Petition for Writ of Certiorari — Bill H. Walmsley, et al., Petitioners v. Federal Trade Commission, et al.

No. __________

In the Supreme Court of the United States

____________________

BILL H. WALMSLEY; JON MOSS; IOWA HORSEMEN’S

BENEVOLENT AND PROTECTIVE ASSOCIATION,

Petitioners,

v.

FEDERAL TRADE COMMISSION, ET AL.,

Respondents.

____________________

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Eighth Circuit

____________________

PETITION FOR A WRIT OF CERTIORARI

____________________

BRETT D. WATSON

Brett D. Watson, Attorney

at Law, PLLC

P.O. Box 707

Searcy, AR 72145

(501) 281-2468

AUSTIN L. RAYNOR

Counsel of Record

FRANK D. GARRISON

JOSHUA M. ROBBINS

Pacific Legal Foundation

3100 Clarendon Blvd.,

Suite 1000

Arlington, VA 22201

(202) 888-6881

araynor@pacificlegal.org

Counsel for Petitioners

i

QUESTIONS PRESENTED

The Horseracing Integrity and Safety Act, 15

U.S.C. §§ 3051-3060, delegates broad enforcement

powers over regulated parties in the horseracing

industry to a private corporation, the Horseracing

Integrity and Safety Authority. Among other things,

the statute empowers the Authority to conduct

investigations, impose sanctions, and sue in federal

court. §§ 3054, 3057. In addition, the Act grants the

Authority broad rulemaking power. The Act requires

the Federal Trade Commission to approve rules

proposed by the Authority even if it disagrees with

those rules as a policy matter, so long as they are

“consistent” with the Act and the FTC’s own

regulations, § 3053(c)(2), though the Act also grants

the FTC the after-the-fact power to “abrogate, add to,

and modify” Authority rules, § 3053(e).

The questions presented are:

1. Whether the Act unlawfully

enforcement power to the Authority.

delegates

2. Whether the Act unlawfully

rulemaking power to the Authority.1

delegates

1 Two other cases currently pending before the Court present

substantially similar questions. See Horseracing Integrity and

Safety Auth., Inc. v. Nat’l Horsemen’s Benevolent and Protective

Ass’n, No. 24A287 (stay app. filed Sept. 19, 2024); Oklahoma v.

United States, No. 23-402 (pet. filed Oct. 13, 2023).

ii

PARTIES TO THE PROCEEDING AND

RULE 29.6 STATEMENT

Petitioners were plaintiffs in the district court.

They are Bill Walmsley, Jon Moss, and the Iowa

Horsemen’s Benevolent and Protective Association.

Respondents were defendants in the district

court. They are the Federal Trade Commission; Lina

M. Khan, Chair, Federal Trade Commission; Rebecca

Kelly Slaughter, Commissioner, Federal Trade

Commission; Melissa Holyoak, Commissioner,

Federal Trade Commission; Alvaro Bedoya,

Commissioner, Federal Trade Commission; the

Horseracing Integrity and Safety Authority; Charles

Scheeler; Steve Beshear; Adolpho Birch; Leonard

Coleman; Joseph De Francis; Ellen McClain; Susan

Stover; Bill Thomason; and D.G. Van Clief.2

Messrs. Walmsley and Moss are natural persons.

The Iowa Horsemen’s Benevolent and Protective

Association does not have a parent corporation, and

no publicly held corporation owns 10% or more of its

stock.

2 Christine Wilson, former Commissioner of the Federal Trade

Commission, was a defendant in the district court but has since

been substituted.

iii

STATEMENT OF RELATED CASES

These proceedings are directly related to the

above-captioned case under Rule 14.1(b)(iii):

Walmsley v. Federal Trade Comm’n, No. 23-2687

(8th Cir. Sept. 20, 2024)

Walmsley v. Federal Trade Comm’n, No. 23-81

(E.D. Ark. July 11, 2023)

iv

TABLE OF CONTENTS

QUESTIONS PRESENTED ........................................ i

PARTIES TO THE PROCEEDING

AND RULE 29.6 STATEMENT ................................. ii

STATEMENT OF RELATED CASES ...................... iii

TABLE OF AUTHORITIES ...................................... vi

PETITION FOR A WRIT OF CERTIORARI ............. 1

OPINIONS BELOW ................................................... 3

JURISDICTION.......................................................... 3

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED ......................................... 3

STATEMENT OF THE CASE .................................... 4

A. Congress adopts the Horseracing

Integrity and Safety Act ............................ 4

B. Congress amends HISA in an effort

to cure a constitutional defect ................... 7

C. Factual and procedural background ......... 9

REASONS FOR GRANTING THE PETITION ....... 12

I.

The decision below deepens a circuit conflict

over HISA’s constitutionality ........................ 12

II.

The questions presented are exceptionally

important ........................................................ 16

III. The decision below is wrong .......................... 19

A. HISA unlawfully delegates enforcement

power to the Authority ............................ 22

B. HISA unlawfully delegates rulemaking

power to the Authority ............................ 25

v

IV. This case is an excellent vehicle .................... 27

CONCLUSION.......................................................... 30

APPENDIX

Opinion, U.S. Court of Appeals for the Eighth

Circuit, filed September 20, 2024 ....................... 1a

Minute entry denying motion for preliminary

injunction, U.S. District Court, Eastern

District of Arkansas, filed July 11, 2023 .......... 18a

Transcript of Motion for Preliminary Injunction,

U.S. District Court, Eastern District of

Arkansas, filed July 21, 2023 ............................ 19a

U.S. Const. art. I ..................................................... 60a

U.S. Const. art. II.................................................... 61a

15 U.S.C. § 3051 ...................................................... 65a

15 U.S.C. § 3052 ...................................................... 69a

15 U.S.C. § 3053 ...................................................... 79a

15 U.S.C. § 3054 ...................................................... 83a

15 U.S.C. § 3055 ...................................................... 94a

15 U.S.C. § 3056 .................................................... 104a

15 U.S.C. § 3057 .................................................... 109a

15 U.S.C. § 3058 .................................................... 116a

15 U.S.C. § 3059 .................................................... 121a

15 U.S.C. § 3060 .................................................... 122a

vi

TABLE OF AUTHORITIES

Cases

A.L.A. Schechter Poultry Corp. v. United States,

295 U.S. 495 (1935) ............................................. 20

Alpine Sec. Corp. v. FINRA, No. 23-5129,

2023 WL 4703307 (D.C. Cir. July 5, 2023) ......... 19

Ass’n of Am. Railroads v. U.S. Dep’t of Transp.,

721 F.3d 666 (D.C. Cir. 2013) ............................. 16

Biden v. Nebraska,

143 S. Ct. 2355 (2023) ......................................... 24

Buckley v. Valeo,

424 U.S. 1 (1976) ................................................. 23

Carter v. Carter Coal Co.,

298 U.S. 238 (1936) ......................... 2, 7, 17, 21, 25

City of Arlington v. FCC,

569 U.S. 290 (2013) ................................... 1, 20, 25

Dep’t of Transp. v. Ass’n of Am. Railroads,

575 U.S. 43 (2015) ........................... 2, 16-17, 20-21

FCC v. Fox Television Stations, Inc.,

556 U.S. 502 (2009) ............................................. 26

Fulton v. City of Philadelphia,

593 U.S. 522 (2021) ............................................. 28

Gundy v. United States,

588 U.S. 128 (2019) ............................................. 24

Horseracing Integrity & Safety Auth., Inc. v.

