Petition for Writ of Certiorari — Federal Trade Commission, et al., Petitioners v. National Horsemen's Benevolent and Protective Association, et al.
Supreme Court briefAug 14, 2026
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No. XX-XX
In the Supreme Court of the United States
FEDERAL TRADE COMMISSION, ET AL., PETITIONERS
v.
NATIONAL HORSEMEN’S BENEVOLENT
AND PROTECTIVE ASSOCIATION, ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
LUCAS CROSLOW
General Counsel
Federal Trade Commission
Washington, DC 20580
D. JOHN SAUER
Solicitor General
Counsel of Record
BRETT A. SHUMATE
Assistant Attorney General
MALCOLM L. STEWART
Deputy Solicitor General
VIVEK SURI
Assistant to the
Solicitor General
DANIEL AGUILAR
CAROLINE W. TAN
Attorneys
Department of Justice
Washington, D.C. 20530-0001
SupremeCtBriefs@usdoj.gov
(202) 514-2217
QUESTION PRESENTED
Whether the enforcement provisions of the Horseracing Integrity and Safety Act of 2020, 15 U.S.C. 3051
et seq.—which authorize the Horseracing Integrity and
Safety Authority, a private entity, to assist the Federal
Trade Commission in enforcing the statute—violate the
private nondelegation doctrine on their face.
(I)
PARTIES TO THE PROCEEDING
The following parties are petitioners in this Court
and were defendants-appellees below: the Federal
Trade Commission, Chairman Andrew N. Ferguson,
and Commissioner Mark R. Meador.*
The following parties are respondents in this Court
and were defendants-appellees below: Horseracing Integrity and Safety Authority, Inc., Charles Scheeler,
Steve Beshear, Adolpho Birch, Leonard Coleman, Joseph De Francis, Susan Stover, Bill Thomason, D.G.
Van Clief, Nancy Cox, Katrina Adams, Jerry Black, Joseph Dunford, Frank Keating, Kenneth Schanzer, Ellen
McClain, and Lisa Lazarus.
The following parties are respondents in this Court
and were plaintiffs-appellants below: National Horsemen’s Benevolent and Protective Association, Arizona
Horsemen’s Benevolent and Protective Association, Arkansas Horsemen’s Benevolent and Protective Association, Indiana Horsemen’s Benevolent and Protective
Association, Illinois Horsemen’s Benevolent and Protective Association, Louisiana Horsemen’s Benevolent
and Protective Association, Mountaineer Park Horsemen’s Benevolent and Protective Association, Nebraska Horsemen’s Benevolent and Protective Association, Oklahoma Horsemen’s Benevolent and Protective
Association, Oregon Horsemen’s Benevolent and Protective Association, Pennsylvania Horsemen’s Benevolent and Protective Association, Washington Horsemen’s Benevolent and Protective Association, Tampa
Bay Horsemen’s Benevolent and Protective Associa* Chairman Ferguson and Commissioner Meador are automatically substituted for their predecessors in office. See Sup. Ct. R. 35.3.
Former Chair Lina Khan and former Commissioners Noah Phillips,
Christine Wilson, Rebecca Slaughter, Alvaro Bedoya, and Melissa
Holyoak were parties below but are no longer members of the Federal Trade Commission.
(II)
III
tion, Gulf Coast Racing, L.L.C., LRP Group, Ltd., Valle
de Los Tesoros, Ltd., Global Gaming LSP, L.L.C., and
Texas Horsemen’s Partnership, L.L.P.
The following parties are respondents in this Court
and were intervenors-appellants below: the State of
Texas and the Texas Racing Commission.
RELATED PROCEEDINGS
United States District Court (N.D. Tex.):
National Horsemen’s Benevolent & Protective Ass’n
v. Black, No. 21-cv-71 (May 4, 2023)
United States Court of Appeals (5th Cir.):
National Horsemen’s Benevolent & Protective Ass’n
v. Black, No. 22-10387 (Nov. 18, 2022)
National Horsemen’s Benevolent & Protective Ass’n
v. Black, No. 23-10520 (June 11, 2026)
United States Supreme Court:
Horseracing Integrity & Safety Authority, Inc. v.
National Horsemen’s Benevolent & Protective
Ass’n, No. 24A287 (Oct. 28, 2024)
Federal Trade Commission v. National Horsemen’s
Benevolent & Protective Ass’n, No. 24-429
(Aug. 1, 2025)
Horseracing Integrity & Safety Authority, Inc. v.
National Horsemen’s Benevolent & Protective
Ass’n, No. 24-433 (Aug. 1, 2025)
Texas v. Black, No. 24-465 (Aug. 1, 2025)
National Horsemen’s Benevolent & Protective Ass’n
v. Horseracing Integrity & Safety Authority, Inc.,
No. 24-472 (Aug. 1, 2025)
IV
Gulf Coast Racing, L.L.C. v. Horseracing Integrity
& Safety Authority, Inc., No. 24-489
(Aug. 1, 2025)
TABLE OF CONTENTS
Page
Opinions below .............................................................................. 1
Jurisdiction .................................................................................... 1
Introduction................................................................................... 2
Statement ...................................................................................... 3
Reasons for granting the petition ............................................... 8
A. The Fifth Circuit’s decision is incorrect ........................ 9
B. The question presented warrants this Court’s
review .............................................................................. 14
C. The Court should grant both this petition and the
Authority’s petition for a writ of certiorari ................. 15
Conclusion ................................................................................... 16
Appendix A — Court of appeals opinion (June 11, 2026) ..... 1a
Appendix B — District court memorandum opinion
and order (May 4, 2023) ......................... 52a
TABLE OF AUTHORITIES
Cases:
Department of Labor v. Sun Valley Orchards, LLC,
No. 25-966, 2026 WL 1127242 (Apr. 27, 2026) .................. 15
FCC v. Consumers’ Research, 606 U.S. 656 (2025) ........ 7, 10
First Jersey Securities, Inc. v. Bergen, 605 F.2d 690
(3d Cir. 1979), cert. denied, 444 U.S. 1074 (1980) ............ 12
Haaland v. Brackeen, 599 U.S. 255 (2023) ......................... 15
Iancu v. Brunetti, 588 U.S. 388 (2019) ................................ 15
Kennedy v. Braidwood Management, Inc.,
606 U.S. 748 (2025)........................................................ 12, 13
Moody v. NetChoice, LLC, 603 U.S. 707 (2024) ................... 9
Oklahoma v. United States, 163 F.4th 294
(6th Cir. 2025), petition for cert. pending,
No. 25-1325 (filed May 15, 2026) ..................................... 2, 3
(V )
VI
Cases—Continued:
Page
R.H. Johnson & Co. v. SEC, 198 F.2d 690 (2d Cir.),
cert. denied, 344 U.S. 855 (1952) ....................................... 12
SEC v. Jarkesy, 603 U.S. 109 (2024) .................................... 15
Sorrell v. SEC, 679 F.2d 1323 (9th Cir. 1982) ..................... 12
Sunshine Anthracite Coal Co. v. Adkins,
310 U.S. 381 (1940)...................................................... 5, 9, 10
United States v. Hansen, 599 U.S. 762 (2023) .................... 13
United States v. Rahimi, 602 U.S. 680 (2024) .......... 9, 13, 15
United States v. Raines, 362 U.S. 17 (1960) ....................... 14
Vidal v. Elster, 602 U.S. 286 (2024) ..................................... 15
Constitution and statutes:
U.S. Const.:
Art. I, § 1 ............................................................................ 9
Art. II, § 1, Cl. 1 ................................................................. 9
Art. III, § 1 ......................................................................... 9
Consolidated Appropriations Act, 2023, Pub. L. No.
117-328, Div. O, Tit. VII, § 701, 136 Stat. 5231-5232 ......... 6
Horseracing Integrity and Safety Act of 2020,
Pub. L. No. 116-260, Div. FF, Tit. XII, 134 Stat.
3252 (15 U.S.C. 3051 et seq.) ................................................ 2
15 U.S.C. 3051(6) ............................................................... 4
15 U.S.C. 3052(a) ............................................................... 3
15 U.S.C. 3052(b)(1)(A) ..................................................... 4
15 U.S.C. 3052(b)(1)(B)(i) ................................................. 4
15 U.S.C. 3053 .................................................................... 4
15 U.S.C. 3053(a) ............................................................... 4
15 U.S.C. 3053(a)(9) ......................................................... 10
15 U.S.C. 3053(a)(10) ................................................. 10, 13
15 U.S.C. 3053(b)(2) .................................................... 4, 10
15 U.S.C. 3053(c)(2) ........................................................... 4
VII
Statutes—Continued:
Page
15 U.S.C. 3053(e) ................................................... 6, 11, 13
15 U.S.C. 3054(a)(1) ......................................................... 12
15 U.S.C. 3054(c)(1)(A) ................................................... 10
15 U.S.C. 3054(c)(2) ................................................... 10, 11
15 U.S.C. 3054(d)(1) .......................................................... 4
15 U.S.C. 3054(d)(2) .......................................................... 4
15 U.S.C. 3054(d)(3) ........................................................ 12
15 U.S.C. 3054(h) ............................................................... 4
15 U.S.C. 3055-3057........................................................... 4
15 U.S.C. 3057(c) ............................................................... 4
15 U.S.C. 3057(d) ............................................................... 4
15 U.S.C. 3058(b) ............................................................... 4
15 U.S.C. 3058(b)(1) ........................................................ 11
15 U.S.C. 3058(b)(2)(B) ..................................................... 4
15 U.S.C. 3058(c) ............................................................... 4
15 U.S.C. 3058(c)(1) ......................................................... 11
15 U.S.C. 3058(c)(3) ......................................................... 11
15 U.S.C. 3058(d) ............................................................. 11
Maloney Act, ch. 677, § 152 Stat. 1070-1075 ....................... 11
15 U.S.C. 78s(c) .................................................................... 5, 6
15 U.S.C. 78s(e) ...................................................................... 11
Miscellaneous:
FTC, Order Approving the Enforcement Rule
Modification Proposed by the Horseracing
Integrity and Safety Authority (Dec. 19, 2025),
https://perma.cc/ER4F-ZY8M .......................................... 14
H.R. Rep. No. 554, 116th Cong., 2d Sess. (2020) ................ 15
In the Supreme Court of the United States
No. XX-XX
FEDERAL TRADE COMMISSION, ET AL., PETITIONERS
v.
NATIONAL HORSEMEN’S BENEVOLENT
AND PROTECTIVE ASSOCIATION, ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
The Solicitor General—on behalf of the Federal
Trade Commission, et al.—respectfully petitions for a
writ of certiorari to review the judgment of the United
States Court of Appeals for the Fifth Circuit in this
case.
OPINIONS BELOW
The opinion of the court of appeals (App., infra, 1a51a) is reported at 178 F.4th 224. The memorandum
opinion and order of the district court (App., infra, 52a112a) is reported at 672 F. Supp. 3d 220.
JURISDICTION
The judgment of the court of appeals was entered on
June 11, 2026. The jurisdiction of this Court is invoked
under 28 U.S.C. 1254(1).
(1)
2
INTRODUCTION
The Horseracing Integrity and Safety Act of 2020, 15
U.S.C. 3051 et seq., establishes a regulatory scheme in
which the Horseracing Integrity and Safety Authority
(a private, not-for-profit corporation) assists the Federal Trade Commission (a governmental agency) in that
agency’s regulation of the horseracing industry. Under
the Act’s rulemaking provisions, the Authority may propose regulations that the Commission may then adopt
or reject. And under the Act’s enforcement provisions,
the Authority may conduct disciplinary hearings and issue initial decisions that the Commission may then review de novo.
In the decision below, the Fifth Circuit held that the
Act’s enforcement provisions violate the Constitution
on their face because they delegate governmental
power to a private entity. That decision is incorrect. To
survive a facial challenge, a statute need have only some
valid applications—as the Act’s enforcement provisions
do. In general, the Authority’s initial decision operates
as a recommendation that the Commission is free to accept or reject. The Constitution allows executive agencies to receive such advice from private actors. The
Fifth Circuit expressed the concern that the Act would
allow the Authority to take some actions, such as issuing
a subpoena or filing a civil enforcement suit, on its own.
But the Authority has never actually taken those steps,
and under the Commission’s rules cannot do so. Speculation that the rules might someday change does not
justify facial invalidation of the Act.
The decision below warrants this Court’s review. In
contrast to the Fifth Circuit here, the Sixth Circuit has
held that the Horseracing Act’s enforcement provisions
do not violate the Constitution on their face. See Okla-
3
homa v. United States, 163 F.4th 294, 307 (6th Cir.
2025), petition for cert. pending, No. 25-1325 (filed May
15, 2026). And even in the absence of a circuit conflict,
this Court ordinarily grants certiorari when a court of
appeals holds that an Act of Congress is facially invalid.
The challengers in Oklahoma have filed their own
petition for a writ of certiorari, but that petition raises
additional issues on which there is no circuit conflict and
which do not warrant this Court’s review. The Court
should accordingly grant this petition, along with the
parallel petition that the Authority has filed in this case.
See Horseracing Integrity & Safety Authority, Inc. v.
National Horsemen’s Benevolent & Protective Ass’n,
petition for cert. pending (filed Aug. 10, 2026).
STATEMENT
1. Congress enacted the Horseracing Integrity and
Safety Act of 2020 (Horseracing Act or Act), Pub. L. No.
116-260, Div. FF, Tit. XII, 134 Stat. 3252 (15 U.S.C.
3051 et seq.), in order to prevent doping and improve
safety in the horseracing industry. Congress modeled
the Act’s framework on the longstanding regulatory
scheme used in the securities industry, in which industry participants are subject to rules proposed by selfregulatory private entities that are in turn overseen by
the Securities and Exchange Commission (SEC). See
Oklahoma v. United States, 163 F.4th 294, 307 (6th Cir.
2025), petition for cert. pending, No. 25-1325 (filed May
15, 2026).
The Horseracing Act “recognized” the Horseracing
Integrity and Safety Authority (Authority)—a “private,
independent, self-regulatory, nonprofit corporation”—
“for purposes of developing and implementing a horseracing anti-doping and medication control program and
a racetrack safety program.” 15 U.S.C. 3052(a). The
4
Authority’s Board of Governors consists of four members from the horseracing industry and five members
from outside the industry. See 15 U.S.C. 3052(b)(1)(A)
and (B)(i). The Authority operates under the oversight
of the Federal Trade Commission (FTC or Commission). See 15 U.S.C. 3053.
The Horseracing Act directs the Authority to propose rules concerning doping, racetrack safety, and
other subjects. See 15 U.S.C. 3055-3057. The Authority
must submit its proposals to the FTC “in accordance
with such rules as the Commission may prescribe.” 15
U.S.C. 3053(a). The Commission must approve a proposed rule if the agency determines that the rule “is
consistent with” the Act and the Commission’s regulations. 15 U.S.C. 3053(c)(2). A proposal takes effect only
if the Commission approves it. See 15 U.S.C. 3053(b)(2).
The Act requires various “[c]overed persons”—i.e.,
owners, breeders, trainers, jockeys, and other persons
involved in the horseracing industry—to register with
the Authority and to comply with the rules approved by
the FTC. See 15 U.S.C. 3051(6), 3054(d)(1) and (2). The
Authority may investigate violations of the rules. See
15 U.S.C. 3054(h). The Authority also may conduct disciplinary proceedings and impose civil sanctions upon
violators. See 15 U.S.C. 3057(c) and (d). A final decision
by the Authority to impose discipline is subject to de
novo review by an FTC administrative law judge (ALJ),
see 15 U.S.C. 3058(b), who may “conduct a hearing in
such a manner as the Commission may specify by rule,”
15 U.S.C. 3058(b)(2)(B). The ALJ’s decision is in turn
subject to de novo review by the FTC, and the Commission may consider additional evidence that was not presented to the Authority or the ALJ. See 15 U.S.C.
3058(c).
5
2. In 2021, various organizations including the National Horsemen’s Benevolent and Protective Association (private respondents) brought this suit in the
United States District Court for the Northern District
of Texas. See 53 F.4th 869, 875. The private respondents named as defendants the Authority and its officials
(collectively Authority), as well as the FTC and its
members, and their complaint asserted various constitutional challenges to the Act. See ibid. The State of
Texas and the Texas Racing Commission (state respondents) intervened to support the private respondents’ challenges. See ibid.
In the initial phase of this litigation, the Fifth Circuit
held that the Horseracing Act, as originally enacted, violated a constitutional principle that is sometimes
known as the private nondelegation doctrine. See 53
F.4th at 880. The court explained that, under that doctrine, a private entity may aid a governmental agency
in implementing a federal regulatory scheme, but only
if the private entity “functions subordinately” to the
agency and is subject to the agency’s “authority and
surveillance.” Id. at 881; see Sunshine Anthracite Coal
Co. v. Adkins, 310 U.S. 381, 399 (1940). The court determined that, under the Horseracing Act in its original
form, the FTC lacked constitutionally sufficient control
over the Authority’s activities. See 53 F.4th at 880-890.
In reaching that conclusion, the Fifth Circuit highlighted a “key distinction” between the original
Horseracing Act and the securities-industry scheme on
which the Act was modeled. 53 F.4th at 887. The court
explained that the securities-industry scheme allows
the SEC to “abrogate, add to, and delete from” the rules
of self-regulatory organizations as the SEC deems
“necessary or appropriate.” Ibid. (quoting 15 U.S.C.
