added). If a Covered Person
establishes NSF for the ADRV charged, “then . . . the period of Ineligibility shall be fixed
between 3 months and 2 years, depending on the Covered Person’s degree of Fault.” HISA Rule
3225(a). 33
32
See also Stroman v. FEI, CAS 2013/A/3318, at ¶¶ 70-74 (Mar. 14, 2014) (Equestrian competitor who permitted an
unknown substance, provided by a veterinarian, to be injected without further inquiry, failed to exercise utmost
caution.); Carriere Zwei, FEI Tribunal Decision, Case No. 2007/08, at ¶ 4.1x (Aug. 10, 2007) (despite assurances of
a stable veterinarian that a supplement with a “suspicious name” would not increase testosterone level, an equestrian
rider “acted with gross negligence and disregard to the risks” by not “receiving written advices [sic] from renowned
veterinarians”).
33
See also Al Nahyan v. FEI, 2014/A/3591, at ¶ 237 (8 June 2015) (“the exercise [in analyzing NSF] is essentially
one of considering the possible application of the defence in the circumstances that led to the violation.”); Ali
Alabbar v. FEI, CAS 2013/A/3124, at ¶ 12.17(1) (“Significant fault or negligence must mean something different
from (mere) fault of negligence. Otherwise one or other of the concepts would be redundant.”).
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No similar HISA Rule provision applies fault principles to determine the appropriate
financial penalties under HISA Rule 3223(b). The amount of the fine is discretionary, allowing
for a first offense an amount “up to” $25,000 or twenty-five percent of the purse, whichever is
greater, and payment of “some or all” of adjudication and legal costs. HISA Rule 3223(b).
However, the degree of fault, among other facts and circumstances, may be considered in
exercising discretion to determine an appropriate fine. See In re Poole, FTC No. 9417 at 10-11;
In re Lewis, FTC No. 9434 at 8-9.
Analysis of NSF in HISA cases takes account of the three-tiered approach applied in Cilic
v. ITF, CAS 2013/A/3327 (Apr. 11, 2014), which adjusts the maximum period of ineligibility
and appropriate fines where NSF was shown. See, e.g., HIWU v. Poole, JAMS Case No.
1501000576, at ¶¶ 7.16-.20 (Aug. 8, 2023), aff’d, No. 9417, at 6-8, 11 (ALJ Nov. 13, 2023)
(discussing the arbitrator’s three-tiered analysis, and holding de novo that the sanctions imposed
were “reasonable, and rationally related to Appellant’s degree of fault”); AOBr. at 13; AuOBr. at
12-13. Under the Cilic framework, the NSF analysis requires consideration of both “objective”
and “subjective” elements of fault:
The objective element describes what standard of care could have been expected
from a reasonable person in the athlete’s situation. The subjective element
describes what could have been expected from that athlete, in light of his personal
capacities.
Cilic, CAS 2013/A/3327, at ¶ 71. The conclusion of the analysis places the offender in one of
three ineligibility ranges, depending on degree of fault. As adapted for HISA cases under Rule
3225(a), the tiers are:
a. Slight or Insignificant Fault – three (3) to ten (10) months;
b. Moderate Fault – ten (10) to seventeen (17) months; and
c. Significant Fault – seventeen (17) to twenty-four (24) months.
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Poole, JAMS Case No. 1501000576, at ¶ 7.17, aff’d, FTC No. 9417, at 7; see also Cilic, CAS
2013/A/3327, at ¶ 69.
a.
Objective Considerations
HISA’s ADMC Program represented a change in the horseracing industry nationwide.
Various ADRVs and defenses were defined, and a Prohibited List was created for designated
substances. Stringent sanctions for Possession of Banned Substances, among other ADRVs, were
adopted. Accordingly, prior to the ADMC Program’s effective date in May 2023, Dr. Scollay
made presentations at more than 30 racetracks throughout the country to educate industry
participants, including veterinarians such as Dr. Shell, on the new regulatory regime. AB2 at
7059-62 (Scollay).