Nat’l Horsemen’s Benevolent & Protective

Ass’n, No. 24A287 (U.S.) ..................................... 28

Iancu v. Brunetti,

588 U.S. 388 (2019) ............................................. 16

vii

Moody v. NetChoice, LLC,

144 S. Ct. 2383 (2024) ......................................... 28

Murthy v. Missouri,

144 S. Ct. 1972 (2024) ......................................... 28

Nat’l Horsemen’s Benevolent &

Protective Ass’n v. Black,

53 F.4th 869 (5th Cir. 2022) ......................... 6-8, 26

Nat’l Horsemen’s Benevolent &

Protective Ass’n v. Black,

107 F.4th 415 (5th Cir. 2024) ............. 10-11, 13-15,

18, 23-24

Nat’l Inst. of Family & Life Advocates v. Becerra,

585 U.S. 755 (2018) ............................................. 28

Oklahoma v. United States,

62 F.4th 221 (6th Cir. 2023) .... 10-11, 13-14, 17-18,

22, 29

Oklahoma v. United States,

No. 23-402 (U.S. Oct. 13, 2023) ........................... 28

Pittston Co. v. United States,

368 F.3d 385 (4th Cir. 2004) .......................... 15-16

Ramirez v. Collier,

595 U.S. 411 (2022) ............................................. 28

Rostker v. Goldberg,

453 U.S. 57 (1981) ............................................... 16

Seila Law LLC v. CFPB,

591 U.S. 197 (2020) ............................................. 23

Siegel v. Fitzgerald,

596 U.S. 464 (2022) ............................................. 16

Springer v. Gov’t of Philippine Islands,

277 U.S. 189 (1928) ............................................. 23

viii

Sunshine Anthracite Coal Co. v. Adkins,

310 U.S. 381 (1940) .............. 2, 7, 12, 17, 21-22, 26

Texas v. Comm’r of Internal Rev.,

142 S. Ct. 1308 (2022) ............................... 2, 17, 19

United States v. Frame,

885 F.2d 1119 (3d Cir. 1989) ............................... 16

United States, ex rel. Polansky v.

Exec. Health Res., Inc.,

599 U.S. 419 (2023) ......................................... 2, 17

Whitman v. Am. Trucking Ass’ns,

531 U.S. 457 (2001) ........................ 1, 19-20, 22, 25

U.S. Constitution

U.S. Const. art. I, § 1 ............................................ 1, 19

U.S. Const. art. II, § 1, cl. 1 ............................ 1, 19, 25

U.S. Const. art. II, § 2, cl. 2 ........................................ 4

U.S. Const. art. III, § 1 ......................................... 1, 19

Statutes

15 U.S.C. § 2056a(b)(4)(B) ........................................ 19

15 U.S.C. § 3051(4) ..................................................... 5

15 U.S.C. § 3051(5) ..................................................... 5

15 U.S.C. § 3051(6) ................................................. 5, 9

15 U.S.C. §§ 3051-3060 ............................................... 4

15 U.S.C. § 3052(a) ..................................................... 5

15 U.S.C. § 3052(b) ..................................................... 4

15 U.S.C. § 3052(b)(3) ................................................. 4

15 U.S.C. § 3052(c) ................................................... 4-5

15 U.S.C. § 3052(f)(1)(C) ....................................... 6, 25

ix

15 U.S.C. § 3052(f)(2)-(4) ...................................... 6, 25

15 U.S.C. § 3053(a) ............................................... 6, 25

15 U.S.C. § 3053(b)(1) ........................................... 6, 27

15 U.S.C. § 3053(c)(1) ........................................... 6, 27

15 U.S.C. § 3053(c)(2) .................................. 6, 8, 25-27

15 U.S.C. § 3053(d) .................................................. 5-6

15 U.S.C. § 3053(e)...............................8, 11, 13, 24, 26

15 U.S.C. § 3054(a) ..................................................... 5

15 U.S.C. § 3054(b) ..................................................... 6

15 U.S.C. § 3054(c)(1)(A) ............................................ 6

15 U.S.C. § 3054(d)(1) ............................................. 5, 9

15 U.S.C. § 3054(d)(2) ............................................. 5, 9

15 U.S.C. § 3054(d)(3) ................................................. 5

15 U.S.C. § 3054(d)(4) ................................................. 5

15 U.S.C. § 3054(g) ............................................... 6, 25

15 U.S.C. § 3054(h) ............................................... 6, 22

15 U.S.C. § 3054(i) ...................................................... 7

15 U.S.C. § 3054(j) ...................................................... 7

15 U.S.C. § 3054(j)(1) ........................................... 22-23

15 U.S.C. § 3054(j)(2) ................................................ 23

15 U.S.C. § 3054(l)(1) .................................................. 5

15 U.S.C. § 3057 ........................................................ 22

15 U.S.C. § 3057(a)(2)(G) ............................................ 5

15 U.S.C. § 3057(d) ..................................................... 5

15 U.S.C. § 3057(d)(3)(A) ............................................ 7

x

15 U.S.C. § 3058 .................................................... 7, 23

15 U.S.C. § 3058(a) ................................................... 22

28 U.S.C. § 1254 .......................................................... 3

Consolidated Appropriations Act, 2023,

Pub. L. No. 117-328, Div. O, Tit. VII,

136 Stat. 4459, 5231 (2022)................................... 8

Pub. L. No. 116-260, Div. FF, Tit. XII,

§§ 1201-1212, 134 Stat. 1182, 3252-75 (2020) ...... 4

Other Authorities

Authority Br., Nat’l Horsemen’s Benevolent &

Protective Ass’n v. Black, Doc. 114,

Dkt. 23-10520 (5th Cir. Aug. 4, 2023) ................ 28

Community and Economic Development

Initiative of Kentucky, The Influence of the

Race Horse Industry on Iowa’s Economy

(June 2019), https://tinyurl.com/5cfsb2ww ......... 18

The Federalist Papers No. 47 (Feb. 1, 1788) .............. 1

The Federalist Papers No. 51 (Feb. 8, 1788) .............. 3

FTC Br., Nat’l Horsemen’s Benevolent &

Protective Ass’n v. Black, Doc. 113,

Dkt. 23-10520 (Aug. 4, 2023) ......................... 28-29

Howland, Joan S., Let’s Not “Spit the Bit”

in Defense of “The Law of the Horse”:

The Historical and Legal Development

of American Thoroughbred Racing,

14 Marq. Sports L. Rev. 473 (2004) ...................... 4

Mascott, Jennifer L., Private Delegation

Outside of Executive Supervision,

45 Harv. J.L. & Pub. Pol’y 837 (2022) ................ 22

xi

Press Release, American Horse Council, Results

from the 2023 National Equine Economic

Impact Study Released (Jan. 31, 2024),

https://tinyurl.com/mv3v3bwe............................. 18

Purdue Extension, Economic Impact of

the Horse Racing and Breeding

Industry to Indiana (May 2013),

https://tinyurl.com/4m49s2jc ............................... 18

1

PETITION FOR A WRIT OF CERTIORARI

The Constitution establishes three—and only

three—branches of government. And it vests each

with a distinctive form of sovereign power. The

legislative power is vested in Congress. U.S. Const.

art. I, § 1. The executive power is vested in the

President. Id. art. II, § 1, cl. 1. And the judicial power

is vested in this Court and whatever inferior courts

Congress may establish. Id. art. III, § 1. Each vesting

is permanent and cannot be altered by the branches

themselves, either with or without the consent of the

relevant branch. See Whitman v. Am. Trucking Ass’ns,

531 U.S. 457, 472 (2001).

The Constitution’s separation of powers exists to

“safeguard[] liberty,” City of Arlington v. FCC, 569

U.S. 290, 315 (2013) (Roberts, C.J., dissenting), by

dispersing power and preventing its accumulation in

a single body or individual, a state of affairs the

Framers described as the “very definition of tyranny,”

The Federalist Papers No. 47 (Feb. 1, 1788) (J.