6
78s(c)). The Act in its original form, in contrast, did not
grant the FTC comparable authority to abrogate or
modify the Authority’s rules. See ibid. Because the
FTC lacked the “final word on the substance of the
rules” under the original Act, the court concluded that
the FTC possessed insufficient control over the Authority’s actions. Ibid.
In response to that decision and to the constitutional
concerns that had been raised about the Act in its original form, Congress amended the Horseracing Act. See
Consolidated Appropriations Act, 2023, Pub. L. No.
117-328, Div. O, Tit. VII, § 701, 136 Stat. 5231-5232;
App., infra, 52a-53a. As amended, the Act empowers
the FTC to “abrogate, add to, and modify” the rules
promulgated by the Authority “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 [Act] and applicable
rules approved by the Commission, or otherwise in furtherance of the purposes of this [Act].” 15 U.S.C.
3053(e). That language is substantially identical to the
language used in the statutes that empower the SEC to
oversee self-regulatory organizations in the securities
industry. See 15 U.S.C. 78s(c).
3. After the initial Fifth Circuit decision in this case
and the enactment of the 2023 amendments to the
Horseracing Act, the plaintiffs on remand continued to
challenge the Act’s constitutionality. See App., infra,
53a. The district court conducted a bench trial and ultimately granted final judgment to the defendants. Id. at
52a-112a. As relevant here, the court rejected the private-nondelegation challenge to the amended Act. Id. at
87a-99a, 103a-105a.
7
The district court first rejected the contention that
the Authority’s role in the rulemaking process violates
the private nondelegation doctrine. App., infra, 87a99a. The court explained that, by amending the Act to
give the FTC the final word on the content of the rules,
Congress had “cured the constitutional issues identified
by the Fifth Circuit.” Id. at 89a.
The district court also rejected the contention that
the Authority’s enforcement role violates the private
nondelegation doctrine. App., infra, 103a-105a. The
court noted that “any Authority enforcement decision
will be reviewed by an ALJ and the FTC.” Id. at 103a.
4. The Fifth Circuit affirmed in part and reversed in
part, 107 F.4th 415, and the court later denied petitions
for rehearing filed by the Authority and the government, C.A. Doc. 213 (Sept. 9, 2024). This Court granted
the Authority’s application to stay the court of appeals’
mandate. 145 S. Ct. 8. The Court subsequently vacated
the Fifth Circuit’s judgment and remanded the case for
further consideration in light of FCC v. Consumers’ Research, 606 U.S. 656 (2025). 145 S. Ct. 2835.
On remand, the Fifth Circuit concluded that “Consumers’ Research d[id] not affect [its] prior decision,
which [it] reissue[d].” App., infra, 3a; see id. at 1a-51a.
The court of appeals agreed with the district court that,
by amending the Act, Congress had “cured the private
nondelegation flaw in the Authority’s rulemaking
power.” Id. at 51a. “Because the FTC has [the] ultimate say on what the rules are,” the court stated, “the
Authority’s power to propose horseracing rules does
not violate the private nondelegation doctrine.” Id. at
15a-16a.
The court of appeals concluded, however, that “the
FTC lacks adequate oversight and control over the Au-
8
thority’s enforcement power.” App., infra, 40a. The
court stated that “the Authority,” not “the agency,” decides “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.” Id. at 22a. The defendants argued that
the FTC possesses sufficient control because it “can review sanctions at the back end” and can adopt rules “to
rein in the Authority’s enforcement actions.” Id. at 24a,
27a. But the court of appeals rejected that defense of
the Act’s enforcement provisions, concluding that the
Authority can still exercise substantial enforcement
powers “without any supervision by the FTC.” Id. at
25a. The court accordingly declared that the Act’s “enforcement provisions are facially unconstitutional.” Id.
at 4a.
REASONS FOR GRANTING THE PETITION
In the decision below, the Fifth Circuit held that the
Horseracing Act’s enforcement provisions are unconstitutional on their face. That decision is incorrect. The
Fifth Circuit misapplied the private nondelegation doctrine, contravened this Court’s precedents limiting facial challenges, and misconstrued the scope of the
FTC’s statutory power to oversee the Authority.
The Fifth Circuit’s decision warrants this Court’s review. It holds an Act of Congress unconstitutional on
its face, conflicts with a decision of the Sixth Circuit rejecting facial challenges to the same statutory provisions, and produces harmful practical consequences.
This Court should grant certiorari and reverse.
9
A. The Fifth Circuit’s Decision Is Incorrect
Respondents have chosen to litigate this case as a facial challenge, and “that decision comes at a cost.”
Moody v. NetChoice, LLC, 603 U.S. 707, 723 (2024). Because facial challenges “ ‘often rest on speculation’ ” and
“ ‘threaten to short circuit the democratic process,’ ” this
Court has made them “hard to win.” Ibid. (citations
omitted). To prevail on a facial challenge, a party must
show that “no set of circumstances exists under which
the Act would be valid.” United States v. Rahimi, 602
U.S. 680, 693 (2024) (citation omitted). Conversely, to
defeat a facial challenge, the government need show
only that the statute “is constitutional in some of its applications.” Ibid. Under those standards, the court of
appeals erred in holding the Act’s enforcement provisions to be facially invalid.
1. The Constitution vests the federal government’s
legislative, executive, and judicial powers in Congress,
the President, and the federal courts, respectively. U.S.
Const. Art. I, § 1; Art. II, § 1, Cl. 1; Art. III, § 1. The
federal government therefore may not delegate those
powers to private entities. But in exercising executive
power, Executive Branch officials may obtain advice
and assistance from private entities.
In Sunshine Anthracite Coal Co. v. Adkins, 310 U.S.
381 (1940), for example, this Court upheld a statute that
authorized local boards consisting of private coal producers to propose minimum coal prices, which could be
approved, disapproved, or modified by the National Bituminous Coal Commission (a governmental body). The
Court noted that the private boards “function[ed] subordinately” to a federal agency and were subject to its
“authority and surveillance.” Id. at 399. The Court also
10
emphasized that the agency, not the private boards, ultimately “determine[d] the prices.” Ibid.
In FCC v. Consumers’ Research, 606 U.S. 656 (2025),
this Court similarly held that a private, not-for-profit
corporation could help the Federal Communications
Commission administer a federal subsidy program. The
Court determined that the private corporation is
“broadly subordinate” to the FCC because it “must
carry out all its tasks ‘consistent with’ the FCC’s rules,”
and because “anyone aggrieved by an action of the [corporation] may seek de novo review by the [FCC].” Id.
at 692-693 (citation omitted). The Court also noted that
the corporation “plays an advisory role” under the governing statutory scheme, and that the FCC retains final
“decision-making authority.” Ibid.
On their face, the Horseracing Act’s enforcement
provisions are consistent with those precedents. The
Authority is “broadly subordinate” to the FTC, which
retains final “decision-making authority” regarding the
Act’s enforcement. Consumers’ Research, 606 U.S. at
692-693.
On the front end, the FTC makes or approves the
rules that govern how the Authority “must carry out all
its tasks.” Consumers’ Research, 606 U.S. at 693. The
Act directs the Authority to propose rules concerning
“investigatory powers,” “issuance and enforcement of
subpoenas,” “access to offices, racetrack facilities, other
places of business, books, records, and personal property,” “procedures for disciplinary hearings,” and “civil
sanctions for violations.” 15 U.S.C. 3053(a)(9) and (10),
3054(c)(1)(A). Those rules take effect, however, only if
the FTC approves them. See 15 U.S.C. 3053(b)(2),
3054(c)(2). The Commission may “abrogate, add to, and
modify” those rules, just as it may abrogate, add to, and
11
modify the substantive rules that govern the conduct of
regulated parties. 15 U.S.C. 3053(e); see 15 U.S.C.
3054(c)(2).
On the back end, the FTC may review any sanctions
that the Authority imposes upon regulated parties. The
Commission or an aggrieved party may ask an FTC
ALJ to review any such sanction de novo. See 15 U.S.C.
3058(b)(1). The Commission itself may then review the
ALJ’s decision de novo and may take additional evidence as needed. See 15 U.S.C. 3058(c)(1) and (3). The
Act also empowers the ALJ or the Commission to stay
a sanction pending review. See 15 U.S.C. 3058(d).
A simple example illustrates a constitutional application of the Horseracing Act. The Authority could seek
to enforce its crop rule, which limits how often a jockey
may strike a horse with a riding crop during a horse
race, by reviewing a video of the race. The Commission
or an ALJ could then review the Authority’s decision de
novo by rewatching the same video. In that scenario,
the Authority would not exercise any governmental
power. In practical effect, the Authority would simply
provide a recommendation that the ALJ and the FTC
could accept or reject. A private entity’s provision of
such a recommendation does not raise constitutional
concerns.
Longstanding practice confirms the statute’s facial
constitutionality. Since 1938, Congress has authorized
self-regulatory organizations in the securities industry
to discipline their members subject to oversight by the
SEC. See Maloney Act, ch. 677, § 1, 52 Stat. 1070-1075.
Like the scheme at issue here, the securities laws empower the SEC to review self-regulatory organizations’
disciplinary decisions. See 15 U.S.C. 78s(e). Multiple
courts of appeals have rejected private nondelegation
12
challenges to those organizations’ role in implementing
the securities laws, citing the SEC’s power to supervise
the organizations’ activities. See R.H. Johnson & Co. v.
SEC, 198 F.2d 690, 695 (2d Cir.), cert. denied, 344 U.S.
855 (1952); First Jersey Securities, Inc. v. Bergen, 605
F.2d 690, 697 (3d Cir. 1979), cert. denied, 444 U.S. 1074
(1980); Sorrell v. SEC, 679 F.2d 1323, 1325-1326 (9th
Cir. 1982).
2. The court of appeals nonetheless concluded that
the Act is facially invalid under the private nondelegation doctrine. See App., infra, 4a. The court’s reasons
for that conclusion lack merit.
First, the court of appeals distinguished the
Horseracing Act from the securities-law self-regulatory
scheme on the ground that the SEC retains independent power to investigate violations of the laws that
agency administers. See App., infra, 33a. But the FTC
likewise retains independent power to investigate violations of the Horseracing Act. The Act directs “the Commission” to “implement and enforce” the Act’s provisions, 15 U.S.C. 3054(a)(1). The Act also requires covered persons to “cooperate with the Commission” “during any civil investigation” and to “respond truthfully”
“if questioned by the Commission.” 15 U.S.C. 3054(d)(3).
Even if the FTC lacked independent power to investigate violations, moreover, the Act would still be constitutional. The Constitution does not require that the
FTC be able “to ‘start’ individual investigations” or “to
compel a subordinate to take an affirmative act affecting private parties.” Kennedy v. Braidwood Management, Inc., 606 U.S. 748, 777 (2025) (citation omitted).
Second, the court of appeals denied that the FTC
could make rules to control the Authority’s investigative activities, stating that such an interpretation of the
13
Act “would rewrite the enforcement scheme Congress
enacted.” App., infra, 30a. But even if the Authority’s
investigative activities raise constitutional concerns,
the ultimate enforcement decisions would remain lawful
—which suffices to defeat a facial constitutional claim.
Regardless, under the statutory provisions that govern
enforcement of the Horseracing Act, the Commission
through rulemaking may “abrogate, add to, and modify,” 15 U.S.C. 3053(e), the Authority’s rules governing
matters that include “investigatory powers” and “procedures,” 15 U.S.C. 3053(a)(10). To the extent the statute is ambiguous on that point, the principle of constitutional avoidance requires courts to resolve that ambiguity in a way that saves the statute from constitutional
attack. See, e.g., Braidwood, 606 U.S. at 775-776;
United States v. Hansen, 599 U.S. 762, 781 (2023).
Third, the court of appeals described the Horseracing Act as “facially permit[ting]” the Authority to engage in a broad range of investigative activities. App.,
infra, 24a n.12. For example, the court credited contested allegations that, in one case, the Authority’s investigators had subjected an individual to “a coercive
interrogation.” Ibid. (citation omitted). But treating
such allegations as a ground for facial invalidation conflicts with this Court’s precedents. A court reviewing a
facial challenge should focus on the circumstances in
which the challenged statute is “most likely to be constitutional,” not those in which the statute “might raise
constitutional concerns.” Rahimi, 602 U.S. at 701.
Finally, the court of appeals emphasized that the
Horseracing Act permits the Authority to “issue subpoenas” and “seek injunctions.” App., infra, 4a. But
the Authority has explained that it has never issued a
subpoena or sought an injunction. See, e.g., Appl. at 17,
14
Horseracing Integrity & Safety Authority, Inc. v. National Horsemen’s Benevolent & Protective Ass’n, No.
24A287 (Sept. 19, 2024). The FTC also recently approved a rule that requires the FTC’s approval before
the Authority may issue a subpoena or bring a civil enforcement suit. See FTC, Order Approving the Enforcement Rule Modification Proposed by the
Horseracing Integrity and Safety Authority (Dec. 19,
2025), https://perma.cc/ER4F-ZY8M. Speculation that
the FTC’s rules might change does not justify facial invalidation of the statute. The “delicate power of pronouncing an Act of Congress unconstitutional is not to
be exercised with reference to hypothetical cases.”
United States v. Raines, 362 U.S. 17, 22 (1960).
B. The Question Presented Warrants This Court’s Review
Before the Fifth Circuit issued the decision below,
the Sixth Circuit rejected a facial challenge to the
Horseracing Act’s enforcement provisions. See Oklahoma v. United States, 163 F.4th 294 (6th Cir. 2025),
petition for cert. pending, No. 25-1325 (filed May 15,
2026). The Sixth Circuit explained that “[s]erial layers
of review of any proposed sanctions, together with the
FTC’s rulemaking powers over enforcement actions,
give [the FTC] ‘pervasive’ oversight and control of the
Authority’s enforcement activities.” Id. at 312 (citation
omitted). The court held that the Commission’s oversight powers sufficed to defeat a facial challenge, leaving further issues to be resolved as needed in “asapplied challenge[s]” to “actual enforcement action[s].”
Id. at 316. The decision below thus conflicts with the
Sixth Circuit’s disposition of a substantially similar facial challenge. See App., infra, 4a (Fifth Circuit acknowledging below that it was “part[ing] ways with” the
Sixth Circuit).
15
The fact that the decision below holds an Act of Congress unconstitutional on its face provides a further reason for this Court’s review. “[ W ]hen a lower court has
invalidated a federal statute,” this Court’s “usual” approach is to grant review, even in the absence of a circuit conflict. Iancu v. Brunetti, 588 U.S. 388, 392 (2019);
see, e.g., Department of Labor v. Sun Valley Orchards,
LLC, No. 25-966, 2026 WL 1127242, at *1 (Apr. 27,
2026); SEC v. Jarkesy, 603 U.S. 109, 120 (2024); Rahimi,
602 U.S. at 690; Vidal v. Elster, 602 U.S. 286, 292 (2024);
Haaland v. Brackeen, 599 U.S. 255, 272 (2023). The
Court should follow its usual approach here.
The practical significance of the question presented
underscores the need for this Court’s review. Congress
enacted the Act in response to a series of scandals and
accidents in the horseracing industry. See H.R. Rep.
No. 554, 116th Cong., 2d Sess. 17 (2020). In 2019, for
example, 441 thoroughbred horses in the United States
suffered fatal injuries—a fatality rate between two and
a half and five times greater than the rates in Europe
and Asia. See ibid. The decision below thwarts Congress’s efforts to protect the horseracing industry from
those problems.
C. The Court Should Grant Both This Petition And The
Authority’s Petition For A Writ Of Certiorari
The Authority has filed its own petition for a writ of
certiorari seeking review of the decision below. See Pet.
at i, Horseracing Integrity & Safety Authority, Inc. v.
National Horsemen’s Benevolent & Protective Ass’n
(filed Aug. 10, 2026). The Court should grant both this
petition and the Authority’s petition and should consolidate the cases.
The challengers in Oklahoma, the case in which the
Sixth Circuit rejected a facial challenge to the Horse-
16
racing Act’s enforcement provisions, have filed their
own petition for a writ of certiorari. See Oklahoma, supra (No. 25-1325). But the petitions filed by the Authority and the government in this case provide better vehicles for resolving the question presented than does the
petition in Oklahoma. Granting certiorari in this case
would enable the Court to directly review the reasoning
of the only court of appeals that has held the Act facially
unconstitutional. The Oklahoma petition, moreover,
raises additional issues apart from the facial validity of
the Act’s enforcement provisions—issues on which
there is no circuit conflict and which do not presently
warrant the Court’s review.
CONCLUSION
The petition for a writ of certiorari should be granted.
Respectfully submitted.