Dr. Scollay’s presentations included discussion not only of Banned Substances, but also
of the Possession ADRV’s application to Veterinarians. See, e.g., AB1 at 2589-90 (Banned
Substances slides); AB2 at 7063-68 (Scollay). As discussed earlier, Dr. Scollay noted that while a
veterinarian with a farm practice could use Banned Substances in that practice, there were limits:
“we have the ability to investigate, if the story gets a little weird or a little extreme, you’re going
to get more than a raised eyebrow.” AB2 at 7117-18 (Scollay); see also AB2 at 7067 (Scollay).
The defense of compelling justification where industry participants, such as veterinarians,
handled Covered and non-Covered Horses was discussed. Dr. Scollay explained that the HISA
Rules did not apply to non-Covered horses. However, Veterinarians would have to show a
justification, including using proper labeling and documentation. AB2 at 7065-67, 7069-70,
7073-74, 7081-82, 7118, 7133-35, 7152 (Scollay).
The advent of the ADMC Program marked a time for a reasonable Veterinarian to take
stock of their practices and existing routines to assure ADMC Program compliance—particularly
where the Veterinarian treated both thoroughbred racehorse and farm horses. Although Banned
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Substances were subject to the ADMC Program, a reasonable Veterinarian with a farm practice
would recognize the possible need to accommodate use of Banned Substances to the HISA
Rules—and to be able to show compliance if HIWU questioned possession or use. The existence
of the Authority’s Prohibited Substances List would have been of particular interest. A reasonable
Veterinarian would have determined whether substances in use were on that List, and whether
switching to an available permissible substance might be prudent.
Simply put, an ounce of prevention is worth a pound of cure.
Dr. Scollay’s presentations offered no guidance on the special circumstance of West
Virginia—where HISA could not be legally enforced. Therefore, a reasonable Ohio Veterinarian
with a West Virginia practice involving thoroughbred racehorses would have an even greater
incentive to take precautions. Besides assessing existing office practice for potential adjustments,
a reasonable Veterinarian with a West Virginia practice could be expected to inquire further for
guidance from the Authority or HIWU, the West Virginia Racing Commission, or perhaps an
attorney.
Knowing a change was coming, Dr. Shell took some action to educate himself. AB2 at
6687-68, 6789-90 (Shell). But there is no evidence that Dr. Shell undertook any sort of practice
assessment or sought guidance regarding his practice in West Virginia. There is no evidence that
Dr. Shell looked, for example, at his ordering and recordkeeping practices to make sure he could
justify his possession and use of Banned Substances in circumstances not subject to HISA Rules.
Similarly, despite his active West Virginia practice, he did not ask anyone specifically on the
effect, if any, of the federal court order on his dealings with thoroughbred racehorses or their
trainers in West Virginia. Nor is there any evidence that he considered FDA-approved
alternatives to substances he used that were to become Banned Substances.
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Although his typical practice was to service Thistledown from Monday through
Thursday, and West Virginia on Fridays, there is no evidence he adjusted the contents of his
trucks or his Ohio storage facility at Thistledown to avoid Possession of Banned Substances. See
AB2 at 6675, 6908 (Shell). Similarly, there is no evidence that any comparable adjustments took
place for Dr. Hippie, who handled a majority of the Ohio farm practice, while also servicing
Thistledown. AB2 at 6680 (Shell).
Perhaps temporarily inconvenient, adjustments like this were feasible for a reasonable
Veterinarian. Since being charged in this case, Dr. Shell has improved his ordering and
recordkeeping practices. AB2 at 6864, 6933-34 (Shell). There was, Dr. Shell testified, “a record
keeping issue that I needed to correct? Absolutely. Have we corrected it? Absolutely.” AB2 at
6931 (Shell); see also AB2 at 7026-29 (Duhon). His two trucks now have “two sets of different
drugs so that we can not only care properly for our clients at the racetrack . . . as well as our
clients on the farm.” AB2 at 6771-72; see also AB2 at 6999-7001 (Shell). Despite the changes,
Dr. Shell is able to discharge his ethical obligations as a veterinarian. AB2 at 7001-03 (Shell).