Madison). Just as significantly, when a particular

power is transplanted outside of its assigned branch,

it escapes the democratic and institutional checks—

such as bicameralism or appointment—that the

Constitution imposes on its exercise as a safeguard

against government overreach.

To be sure, modern government has been

characterized by vast delegations of power to

administrative agencies, the de facto “fourth branch.”

Those delegations have taxed the structure the

Founders established. But this case involves a more

extreme departure from that structure—a delegation

of governmental power to a private entity. “This is

legislative delegation in its most obnoxious form,”

2

Carter v. Carter Coal Co., 298 U.S. 238, 311 (1936), for

which “there is not even a fig leaf of constitutional

justification,” Dep’t of Transp. v. Ass’n of Am.

Railroads, 575 U.S. 43, 62 (2015) (Alito, J.,

concurring). Because the Constitution vests private

parties with no part of sovereign power, they may not

exercise any of it.

The Horseracing Integrity and Safety Act flouts

that bedrock principle. It delegates power to a private

entity, the Horseracing Integrity and Safety

Authority, to perform indisputably sovereign and

coercive functions like conducting searches, issuing

subpoenas, and making binding rules of private

conduct. And it subjects the Authority only to limited,

after-the-fact oversight by a federal agency. The

Authority is not merely an “aid” to the government.

Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381,

388 (1940). From the perspective of its victims, it is

the government. That is impermissible.

In concluding otherwise, the court of appeals

contributed to a square circuit conflict over the

constitutionality of a significant federal statute on a

subject that multiple Justices have recognized cries

out for this Court’s clarification. See Texas v. Comm’r

of Internal Rev., 142 S. Ct. 1308, 1309 (2022)

(statement of Alito, J., respecting the denial of

certiorari, joined by Thomas and Gorsuch, JJ.); cf.

United States, ex rel. Polansky v. Exec. Health Res.,

Inc., 599 U.S. 419, 442 (2023) (Kavanaugh, J.,

concurring, joined by Barrett, J.). This case presents

an especially clean vehicle, free from threshold

questions or other obstructions, for resolving this

important question of law.

3

The Framers were right about many things. But

one thing they misapprehended was the extent to

which each branch would jealously guard its own

prerogatives. See The Federalist Papers No. 51 (Feb. 8,

1788) (“Ambition must be made to counteract

ambition.”). Congress and the Executive Branch have

proven all too willing to cede their authority when it

is politically expedient to do so. This Court is the last

bulwark against that consensual degradation of the

Constitution’s structure. It should intervene to ensure

that the people are subject to exercises of sovereign

authority only by government officials who are, in

turn, subject to the people themselves.

OPINIONS BELOW

The opinion of the court of appeals (App. 1a-17a)

is not yet reported but is available at 2024 WL

4248221. The order and accompanying transcript of

the district court (App. 18a-58a) are unpublished.

JURISDICTION

The judgment of the court of appeals was entered

on September 20, 2024. This Court’s jurisdiction is

invoked under 28 U.S.C. § 1254.

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

Pertinent constitutional and statutory provisions

are reprinted in the appendix to this petition. App.

60a-123a.

4

STATEMENT OF THE CASE

A. Congress

adopts

the

Integrity and Safety Act

Horseracing

For nearly 250 years, horseracing was subject

predominantly to state and local regulation.1 But in

2020, Congress effectively federalized the industry by

enacting the Horseracing Integrity and Safety Act

(HISA or Act). See Pub. L. No. 116-260, Div. FF, Tit.

XII, §§ 1201-1212, 134 Stat. 1182, 3252-75 (2020)

(codified at 15 U.S.C. §§ 3051-3060). HISA establishes

a comprehensive regulatory and enforcement regime

governing, among other things, doping, medication,

and track safety. Rather than charge a federal agency

with implementing the Act, Congress conferred

principal authority on a private entity, the

Horseracing Integrity and Safety Authority

(Authority), nominally supervised by the Federal

Trade Commission (FTC or Commission).

1. The Authority is a “private, independent, selfregulatory, nonprofit corporation” governed by a ninemember Board of Directors comprising five

“independent” members and four “industry” members.

§ 3052(b).2 The Board members are not appointed or

removable by the President, the head of any

department, or the courts, see U.S. Const. art. II, § 2,

cl. 2, but instead are selected under the Authority’s

bylaws, § 3052(b)(3). The Authority also includes both

an “anti-doping and medication control standing

1 Joan S. Howland, Let’s Not “Spit the Bit” in Defense of “The

Law of the Horse”: The Historical and Legal Development of

American Thoroughbred Racing, 14 Marq. Sports L. Rev. 473,

488-506 (2004).

2 Unless otherwise noted, all Code citations are to Title 15.

5

committee” and a “racetrack safety standing

committee,” which “provide advice and guidance to the

Board on the development and maintenance of” the

anti-doping and racetrack safety programs. § 3052(c).

The Authority’s regulatory jurisdiction is vast. See

§ 3054(a). Congress granted it power over “any

Thoroughbred horse . . . [and] any horserace involving

covered horses that has a substantial relation to

interstate commerce,” § 3051(4)-(5), as well as the

power to expand its own jurisdiction to encompass

other horse breeds upon the election of a “State racing

commission or a breed governing organization,”

§ 3054(l)(1). The Authority also enjoys jurisdiction

over, among others, “all trainers, owners, breeders,

jockeys, racetracks, veterinarians,” and “other horse

support personnel who are engaged in the care,

training, or racing of covered horses.” § 3051(6).

The Act requires all “covered persons” to register

with the Authority and comply with specified

Authority rules as a “condition of participating in

covered races and in the care, ownership, treatment,

and training of covered horses.” § 3054(d)(1)-(3).

Covered persons who fail to do so are subject to civil

sanctions as specified by the Authority. §§ 3054(d)(4),

3057(a)(2)(G), (d).

2. Congress delegated equally vast power to the

Authority to make rules, issue guidance, and set fees

within the scope of its jurisdiction. The Authority is

broadly tasked with “developing and implementing a

horseracing anti-doping and medication control

program and a racetrack safety program for covered

horses, covered persons, and covered horseraces.”

§ 3052(a). And it has the power to make rules covering

everything

from

“permitted

and

prohibited

6

medications, substances, and methods,” to “racetrack

safety standards and protocols,” to “a schedule of civil

sanctions for violations” and “a process or procedures

for disciplinary hearings.” § 3053(d).

The Authority must submit proposed rules to the

FTC, § 3053(a), which “shall” publish them in the

Federal Register and provide an opportunity for

public comment, § 3053(b)(1). The statute then

mandates that, “[n]ot later than 60 days” after

publication, the FTC “shall approve a proposed rule or

modification if the Commission finds that the

proposed rule or modification is consistent with—(A)

this chapter; and (B) applicable rules approved by the

Commission.” § 3053(c)(1)-(2). Under that limited

consistency review, the FTC has no discretion to

disapprove the Authority’s rules on policy grounds.