LUCAS CROSLOW
General Counsel
Federal Trade Commission
AUGUST 2026
D. JOHN SAUER
Solicitor General
BRETT A. SHUMATE
Assistant Attorney General
MALCOLM L. STEWART
Deputy Solicitor General
VIVEK SURI
Assistant to the
Solicitor General
DANIEL AGUILAR
CAROLINE W. TAN
Attorneys
APPENDIX
TABLE OF CONTENTS
Page
Appendix A — Court of appeals opinion (June 11, 2026)...... 1a
Appendix B — District court memorandum opinion
and order (May 4, 2023) ......................... 52a
(I)
APPENDIX A
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 23-10520
NATIONAL HORSEMEN’S BENEVOLENT AND
PROTECTIVE ASSOCIATION; ARIZONA HORSEMEN’S
BENEVOLENT AND PROTECTIVE ASSOCIATION;
ARKANSAS HORSEMEN’S BENEVOLENT AND
PROTECTIVE ASSOCIATION; INDIANA HORSEMEN’S
BENEVOLENT AND PROTECTIVE ASSOCIATION;
ILLINOIS HORSEMEN’S BENEVOLENT AND
PROTECTIVE ASSOCIATION; LOUISIANA HORSEMEN’S
BENEVOLENT AND PROTECTIVE ASSOCIATION;
MOUNTAINEER PARK HORSEMEN’S BENEVOLENT AND
PROTECTIVE ASSOCIATION; NEBRASKA HORSEMEN’S
BENEVOLENT AND PROTECTIVE ASSOCIATION;
OKLAHOMA HORSEMEN’S BENEVOLENT AND
PROTECTIVE ASSOCIATION; OREGON HORSEMEN’S
BENEVOLENT AND PROTECTIVE ASSOCIATION;
PENNSYLVANIA HORSEMEN’S BENEVOLENT AND
PROTECTIVE ASSOCIATION; WASHINGTON
HORSEMEN’S BENEVOLENT AND PROTECTIVE
ASSOCIATION ; TAMPA BAY HORSEMEN’S BENEVOLENT
AND PROTECTIVE ASSOCIATION ; GULF COAST RACING,
L.L.C.; LRP GROUP, LIMITED; VALLE DE LOS
TESOROS , LIMITED; GLOBAL GAMING LSP, L.L.C.;
TEXAS HORSEMEN’S PARTNERSHIP, L.L.P.,
PLAINTIFFS -APPELLANTS
STATE OF TEXAS; TEXAS RACING COMMISSION,
INTERVENOR PLAINTIFFS -APPELLANTS
v.
JERRY BLACK; KATRINA ADAMS; LEONARD COLEMAN;
MD NANCY COX; JOSEPH DUNFORD; FRANK
KEATING; KENNETH SCHANZER; HORSERACING
INTEGRITY AND SAFETY AUTHORITY, INCORPORATED ;
(1a)
2a
FEDERAL TRADE COMMISSION; COMMISSIONER NOAH
PHILLIPS ; COMMISSIONER CHRISTINE WILSON; LISA
LAZARUS ; STEVE BESHEAR; ADOLPHO BIRCH; ELLEN
MCCLAIN; CHARLES SCHEELER; JOSEPH
DEFRANCIS; SUSAN STOVER; BILL THOMASON;
LINA KHAN, CHAIR; REBECCA SLAUGHTER,
COMMISSIONER; ALVARO BEDOYA, COMMISSIONER;
D. G. VAN CLIEF, DEFENDANTS -APPELLEES
Filed: June 11, 2026
Appeal from the United States District Court
for the Northern District of Texas,
USDC Nos. 5:21-CV-71, 5:23-CV-77
ON REMAND FROM THE
SUPREME COURT OF THE UNITED STATES
Before KING, DUNCAN, and ENGELHARDT, Circuit
Judges.
STUART KYLE DUNCAN, Circuit Judge:
Last year, the Supreme Court vacated our decision
in National Horsemen’s Benevolent & Protective Association v. Black (Horsemen’s II), 107 F.4th 415 (5th Cir.
2024), and remanded “for further consideration in light
of FCC v. Consumers’ Research, 606 U.S. [656] (2025).”
Horseracing Integrity & Safety Auth., Inc. v. Nat’l
Horsemen’s Benevolent & Protective Ass’n, 145 S. Ct.
2837 (2025) (mem.). The parties have filed supplemental
briefs helpfully addressing this question.
3a
We conclude Consumers’ Research does not affect
our prior decision, which we reissue below. 1 In a new
section, infra Part III(B)(6), we explain why Consumers’ Research does not change our analysis of the private
nondelegation question presented in this case.
INTRODUCTION
We again consider constitutional challenges to the
Horseracing Integrity and Safety Act of 2020 (“HISA”
or the “Act”). In HISA, Congress empowered a private
corporation—the Horseracing Integrity and Safety Authority (“Authority”)—to create and enforce nationwide
rules for thoroughbred horseracing. In our first foray
into HISA, we held the Act facially unconstitutional under the private nondelegation doctrine because the Authority’s rulemaking was not subordinate to the Federal
Trade Commission (“FTC”). See Nat’l Horsemen’s Benevolent & Protective Ass’n v. Black (Horsemen’s I), 53
F.4th 869 (5th Cir. 2022). At the time, we did not consider a separate nondelegation challenge to the Authority’s enforcement power. Congress responded to our decision by amending HISA, giving the FTC power to abrogate, add to, or modify the Authority’s rules.
On remand, the district court held the amendment
cured HISA’s constitutional deficiencies because the
FTC now has general rulemaking power over the Authority’s activities. It also rejected claims raised by a
new plaintiff, Gulf Coast Racing LLC (“Gulf Coast”),
that HISA violates the Constitution’s Appointments
Clause because the Authority wields significant governWe add a handful of footnotes to clarify a few matters and also
to discuss sister-circuit decisions issued after Horsemen’s II. See
infra nn.7, 12, 17, 19, 22, 23.
1
4a
mental authority. The plaintiffs all appealed, arguing
HISA is still constitutionally deficient under the private
nondelegation doctrine, the Due Process Clause, the Appointments Clause, and the Tenth Amendment.
Just as we concluded in our now-vacated Horsemen’s
II opinion, we agree with nearly all of the district court’s
well-crafted opinion. Specifically, we agree that the
FTC’s new rulemaking oversight means the agency is no
longer bound by the Authority’s policy choices. In other
words, the amendment solved the nondelegation problem with the Authority’s rulemaking power. We also
agree that HISA does not violate the Due Process Clause
by putting financially interested private individuals in
charge of competitors. Further, we agree that, under
current Supreme Court precedent, see Lebron v. Nat’l
R.R. Passenger Corp., 513 U.S. 374 (1995), the Authority
does not qualify as a government entity subject to the
Appointments Clause. Finally, we agree that plaintiff
Gulf Coast lacks standing to bring its Tenth Amendment
challenge.
After the Supreme Court’s remand, we still disagree
with the district court in one important respect, however: HISA’s enforcement provisions violate the private
nondelegation doctrine. The statute empowers the Authority to investigate, issue subpoenas, conduct searches, levy fines, and seek injunctions—all without the
FTC’s say-so. That is forbidden by the Constitution.
We therefore DECLARE that HISA’s enforcement provisions are facially unconstitutional on that ground. In
doing so, we part ways with our esteemed colleagues on
the Sixth Circuit. See Oklahoma v. United States (Oklahoma I), 62 F.4th 221 (6th Cir. 2023); Oklahoma v.
United States (Oklahoma II), 163 F.4th 294 (6th Cir.
5a
2025) (both rejecting nondelegation challenge to HISA’s
enforcement provisions).
Accordingly, the district court’s judgment is AFFIRMED in part and REVERSED in part.
I. BACKGROUND
A.
HISA Framework
In 2020, HISA created a framework for enacting and
enforcing nationwide rules governing doping, medication control, and racetrack safety in the thoroughbred
horseracing industry. See 15 U.S.C. § 3054(a). See generally Horsemen’s I, 53 F.4th at 873-75. To “develop[]
and implement[]” these rules, HISA empowers a “private, independent, self-regulatory, nonprofit corporation, to be known as the ‘Horseracing Integrity and
Safety Authority,’ ” subject to the “oversight” of the
FTC. §§ 3052(a), 3053.
Under HISA, the Authority writes all the rules—that
is, rules fleshing out the substantive areas covered by
HISA, as well as rules governing investigation, adjudication, and sanctions. 2 The Authority submits proposed
rules to the FTC, which publishes them for public comment. § 3053(b)(1), (c)(1). Rules take effect only after
FTC approval, which must occur within 60 days of publication. § 3053(c)(1). The FTC “shall approve” a proposed rule if it finds the rule “consistent” with the Act
and with “applicable rules approved by the [FTC].”
See § 3057(a)(1), (c)(1) (power to establish substantive rules
governing medication controls); § 3056(a)(1) (power to establish
racetrack safety rules); §§ 3054(c), 3057(c) (power to “develop uniform procedures and rules” governing investigations and adjudications that afford due process); § 3057(d) (power to establish civil
sanctions); § 3054(c), (h) (investigatory and subpoena powers).
2
6a
§ 3053(c)(2). Originally, this “consistency review” did
not allow the FTC to reject a proposed rule based on its
disagreement with the Authority’s policy choices. Horsemen’s I, 53 F.4th at 884-87. In Horsemen’s I, we held
that this arrangement violated the private nondelegation doctrine by making a private entity superior to a
government agency. Ibid. In response, Congress
amended HISA to give the FTC power to “abrogate, add
to, and modify” the Authority’s rules. § 3053(e).
The Authority also has the power to enforce HISA.
It does so by (1) exercising “subpoena and investigatory
authority,” § 3054(h); (2) imposing civil sanctions,
§§ 3054(i), 3057; and (3) filing civil actions seeking injunctions or enforcement of sanctions, § 3054( j). The actual work of enforcing HISA involves a further delegation to other entities, however. For instance, HISA directs the Authority to contract enforcement of doping
and medication rules to a private non-profit, the U.S.
Anti-Doping Agency (“USADA”), or other comparable
entity. § 3054(e)(1)(A), (B). The Authority’s proposed
partnership with USADA ultimately did not pan out. Instead, the Authority partnered with Drug Free Sport
International, which operates as the Horseracing Integrity and Welfare Unit (“HIWU”).
HIWU then acts as “the independent . . . enforcement organization” for those rules, “implement[s]”
HISA’s anti-doping programs, and exercises related
powers “including independent investigations, charging
and adjudication of potential medication control rule violations, and the enforcement of any civil sanctions for
7a
such violations.” § 3054(e)(1)(E)(i), (iii), (iv); § 3055(c)(4)(B).3
HIWU’s decisions on such matters “shall be the final decision or civil sanction of the Authority,” subject to de
novo review by an administrative law judge (“ALJ”) and
the FTC. § 3055(c)(4)(B); § 3058.
B.
Procedural History
Horsemen’s I concluded that HISA’s delegation of
rulemaking power was facially unconstitutional. HISA
delegated rulemaking power to a private organization
(the Authority) whose policy choices could not be secondguessed by the agency (FTC). The Authority’s rulemaking powers were therefore not subordinate to the FTC,
meaning HISA facially violated the private nondelegation doctrine. Horsemen’s I, 53 F.4th at 872. We did not
consider the plaintiffs’ distinct nondelegation challenges
to the Authority’s investigative and enforcement powers
nor their due process claims. Id. at 890 n.37. Finally, as
noted, Congress responded to Horsemen’s I by empowering the FTC to “abrogate, add to, and modify” the Authority’s rules. § 3053(e).
On remand, the National Horsemen’s Association
(“Horsemen”) and Texas continued to press their private nondelegation claims, arguing Congress’s amendment did not actually subordinate Authority rulemaking
to the FTC. They also continued to press their nondelegation challenge to the Authority’s enforcement powers
(as well as their due process claims). In addition, a new
plaintiff, Gulf Coast Racing LLC (“Gulf Coast”), raised
Similarly, the Authority may contract out enforcement of the
racetrack safety program to “State racing commissions” or “other
State regulatory agencies.” § 3054(e)(2), (3); see also § 3056 (discussing racetrack safety program).
3
8a
separate challenges to HISA in a different division of
the same district. See Nat’l Horsemen’s Benevolent &
Protective Ass’n v. Black (Black II), 672 F. Supp. 3d 220,
224-25 (N.D. Tex. 2023). Gulf Coast claimed (1) HISA’s
directors qualify as “officers of the United States” and
are therefore subject to Article II’s appointment and removal requirements; and (2) HISA commandeers Texas
in violation of the Tenth Amendment. Gulf Coast’s suit
was consolidated with the remanded Horsemen’s I case.
Id. at 230-31. Following a one-day bench trial, the district court rejected all the plaintiffs’ claims.
As to private nondelegation, the district court followed the Sixth Circuit’s decision in Oklahoma I, 62
F.4th 221. The district court reasoned that Congress’s
amendment empowering the FTC to “abrogate, add to,
and modify” proposed rules “cured the constitutional issues identified by [Horsemen’s I]” by making the Authority’s rulemaking power “subordinate” to the FTC.
Black II, 672 F. Supp. 3d at 241, 243-44 (citing Oklahoma I, 62 F.4th at 230, 232). As to the separate challenge to the Authority’s enforcement powers, the district court largely relied on its previous order rejecting
the claim because those powers “comport with due process.” See id. at 248 (quoting Nat’l Horsemen’s Benevolent & Protective Ass’n v. Black (Black I), 596 F. Supp.
3d 691, 725 (N.D. Tex. 2022)). The court also relied on
the fact that the FTC could review civil sanctions and
control enforcement through rulemaking. Id. at 248-49
(citing Black I, 596 F. Supp. 3d at 725-26); see also Oklahoma I, 62 F.4th at 231. Finally, the court rejected
the due process claims because the Horsemen failed to
show the Authority’s directors have financial interests
in regulating competitors. Black II, 672 F. Supp. 3d at
252.
9a
As to Gulf Coast’s claims, the district court concluded
that our Horsemen’s I decision required it to reject
them. Specifically, the court reasoned that Horsemen’s
I necessarily decided the Authority was a private entity,
and so its directors were not subject to the Appointments Clause. Id. at 234-37. Alternatively, the court
reasoned that the Authority is private because “it is not
government created, and its directors are not government appointed.” Id. at 234 (citing Lebron, 513 U.S.
374). Finally, the court rejected the Tenth Amendment
anti-commandeering argument for lack of standing. Id.
at 249-50.
Accordingly, the district court entered final judgment dismissing all claims. The Horsemen, Texas, and
Gulf Coast timely appealed.
II. STANDARD OF REVIEW
We review the district court’s legal conclusions following a bench trial de novo. Deloach Marine Servs.,
L.L.C. v. Marquette Transp. Co., L.L.C., 974 F.3d 601,
606 (5th Cir. 2020). To prevail on their facial challenge,
the plaintiffs “must show that no set of circumstances
exists under which [HISA] would be valid.” Horsemen’s
I, 53 F.4th at 878 (cleaned up).
III. DISCUSSION
The various plaintiffs raise these issues on appeal:
(A) Did Congress’s amendment to HISA cure the
private nondelegation problem with the Authority’s rulemaking powers?
(B) Do the Authority’s enforcement powers separately violate the private nondelegation doctrine?
10a
(C) Does HISA violate due process by permitting
self-interested industry participants to regulate their
competitors?
(D) Are the Authority’s directors subject to the Appointments Clause?
(E) Does HISA violate the Tenth Amendment’s
anti-commandeering rule by forcing States to administer a federal program?
We consider each issue in turn.
A.
Private Nondelegation Challenge to Authority’s
Rulemaking
We previously discussed the origins of the private
nondelegation doctrine in Horsemen’s I. See id. at 88081. In essence, the doctrine teaches that “a private entity may wield government power only if it ‘functions
subordinately’ to an agency with ‘authority and surveillance’ over it.” Id. at 881 & n.21 (citing Texas v. Rettig,
987 F.3d 518, 532 (5th Cir. 2021)); Pittston Co. v. United
States, 368 F.3d 385, 394 (4th Cir. 2004); United States
v. Frame, 885 F.2d 1119, 1128 (3d Cir. 1989). 4 Or, as our
sister circuit has explained: “Congress may formalize
the role of private parties in proposing regulations so
long as that role is merely as an aid to a government
agency that retains the discretion to approve, disapprove, or modify them.” Ass’n of Am. R.Rs. v. U.S. Dep’t
of Transp. (Amtrak I), 721 F.3d 666, 671 (D.C. Cir. 2013)
(cleaned up) (quoting Adkins, 310 U.S. at 388), vacated
See also generally A.L.A. Schechter Poultry Corp. v. United
States, 295 U.S. 495, 537 (1935); Carter v. Carter Coal Co., 298 U.S.
238, 311 (1936); Currin v. Wallace, 306 U.S. 1, 15-16 (1939); Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 399 (1940).
4
11a
and remanded on other grounds, Dep’t of Transp. v.
Ass’n of Am. R.Rs. (Amtrak II), 575 U.S. 43 (2015).
In Horsemen’s I, we ruled the Authority’s rulemaking power was an unconstitutional private delegation.
Our analysis focused on the fact that the Authority’s
proposed rules were subject only to the FTC’s limited
“consistency review,” which did not permit the agency
to second-guess the Authority’s policy choices. See
Horsemen’s I, 53 F.4th at 882-87. In response, Congress amended HISA to provide that:
The [FTC], 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.
15 U.S.C. § 3053(e). This new provision was borrowed
from the Maloney Act, which allocates authority between the Securities and Exchange Commission (“SEC”)
and private, self-regulatory organizations (such as the
Financial Industry Regulatory Authority (“FINRA”)).