Prior to the ADMC Program taking effect, a reasonable Veterinarian comparable to Dr.
Shell had both the incentive and ability to take action such as this. Objective considerations do
not support a sanctions reduction under Rule 3225.
b.
Subjective Considerations
The facts discussed in the NF analysis above are relevant to Dr. Shell’s individual
circumstances—the subjective part of the NSF inquiry—and I incorporate them here. Additional
facts bear mention.
Dr. Shell testified that after attending Dr. Scollay’s Mahoning presentation, he was
“antsy” nonetheless. He sought further guidance regarding his farm practice. AB2 at 6693-94,
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6822-23 (Shell). In the ensuing follow-up conversation, according to Dr. Shell, Dr. Scollay told
him “if we had a large farm practice and had non-covered horses, that we were allowed to carry
the banned substance.” AB2 at 6695; see also AB2 at 6816, 6823, 6828 (Shell). Dr. Scollay
added: “[Y]ou must have records indicating that you are using the banned medication.” AB2 at
6825 (Shell). Dr. Shell “assume[d] every record I have would be sufficient,” and therefore did
not ask what type of record would be needed. AB2 at 6826 (Shell).
Thereafter, Ms. Naylor, a Randall Equine veterinarian, asked Dr. Scollay “to confirm that
banned substances legal in non-covered horses . . . were allowed to be carried by veterinarians
that practice off track as well.” AB2 at 6118. After quoting Rule 3214(a)’s prohibition of Banned
Substances “unless there is compelling justification,” Dr. Scollay wrote:
The regulation above provides for the ability to justify the possession of Banned
Substances. To the extent that your practice provides veterinary care to nonCovered horses—and can demonstrate (through records, day sheets, etc.) the need
to carry those substances you can establish compelling justification.
AB2 at 6118. Dr. Shell received and read a copy of the email “around the time it was sent in
June.” AB2 at 6804, 6807 (Shell). He understood that to justify Possession, he would need
records such as “day sheets” and “veterinarian patient records.” AB2 at 6807-08, 6812 (Shell). 34
Despite what he learned at Mahoning and from the Randall Equine email exchange, there
is no evidence Dr. Shell took any steps to assess his ability to demonstrate compelling
justification using the documents prepared and maintained in his practice. There is no evidence
34
A “day sheet” is:
[A] record of the interactions that the veterinarian has with respective horses, either scheduled or
added on the ‘while you’re here, doc’, kind of situation. That day sheet can also record specific
treatments or diagnostics for the purpose of the office administrator setting up the billing, and
perhaps can also be sort of a cue for the veterinarian who then enters the information into the . . .
patient’s medical record.
AB2 at 7074 (Scollay).
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that Dr. Shell changed his substance ordering or recordkeeping practices in any way. Dr. Shell
may be presumed to know the state of his practice routines and recordkeeping. Once the ADMC
Program took effect, he could not reasonably have thought, for example, that listing an arbitrary
horse’s name on a bulk order would, without more, amount to a sufficiently reliable record to
defend against Possession of a Banned Substance charge, such as that brought here.
Likewise, as noted above, there is no evidence Dr. Shell considered whether to adjust his
practice to take account of the special circumstances of West Virginia. He simply “made the
assumption that a racehorse in West Virginia was not covered.” AB2 at 6821 (Shell). Therefore,
Dr. Shell incorrectly believed—but took no steps to confirm—that he could possess Banned
Substances in Ohio to use in his West Virginia practice, so long as he administered or dispensed
the Banned Substance in West Virginia, outside of HISA jurisdiction. See AB2 at 6823-25, 682728 (Shell).
Dr. Shell knew that if he was found in possession of Banned Substances in Ohio, at the
very least he could be required to explain their use in West Virginia. He therefore should have
been particularly careful about his recordkeeping involving his practice in that State, but was not.
Dr. Scollay’s remarks simply do not absolve Dr. Shell of responsibility to both act and inquire
further to assure that his practice complied with his ADMC Program obligations. By way of
analogy, numerous sports law panels have rejected an NSF argument where the athlete used a
drug prescribed by their doctor, even when “a specialist
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.