See National Horsemen’s Benevolent and Protective

Association v. Black, 53 F.4th 869, 885-86 (5th Cir.

2022) (Black I). Following FTC approval, the

Authority’s rules become federal law binding on all

persons covered by HISA. See § 3054(b).

Nor is the Authority’s legislative delegation

limited to traditional rulemaking. The Authority may

also issue guidance interpreting its own rules.

§ 3054(g). And it may set the fees that industry

participants must pay to fund the Authority’s own

activities. § 3052(f)(1)(C), (2)-(4).

3. HISA delegates to the Authority the power not

only to issue regulations, but to enforce the

regulations that it adopts. The Act grants the

Authority comprehensive “investigatory authority,”

including the power to conduct searches and issue

subpoenas. § 3054(c)(1)(A), (h). It also empowers the

Authority to create a scheme of civil penalties,

7

§ 3054(i), which may include “lifetime bans from

horseracing, disgorgement of purses, monetary fines

and penalties, and changes to the order of finish in

covered races,” § 3057(d)(3)(A). And it grants the

Authority a menu of remedial options for imposing

those penalties. The Authority may file civil lawsuits

against alleged violators in federal court for penalties

or injunctive relief. § 3054(j). Alternatively, the

Authority

may

enforce

compliance

in

an

administrative proceeding, subject to review by the

FTC. § 3058.

B. Congress amends HISA in an effort to

cure a constitutional defect

1. In November 2022, the Fifth Circuit held the

original version of HISA facially unconstitutional

because it impermissibly delegated rulemaking power

to the Authority, a private entity. Black I, 53 F.4th at

872. The court recognized that under the “privatenondelegation doctrine,” “a private entity may wield

government power only if it ‘functions subordinately’

to an agency with ‘authority and surveillance’ over it.”

Id. at 881 (footnote omitted); see Sunshine Anthracite

Coal Co. v. Adkins, 310 U.S. 381, 399 (1940); Carter v.

Carter Coal Co., 298 U.S. 238, 311 (1936).

The court concluded that HISA did not satisfy

that test. It noted that the Act granted the Authority

“‘sweeping’ power,” allowing it “to craft entire

industry ‘programs’” through rulemaking. Black I, 53

F.4th at 882-83 (citation omitted). At the same time,

the statute failed to provide the FTC with the

requisite degree of oversight. In the court’s view, the

statute’s “consistency review” was “too limited to

ensure the Authority functions subordinately to the

agency,” id. at 884 (cleaned up), because it excluded

8

review of the Authority’s “policy choices”—a

constraint the FTC itself had acknowledged in prior

rulemakings, id. at 885-86. Ultimately, the court

concluded that “[a]n agency does not have meaningful

oversight if it does not write the rules, cannot change

them, and cannot second-guess their substance.” Id.

at 872.

2. Congress responded to Black I by amending

HISA to grant the FTC additional authority over the

rulemaking process. See Consolidated Appropriations

Act, 2023, Pub. L. No. 117-328, Div. O, Tit. VII, 136

Stat. 4459, 5231 (2022). Specifically, Congress revised

Section 3053(e), which now states:

The Commission, by rule in accordance with

section 553 of Title 5, may abrogate, add to,

and modify the rules of the Authority

promulgated in accordance with this chapter

as the Commission finds necessary or

appropriate to ensure the fair administration

of the Authority, to conform the rules of the

Authority to requirements of this chapter and

applicable

rules

approved

by

the

Commission, or otherwise in furtherance of

the purposes of this chapter.

§ 3053(e).

The amendment did not, however, change any

other aspect of the rulemaking process, including

Section 3053(c), which still requires the FTC to

approve the Authority’s rules if they are “consistent

with” HISA and regulations thereunder. § 3053(c)(2).

Nor did Congress grant the FTC any additional

supervision over the Authority’s enforcement actions.

9

C. Factual and procedural background

1. Petitioners Bill Walmsley, Jon Moss, and the

Iowa Horsemen’s Benevolent Protective Association

(HBPA) are all involved in the horseracing industry.

Mr. Walmsley is the head of the Arkansas chapter of

the HBPA, a group dedicated to providing housing,

meals, and other assistance to employees in the

industry. Compl. 1. Mr. Moss is a member of the Iowa

chapter of the HBPA, which counts as members over

900 horsemen in Iowa. Compl. 2, ¶ 6. Messrs.

Walmsley and Moss, as well as many members of the

Iowa HBPA, are “covered persons” under HISA,

§ 3051(6); see Compl. ¶¶ 4-6, who must register with

the Authority and comply with its rules as a condition

of participating in the thoroughbred horseracing

industry, § 3054(d)(1)-(2); see App. 4a.

In 2023, following Congress’s amendment to

HISA, petitioners sued the Authority and its Board

members, as well as the FTC and its commissioners,

in district court, challenging the Act as facially

unconstitutional. App. 4a. Petitioners alleged, as

relevant here, that Congress’s delegation of

rulemaking and enforcement powers to the Authority

violates the private nondelegation doctrine. App. 5a,

8a. Petitioners also alleged that Congress’s delegation

of power to the FTC under § 3053(e) violates the public

nondelegation doctrine and that the Authority’s board

members are not properly appointed in conformity

with the Appointments Clause. App. 10a, 12a.

Petitioners immediately moved for a preliminary

injunction. App. 2a.

2. The district court denied petitioners’ motion in

an oral order solely on the ground that their claims

10

are unlikely to succeed on the merits. App. 58a; see

App. 18a.

3. A panel of the Eighth Circuit affirmed, over the

dissent of Judge Gruender. App. 1a-17a.

a. The court of appeals first rejected petitioners’

private nondelegation claim as to HISA’s rulemaking

provisions. App. 5a-8a. In reaching that conclusion,

the court relied on the decisions of the Sixth and Fifth

Circuits rejecting the same claim. See Oklahoma v.

United States, 62 F.4th 221 (6th Cir. 2023); Nat’l

Horsemen’s Benevolent & Protective Ass’n v. Black,

107 F.4th 415 (5th Cir. 2024) (Black II). The court

agreed with its sister circuits that “Section 3053(e) as

amended gives the [FTC] ‘ultimate discretion over the

content of the rules that govern the horseracing

industry.’” App. 6a (quoting Oklahoma, 62 F.4th at

230). The court reasoned that if the FTC “disagrees

with policies reflected in the Authority’s rules,” then

it “may change them under its power to ‘abrogate, add

to, and modify’ the rules.” Ibid.

Petitioners contended that Authority rules would,

at the least, bind the public until the FTC could

promulgate a repeal. But the court concluded that the

FTC could theoretically avoid this outcome by “us[ing]

its power to postpone the effective date of a proposed

rule.” App. 7a.

As for the Authority’s enforcement powers, the

panel majority recognized that the Sixth and Fifth

Circuits had split over their constitutionality. App. 8a.

The Sixth Circuit, for its part, had held in Oklahoma

that the FTC’s power to “abrogate, add to, or modify”

the Authority’s rules could be used to cure any

potential problem by, for example, “requir[ing] the

11

Authority to obtain the Commission’s approval” before

filing suit. App. 9a (citing Oklahoma, 62 F.4th at 231).