See Oklahoma I, 62 F.4th at 231-32. Although HISA
was originally modeled on the Maloney Act, it lacked
this provision until the recent amendment. See Consolidated Appropriations Act, Pub. L. No. 117-328, div. O,
tit. VII, § 701, 136 Stat. 4459, 5231-32 (2023). As noted,
the district court followed the Sixth Circuit in ruling
that the amendment cured the nondelegation problem
with the Authority’s rulemaking power. See Black II,
12a
672 F. Supp. 3d at 241-45 (citing Oklahoma I, 62 F.4th
at 230, 232).
We agree with the district court and the Sixth Circuit
that the amendment cured the nondelegation defect
identified in Horsemen’s I. That defect lay in the
agency’s being at the mercy of the Authority’s policy
choices. See Horsemen’s I, 53 F.4th at 872 (“[T]he FTC
concedes it cannot review the Authority’s policy
choices.”). For instance, when the Authority issued
rules on the kinds of horseshoes permitted during races,
the FTC told objecting commenters it lacked the power
to question the Authority’s views. See id. at 885 & n.29
(discussing FED. TRADE COMM’N, ORDER APPROVING
THE E NFORCEMENT RULE PROPOSED BY THE
HORSERACING INTEGRITY AND SAFETY AUTHORITY 26
(Mar. 25, 2022), https://www.ftc.gov/system/files/ftc_gov/
pdf/P222100HISA OrderRacetrackSafety.pdf [https://
perma.cc/G3VQ-JPJR]). The amendment has corrected
that imbalance. Now, the FTC may “abrogate, add to,
and modify” the Authority’s rules. § 3053(e). So, unlike
before, if the FTC now disagrees with the policies reflected in the Authority’s rules, it may change them. See
Oklahoma I, 62 F.4th at 230 (noting recent rule explaining that FTC’s “new ‘rulemaking power’ allows it to ‘exercise its own policy choices’ ” (quoting FED. TRADE
COMM’N, ORDER RATIFYING PREVIOUS COMMISSION
ORDERS AS TO HORSERACING INTEGRITY AND SAFETY
AUTHORITY ’S RULES 3 (Jan. 3, 2023), https://www.ftc.
gov/system/files/ftc_gov/pdf/HISA%20Order%20re%20
Ratification%20of%20Previous%20Orders%20-%20 Final%20not%20 signed.pdf [https://perma.cc/44BK-37A9])).
As the Sixth Circuit correctly observed, “§ 3053(e)’s
amended text gives the FTC ultimate discretion over
the content of the rules,” which “makes the FTC the pri-
13a
mary rule-maker, and leaves the Authority as the secondary, the inferior, the subordinate one.” Ibid. (citing
Adkins, 310 U.S. at 388).
Appellants’ arguments to the contrary do not persuade us.
First, the Horsemen argue the Authority remains superior because it continues to write the rules in the first
place and the agency must approve them if they hurdle
the low bar of consistency review. We disagree. The
problem was never that the private entity proposed the
rules; the problem was that the agency lacked power to
second-guess them once they were proposed. See
Horsemen’s I, 53 F.4th at 884 (“The FTC’s oversight is
too limited to ensure the Authority functions subordinately to the agency.” (cleaned up) (quoting Adkins, 310
U.S. at 399)). Now the FTC has been given that power:
it can “abrogate” or “modify” Authority rules it disagrees with. § 3053(e). And that new power gives consistency review new bite. Previously, consistency review “exclude[d] . . . the Authority’s policy choices in
formulating rules.” Horsemen’s I, 53 F.4th at 885. Now
it implicitly includes review of those choices. The FTC
must approve only those rules “consistent with . . . applicable rules approved by the [FTC],” and, thanks to
the amendment, it is the FTC that has final word over
what those rules are. § 3053(c)(2); see also Oklahoma I,
62 F.4th at 231 (explaining that “the FTC’s later authority to modify any rules for any reason at all, including
policy disagreements, ensures that the FTC retains
14a
ultimate[] authority over the implementation of the
Horseracing Act”). 5
Next, the Horsemen argue the FTC’s new review
power creates a timing problem. Because the FTC may
alter only rules “promulgated” by the Authority, § 3053(e),
regulated entities may end up being subject to the Authority’s rules until the FTC can intervene and fix them.
We disagree. The FTC has 60 days to approve or disapprove a proposed rule. § 3053(c)(1). If the FTC is concerned about a proposed rule going into effect, then it
can intervene and create safeguards to prevent that
from happening. See § 3053(a) (requiring Authority to
submit proposed rules to the FTC “in accordance with
such rules as the [FTC] may prescribe”). For instance,
the agency could adopt a rule postponing the effective
date of a newly enacted rule. See Oklahoma I, 62 F.4th
at 232 (suggesting this). Or the agency could engage in
emergency rulemaking to delay the effective date of a
rule. In any event, these are hypothetical problems that,
if they arise, can be addressed in as-applied challenges.
See Hersh v. U.S. ex rel. Mukasey, 553 F.3d 743, 762 (5th
Cir. 2008) (holding that “as-applied challenges are preTexas contends § 3053(e) does not solve the nondelegation problem because it gives the FTC only limited rulemaking authority—
i.e., “to ensure the fair administration of the Authority.” Because
the FTC lacks plenary rulemaking authority, Texas argues, the Authority still effectively calls the shots. We disagree. Section 3053(e)
empowers the FTC to engage in rulemaking, not only for specified
purposes, but also “otherwise in furtherance of the purposes of
[HISA].” This language, borrowed from the Maloney Act, gives
the agency “broad authority to oversee and to regulate the rules
adopted by the [Authority] . . . , including the power to mandate the
adoption of any rules it deems necessary[.]” Shearson/Am. Express,
Inc. v McMahon, 482 U.S. 220, 233-34 (1987).
5
15a
ferred”). This is a facial challenge, however, and we cannot say that a potential timing gap in FTC’s § 3053(e)
review makes HISA unconstitutional in all its applications. See United States v. Salerno, 481 U.S. 739, 745
(1987) (holding that a facial challenger “must establish
that no set of circumstances exists under which the Act
would be valid”). 6
Finally, the Horsemen point to the SEC’s supervisory authority over private self-regulatory organizations
like FINRA. They argue that, notwithstanding § 3053(e),
the FTC still has less sway over the Authority than the
SEC does over FINRA. We again disagree. We previously pointed out that the “key distinction” between the
FTC and the SEC was the FTC’s lack of general rulemaking power. See Horsemen’s I, 53 F.4th at 887-88.
“The SEC itself,” we explained, “can make changes to
FINRA rules, but the FTC can only recommend
changes to the Authority’s rules.” Id. at 888 (citation
omitted). But Congress has now amended HISA to give
the FTC the same general rulemaking authority that the
SEC has with respect to FINRA. See Oklahoma I, 62
F.4th at 225, 229 (reaching this conclusion).
In sum, we agree with the district court and the Sixth
Circuit that, in light of Congress’s amendment to HISA
in § 3053(e), the Authority’s rulemaking power is subordinate to the FTC’s. Because the FTC has ultimate say
on what the rules are, the Authority’s power to propose
The Horsemen also argue that the Authority can circumvent the
FTC by issuing unreviewable guidance documents, such as dear
colleague letters. We disagree. The Authority admits such guidance
would not have the force of law and, even if it did, the FTC has authority to review guidance documents, § 3054(g)(2), and to promulgate a
rule overruling guidance it disagrees with.
6
16a
horseracing rules does not violate the private nondelegation doctrine.
B.
Private Nondelegation Challenge to Authority’s Enforcement
Appellants next argue that, apart from its rulemaking powers, the Authority’s enforcement powers violate
the private nondelegation doctrine. Recall that the Authority enforces HISA by levying sanctions, which are
ultimately subject to FTC review, and by bringing lawsuits. The Authority also has power to investigate potential violations, although the actual investigatory
work is contracted to other private organizations, such
as HIWU in the case of doping rules, or to state racing
commissions in the case of racetrack safety rules. See
supra Part I(A). Our Horsemen’s I decision did not address this challenge to the Authority’s enforcement
powers, see 53 F.4th at 890 n.37, and on remand the district court treated it as a due process claim and rejected
it, see Black II, 672 F. Supp. 3d at 248-49. Appellants
now bring the claim to us, arguing that the Authority’s
enforcement power is not subordinate to FTC oversight.
1.
Before addressing the merits of this claim, we must
address the Authority’s argument that it is premature.
Arguing both in terms of standing and ripeness, the Authority contends that it has not yet tried to enforce
HISA against the Horsemen and that any challenge to
the Authority’s enforcement power can be raised if and
when it does. We disagree for several reasons.
First, the Authority misunderstands the Horsemen’s
claim. They do not challenge some particular enforcement action undertaken by the Authority—claiming, for
17a
instance, that the Authority issued an overbroad subpoena for medical records or lacked probable cause to
search a racetrack. Instead, the Horsemen argue that
HISA, on its face, vests the Authority with enforcement
power that is effectively unreviewable by the agency.
When a regulated entity raises “a purely legal challenge” like this one, “it is unnecessary to wait for the
Regulation to be applied in order to determine its legality.” Contender Farms, L.L.P. v. U.S. Dep’t of Agric.,
779 F.3d 258, 267 (5th Cir. 2015) (cleaned up); see also
Nat’l Env’t Dev. Ass’n’s Clean Air Project v. EPA, 752
F.3d 999, 1008 (D.C. Cir. 2014) (“Petitioner’s challenge
in this case presents a purely legal question. . . . It is
unnecessary to wait for the [statute] to be applied in order to determine its legality.”); Susan B. Anthony List
v. Driehaus, 573 U.S. 149, 163 (2014) (“Nothing in this
Court’s decisions requires a plaintiff who wishes to challenge the constitutionality of a law to confess that he will
in fact violate that law.”).
Second, the Horsemen have a cognizable injury for
standing purposes. Pursuant to HISA, they have already
had to agree “to be subject to and comply with the [Authority’s] rules, standards, and procedures”—including
rules requiring they cooperate with investigations, consent to searches, and comply with subpoenas. See 15
U.S.C. § 3054(c)-(f ). In other words, the Horsemen are
themselves “objects of the Regulation,” and so “there is
ordinarily little question” that they have standing to
challenge it. Contender Farms, 779 F.3d at 264-65 (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 561-62
(1992)). And courts typically do not require a regulated
party to “bet the farm” by violating a regulation before
allowing it to test its validity. Free Enter. Fund v. Pub.
Co. Acct. Oversight Bd., 561 U.S. 477, 490 (2010); see
18a
also, e.g., Metro. Wash. Airports Auth. v. Citizens for
Abatement of Aircraft Noise, Inc., 501 U.S. 252, 265 n.13
(1991) (explaining that a separation-of-powers challenge
to a board’s veto powers was “ripe even if the veto power
ha[d] not been exercised to respondents’ detriment”).
Finally, the record shows several instances in which
the Authority has enforced HISA against the Horsemen. For example, the Authority has threatened one of
the Horsemen’s members with sanctions if it did not repair a racetrack railing. Additionally, the Authority has
both threatened and actually barred member racetracks
in Texas from broadcasting races out of state because
they failed to register with the Authority. More generally, the Horsemen represent some 30,000 members
and, when the parties filed their briefs, the Authority’s
website already listed hundreds of enforcement actions
—and that number has now grown to over 3,000. 7 So, at
a minimum, the Horsemen have shown a credible threat
that the Authority will bring enforcement actions against
their members in the future. See Driehaus, 573 U.S. at
164.
In sum, the Horsemen have standing to challenge the
Authority’s enforcement powers and that challenge is
ripe. We proceed to the merits.
2.
The Horsemen’s (as well as Texas’s) basic contention
is that HISA grants the Authority enforcement power
that is effectively unreviewable by the FTC. That claim
See generally Rulings, HORSERACING INTEGRITY & SAFETY
AUTH., https://portal.hisausapps.org/public-rulings [https://perma.
cc/24TV-7NV3] (last visited June 3, 2026) (listing 3,307 enforcement
rulings)
7
19a
turns on the same standard as the challenge to the Authority’s rulemaking addressed in Horsemen’s I: the
delegation is constitutional if, when enforcing HISA,
the Authority “ ‘functions subordinately’ to an agency
with ‘authority and surveillance’ over it.” 53 F.4th at 881
(quoting Rettig, 987 F.3d at 532). In other words, the
Authority may constitutionally enforce HISA only if it
acts “as an aid” to the FTC, which “retains the discretion to approve, disapprove, or modify” the private entity’s enforcement actions. Ibid. (cleaned up) (quoting
Amtrak I, 721 F.3d at 671). 8
While the constitutional standard is the same, the nature of the delegated authority is different this time
around. Horsemen’s I addressed delegation of legislative authority—the power to make rules. See Myers v.
United States, 272 U.S. 52, 186 (1926) (McReynolds, J.,
dissenting) (“The essence of the legislative authority is
to . . . prescribe rules for the regulation of the society[.]”). Logically, we focused on which actor—government agency or private entity?—had final say over
the content of those rules. See Horsemen’s I, 53 F.4th
at 884-87 (analyzing FTC’s lack of authority over the
Authority’s policy choices). Today, by contrast, we address delegation of executive authority. The power
to launch an investigation, to search for evidence, to
sanction, to sue—these are all quintessentially executive
As explained in Horsemen’s I, the D.C. Circuit’s Amtrak I decision was vacated only because the Supreme Court found Amtrak was
a governmental, as opposed to private, entity. 53 F.4th at 881 n.22
(citing Amtrak II, 575 U.S. at 46, 50–55). The D.C. Circuit’s private
nondelegation analysis, however, remains sound and has been approved by our court. See id. at 881 (explaining that Amtrak I
“expressed the [private nondelegation doctrine] more precisely”
than prior formulations).
8
20a
functions.9 And they have been considered so from our
Nation’s founding. 10 As much as legislative power, the
See, e.g., Bowsher v. Synar, 478 U.S. 714, 733 (1986) (“Interpreting a law enacted by Congress to implement the legislative mandate
is the very essence of ‘execution’ of the law.”); Morrison v. Olson,
487 U.S. 654, 696 (1988) (reasoning “the power to initiate an investigation” is executive power that must be subject to the Attorney
General’s “unreviewable discretion”); Buckley v. Valeo, 424 U.S. 1,
138, 140 (1976) (per curiam) (concluding the “discretionary power to
seek judicial relief” and “conduct[] civil litigation in the courts of the
United States for vindicating public rights” are exercises of Article
II executive power); Seila L. LLC v. Consumer Fin. Prot. Bureau,
591 U.S. 197, 225 (2020) (holding the CFPB director unconstitutionally exercised “executive power” to “set enforcement priorities,
initiate prosecutions, and determine what penalties to impose on
private parties”); id. at 219 (holding the “power to seek daunting
monetary penalties against private parties . . . [is] a quintessentially executive power”); Free Enter. Fund, 561 U.S. at 504 (holding
the “power to start, stop, or alter individual Board investigations” is
part of the executive power); Collins v. Yellen, 594 U.S. 220, 254
(2021) (holding the power “to issue subpoenas” is an “executive
power”); id. at 289 (SOTOMAYOR, J., concurring in part and dissenting in part) (noting “the power to impose fines” is an “executive
power”); id. at 287 (arguing the FTC had significant executive power
because it had “wide powers of investigation” and “broad authority
to issue complaints and cease-and-desist orders” (quoting Humphrey’s Ex’r v. United States, 295 U.S. 602, 620–21 (1935))); United
States v. Grubbs, 547 U.S. 90, 98 (2006) (describing a search as an
“exercise of executive power”); California v. Acevedo, 500 U.S. 565,
586 (1991) (STEVENS, J., dissenting) (“The Fourth Amendment is a
restraint on Executive power.”).
10
See generally Dina Mishra, An Executive-Power Non-Delegation
Doctrine for the Private Administration of Federal Law, 68 VAND.
L. REV. 1509, 1545 (2015) (discussing “[c]ertain types of tasks
that seem quintessentially executive,” including “the tasks of law
enforcement—that is, of forcing compliance with the law”); id. at
1546 (“Ratification-era history further supports the understanding
that law enforcement consists of forcing compliance or imposing
9
21a
private nondelegation doctrine forbids unaccountable
delegations of executive power. See, e.g., Amtrak II, 575
U.S. at 62 (Alito, J., concurring) (“Private entities are
not vested with ‘legislative Powers.’ Art. I, § 1. Nor are
they vested with the ‘executive Power,’ Art. II, § 1, cl. 1,
which belongs to the President.”). Accordingly, we must
determine whether HISA delegates enforcement power
to private entities and, if so, whether that power is subordinate to the FTC.
HISA divides enforcement authority among the
FTC, the Authority, and HIWU, “each within the scope
of their powers and responsibilities under this chapter.”
§ 3054(a). Recall that HIWU is the private non-profit to
whom the Authority must delegate anti-doping and
medication enforcement. See § 3054(e)(1)(B).11 So, the
answer to the question before us turns on what “powers
and responsibilities” each of these three entities has unsanctions on law violators.” (citing THE FEDERALIST No. 21, at 134–
35 (Alexander Hamilton) (Clinton Rossiter ed., 1961))); Aditya Bamzai & Saikrishna Bangalore Prakash, The Executive Power of Removal, 136 HARV. L. REV. 1756, 1764 (2023) (“Law execution was the
executive power’s principal component.”); Saikrishna Prakash, The
Essential Meaning of Executive Power, 2003 U. ILL. L. REV. 701,
737 (“Executive officers investigate, apprehend, and prosecute potential lawbreakers. As the wielder of the executive power, the president is the chief of these law enforcement executives.”); Ilan
Wurman, In Search of Prerogative, 70 DUKE L.J. 93, 146-47 (2020)
(arguing that law enforcement and prosecution powers have been
considered core executive functions since the Founding).
11
The Authority also “may enter into agreements” with State racing commissions to enforce the racetrack safety program. See
§ 3054(e)(2)(A)(i), (3); § 3056(c). The Authority remains in charge,
however, and dictates the “scope of work, performance metrics,
reporting obligations, budgets, and any other matter [it] considers
appropriate.” § 3054(e)(2)(B).
22a
der HISA. Although HISA somewhat confusingly disperses the relevant provisions throughout the Act, we
can discern the following division of labor.
First, the Authority has responsibility for (1) investigating potential violations, including by issuing subpoenas (§ 3054(h)); (2) levying sanctions (§§ 3054( j)(1), 3057,
3058(a)); and (3) bringing suit against violators for injunctive relief or to enforce sanctions (§ 3054( j)(1)-(2)).
Second, actual enforcement of doping and medication
rules is done by HIWU, which “implement[s]” those
rules “on behalf of the Authority.” § 3054(e)(1)(E)(i).
In this regard, HIWU’s responsibilities include “independent investigations, charging and adjudication of
potential medication control rule violations, and the enforcement of any civil sanctions for such violations.”
§ 3055(c)(4)(B); see also § 3054(e)(1)(E)(iv). Third, the
FTC may ask an ALJ to review any sanction de novo,
§ 3058(b)(1), and the FTC may itself review the ALJ’s
decision de novo, either on its own motion or upon petition by an aggrieved party, § 3058(c).
The Act’s plain terms permit only one conclusion:
HISA is enforced by a private entity, the Authority. The
Authority decides whether to investigate a covered entity for violating HISA’s rules. The Authority decides
whether to subpoena the entity’s records or search its
premises. The Authority decides whether to sanction
it. And the Authority decides whether to sue the entity
for an injunction or to enforce a sanction it has imposed.
To be sure, the Authority does not perform these functions itself. Rather, HISA requires the Authority to
contract with another private entity, HIWU, which undertakes enforcement “on behalf of the Authority.”
§ 3054(e)(1)(E)(i). The bottom line, though, is that a pri-
23a
vate entity, not the agency, is in charge of enforcing
HISA.
Consider also what HISA does not say. It does not
empower the FTC to decide whether to investigate a
covered entity, whether to subpoena its records, whether
to search its premises, whether to charge it with a violation, or whether to sanction or sue it. Nor does the Act
empower the FTC to countermand any of the Authority’s investigatory or charging decisions (or, more precisely, HIWU’s decisions). Nor does it require the Authority or HIWU to seek the FTC’s approval before investigating, searching, charging, sanctioning, or suing.
All these actions are enforcement actions, and, by the
plain terms of the Act, they can be done by the private
entities without the FTC’s involvement.
The inescapable conclusion is that the Authority does
not “function subordinately” to the FTC when enforcing
HISA. Horsemen’s I, 53 F.4th at 881. That is not permitted under the private nondelegation doctrine. A private entity that can investigate potential violations, issue subpoenas, conduct searches, levy fines, and seek
injunctions—all without the say-so of the agency—does
not operate under that agency’s “authority and surveillance.” Ibid. Put another way, with respect to enforcement, HISA’s plain terms show that the Authority does
not merely act “as an aid” to the FTC because the FTC
does not “retain[] the discretion to approve, disapprove,
or modify” the Authority’s enforcement actions. Ibid.
(cleaned up) (quoting Amtrak I, 721 F.3d at 671).
3.
One might counter, though, that the FTC at least
partially supervises the Authority because it can review
sanctions at the back end, after ALJ review. See
24a
§§ 3055(c)(4)(B), 3058(b)(3)-(c)(3). That is true, and it is
the Authority’s best argument for why its enforcement
power is subordinate to the FTC.
The argument nonetheless fails. Suppose the Authority sanctions a horse owner for a doping violation,
but the sanction is later reversed by the FTC. Does that
make the Authority’s enforcement power subordinate to
the agency? No, it does not. Consider everything the
Authority was permitted to do up to that point: launch
an investigation into the owner, subpoena his records,
search his facilities, charge him with a violation, adjudicate it, and fine him. 12 Each and every one of those acNot only does HISA facially permit that, but it has already happened. For example, in one FTC appeal, it is uncontested that
three private Authority investigators showed up at the appellant’s
residence and served her with a notice of an alleged doping violation (there is no personal service requirement under the statute).
The investigators then “subjected [the appellant] to a coercive interrogation in a small room” and searched “her barn and . . . her
mother’s car” for banned substances. Statement of Contested
Facts and Specification of Additional Evidence, In re Lynch, 2024
WL 1111724 (F.T.C.), at *2, Dkt. No. 9423. She was then fined
$55,000 and banned from racing for 48 months. Id. at *3. She later
settled with the Authority, and the case was dismissed. Order of
Withdrawal from Review by the Administrative Law Judge, In re
Lynch, 2024 WL 4298917 (F.T.C.), Dkt. No. 9423. Authority investigators have also searched defendants’ property and extracted
fines under HISA’s strict liability regime for possession of banned
substances. For example, one veterinarian forgot to clean out his
trailer and still had two buckets of a newly banned substance two
weeks after the effective date. Private Authority investigators
searched his trailer, found the buckets, fined him $5,000, and banned
him from practice for 14 months. The ALJ affirmed on appeal. All
this despite the fact that the Authority and the ALJ conceded that
the appellant purchased the substance long before it was banned,
forgot it was in his trailer, and did not even attempt to use it on a
12
25a
tions is “enforcement” of HISA. Each can occur under
HISA without any supervision by the FTC. Moreover,
penalties imposed by the Authority are not automatically stayed pending appeal. See 16 C.F.R. § 1.148(a)
(2022). So, any penalty goes into effect as soon as the
Authority makes its decision, unless the ALJ or FTC exercises its discretion to implement a stay pending appeal. See § 3058(d).
It is no answer to say that the FTC can come in at the
tail-end of this adversarial process and review the sanction. As far as enforcement goes, the horse was already
out of the barn. (You knew that was coming.) Besides,
what if the sanctioned owner, instead of fighting the process, opts to settle for a lower fine? See, e.g., In re Lynch,
2024 WL 4298917 (F.T.C.), Dkt. No. 9423 (dismissing case
due to settlement). In that case, according to the Authority’s logic, no one has enforced HISA. That is obviously not true. To the contrary, the settlement scenario
—which will likely happen often—only underscores that
it is the private entity that acts as HISA’s enforcer in
any meaningful sense.
Consider a hypothetical. Suppose a city structures
its speeding laws to let a group of private car enthusiasts
monitor speeds with their own radar guns, pull speeders
over, and ticket them. Fines are reviewed by the police
department and, ultimately, the mayor. Who enforces
horse. The appellant petitioned the FTC to review the decision.
That petition was denied. Decision of the Commission on Application for Review Under 15 U.S.C. § 3058, In re Perez, 2024 WL
3824065 (F.T.C.), Dkt. No. 9420; see also Administrative Law Judge
Decision on Application for Review, In re Poole, 2023 WL 8435860
(F.T.C.), Dkt. No. 9417 (affirming an $18,000 fine and banning him
from practice for 22 months for a similar inadvertent possession of
a newly banned substance).
26a
the speeding laws? Anyone would say the private group.
After all, consider how many cases we decide concerning
whether the police have wrongly stopped someone or
used excessive force during the stop. See, e.g., Terrell v.
Town of Woodworth, No. 23-30510, 2024 WL 667690 (5th
Cir. Feb. 19, 2024) (per curiam). All would agree that
the police were “enforcing” the law when they stopped
the person. The same goes for the private entity in the
hypothetical.
The Authority’s argument, moreover, does not work
even on its own terms. In addition to levying fines, HISA
empowers the Authority to sue people and racetracks
to enjoin past, present, or impending violations. See
§ 3054( j)(1) (providing “the Authority may commence a
civil action against a covered person or racetrack that
has engaged, is engaged, or is about to engage, in acts
or practices constituting a violation of this chapter . . .
to enjoin such acts or practices”); § 3054( j)(2) (allowing
issuance of “a permanent or temporary injunction or restraining order . . . without bond”). HISA gives the
FTC no role in this process, either before or after the
fact. So, even assuming the Authority is correct (and it
is not) that the agency’s after-the-fact supervision of
sanctions makes the Authority subordinate, the Authority is demonstrably not subordinate when it comes to suing violators for injunctions. That is plainly an unsupervised delegation of executive power that the Constitution does not tolerate. See Buckley, 424 U.S. at 138 (“A
lawsuit is the ultimate remedy for a breach of the law,
and it is to the President . . . that the Constitution entrusts [this] responsibility[.]”).
27a
4.
The Authority next argues 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. See § 3053(e) (empowering FTC to “abrogate, add to, and modify” the Authority’s rules). This argument persuaded the Sixth Circuit
that at least a facial challenge to the Authority’s enforcement powers should fail. See Oklahoma I, 62 F.4th
at 231 (through § 3053(e) rulemaking, “the FTC could
subordinate every aspect of the Authority’s enforcement,” which “suffices to defeat a facial challenge”).
And we have already found that the FTC’s rulemaking
power has some purchase in turning back a facial challenge to the Authority’s rulemaking power: as explained,
the agency could ensure via rulemaking that no Authority rule could go into effect until the agency had time to
review it. See supra Part III(A). With great respect to
our colleagues on the Sixth Circuit, however, we are not
convinced that this rulemaking argument can save the
Authority’s enforcement powers.
The Authority’s rulemaking argument would let the
agency rewrite the statute. In HISA, Congress set
out a definite enforcement scheme, dividing responsibilities among the FTC, the Authority, and HIWU. See
§ 3054(c)(1), (e). HISA is quite clear about this: it provides that those three entities “implement and enforce”
the Act, “each within the scope of their powers and responsibilities under this chapter.” § 3054(a)(1) (emphasis added). A mere agency cannot alter that statutory
division of labor. See, e.g., Gulf Fishermens Ass’n v.
Nat’l Marine Fisheries Serv., 968 F.3d 454, 460 (5th Cir.
2020) (“We will not defer to ‘an agency interpretation
28a
that is inconsistent with the design and structure of the
statute as a whole.’ ” (quoting Util. Air Regul. Grp. v.
EPA, 573 U.S. 302, 321 (2014))); 5 U.S.C. § 706(2)(C) (authorizing courts to set aside agency action “in excess of
statutory jurisdiction, authority, or limitations”). 13 As
the Supreme Court recently reiterated, even “statutory
permission to ‘modify’ does not authorize ‘basic and fundamental changes in the scheme’ designed by Congress.”
Biden v. Nebraska, 600 U.S. 477, 494 (2023) (quoting MCI
Telecomms. Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218,
225 (1994)). Yet that is just what the Authority says the
FTC could do through rulemaking.
Take the Authority’s power to seek injunctions.
HISA empowers the Authority to file suit to enjoin vioSee also Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 473
(2001) (holding that agency rulemaking “has no bearing upon”
whether a statutory delegation is constitutional); Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6-7 (2000)
(“Where a statute names the parties granted the right to invoke its
provisions, such parties only may act.” (cleaned up)); Bayou Lawn
& Landscape Servs. v. Sec’y of Lab., 713 F.3d 1080, 1084-85 (11th
Cir. 2013) (holding it “axiomatic that an agency’s power to promulgate legislative regulations is limited to the authority delegate[d]
to it by Congress” and that courts cannot “locate . . . power in
one agency where it had been specifically and expressly delegated
by Congress to a different agency”); Union Pac. R.R. Co. v. Surface Transp. Bd., 863 F.3d 816, 823 (8th Cir. 2017) (finding express
delegation to the Federal Railroad Administration precluded implied authority claimed by the private Board); Perot v. FEC, 97
F.3d 553, 559 (D.C. Cir. 1996) (per curiam) (“We agree with the general proposition that when Congress has specifically vested an agency
with the authority to administer a statute, it may not shift that responsibility to a private actor[.]”); EPA v. EME Homer City Generation, L.P., 572 U.S. 489, 509 (2014) (relying on the statute’s “plain
text and structure [to] establish a clear chronology of federal and
State responsibilities” (quotation omitted)).
13
29a
lations, while saying nothing about FTC involvement in
the process. See § 3054( j)(1). Yet the Authority suggests the FTC could, by rule, require the Authority to
preclear any such action with the agency. We disagree.
That would let the agency amend the enforcement scheme
delineated by statute.14 The same goes for investigatory
and subpoena power: HISA unqualifiedly gives that power to the Authority, see § 3054(h), and then requires the
Authority to delegate it to HIWU, see §§ 3054(e)(1)(E)(iv),
3055(c)(4)(B) (the Authority “shall” contract with HIWU
to “conduct and oversee” anti-doping and medication enforcement “including independent investigations”). And
the same goes for charging and adjudicating violations
and levying sanctions. See ibid. (the Authority “shall”
contract with HIWU to “conduct and oversee . . . charging and adjudication of potential medication control rule
violations, and the enforcement of any civil sanctions for
such violations”); § 3054( j) (recognizing the Authority’s
power to impose “civil sanctions”). Congress enacted
this reticulated scheme. The agency cannot amend it by
promulgating a rule.
Furthermore, when Congress wanted to put the FTC
in charge of enforcement, it knew how. Section 3059, for
instance, is a separate part of HISA targeting certain
Nor could the Authority claim that the statute is merely silent
about FTC pre-approval and that gap could be filled by rulemaking.
Our circuit has repeatedly rejected this “nothing-equals-something
argument” for conjuring agency authority out of thin air. Gulf Fishermens, 968 F.3d at 460-61 (citing Texas v. United States, 809 F.3d
134, 186 (5th Cir. 2015), aff ’d by an equally divided court, 579 U.S.
547 (2016) (per curiam)).
14
30a
“unfair or deceptive” practices in selling horses. 15 With
respect to that section, the Authority can only “recommend” that the FTC “commence an enforcement action.”16 § 3054(c)(1)(B). In other words, only here did
Congress limit the Authority’s enforcement discretion
to “recommending” agency enforcement. Cf. § 3054( j)(1)
(providing “the Authority may commence a civil action”
seeking an injunction). Yet the Authority contends that
the agency could, by rulemaking, make every enforcement action subject to similar FTC approval. That would
rewrite the enforcement scheme Congress enacted. See
Russello v. United States, 464 U.S. 16, 23 (1983) (“Where
Congress includes particular language in one section of
a statute but omits it in another section of the same Act,
it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” (cleaned up)). 17
See § 3059 (deeming it an unfair or deceptive practice under 15
U.S.C. § 45(a) to fail to disclose to a buyer that a horse was administered “a bisphosphonate” before its fourth birthday or any other
prohibited substance).
16
See § 3054(c)(1)(B) (providing the “Authority . . . with respect
to an unfair or deceptive act or practice described in section 3059
of this title, may recommend that the Commission commence an
enforcement action”).
17
Following our original Horsemen’s II decision, a split panel of
the Eighth Circuit disagreed with us on this point. See Walmsley
v. Fed. Trade Comm’n, 117 F.4th 1032, 1039-40 (8th Cir. 2024). In
partial dissent, Judge Gruender agreed with our view. See id. at
1041-44 (Gruender, J., concurring in part and dissenting in part).
The Supreme Court subsequently vacated the Eighth Circuit’s
judgment and remanded for further consideration in light of Consumers’ Research. See 145 S. Ct. 2870 (2025) (mem.). The Eighth
Circuit has not yet issued a decision on remand.
15
31a
Additionally, the Sixth Circuit believed the FTC
could supervise the Authority through a slightly different kind of rulemaking—that is, by issuing rules governing how the Authority enforces HISA. See Oklahoma I,
62 F.4th at 231. For instance, the agency could issue rules
against “overbroad subpoenas or onerous searches” or
“provid[ing] a suspect with a full adversary proceeding
and with free counsel.” Ibid. Unhappily, we again disagree with our sister circuit.
The Horsemen are not complaining about how the
Authority exercises its enforcement power. They are
complaining about where the enforcement power is
lodged: on its face, HISA empowers private entities to
enforce it and permits agency oversight only after the
enforcement process is over and done with (and then
only with respect to fines, not injunctions). If the Horsemen were objecting only to overbroad subpoenas, unwarranted searches, or lack of free counsel, perhaps
those complaints could be addressed through rulemaking or as-applied challenges. But their complaint is different. They contend that HISA facially delegates unsupervised enforcement power to private actors. They
are right. See Salerno, 481 U.S. at 745 (recognizing
challengers shoulder a “heavy burden” to demonstrate
facial invalidity when they “establish that no set of circumstances exists under which the Act would be
valid”).18
Moreover, consider the revealing premise of this line of argument. Suppose the FTC issued a rule saying, “The Authority can
search racetracks only if it has probable cause.” Well and good,
but that rule still presupposes the Authority is the one doing the
search. Merely because the Authority would have to obey the
Fourth Amendment does not change the fact that a private entity
18
32a
In sum, HISA’s clear delineation of enforcement
power between the FTC, the Authority, and HIWU cannot be altered through rulemaking.