By contrast, the Fifth Circuit had held that the FTC’s

“power to modify and add to the rules of the Authority

does not ‘authorize basic and fundamental changes in

the scheme designed by Congress,’” which vests

enforcement power in the Authority. Ibid. (quoting

Black II, 107 F.4th at 432). The panel majority agreed

with the Sixth Circuit, citing the canon of

constitutional avoidance and concluding that “[t]o

subordinate the Authority’s enforcement activity, . . .

the Commission need only work within the structure

of the Act as designed, not create a new statutory

regime.” App. 10a.

The panel rejected petitioners’ remaining

arguments too. App. 10a-12a. Petitioners asserted

that if the FTC were permitted fundamentally to alter

the statutory scheme through rulemaking, then HISA

would violate the public nondelegation doctrine. But

the panel reasoned that the Act’s instruction for the

FTC to “ensure fair administration of the Authority,

conform rules to the requirements of the statute, and

further the purposes of the statute,” provides an

intelligible principle. App. 10a (citing § 3053(e)). And

the court rejected petitioners’ Appointments Clause

argument on the ground that the Authority is private,

rather than part of the government, and the

“requirements of the Clause apply only to officers of

the United States.” App. 12a.

b. Judge Gruender dissented in part, App. 13a-17,

concluding that HISA unlawfully delegates

enforcement power to the Authority. He agreed “with

the Fifth Circuit that the plain text of HISA creates a

clear delegation of enforcement power between the

12

FTC and the Authority,” and the FTC “cannot impede

upon the power granted to the Authority, nor can the

FTC compel Authority enforcement action.” App. 14a

(cleaned up). As a result, the “Authority does not

‘function subordinately’” to the agency, “in violation of

the private nondelegation doctrine.” Ibid. (quoting

Adkins, 310 U.S. at 399). Judge Gruender observed

that, “where Congress has avoided the limitations of

the Appointments Clause by vesting in a private

entity the wholesale power to regulate . . . nationwide,

it is imperative that the private nondelegation

doctrine carry force to prevent broad delegation of

governmental powers to unsupervised private

parties.” App. 17a.

REASONS FOR GRANTING THE PETITION

The Eighth Circuit’s holding that HISA complies

with the private nondelegation doctrine squarely

conflicts with the Fifth Circuit’s holding that the same

statute is unconstitutional in significant part. The

questions presented raise deep issues of constitutional

structure that this Court has not meaningfully

addressed in over eighty years and that multiple

Justices have recognized cry out for clarification. And

the Eighth Circuit answered those questions

incorrectly, sanctioning a striking departure from

bedrock rules guarding against arbitrary and

unaccountable government. This case is an

appropriate vehicle to correct that error. The Court

should grant review.

I.

The decision below deepens a circuit

conflict over HISA’s constitutionality

The Eighth Circuit’s decision contributes to a

square circuit conflict over whether HISA’s delegation

13

of sovereign power to the Authority—even with the

2022 amendment—is facially unconstitutional. Like

the court below, the Sixth Circuit sustained HISA

against attack, while the Fifth Circuit invalidated

many of its enforcement provisions. Compare

Oklahoma v. United States, 62 F.4th 221 (6th Cir.

2023), with Nat’l Horsemen’s Benevolent & Protective

Ass’n v. Black, 107 F.4th 415 (5th Cir. 2024) (Black II).

And while no circuit has invalidated the Authority’s

rulemaking power as amended, the courts have fully

vetted the relevant arguments and their decisions

sustaining that delegation are in tension with circuit

decisions addressing similar claims in other contexts.

A. The Sixth Circuit was the first to address the

constitutionality of the amended version of HISA. As

in this case, the plaintiffs there argued that HISA’s

delegation of both rulemaking and enforcement power

to the Authority is facially unconstitutional.

Oklahoma, 62 F.4th at 227-28. The Sixth Circuit

rejected the plaintiffs’ challenge based on an

expansive reading of HISA’s newly added rulemaking

provision, which authorizes the FTC to “abrogate, add

to, and modify the rules” of the Authority. Id. at 23031 (quoting § 3053(e)).

The plaintiffs contended that Section 3053(e)

gives the FTC insufficient supervision over Authority

rulemaking because Authority regulations govern

until the FTC can act to displace them. Like the court

below, the Sixth Circuit dismissed this “timing gap”

problem on the ground that the FTC could, at least

theoretically, “resolve it ahead of time” by adopting a

regulation delaying the effectiveness of Authority

rules. Id. at 232; see App. 7a (same).

14

The Sixth Circuit similarly concluded (again

consistent with the decision below, see App. 8a) that

Section 3053(e) grants the FTC “pervasive oversight

and control of the Authority’s enforcement activities.”

Oklahoma, 62 F.4th at 231 (cleaned up). In the court’s

view, the FTC could, if it chose, add conditions to the

Authority’s enforcement powers, such as requiring it

to “preclear” enforcement “decision[s] with the FTC.”

Ibid.; see App. 9a (similar). But the court declined to

resolve the plaintiffs’ challenge to the Authority’s

power to bring suit in federal court, observing that

“the parties simply have not engaged with this feature

of the Act, including briefing with respect to foundingera or contemporary analogs showing the role private

entities may, and may not, play in law enforcement.”

Oklahoma, 62 F.4th at 233.

After the Sixth Circuit decided Oklahoma, the

Fifth Circuit also resolved a facial challenge to HISA.

Black II, 107 F.4th at 420. It “agree[d] with . . . the

Sixth Circuit that the amendment cured the

nondelegation

defect”

with

the

Authority’s

rulemaking power. Id. at 424. But the Fifth Circuit

“part[ed] ways” with the Sixth Circuit (and the Eighth

Circuit’s later decision in this case) as to HISA’s

enforcement provisions. Id. at 421; see App. 8a-9a

(explicitly rejecting the Fifth Circuit’s analysis and

“agree[ing] with the Sixth Circuit”).

The Fifth Circuit observed that HISA empowers

the Authority to decide “whether to investigate a

covered entity,” “whether to subpoena the entity’s

records or search its premises,” “whether to sanction

it,” and “whether to sue the entity for an injunction or

to enforce a sanction it has imposed”—“all

quintessentially executive functions” that cannot be

15

delegated to a private party. Black II, 107 F.4th at

428-29. And the Act grants the FTC the power neither

to supersede nor “to countermand any of” those

decisions. Id. at 429. The court explained that the

FTC’s ability to “review sanctions at the back end”

does not fix the problem, given the multiple,

unchecked enforcement actions the Authority is

empowered to take “up to that point.” Id. at 430.

The Fifth Circuit rejected the notion that “the

FTC could use its new rulemaking authority to rein in

the Authority’s enforcement actions or even require

the Authority to preclear lawsuits with the agency.”

Id. at 431. The court explained that “[i]n HISA,

Congress set out a definite enforcement scheme,

dividing responsibilities” between the FTC and the

Authority, and the Sixth (and Eighth) Circuit’s

construction would impermissibly “let the agency

rewrite the statute.” Ibid.

B. Although the Fifth, Sixth, and Eighth Circuits

have sustained HISA’s delegation of rulemaking

authority against attack, their decisions on that score

are in serious tension with decisions from other courts

of appeals addressing nondelegation challenges to

other statutes. In rejecting petitioners’ challenge, the

Eighth Circuit did not deny that the Authority has the

power to issue binding rules of private conduct. See

App. 6a-7a. Even so, it reasoned that the statutory

delegation was permissible because the FTC could

displace the Authority’s rules if it so chose. Ibid.