5.
Finally, the Authority defends its enforcement role
by analogizing it to the role of self-regulatory organizations (“SROs”)—specifically, FINRA—which assist the
SEC in enforcing securities laws. The Authority seeks
support in circuit cases concluding that FINRA’s enforcement role presents no private nondelegation problem. See, e.g., Oklahoma I, 62 F.4th at 229, 232 (gathering cases).19 For their part, the Horsemen argue that,
for enforcement purposes, the FTC-Authority relationis searching your racetrack without agency say-so. And it is no
answer to say that the agency could issue a rule saying, “The Authority can search racetracks only if the FTC approves the search.”
That rule, as explained, would amend the statute’s division of authority. See § 3054(h) (“The Authority shall have subpoena and investigatory authority with respect to civil violations committed under its jurisdiction.”).
19
The Sixth Circuit relied on several cases upholding the constitutionality of FINRA to hold that “[i]n case after case, the courts
have upheld [the Maloney Act’s] arrangement, reasoning that the
SEC’s ultimate control over the rules and their enforcement makes
the SROs permissible aides and advisors.” Oklahoma I, 62 F.4th
at 229. We do not read those cases quite so broadly. They relied
largely on the grounds that the SEC ultimately approves any proposed rules and has its own generalized rulemaking power. See,
e.g., R.H. Johnson & Co. v. SEC, 198 F.2d 690, 696 (2d Cir. 1952)
(considering only whether the SEC abused its discretion); Todd &
Co. v. SEC, 557 F.2d 1008, 1012 (3d Cir. 1977) (considering only a
nondelegation challenge to the SEC’s legislative rulemaking authority); First Jersey Sec., Inc. v. Bergen, 605 F.2d 690, 697 (3d Cir.
1979) (same); Sorrell v. SEC, 679 F.2d 1323, 1325-26 (9th Cir. 1982)
(same). But none addressed a nondelegation challenge to executive
power.
33a
ship is meaningfully different from the SEC-FINRA relationship. As we have before noted, HISA was modeled
on the Maloney Act, which created FINRA. See Horsemen’s I, 53 F.4th at 887; supra Part III(A). Moreover,
we concluded in Horsemen’s I that HISA lacked a key
feature of the Maloney Act empowering the SEC to “abrogate, add to, and delete” rules proposed by FINRA.
Horsemen’s I, 53 F.4th at 887. As discussed, Congress
added a similar provision to HISA, which remedied the
nondelegation problem with the Authority’s rulemaking
powers. Supra Part III(A).
We agree with the Horsemen that, for enforcement
purposes, HISA gives the Authority an enforcement role
meaningfully different from FINRA’s. Unlike the SECFINRA relationship, HISA does not give the FTC potent oversight power over the Authority’s enforcement
such as the power to enforce HISA itself, deregister the
Authority as the enforcing entity, or remove its directors.
To begin with, Congress empowered the SEC to enforce FINRA’s rules if needed. The SEC can “in its discretion, make such investigations as it deems necessary
to determine whether any person has violated, is violating, or is about to violate” the Maloney Act. 15 U.S.C.
§ 78u(a)(1). The SEC can also, on its own accord, seek
criminal sanctions, injunctive relief, or disgorgement.
§ 78u(c), (d), (d)(4). The FTC cannot. See § 3054(c)(1)(A)(iii)
(granting the Authority investigatory power); § 3054(e)
(granting the Authority and HIWU enforcement responsibility). The SEC has power to issue subpoenas,
see §§ 77s(c), 78u(c), while HISA gives the Authority
that power, § 3054(h), (c)(1)(A)(ii). The SEC can also
revoke FINRA’s ability to enforce its rules, § 78s(g)(2),
34a
and step in and enforce any written rule itself, § 78o(b)(4).
HISA gives the FTC none of these tools.
Moreover, HISA diverges radically from the Maloney Act in empowering the Authority to sue. The SEC
alone has the power to bring civil suits, §§ 78u-1(a)(1),
78u(d)(1), while HISA gives that power exclusively to
the Authority, § 3054( j)(1). Giving a private entity the
sole power to sue in federal court to enforce a statute
cuts to the core of executive power. See Buckley, 424
U.S. at 138 (“A lawsuit is the ultimate remedy for a
breach of the law, and it is to the President . . . that
the Constitution entrusts [this] responsibility[.]”). 20
Finally, the SEC “retains formidable oversight power
to supervise, investigate, and discipline [FINRA] for
any possible wrongdoing or regulatory missteps.” In
re NYSE Specialists Sec. Litig., 503 F.3d 89, 101 (2d Cir.
2007). The FTC does not. This “formidable” power is
manifest in the SEC’s ability to derecognize FINRA’s
regulatory role entirely, § 78s(a)(3), (h)(1); remove
One may reasonably ask whether HISA’s delegation of enforcement authority is supported by an analogous delegation in qui tam
statutes. We think not. The Horsemen note our decision in Riley v.
St. Luke’s Episcopal Hospital, 252 F.3d 749 (5th Cir. 2001) (en banc),
where we held that the False Claims Act (“FCA”) does not violate Article I’s Take Care Clause. They argue that Riley does not support
HISA’s delegation because qui tam relators are episodic and do not
have a continuing relationship with the government. That is true,
but we see a more fundamental distinction between the two statutes:
under the FCA, the executive branch has substantial power over qui
tam relators that the FTC does not have over the Authority. For
example, the United States can intervene in any qui tam litigation,
take control of the litigation, veto settlement agreements, and dismiss the suit “notwithstanding the objections of the [relator].” Id.
at 753-54. HISA gives the FTC none of those powers.
20
35a
FINRA board members for cause, § 78s(h)(4); remove
any individual FINRA member, § 78s(h)(2); and bar
any person from associating with FINRA, § 78o3(g)(2). HISA, on the other hand, “recognize[s] for
purposes of developing and implementing” the Act only
“[t]he private, independent, self-regulatory, nonprofit
corporation, to be known as the ‘Horseracing Integrity
and Safety Authority.’ ” § 3052(a). And only the Authority’s Board can remove members: directors by a twothirds vote and committee members for any reason. 21
6.
We now consider whether the Supreme Court’s recent Consumers’ Research decision impacts our private
nondelegation analysis in this case.
Consumers’ Research addressed challenges to a federal law tasking the Federal Communications Commission (“FCC”) with providing affordable communications
services throughout the United States. The law required telecom carriers to pay quarterly into a Universal Service Fund (“USF”), which would be distributed
to underserved populations. A “contribution factor,” devised by the FCC, would set each carrier’s USF share.
See Consumers’ Rsch., 606 U.S. at 664, 666-67, 668; 47
U.S.C. §§ 151, 254.
Much of Consumers’ Research addressed whether
the law improperly delegated legislative power to the
FCC (i.e., a “public” nondelegation challenge). See 606
U.S. at 672-91. The Supreme Court held it did not. In
In saying all this, we express no opinion on whether the
SEC-FINRA relationship poses any constitutional issues under the
private nondelegation doctrine (or any other doctrine). Such questions are not posed by this case.
21
36a
brief, the Court explained that Congress had placed sufficiently “intelligible” guardrails around the FCC’s exercise of its assigned powers. See id. at 680-91; see generally J.W. Hampton, Jr., & Co. v. United States, 276
U.S. 394, 409 (1928) (asking whether Congress enacted
“intelligible principle[s]” to guide an agency’s exercise
of delegated authority).
The part of Consumers’ Research relevant here concerned a separate challenge to the FCC’s appointment
of a private organization—the Universal Service Administrative Company (the “Administrator”)—to manage
the USF. Consumers’ Rsch., 606 U.S. at 669. Among
other tasks, the Administrator produced the financial
projections the FCC used to determine carriers’ quarterly USF contribution. Id. at 669-70. The Administrator’s role was challenged as the delegation of legislative
power to a private organization. Id. at 692. The Court
rejected this challenge. Id. at 692-95.
Drawing on its earlier precedents, the Court reaffirmed the basic idea that a federal agency can delegate
power to a private organization only if it functions “subordinately” to the agency. Ibid. (first citing Carter Coal,
298 U.S. 238; and then citing Adkins, 310 U.S. 381 ). The
Court summarized the doctrine this way: “As long as an
agency . . . retains decision-making power, it may enlist private parties to give it recommendations.” Id. at
692.
Applying that standard, the Court held the Administrator’s role was permissible. The Administrator was
“broadly subordinate to the [FCC]” because (1) the FCC
appointed the Administrator’s board and approved its
budget; (2) the Administrator engaged in “no policymaking” but was “just doing arithmetic”; (3) the Admin-
37a
istrator had to carry out all tasks consistent with FCC
directives; and (4) the FCC could review the Administrator’s actions de novo. Id. at 693. Critically, the FCC
always had “a chance to review—and, if needed, to revise” the Administrator’s projections before approving
them. Id. at 694; see also id. at 695 (observing the Administrator’s projections could not “go into effect without [the FCC’s] say-so”). In sum, the FCC “alone” had
decision-making authority, while the Administrator
played only an “advisory role.” Id. at 693. Accordingly,
the Court concluded the FCC’s “transfer of accounting
functions to the Administrator” was proper because
“[i]n every way that matters to the constitutional inquiry, the [FCC], not the Administrator, is in control.”
Id. at 695.
For the following reasons, we conclude the private
nondelegation analysis in Consumers’ Research does
not change the outcome in this case.
a.
To begin with, Consumers’ Research articulated the
same private nondelegation doctrine we applied before
(and now reapply). An agency, the Court explained, may
“rely on advice and assistance from private actors,” provided they remain “broadly subordinate” to the agency’s
“authority and surveillance.” Id. at 692. That doctrinal
formulation is identical to our own: “[A] private entity
may wield government power only if it functions subordinately to an agency with authority and surveillance
over it.” Horsemen’s II, 107 F.4th at 423 (internal citations omitted). Indeed, the Court drew on the same
precedents we did. Compare Consumers’ Rsch., 606
U.S. at 692 (discussing Schechter Poultry, 295 U.S. 495;
Carter Coal, 298 U.S. 238; Adkins, 310 U.S. 381), with
38a
Horsemen’s II, 107 F.4th at 423 n.4 (citing same cases);
see also Horsemen’s I, 53 F.4th at 880-81 (same).
So, Consumers’ Research did not alter the doctrine,
whose touchstone remains the same it has always been
—namely, whether the private organization is “subordinate” to a superintending agency.
b.
Nor does the Court’s application of the doctrine to
the USF Administrator change our conclusion in this
case about the Authority’s enforcement powers. As we
held before and now reaffirm, in exercising those powers, the Authority does not function subordinately to the
FTC.
To see why, just compare the private actors in the
two cases. In Consumers’ Research, the Administrator
played merely an “advisory role,” leaving the FCC “alone”
with “decision-making authority.” Id. at 693. The Administrator only recommended how to calculate the contribution factor—but its advice could not go into effect
until the FCC reviewed it, revised it if necessary, and
gave the final “say-so.” Id. at 693-95. This arrangement
meant “the [FCC], not the Administrator, [wa]s in control.” Id. at 695.
The Authority wields power of an entirely different
color. HISA gives the Authority (and its secondary private partner) power to investigate, subpoena, sue, and
sanction covered entities. See Horsemen’s II, 107 F.4th
at 429. The FTC is given no statutory authority to approve, review, or countermand any of the Authority’s investigatory, prosectuory, or adjudicatory decisions. Ibid.
All of that enforcement, according to HISA’s “plain
terms,” “can be done by the private entities without the
39a
FTC’s involvement.” Ibid.; see generally supra Parts
I(A), III(B)(2).
True, the FTC has some back-end review over the
Authority’s enforcement actions.
See supra Part
III(B)(3) (discussing §§ 3055(c)(4)(B), 3058(b)(3)-(c)(3)).
So, one might ask: isn’t that like the “de novo review”
exercised over the Administrator by the FCC? See Consumers’ Rsch., 606 U.S. at 693. No, it is not. As the
Supreme Court explained, nothing the USF Administrator does respecting the contribution factor has any “legal (or, indeed, practical) effect” until the agency “decides [it] should.” Id. at 694. Contrast that with the Authority, which is empowered to launch numerous intrusive enforcement actions—investigations subpoenas,
searches, charges, adjudications—all without any agency oversight.22
All that is to say: Consumers’ Research only reinforces our previous conclusion. By exercising a raft of
unsupervised enforcement actions that go far beyond
This is where we continue to differ with the Sixth Circuit. On
remand, see Oklahoma v. United States, 145 S. Ct. 2836 (2025)
(mem.), our sister circuit reaffirmed its holding that the Authority’s enforcement powers are subordinate to the FTC. See Oklahoma II, 163 F.4th 294. Specifically, Oklahoma II relied on the
agency’s de novo review of Authority sanctions. Id. at 311. But we
have already explained why that review comes far too late to constitute genuine oversight of the Authority’s wide-ranging enforcement powers—such as investigations and subpoenas. See supra
Part III(B)(3). In addition, we have previously explained why the
FTC’s § 3053(e) rulemaking authority cannot amend the statutory
allocation of power between the agency and the Authority, see supra Part III(B)(4), another point on which we part ways with our
Sixth Circuit colleagues. Cf. Oklahoma II, 163 F.4th at 312 (concluding FTC could constrain the Authority’s investigatory powers
by rule).
22
40a
the USF Administrator’s “recommendations,” it is evident that “the [Authority], not the [FTC], is in control.”
Id. at 695.23
***
In sum, we agree with the Horsemen that the FTC
lacks adequate oversight and control over the Authority’s enforcement power. HISA’s explicit division of enforcement responsibility empowers the Authority with
quintessential executive functions and gives the FTC
scant oversight until enforcement has already occurred.
Such back-end review by the FTC does not subordinate
the Authority. And the FTC’s general rulemaking power provides no answer because executive rulemaking
cannot amend the plain division of enforcement power
laid out in HISA’s text. Such a radical delegation differs materially from the SEC–FINRA relationship because the FTC lacks any tools to ensure that the law is
properly enforced. HISA’s enforcement provisions
thus facially violate the private nondelegation doctrine.
C.
Due Process Challenge
We turn next to the Horsemen’s challenge based on
the Fifth Amendment’s Due Process Clause. They argue that HISA, both facially and as-applied, deprives
Although the point is not strongly contested by the parties on
remand, we note that Consumers’ Research also does not change
our previous holding concerning the Authority’s rulemaking. See
supra Part III(A). Texas points out that, unlike in Consumers’ Research, the FTC neither appoints the Authority’s Board nor approves its budget. True, but that feature is outweighed by the far
more critical point that the HISA amendments give the agency final
say-so over the content of any rule before it ever takes effect. See
supra Part III(A); see also Walmsley, 117 F.4th at 1039; Oklahoma
II, 163 F.4th at 308 (agreeing with us on this point).
23
41a
them of due process by permitting economically selfinterested actors to regulate their competitors. See
Carter Coal, 298 U.S. at 311 (government violates due
process by allowing regulation by “private persons
whose interests may be and often are adverse to the interests of others in the same business”). Specifically,
the Horsemen contend that Carter Coal does not require
proof of economic self-interest, only that the private
person “may be” adverse to those he regulates. They
then argue that several members of the Board and
standing committees violate the conflict of interest provisions due to their professions and prior financial interests. Finally, the Horsemen contend that the statute
fails to properly protect against self-interested actors
because it does not cover financial interests other than
interests in a covered horse, as opposed to a racetrack
or other facility.
The district court correctly rejected these claims. As
to the Horsemen’s facial challenge, the court concluded
it was defeated by HISA’s conflict-of-interest provisions. See Black II, 672 F. Supp. 3d at 252. Those provisions prohibit a range of individuals from serving as
Board or independent committee members, including
individuals with financial interests in, or who provide
goods or services to, covered horses; officials, officers,
or policy makers for an equine industry; and employees,
contractors, or immediate family members of the prior
individuals. § 3052(e)(1)-(4).
As to the as-applied challenge, the district court rejected it on the facts. Following a bench trial, the court
found the Horsemen relied only on the committee members’ biographical information but adduced no other evidence showing their adverse interests, financial or oth-
42a
erwise. See Black II, 672 F. Supp. 3d at 252 (“HISA affords sufficient protection through its conflicts-of-interest provisions, and the plaintiffs have not met their burden to show unconstitutional self-dealing by directors,
committee members, or others associated with the Authority.”). At most, the court observed that the biographical information may show the members do not
qualify as “independent members.” Ibid.; § 3052(b)(1)(A)
(“[I]ndependent members [must be] selected from outside the equine industry.”). But, as the court pointed
out, even assuming that to be true, it says nothing about
the members’ financial interests. Black II, 672 F. Supp.
3d at 252. On appeal, the Horsemen fail to show any error by the district court here.
D.