That logic is incompatible with the approach

taken by other circuits. In Pittston Co. v. United

States, 368 F.3d 385 (4th Cir. 2004), the Fourth

Circuit rejected a constitutional challenge to a federal

statute, reasoning that “Congress may employ private

16

entities for ministerial or advisory roles, but it may

not give these entities governmental power over

others,” id. at 395. That is precisely what HISA does:

grant the Authority “power over others.” Similarly, in

United States v. Frame, 885 F.2d 1119 (3d Cir. 1989),

the court upheld a statute against a private

nondelegation challenge on the ground that the

private entities “serve an advisory function, and in the

case of collection of assessments, a ministerial one,”

id. at 1129; see ibid. (observing that “all budgets, plans

or projects approved by the Board become effective

only upon final approval by the Secretary”). Other

decisions likewise depart from the permissive

approach taken by the Eighth Circuit in this case. See,

e.g., Ass’n of Am. Railroads v. U.S. Dep’t of Transp.,

721 F.3d 666, 671 & n.5 (D.C. Cir. 2013), vacated on

other grounds, 575 U.S. 43 (2015).

II. The questions presented are exceptionally

important

Determining a statute’s constitutionality is “the

gravest and most delicate duty that” a court “is called

upon to perform.” Rostker v. Goldberg, 453 U.S. 57, 64

(1981) (citation omitted). This Court thus typically

grants review to resolve circuit conflicts over the

constitutionality of federal statutes. See, e.g., Iancu v.

Brunetti, 588 U.S. 388, 392 (2019); see also Siegel v.

Fitzgerald, 596 U.S. 464, 473 (2022) (“grant[ing]

certiorari to resolve a split that had developed in the

lower courts over the [statute’s] constitutionality,”

even though the statute had been upheld below)

(citation omitted). Review is warranted for that

reason alone.

But the deeper issues at stake here—whether,

and in what circumstances, Congress may confer

17

governmental authority on a private entity—

independently warrant this Court’s review. The Court

has not meaningfully addressed the scope of the

private nondelegation doctrine in over 80 years, since

its decisions in Sunshine Anthracite Coal Co. v.

Adkins, 310 U.S. 381, 399 (1940), and Carter v. Carter

Coal Co., 298 U.S. 238, 311 (1936). And those

decisions addressed the issue in a grand total of two

paragraphs. See Adkins, 310 U.S. at 399; Carter Coal,

298 U.S. at 311. That dearth of guidance has left lower

courts adrift as to the proper standard and how to

apply it. See, e.g., Oklahoma, 62 F.4th at 229

(observing that “[w]hether subordination always

suffices to withstand a challenge raises complex

separation of powers questions,” but noting that “the

parties accept this framing of the appeal”).

As multiple Justices of this Court have

recognized, the scope of the private nondelegation

doctrine “presents an important separation-of-powers

question” that should be resolved “in an

appropriate . . . case.” Texas v. Comm’r of Internal

Rev., 142 S. Ct. 1308, 1308-09 (2022) (statement of

Alito, J., joined by Thomas and Gorsuch, JJ.,

respecting the denial of certiorari); cf. United States,

ex rel. Polansky v. Exec. Health Res., Inc., 599 U.S.

419, 442 (2023) (Kavanaugh, J., concurring, joined by

Barrett, J.) (suggesting that the Court should consider

the constitutionality of private relators under Article

II “in an appropriate case”). The private

nondelegation doctrine has twice come before the

Court in the last decade, but in each case, review was

thwarted by threshold issues. See Texas, 142 S. Ct. at

1308-09; Dep’t of Transp. v. Ass’n of Am. R.Rs., 575

U.S. 43, 46 (2015). This case presents an appropriate

vehicle for providing much-needed clarification.

18

The questions presented also carry significant

practical implications. HISA displaced “38 state

regulatory schemes,” including an “array of protocols

and safety requirements.” Oklahoma, 62 F.4th at 225.

Moreover, horseracing, and the equine industry in

general, has a significant economic footprint. In Iowa

alone, horseracing generated nearly $200 million in

economic activity in 2017.3 Nationally, the economic

impact of the equine industry generally was estimated

in 2023 at $177 billion.4 And the state and local tax

revenue from the horseracing industry can extend into

the tens of millions of dollars.5 The question whether

an unaccountable private entity may constitutionally

supplant state regulation of this important industry

warrants this Court’s attention.

In any event, the questions presented have

broader significance beyond HISA. A host of statutes

confer rulemaking and enforcement authority on

private entities over a wide range of economic activity.

As the courts in the HISA cases have discussed, see,

e.g., Black II, 107 F.4th at 424, 434, Congress has

granted the private Financial Industry Regulatory

Authority (FINRA) both enforcement and rulemaking

authority over the securities laws. The D.C. Circuit

Community and Economic Development Initiative of

Kentucky, The Influence of the Race Horse Industry on Iowa’s

Economy, at 22 (June 2019), https://tinyurl.com/5cfsb2ww.

3

4 Press Release, American Horse Council, Results from the

2023 National Equine Economic Impact Study Released (Jan. 31,

2024), https://tinyurl.com/mv3v3bwe.

See, e.g., Purdue Extension, Economic Impact of the Horse

Racing and Breeding Industry to Indiana, at 3 (May 2013),

https://tinyurl.com/4m49s2jc (noting that state and local tax

revenue from horseracing in Indiana was $45 million).

5

19

recently entered an injunction pending appeal of a

FINRA adjudication, with Judge Walker concurring to

observe that petitioner had “raised a serious

argument that FINRA impermissibly exercises

significant executive power.” Alpine Sec. Corp. v.

FINRA, No. 23-5129, 2023 WL 4703307, at *2 (D.C.

Cir. July 5, 2023) (Walker, J., concurring). As another

example, Congress has permitted private parties to

revise legally binding safety standards for infant and

toddler products without any action by the Consumer

Product Safety Commission. 15 U.S.C. § 2056a(b)(4)(B).

Other regulatory regimes raise similar issues. See,

e.g., Texas, 142 S. Ct. at 1308 (statement of Alito, J.,

respecting the denial of certiorari) (discussing

Medicaid regulation).

Some of those statutes may pass constitutional

muster. But the frequency of federal delegations to

private entities and the variation in those delegations

confirm the need for this Court’s guidance on the

“fundamental question” of when such delegations are

permissible. Ibid.

III. The decision below is wrong

Review is especially warranted because the court

of appeals erred in upholding HISA, sanctioning a

dangerous departure from foundational constitutional

norms.

The Constitution establishes three branches of

government and vests each with a particular form of

sovereign power: legislative, executive, and judicial.

See U.S. Const. art. I, § 1; art. II, § 1, cl. 1; art. III, § 1.

As this Court has long recognized, the text of the

Constitution’s Vesting Clauses “permits no delegation

of those powers.” Whitman v. Am. Trucking Ass’ns,

20

531 U.S. 457, 472 (2001). That principle is critical to

“safeguarding liberty.” City of Arlington v. FCC, 569

U.S. 290, 315 (2013) (Roberts, C.J., dissenting). The

Constitution imposes numerous “accountability

checkpoints” on the processes of making and enforcing

the law, and “[i]t would dash the whole scheme if

Congress could give . . . power away to an entity that

is not constrained by those checkpoints.” Ass’n of Am.

R.R., 575 U.S. at 61 (Alito, J., concurring).