Appointments Clause Challenge
A separate plaintiff, Gulf Coast, challenges the Authority’s structure under the Appointments Clause of
Article II.24 Recall that Gulf Coast raised this distinct
challenge in a suit later consolidated with the Horsemen’s. See id. at 230. Gulf Coast argues that, for constitutional purposes, the Authority is governmental, not
private, and so is subject to the Appointments Clause.
This means the Authority’s directors, if they are principal officers, must be appointed by the President with
Senate confirmation or, if they are inferior officers, by
The Appointments Clause reads “[The President] shall nominate, and by and with the Advice and Consent of the Senate, shall
appoint . . . all other Officers of the United States, whose Appointments are not herein otherwise provided for” but provides “the
Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of
Law, or in the Heads of Departments.” U.S. Const. art. II, § 2, cl.
2.
24
43a
the President, courts, or department heads according to
law. See Free Enter. Fund, 561 U.S. at 487-88; Cochran
v. SEC, 20 F.4th 194, 198 (5th Cir. 2021) (en banc). The
Authority’s directors are not appointed in any of these
ways,25 and so, if Gulf Coast is right, their appointment
would violate Article II.
The Authority and the FTC first respond that we
previously decided this question in Horsemen’s I. By
applying the private nondelegation doctrine to the Authority, they argue we necessarily determined the Authority is not governmental for constitutional purposes.
The district court took this view as well. See Black II,
672 F. Supp. 3d at 234. That is understandable. Challenges based on private nondelegation, on the one hand,
and the Appointments Clause, on the other, appear mutually exclusive. For constitutional purposes, an entity
is either governmental or not. See, e.g., Lebron, 513 U.S.
at 378-79; Amtrak II, 575 U.S. at 50-51. That is why the
Horsemen themselves call Gulf Coast’s claim “fundamentally incompatible” with their private nondelegation
challenge. Texas seems to agree, noting that Gulf
Coast’s Appointments Clause theory would apply only if
“the Court disagree[s]” with its assumption that the Authority is private.
That said, however, we cannot agree that we decided
this question in Horsemen’s I. The Appointments
Clause question was never posed. Party presentation is
a fundamental constraint on appellate decision-making.
See United States v. Sineneng-Smith, 590 U.S. 371, 376
(2020) (“Courts . . . wait for cases to come to them, and
The directors are appointed by the Authority itself. See
§ 3052(d)(3) (Board members are selected by the Authority’s nominating committee).
25
44a
when cases arise, courts normally decide only questions
presented by the parties.” (cleaned up)). The fact is that
in Horsemen’s I, all parties proceeded on the assumption that the Authority is private for constitutional purposes. See Horsemen’s I, 53 F.4th at 875 n.11 (“The
Horsemen also claimed HISA was unconstitutional under the . . . Appointments Clause. The district court
did not rule on those claims and so they are not before
us.”). No one suggested that the Authority might qualify as a government entity or that its directors were subject to the Appointments Clause. So, because we did not
settle the question previously, we can address it now.
See Companion Prop. & Cas. Ins. Co. v. Palermo, 723
F.3d 557, 561 (5th Cir. 2013) (“Appellate powers are limited to reviewing issues raised in, and decided by, the
district court.” (cleaned up)); Alpha/Omega Ins. Servs.,
Inc. v. Prudential Ins. Co. of Am., 272 F.3d 276, 281 (5th
Cir. 2001) (“[T]he law of the case doctrine only applies
to issues we actually decided[.]”).
The basic premise of Gulf Coast’s argument is that
the Authority is part of the federal government for Appointments Clause purposes. See Amtrak II, 575 U.S.
at 50-51. We of course recognize that HISA calls the
Authority private, as does the Authority’s own charter.
See § 3052(a) (“The private, independent, self-regulatory, nonprofit corporation, to be known as the ‘Horseracing Integrity and Safety Authority,’ is recognized for
purposes of developing and implementing [HISA].”);
HORSERACING INTEGRITY & SAFETY AUTH., INC., DEL.
SEC ’Y OF STATE, CERTIFICATE OF INCORPORATION 1
(2020) (“The Corporation is organized and shall be operated as a nonprofit business league[.]”). But deeming an
entity “private” does not settle whether it is legally part
of the federal government. Otherwise, the government
45a
could evade constitutional restrictions by mere labeling.
See Lebron, 513 U.S. at 397 (“It surely cannot be that
government, state or federal, is able to evade the most
solemn obligations imposed in the Constitution by
simply resorting to the corporate form.”). So, we must
determine whether the Authority qualifies as part of the
federal government for constitutional purposes.
The analysis guiding that inquiry comes from Lebron. In that case, the Supreme Court examined “the
long history of corporations created and participated in
by the United States for the achievement of governmental objectives.” Id. at 386.26 The specific question before
the Court was whether “Amtrak, though nominally a
private corporation, must be regarded as a Government
entity for First Amendment purposes.” Id. at 383. The
answer was yes. That was so, the Court held, because
“the Government create[d] [the Amtrak] corporation by
special law, for the furtherance of governmental objectives, and retain[ed] for itself permanent authority to
appoint a majority of the directors of that corporation.”
Id. at 399. The Supreme Court and circuit courts have
since used Lebron’s analysis to discern whether corporations are part of the government for constitutional
purposes.27 Applying Lebron, we conclude that the AuSee also id. at 386-91 (discussing corporations such as the first
and second Banks of the United States, the Panama Railroad Company, the United States Grain Corporation, the Reconstruction Finance Corporation, the Federal Deposit Insurance Corporation,
the Communications Satellite Corporation, the Corporation for
Public Broadcasting, and the Legal Services Corporation).
27
See Nebraska, 600 U.S. at 490-93 (applying Lebron to conclude
that the Missouri Higher Education Loan Authority is “an instrumentality of Missouri”); Free Enter. Fund, 561 U.S. at 486 (citing
Lebron when referencing parties’ agreement that the Public Company
26
46a
thority is not a federal instrumentality for purposes of
the Appointments Clause.
First, the Authority was not created by the federal
government “by special law,” ibid., but was incorporated under Delaware law shortly before HISA’s passage. Contrast this with Amtrak, which “Congress established” by enacting the Rail Passenger Service Act
of 1970. Id. at 383-84; see also Nat’l R.R. Passenger
Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470 U.S.
451, 454 (1985) (observing “Congress established the National Railroad Passenger Corporation, a private, forprofit corporation that has come to be known as Amtrak”).
Second, the Authority was not created to further
“governmental objectives,” Lebron, 513 U.S. at 399, but
instead as a private association to address doping, medication, and safety issues in the thoroughbred racing industry. Again, contrast this with Amtrak, which Congress created “to avert the threatened extinction of passenger trains in the United States” and for other goals
Congress itself “establish[ed].” Id. at 383-84.
Accounting Oversight Board (“PCAOB”) “is ‘part of the Government’ for constitutional purposes”); Amtrak II, 575 U.S. at 54-55
(explaining Lebron “provides necessary instruction” and “teaches
that, for purposes of Amtrak’s status as a federal actor or instrumentality under the Constitution, the practical reality of federal control
and supervision prevails over Congress’[s] disclaimer of Amtrak’s
governmental status”); Kerpen v. Metro. Wash. Airports Auth.,
907 F.3d 152, 158-59 (4th Cir. 2018) (applying Lebron to conclude
that the Metropolitan Washington Airports Authority (“MWAA”) is
not “a federal entity” because “MWAA was not created by the federal
government” and “is not controlled by the federal government”);
Montilla v. Fed. Nat’l Mortg. Ass’n, 999 F.3d 751, 759–61 (1st Cir.
2021) (applying Lebron to conclude that Fannie Mae and FreddieMac
are not government actors).
47a
Third, the federal government does not “control[] the
operation of the [Authority],” nor has it “retain[ed] for
itself permanent authority to appoint a majority of the
[Authority’s] directors.” Id. at 399. To the contrary, the
government has no role in appointing the Authority’s
Board. Once again, contrast this with Amtrak—where
a majority of its directors was appointed by the President. Id. at 397-98; see also Amtrak II, 575 U.S. at 51
(observing that seven of nine Amtrak board members
“are appointed by the President and confirmed by the
Senate”); cf. Free Enter. Fund, 561 U.S. at 484, 484-85
(noting the PCAOB—despite being statutorily deemed
“private”—is a “Government-created, Government-appointed entity,” whose five members are “appointed
. . . by the [SEC]”).
Instead of engaging with Lebron, Gulf Coast argues
that Lebron’s analysis is not “the only way” to tell
whether a corporation is a government instrumentality.
That takes too narrow a view of precedent, however.
Lebron canvassed “the long history of corporations created and participated in by the United States” and set
out a detailed analysis to determine whether a particular corporation—despite its designation as “private”—
counts as a government instrument for constitutional
purposes. See 513 U.S. at 386, 386-91. That is precisely
the question we must answer with respect to the Authority. How can we, as an inferior court, simply bypass Lebron? We cannot.
Gulf Coast tries to offer us a way around Lebron, but
it is a dead end. Gulf Coast argues that Lebron addressed only government-created corporations “that in
no way exercised government power.” But Lebron did
not limit itself in that way—to the contrary, it relied on
48a
cases where Congress turned to private corporations to
“accomplish purely governmental purposes.” Id. at 395
(quoting Cherry Cotton Mills, Inc. v. United States, 327
U.S. 536, 539 (1946)). 28 Furthermore, the corporation
actually addressed in Lebron—Amtrak—itself exercised
regulatory power, as the Supreme Court, the D.C. Circuit, and our court have all recognized. See Amtrak II,
575 U.S. at 50 (“Amtrak . . . cannot constitutionally be
granted the regulatory power[.]” (citation and quotation
omitted)); Amtrak I, 721 F.3d at 671 (“No case prefigures the unprecedented regulatory powers delegated to
Amtrak.”); Horsemen’s I, 53 F.4th at 889 (discussing
how Congress gave “regulatory power to the ‘economically self-interested Amtrak’ ” (citation omitted)).
Gulf Coast also argues that, to determine whether directors of a private entity are “Officers of the United
States,” we should focus on their duration in office and
the nature of the entity’s power. We disagree. The two
principal cases Gulf Coast relies on for this argument
addressed whether individuals already part of the government should be considered “Officers.” So, Buckley
examined whether Federal Election Commission appointees wielded “significant authority pursuant to the
laws of the United States.” 424 U.S. at 126. And Lucia
v. SEC applied this same test to SEC ALJs. 585 U.S.
237, 244-45 (2018). Gulf Coast urges us to extend Buckley and Lucia well beyond their facts to analyze whether
persons in a private entity are “Officers.” Even if we
See also Inland Waterways Corp. v. Young, 309 U.S. 517, 524
n.4 (1940) (“The corporations, of course, perform ‘governmental’
functions.” (citation omitted)); id. at 522 (“The banking system which
Congress thus established embodied a blend of governmental and
private purposes.”).
28
49a
were inclined to take that step, however, Lebron would
remain an insuperable hurdle. As explained, Lebron addressed when a private entity qualifies as part of the
government for constitutional purposes. That is precisely the question before us. Post-Lebron, no case has
applied Buckley to private actors. Instead, the Supreme
Court has repeatedly applied Lebron for three decades.
See supra note 27. We are not at liberty to displace the
Supreme Court’s governing framework. 29
Finally, Gulf Coast argues that if Lebron is the test,
then the federal government can simply vest all executive power in a private corporation and avoid the Appointments Clause. This argument ignores the role of
the private nondelegation doctrine. The government
cannot delegate core governmental powers to unsupervised private parties. Pittston, 368 F.3d at 394. A private entity can only act “subordinately to an agency
with authority and surveillance over it.” Horsemen’s I,
53 F.4th at 881 (quotations omitted). The private nondelegation doctrine thus corrals any attempts to evade
Lebron by giving unaccountable governmental power to
a pre-existing private entity.
In sum, Lebron is the governing test to determine
whether an entity is private or public and, under that
That principle also answers Gulf Coast’s reliance on a 2007 Office of Legal Counsel (“OLC”) opinion. The opinion argued that
the Appointments Clause applies to someone with significant and
continuing government authority, whether he is a private or a government employee. Officers of the United States Within the Meaning of the Appointments Clause, 31 Op. O.L.C. 73, 121-22 (2007). If
the opinion was suggesting its analysis as an alternative to Lebron
(a decision, it should be noted, the opinion cited, see id. at 121), that
is a suggestion only the Supreme Court could act upon, not a circuit
court bound by Lebron.
29
50a
test, the Authority is a private entity not subject to Article II’s Appointments Clause.
E.
Anti-Commandeering Challenge
Finally, we turn to Gulf Coast’s argument that HISA
unconstitutionally commandeers state officials. The
Constitution forbids Congress from “command[ing] the
States’ officers, or those of their political subdivisions,
to administer or enforce a federal regulatory program.”
Printz v. United States, 521 U.S. 898, 935 (1997); see
also New York v. United States, 505 U.S. 144, 165, 188
(1992). Gulf Coast argues HISA violates that principle
by coercing state racing commissions to remit fees to
fund the Authority’s operations. If state officials refuse,
the Authority collects fees directly from covered persons
—but, in that event, HISA prohibits the state from imposing taxes or fees to finance the state’s own horseracing programs. See § 3052(f ). This scheme, argues Gulf
Coast, “puts a gun to the head of Texas” by coercing
state officials to administer a federal program rather
than a state program.
The problem with this claim, as the district court
pointed out, is that Gulf Coast lacks standing to raise it.
Specifically, Gulf Coast’s alleged injury—that it prefers
Texas’s racetrack safety rules to HISA’s—is “no injury
at all.” Black II, 672 F. Supp. 3d at 250. As the district
court correctly reasoned, “[a] party cannot establish constitutional injury by suggesting that he may be subject
to rules that he does not prefer.” Ibid.; see also, e.g.,
Consumers’ Rsch. v. Consumer Prod. Safety Comm’n,
91 F.4th 342, 350 (5th Cir. 2024) (holding that “merely
being subject to . . . regulations, in the abstract, does
not create an injury”).
51a
On appeal, Gulf Coast fails to explain how the district
court erred. It merely argues that the coercive pressure
the funding scheme allegedly places on Texas will lead
it to implement HISA’s rules rather than the current
Texas regulations, which makes Gulf Coast subject to “a
new set of unwanted (federal) regulations.” Again,
though, this does not explain why Gulf Coast experiences an injury sufficient to assert an anti-commandeering challenge to HISA.
IV. CONCLUSION
In sum, we affirm the district court’s judgment that
(1) Congress’s recent amendment to HISA cured the
private nondelegation flaw in the Authority’s rulemaking power; (2) HISA does not violate due process; (3) the
Authority’s directors are not subject to the Appointments Clause under Lebron; and (4) Gulf Coast lacks
standing to challenge HISA on anti-commandeering
grounds.
We reverse the district court’s judgment in one respect. Insofar as HISA is enforced by private entities
that are not subordinate to the FTC, we DECLARE
that HISA violates the private nondelegation doctrine.
Accordingly, the district court’s judgment is AFFIRMED in part and REVERSED in part.
52a
APPENDIX B
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
LUBBOCK DIVISION
No. 5:21-CV-071-H
NATIONAL HORSEMEN’S BENEVOLENT AND
PROTECTIVE ASSOCIATION, ET AL., PLAINTIFFS
THE STATE OF TEXAS AND THE TEXAS RACING
COMMISSION, INTERVENOR-PLAINTIFFS
v.
JERRY BLACK, ET AL., DEFENDANTS
Filed: May 4, 2023
MEMORANDUM OPINION AND ORDER
In hopes of standardizing horseracing regulation, the
Horseracing Integrity and Safety Act of 2020 (HISA)
empowered a private entity to draft nationwide regulations subject to the Federal Trade Commission’s review
and approval. In response, the plaintiffs claimed that
HISA was unconstitutional because it did not give the
FTC meaningful oversight—violating the private-nondelegation doctrine. Although this Court recognized
that the plaintiffs’ concerns were legitimate, it construed binding precedent as permitting Congress’s approach in its March 2022 order. The Fifth Circuit disagreed, explaining that precedent could not justify HISA
53a
and that it was unconstitutional because the FTC lacked
discretion to approve, disapprove, or modify the proposed regulations. Answering the Fifth Circuit’s call,
Congress amended HISA to empower the FTC to “abrogate, add to, and modify” the entity’s regulations.
Nevertheless, the plaintiffs continue to allege constitutional violations. But because Congress remedied the
offending provisions and brought the law within the
Fifth Circuit’s stated requirements, the plaintiffs’
claims fail.
Specifically, after remand, the original plaintiffs
continue to claim that HISA violates the privatenondelegation doctrine under Article I and the Due Process Clause. Dkt. No. 116. Texas and the Texas Racing
Commission, as intervenor-plaintiffs, raise the same arguments. Dkt. No. 155 at 22-25. Additionally, also after
remand, another court transferred a related case to this
Court. Gulf Coast Racing LLC v. Horseracing Integrity
& Safety Authority, No. 2:22-CV-146-Z (N.D. Tex.),
Dkt. No. 53. Those plaintiffs make the same privatenondelegation claim, but only as an alternative to their
primary claim that HISA violates Article II’s Appointments Clause and Article I’s Vesting Clause. Dkt. No.
136. In their view, the private entity at issue —the
Horseracing Integrity and Safety Authority—is, in reality, a public entity subject to the same requirements
applicable to all public officers. No. 5:23-CV-077, Dkt.