Because there is some “overlap between the three

categories of governmental power,” “[c]ertain

functions may be performed by two or more branches

without either exceeding its enumerated powers

under the Constitution.” Id. at 69 (Thomas, J.,

concurring in the judgment). Under this Court’s

precedent, for example, rulemaking qualifies as a

shared function: although ostensibly legislative, the

Court also treats it as an exercise of “the ‘executive

Power,’” City of Arlington, 569 U.S. at 304 n.4, at least

when the relevant statute establishes “‘an intelligible

principle’” to constrain executive discretion, Whitman,

531 U.S. at 472 (citation omitted). Congress may thus

delegate rulemaking power to an Executive Branch

agency without running afoul of the Constitution’s

separation of powers. Ibid.

But that same logic does not extend to private

parties, vested with no part of sovereign power. The

Court has accordingly recognized that a delegation of

governmental power to a private entity “is unknown

to our law, and is utterly inconsistent with the

constitutional prerogatives and duties of Congress.”

A.L.A. Schechter Poultry Corp. v. United States, 295

U.S. 495, 537 (1935); see Ass’n of Am. R.R., 575 U.S.

at 62 (Alito, J., concurring) (“When it comes to private

21

entities, . . . there is not even a fig leaf of

constitutional justification” for delegation.).

The Court recognized this principle in its seminal

decision Carter Coal. There, Congress had delegated

the ability to set maximum labor hours and minimum

wages to private groups of producers and miners. 298

U.S. at 310-11. The Court found that Congress had

impermissibly authorized “one person . . . to regulate

the business of another,” conferring a “governmental

function” on “private persons whose interests may be

and often are adverse to the interests of others in the

same business.” Id. at 311. Because such a scheme

creates “an intolerable and unconstitutional

interference with personal liberty and private

property,” the Court invalidated it. Ibid.

Congress responded to Carter Coal by amending

the statute, which came before the Court again in

Adkins. The amended version similarly conferred

authority on a federal agency acting in conjunction

with private boards composed of industry members to

regulate the sale and distribution of coal. 310 U.S. at

388. But this time the statute “specifie[d] in detail the

methods of [the boards’] organization and operation,

the scope of their functions, and the jurisdiction of the

Commission over them.” Ibid. Among other things,

the boards were tasked with proposing minimum

prices, which could be “approved, disapproved, or

modified by the Commission.” Ibid. The Court rejected

a private nondelegation challenge to the statute on the

ground that the private boards “function

subordinately to the” agency. Id. at 399. Because the

agency, “not the code authorities, determines the

prices,” “law-making is not entrusted to the industry.”

Ibid.

22

The analyses in Carter Coal and Adkins offer little

guidance on the precise scope and contours of the

private nondelegation doctrine. See Oklahoma, 62

F.4th at 229. Properly understood, however, those

decisions stand for a simple principle: a private entity

may act only as an “aid” in performing core sovereign

functions and must be subject to the “pervasive

surveillance and authority” of a federal agency.

Adkins, 310 U.S. at 388. In those circumstances, the

private entity does not exercise sovereign power at

all—the agency does. See Whitman, 531 U.S. at 472

(“This text permits no delegation of those powers.”).

That understanding mirrors original practice, which

“support[s] the use of outside actors to conduct

ministerial tasks, not necessarily to engage in the

exercise of delegated authority to bind third parties or

the government.” Jennifer L. Mascott, Private

Delegation Outside of Executive Supervision, 45 Harv.

J.L. & Pub. Pol’y 837, 925 (2022).

HISA flunks this test twice over. Even after the

amendment,

the

Authority

exercises

both

enforcement and rulemaking authority independent

of the FTC’s control. Because those powers are not

“subordinate[]” to the Commission, Adkins, 310 U.S.

at 399, the Act violates the private nondelegation

doctrine.

A. HISA unlawfully delegates enforcement

power to the Authority

1. On its face, HISA delegates significant

enforcement power to the Authority free from the

FTC’s supervision. Among other things, the Act

grants the Authority the power to investigate and

subpoena covered entities, § 3054(h); to levy

sanctions, §§ 3054(j)(1), 3057, 3058(a); and to sue

23

private parties in federal court for injunctive relief or

to enforce sanctions, § 3054(j)(1)-(2).

These are all quintessentially executive powers

belonging to the sovereign. Black II, 107 F.4th at 428

& n.9. As this Court has explained, the power “to

enforce” laws is an “executive function[],” Springer v.

Gov’t of Philippine Islands, 277 U.S. 189, 202 (1928),

and “[a] lawsuit is the ultimate remedy for a breach of

the law,” Buckley v. Valeo, 424 U.S. 1, 138 (1976) (per

curiam). The Court has thus invalidated under Article

II a scheme vesting the power to “set enforcement

priorities, initiate prosecutions, and determine what

penalties to impose on private parties” in “a single

individual accountable to no one.” Seila Law LLC v.

CFPB, 591 U.S. 197, 224-25 (2020).

HISA grants the Commission zero supervisory

power over many of the Authority’s key enforcement

actions. Although the statute authorizes the FTC to

review sanctions imposed by the Authority, § 3058,

that back-end check still leaves unsupervised

“everything the Authority was permitted to do up to

that point: launch an investigation into the owner,

subpoena his records, search his facilities, [and]

charge him with a violation.” Black II, 107 F.4th at

430; see id. at 430 n.12 (recounting Authority’s abuse

of these powers). In each context, the Authority—not

the FTC—exercises sovereign power.

2. The Eighth Circuit panel majority held that

HISA does not unlawfully delegate executive power to

the Authority because Congress’s amendment to

Section 3053(e) grants the FTC “pervasive oversight

and control of the Authority’s enforcement activities.”

App. 8a-9a (citation omitted). On that theory, the FTC

may even require preclearance before the Authority

24

takes enforcement action. App. 9a. The court of

appeals is mistaken.

The Eighth Circuit’s decision defies the plain text

of the amendment, which allows the FTC only to

“abrogate,” “add to,” or “modify” “the rules of the

Authority.” § 3053(e) (emphasis added); see Gundy v.

United States, 588 U.S. 128, 173 (2019) (Gorsuch, J.,

dissenting) (criticizing plurality for “recasting” the

statute to avoid nondelegation problems). Nothing in

that language authorizes the agency to alter the

statute’s text or structure. But that is exactly what the

panel majority contemplated. Although it argued that

“the Commission need only work within the structure

of the Act as designed,” App. 10a, it offered no support

for that ipse dixit. The statute establishes “a definite

enforcement scheme, dividing responsibilities”

between the agency and the Authority, and the panel’s

interpretation would allow the agency to “rewrite the

statute.” Black II, 107 F.4th at 431.

Although the panel majority justified its

interpretation in part on constitutional avoidance

grounds, App. 10a, that reliance was misplaced, since

the court’s interpretation itself raises serious public

nondelegation problems. A “statutory delegation is

constitutional” only insofar as “Congress lays down by

legislative act an intelligible principle.” Gundy, 588

U.S. at 135 (plurality) (emphasis added; cleaned up).

A grant of authority authorizing an agency to rewrite

the governing statute fails that test by definition. Cf.

Biden v. Nebraska, 143 S. Ct. 2355, 2373 (2023)

(rejecting on major questions grounds an

interpretation that would grant the agency “virtually

unlimited power to rewrite the Education Act”).

25

In any event, the panel majority failed to grapple

with this Court’s decision in Whitman, which held

that an agency cannot “cure an unlawful delegation of

legislative power by adopting in its discretion a

limiting construction of the statute.” 531 U.S. at 472.

“Whether the statute delegates legislative power is a

question for the courts, and an agency’s voluntary selfdenial has no bearing upon the answer.” Id. at 473.

Although Whitman involved the public nondelegation

doctrine, a similar principle applies here. The

question in this case is whether the statute is facially

constitutional. Because it affirmatively confers

sovereign authority on a private entity free from

agency oversight, the answer is no. The agency’s

purported ability to flip that statutory default does not

cure the defect.

B. HISA unlawfully delegates rulemaking

power to the Authority

1. HISA grants the Authority power to adopt

regulations, § 3053(a), (c)(2), set fees, § 3054(g), and

issue interpretive guidance, § 3052(f)(1)(C), (2)-(4).

This Court has described a statute that confers

rulemaking power on a private entity as a “legislative

delegation.” Carter Coal, 298 U.S. at 311. At the same

time, the Court has stated that agency rulemakings

“are exercises of—indeed, under our constitutional

structure they must be exercises of—the ‘executive

Power.’” City of Arlington, 569 U.S. at 304 n.4 (quoting

U.S. Const. art. II, § 1, cl. 1). Regardless of which

characterization applies here, rulemaking plainly

represents an exercise of a sovereign power that a

private entity does not possess.

The Act requires the FTC to approve the

Authority’s proposed rules if they are “consistent”

26

with the Act and its implementing regulations.

§ 3053(c)(2). Congress did not expand that limited

scope of review after the Fifth Circuit decided Black I,

53 F.4th 872, declaring that the original statute

violated the private nondelegation doctrine. Instead,

Congress granted the FTC the power to “abrogate, add

to, or modify” the Authority’s rules after they have

been “promulgated” and become binding on the public.

§ 3053(e).

The amendment does not solve the problem

identified by the Fifth Circuit. Even if the Commission

objects to a proposed rule on policy grounds, the rule

will go into effect and bind the public in the interim

period before the FTC can repeal it or adopt a

replacement.

HISA

explicitly

requires

the

Commission to comply with the Administrative

Procedure Act in abrogating or modifying Authority

rules, see § 3053(e), including by undertaking noticeand-comment procedures and explaining its reasons

for overriding the Authority’s policy choices, see FCC

v. Fox Television Stations, Inc., 556 U.S. 502, 515

(2009). The allocation of power between the FTC and

the Authority thus differs significantly from that

upheld in Adkins, where the private board’s proposed

prices had to be “approved, disapproved, or modified

by the Commission” before going into effect. 310 U.S.

at 388.

2. The Eighth Circuit again sought to avoid the

nondelegation problem through an expansive

construction of Section 3053(e). App. 6a-7a. On the

court’s reading, the FTC can deprive the Authority’s

rules of even temporary binding effect by using its

Section 3053(e) “power to postpone the effective date

27

of a proposed rule or to delay the effective date of a

rule.” App. 7a.

That view suffers from the same flaws as the

court’s view of the FTC’s enforcement authority: it

would confer on the agency the power to rewrite the

statute. HISA specifies that the FTC “shall” publish

the Authority’s proposed rules in the Federal Register

and provide an opportunity for public comment.

§ 3053(b)(1). Then, “not later than 60 days” after

publication, the FTC “shall approve a proposed rule or

modification if the Commission finds that the

proposed rule or modification is consistent with—(A)

this chapter; and (B) applicable rules approved by the

Commission.” § 3053(c)(1)-(2). An agency regulation

“postponing the effective date” of a proposed rule

would override those procedural requirements. Even

if the Eighth Circuit’s interpretation were textually

plausible, though, it would still run into the same

Whitman and public nondelegation problems

discussed above. See pp. 24-25, supra.

IV. This case is an excellent vehicle

A. This case is a strong vehicle for resolving both

questions presented. It presents both issues cleanly,

without alternative holdings or the need to address

preliminary questions. Moreover, this petition

presents the Court with distinct circumstances in

which the nondelegation question may arise:

enforcement and rulemaking. Because the analyses

may differ somewhat across the two contexts, it makes

sense for the Court to consider them together.

Although the case arises in a preliminary

injunction posture, the court of appeals definitively

resolved the relevant legal questions. See, e.g., App. 6a

28

(holding that “the Act’s rulemaking structure does not

violate the private nondelegation doctrine”); App. 10a

(holding that “the statute’s enforcement provisions

are not unconstitutional on their face”). As to the

private nondelegation claims, there is nothing left to

do on remand. This Court regularly grants petitions

for writs of certiorari in preliminary injunction cases,

particularly when (as here) they raise pure questions

of law. See, e.g., Ramirez v. Collier, 595 U.S. 411

(2022) (reviewing denial of preliminary injunction);

Fulton v. City of Philadelphia, 593 U.S. 522 (2021)

(same); Nat’l Inst. of Family & Life Advocates v.

Becerra, 585 U.S. 755 (2018) (same); see also, e.g.,

Moody v. NetChoice, LLC, 144 S. Ct. 2383 (2024);

Murthy v. Missouri, 144 S. Ct. 1972 (2024).

B. This petition offers the Court the cleanest, most

complete opportunity for resolving the questions

presented. The cases arising from the Fifth and Sixth

Circuits both suffer from drawbacks not present here.

See Horseracing Integrity & Safety Auth., Inc. v. Nat’l

Horsemen’s Benevolent & Protective Ass’n, No. 24A287

(petitions forthcoming); Oklahoma v. United States,

No. 23-402 (filed Oct. 13, 2023).

The Fifth Circuit case includes a contested

jurisdictional issue regarding the finality of the

district court’s decision that this Court would need to

resolve before reaching the merits. The Authority

squarely took the position before the Fifth Circuit that

“this Court lacks jurisdiction,” Authority Br. 2, Nat’l

Horsemen’s Benevolent & Protective Ass’n v. Black,

Doc. 114, Dkt. 23-10520 (5th Cir. Aug. 4, 2023), and

the FTC acknowledged that “the question is not free

from doubt,” while suggesting that the order under

review was “likely final and appealable,” FTC Br. 13,

29

Doc. 113 (Aug. 4, 2023). No similar hurdle attends

disposition of this petition.

The Sixth Circuit case, for its part, omits two

issues relevant to a full consideration of the questions

presented. First, the court did not assess whether its

broad reading of Section 3053(e) would violate the

public nondelegation doctrine. But that reading raises

obvious public nondelegation concerns that should

inform the proper interpretation of the statute,

including the role of constitutional avoidance. See

p. 24, supra. Second, the Sixth Circuit declined to

resolve the plaintiffs’ challenge to the “Authority’s

ability to enforce the Act through civil lawsuits,”

acknowledging that “difficult and fundamental

questions . . . arise when private entities enforce

federal law,” but observing that “the parties simply

have not engaged with this feature of the Act.” 62

F.4th at 233 (cleaned up).

30

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

BRETT D. WATSON

Brett D. Watson, Attorney

at Law, PLLC

P.O. Box 707

Searcy, AR 72145

(501) 281-2468

AUSTIN L. RAYNOR

Counsel of Record

FRANK D. GARRISON

JOSHUA M. ROBBINS

Pacific Legal Foundation

3100 Clarendon Blvd.,

Suite 1000

Arlington, VA 22201

(202) 888-6881

araynor@pacificlegal.org

Counsel for Petitioners

OCTOBER 2024