No. 36 at 33. They also allege, albeit briefly, that HISA
violates the Tenth Amendment’s anti-commandeering
principles by requiring Texas to do the federal government’s bidding. Id. at 57.
In light of Congress’s amendment to HISA and the
undisputed evidence following a bench trial, each of
54a
these arguments falls short. First, the plaintiffs’
private-nondelegation argument reveals too much and is
barred by precedent. Previously, the plaintiffs argued
that “HISA violates the private nondelegation doctrine
because the FTC cannot modify the Authority’s rules.”
Dkt. No. 38 at 26. Now that Congress expressly authorizes the FTC to modify the Authority’s rules, the plaintiffs retreat and admit their true view: that there is
nothing Congress could do to bring the HISA-Authority
arrangement within constitutional bounds. Dkt. No. 182
at 31-33, 37-38. But this argument ignores the long history of the executive branch leveraging—with court approval—expertise from private industry so long as the
industry remains subordinate to a supervisory federal
agency. E.g., Sunshine Anthracite Coal Co. v. Adkins,
310 U.S. 381, 388, 399 (1940) (allowing private parties to
participate in price setting because the private entities
“function[ed] subordinately to the Commission” and because the Commission retained “pervasive surveillance
and authority” over the activities of the private parties);
see also Lebron v. Nat’l R.R. Passenger Corp., 513 U.S.
374, 386-90 (1995) (detailing the “long history of corporations created and participated in by the United States
for the achievement of governmental objectives” beginning in the 18th Century). The Court understands the
plaintiffs’ concerns with these arrangements, especially
given how long horseracing has been regulated at the
local level. But because Congress brought HISA within
the Constitution’s limits as defined by the Fifth Circuit,
the Court concludes that HISA does not violate the private non-delegation doctrine.
Second, the plaintiffs’ facial and as-applied Fifth
Amendment Due Process argument fails for the same
reasons this Court explained in its first order rejecting
55a
it. The Court finds that the Authority is not a self-interested industry competitor creating a constitutional violation. As a facial matter, HISA explicitly protects
against self-interest through structural safeguards
while preserving industry representation in the Authority. And the as-applied challenge fails because there is
no evidence of actual, unconstitutional self-dealing that
has harmed industry competitors.
Third, the plaintiffs’ appointment and removal arguments fail for a simple reason—the challenged entity at
issue (the Authority) is not a public, governmental actor
subject to these constitutional limitations. The Fifth
Circuit held as much in its panel opinion, so the plaintiffs’ assertion otherwise at this point is both contrary to
the law of the case and foreclosed by precedent. Moreover, even assuming that the Fifth Circuit left this issue
open, precedent makes clear that the Authority is private because it was not created by the government, and
it retains for itself permanent authority to appoint its
directors.
Finally, the plaintiffs lack standing to raise their
Tenth Amendment argument that HISA unconstitutionally commandeers the states. Although private plaintiffs are not automatically barred from bringing Tenth
Amendment claims, they must still demonstrate injury
that is traceable to the defendant’s conduct and redressable by the Court. But the private plaintiffs have no
traceable, redressable injury to assert because HISA allows Texas to either elect to collect fees of covered persons or, if not, the Authority will. HISA allows states to
“elect[]” to assess and collect fees on covered persons.
15 U.S.C. § 3052(f )(2)(A). But if the state does not make
such an election, then the Authority steps in to do so.
56a
§ 3052(f )(3). In this way, covered persons like the Gulf
Coast plaintiffs will be regulated and subject to assessments even if they were to succeed on the anti-commandeering claim. Although the private plaintiffs clearly
prefer to be regulated by Texas instead of the Authority,
the preference alone is insufficient to establish a redressable injury.
For all these reasons, the Court rejects the plaintiffs’
arguments and conclude that Congress cured the unconstitutional aspects of HISA’s original approach. Given
the parties’ desire for an expeditious resolution, the
Court’s opinion is sufficient to permit appellate review
but does not exhaust every possible vein of analysis. 1
1.
Findings of Fact
Following remand from the Fifth Circuit, the plaintiffs filed multiple motions for a preliminary injunction.
Dkt. Nos. 116; 124; 139. Given the plaintiffs’ requests
for expedited treatment and temporary emergency relief, the Court consolidated the hearing on the plaintiffs’
motions for preliminary injunction with the trial on the
merits. Dkt. No. 135; See also Fed. R. Civ. P. 65(a)(2).
The Court finds the following facts.
As explained infra in Parts 1.I through 1.L, the Court is operating on an expedited timeframe. After resolving multiple emergency motions, the Court consolidated these cases on April 11—
roughly three weeks ago. Trial was held last week on April 26.
Although the ADMC rule’s effective date was delayed until May 22
(Dkt. No. 180), the plaintiffs request resolution “as soon as possible.” Dkt. No. 181 at 8.
1
57a
A.
Congress enacts HISA with broad bipartisan support.
American horseracing has existed for centuries, and
throughout it “has been regulated by the States, local
communities, and private organizations.” Nat’l Horsemen’s Benevolent & Protective Ass’n v. Black, 53 F.4th
869, 873 (5th Cir. 2022). Although popular even in the
colonial era, the growth of American horseracing in the
1850s was met with “a growing interest in the formation
of a national governing board to regulate racing.” 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, 483 (2004). But it would take more
than 170 years for the first national horseracing legislation to be signed into law. Nat’l Horsemen’s, 53 F.4th
at 873.
After an increase in doping scandals and racetrack
fatalities, Congress passed HISA with broad bipartisan
support. Pub. L. No. 116-260, §§ 1201-12, 134 Stat. 1182,
3252-75 (2020) (codified at 15 U.S.C. §§ 3051-60). On December 27, 2020, HISA was signed into law. Id. For the
first time in the long history of American horseracing,
HISA established a framework for national regulation
of certain aspects of the industry. 15 U.S.C. §§ 3051-60.
Specifically, HISA aims to establish nationwide rules
over racetrack safety and anti-doping and medication
control (ADMC). Nat’l Horsemen’s, 53 F.4th at 873.
HISA applies to all covered horses (thoroughbreds
(§ 3051(4)), covered persons (all trainers, owners, breeders, jockeys, racetracks, and veterinarians, among others (§ 3051(6)), and covered horseraces (those horseraces with a substantial effect on interstate commerce
58a
(§ 3051(5)). In other words, “[t]he Act’s reach is broad,”
and HISA creates a truly nationwide, comprehensive
regulatory scheme for racetrack safety and ADMC.
Nat’l Horsemen’s, 53 F.4th at 873.
B.
A private entity, the Authority, is incorporated in
aid of HISA.
The Authority was incorporated as a nonprofit on
September 8, 2020. GPX 6 at 1; No. 5:23-CV-077, Dkt.
No. 47 at 5. HISA “recognize[d]” the Authority, a “private, independent, self-regulatory, nonprofit corporation . . . for purposes of developing and implementing
a horseracing anti-doping and medication control program and a racetrack safety program for covered
horses, covered persons, and covered horseraces.” 15
U.S.C. § 3052(a). HISA prescribes the makeup of the
Authority’s board of directors, including the number of
total directors (nine), independent directors (five), and
industry-member directors (four). § 3052(b)(1). The initial directors are chosen by a nominating committee,
“comprised of seven independent members . . . set
forth in the governing corporate documents of the Authority.” § 3052(d). HISA also directs the Authority to
establish racetrack-safety and ADMC standing committees. § 3052(c).
C.
HISA creates a rulemaking procedure that attempts to allow the Authority to aid the FTC in
regulating thoroughbred horseracing.
HISA creates a regulatory framework that allows the
Authority to operate in aid of the FTC: The Authority
first drafts proposed rules, which are then submitted
for FTC approval. § 3053(a). Once a rule is received
by the FTC, it goes through notice and comment.
§ 3053(a)-(b). HISA also requires FTC approval before
59a
a proposed rule can take effect. § 3053(b)(2). The FTC
is given sixty days to “approve or disapprove the proposed rule or modification,” and the FTC “shall approve” a proposed rule if it is consistent with the statute
and applicable rules. § 3053(c).
D.
With oversight by the FTC, the Authority is
tasked with enforcement.
The Authority is empowered to enforce the rules it
aids the FTC in creating by investigating violations, imposing civil sanctions, and suing to enforce sanctions or
obtain injunctive relief. §§ 3058(a), 3057(d), 3054(h)-( j).
The Authority’s investigatory powers are subject to
“uniform procedures” reviewed and approved by the
FTC. § 3054(c). All civil sanctions imposed by the Authority are subject to two layers of FTC oversight.
First, all civil sanctions are subject to de novo review by
an Administrative Law Judge appointed by the FTC.
§ 3058(b). And the FTC can review de novo the ALJ’s
final decision. § 3058(c).
E.
The Authority is funded by private parties.
At its initial stage, the Authority is funded by loans.
See § 3052(f )(1). After that initial stage, the majority of
the Authority’s funding will derive from fees collected
from covered persons or state racing commissions.
§ 3052(f )(1)-(4). Any “proposed increase” in fees
for covered persons must be reported to the FTC for
review and submitted for notice and comment.
§ 3052(f )(1)(c)(iv).
60a
F.
Multiple parties challenge HISA’s constitutionality.
This case involves many parties, consisting of the leadcase plaintiffs,2 the member-case plaintiffs,3 the intervenor-plaintiffs,4 the FTC defendants,5 and the Authority
defendants. 6 Both plaintiff groups sued FTC-related
defendants and Authority-related defendants.
The plaintiffs in the lead case are National Horsemen’s Benevolent and Protective Association, Arizona Horsemen’s Benevolent
and Protective Association, Arkansas Horsemen’s Benevolent and
Protective Association, Indiana Horsemen’s Benevolent and Protective Association, Illinois Horsemen’s Benevolent and Protective
Association, Louisiana Horsemen’s Benevolent and Protective Association, Mountaineer Park Horsemen’s Benevolent and Protective Association, Nebraska Horsemen’s Benevolent and Protective
Association, Oklahoma Horsemen’s Benevolent and Protective Association, Oregon Horsemen’s Benevolent and Protective Association, Pennsylvania Horsemen’s Benevolent and Protective Association, Tampa Bay Horsemen’s Benevolent and Protective Association, and Washington Horsemen’s Benevolent and Protective Association (hereinafter the Horsemen plaintiffs). Dkt. No. 149 at 210.
3
The plaintiffs in the member case are Gulf Coast Racing LLC,
LRP Group Ltd., Valle de Los Tesoros Ltd., Global Gaming LSP,
LLC, and the Texas Horsemen’s Partnership LLP (hereinafter the
Gulf Coast plaintiffs). Dkt. No. 142 at 7-8.
4
The intervenor-plaintiffs are the State of Texas and the Texas
Racing Commission. Dkt. No. 155.
5
The Authority defendants are Jerry Black, the Horseracing Integrity and Safety Authority, Lisa Lazarus, Steve Beshear, Adolpho
Birch, Leonard Coleman, Ellen McClain, Charles Scheeler, Joseph
DeFrancis, Susan Stover, Bill Thomason, D.G. Van Clief, Katrina
Adams, Nancy Cox, Joseph Dunford, Frank Keating, and Kenneth
Schanzner. Dkt. Nos. 142; 149.
6
The FTC defendants are the Federal Trade Commission, Lina
Khan, in her official capacity as Chair of the Federal Trade Commis2
61a
G.
The Fifth Circuit holds HISA unconstitutional.
In March 2021,the National Horsemen’s Benevolent
and Protective Association and twelve of its affiliates
(the Horsemen plaintiffs) filed suit against the FTC, its
commissioners, the Authority, and the Authority’s Nominating Committee members, challenging HISA’s constitutionality on several grounds. Dkt. No. 1 at 19-26.
In due time, the FTC defendants and the Authority defendants separately filed motions to dismiss (Dkt. Nos.
34; 36), and the Horsemen filed a partial motion for summary judgment, seeking declaratory and injunctive relief on their private-nondelegation and due-process
claims (Dkt. No. 37). After considering the briefing of
the parties and various amici, and after oral argument,
the Court concluded, based on what it viewed as binding
precedent, that HISA did not result in a constitutional
violation. Nat’l Horsemen’s Benevolent & Protective
Ass’n v. Black, 596 F. Supp. 3d 691, 725 (N.D. Tex. 2022),
rev’d and remanded, 53 F.4th 869 (5th Cir. 2022). Thus,
the Court denied the partial motion for summary judgment (Dkt. No. 37) and noted that the plaintiffs had
abandoned their remaining claims (Nat’l Horsemen’s
Benevolent & Protective Ass’n, 596 F. Supp. 3d at 728).
The Court dismissed the plaintiffs’ complaint (Dkt. No.
23) with prejudice.
On appeal, the Fifth Circuit reversed in a thorough
opinion, holding that the FTC-Authority regulatory
scheme was unconstitutional because it gave the FTC
too little control over a private entity with regulatory
authority. Nat’l Horsemen’s, 53 F. 4th at 872. The court
sion, Rebecca Kelly Slaughter, Alvaro Bedoya, Noah Phillips, and
Christine Wilson, all in their official capacities as Commissioners of
the Federal Trade Commission. Dkt. Nos. 142; 149.
62a
explained that “[a] cardinal constitutional principle is
that federal power can be wielded only by the federal
government.” Id. As a result, “a private entity may
wield government power only if it ‘functions subordinately’ to an agency with ‘authority and surveillance’
over it.” Id. at 881. To explain the concept “more precisely,” the court noted that it is within constitutional
bounds for Congress to “formalize the role of private
parties in proposing regulations so long as that role is
merely ‘as an aid’ to a government agency that retains
the discretion to ‘approve[ ], disapprove[ ], or modif [y]’
them.” Id. (quoting Ass’n of Am. R.R.s v. Dep’t of
Transp. [Amtrak I], 721 F.3d 666, 671 (D.C. Cir. 2013)).
But “[i]f the private entity does not function subordinately to the supervising agency, the delegation of
power is unconstitutional.” Id.
Applying these principles, the court held that the Authority was not subordinate to the FTC. Id. at 872-73.
“An 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. It was the
Authority, not the FTC, that had “the last word over
what rules govern our nation’s thoroughbred horseracing industry,” which rendered HISA unconstitutional.
Id.
Three aspects of HISA and the FTC-Authority relationship led the panel to this conclusion. First, the court
noted the Authority’s “sweeping rulemaking power” and
observed that “HISA’s generous grant of authority to
the Authority to craft entire industry ‘programs’ strongly suggests it is the Authority, not the FTC,” that is in
control. Id. at 882-83. Moreover, the court explained
that the FTC’s ability to adopt interim final rules did not
63a
meaningfully alter the scope of the Authority’s power
because such rulemaking is narrow and reserved for
emergencies. Id. at 883.
Second, the court relied on the FTC’s limited power
to review proposed rules, which prevented the FTC
from reviewing the Authority’s policy choices. Id. at
884. The FTC’s review of proposed rules for consistency
with HISA was “too limited to ensure the Authority
‘functions subordinately’ to the agency.” Id. “[S]uch
arms-length review hardly subjects the Authority’s
rules to ‘independent’ oversight.” Id. at 885. Perhaps
more importantly, the court explained that, whatever
the FTC’s consistency review would entail, it excludes
review of the Authority’s policy choices. Id. Similarly,
the FTC could not force the Authority to modify those
choices; it could only make recommendations to the Authority. Id. at 886. “The Act’s division of labor is clear:
the Authority writes the rules; the agency may suggest
certain changes, but the Authority can take them or
leave them.” Id.
Finally, the Fifth Circuit noted that HISA’s FTC-Authority relationship was materially different from the
Maloney Act’s SEC-FINRA model, which has consistently withstood non-delegation challenges. Id. at 887.
Although FINRA, like the Authority, “is a private entity
empowered to draft and propose regulations” to a federal agency, there was “a key distinction” between the
two. Id. “Unlike HISA, the Maloney Act empowers the
SEC to ‘abrogate, add to, and delete from’ FINRA rules
‘as the [SEC] deems necessary or appropriate[.]’ ” Id.
(quoting 15 U.S.C. § 78s(c) and citing Aslin v. Fin. Indus. Regulatory Auth., Inc., 704 F.3d 475, 476 (7th Cir.
2013) (observing that the SEC “may abrogate, add to,
64a
and delete from all FINRA rules as it deems necessary”)). The SEC’s rulemaking power, the court explained, “meaningfully distinguishes the SEC-FINRA
relationship from the FTC-Authority relationship.” Id.
The court recognized that while “FINRA plays an important role in formulating securities industry rules, its
role is ultimately ‘in aid of’ the SEC, which has the final
word on the substance of the rules.” Id. The Authority,
in contrast, has the final word on formulating and proposing rules because of “the limits built into the FTC’s
oversight.” Id. Thus, the Fifth Circuit held that “the
FTC’s power to recommend modifications is not equivalent to the power to require modifications.” Id. at 888.
These reasons—combined with the Fifth Circuit’s
view that precedent did not require affirmance—led the
Court to hold that the Authority was not subordinate to
the FTC and, thus, the FTC-Authority structure violated the Constitution’s guarantee against private nondelegation. Id. at 890.
H.
Congress amends HISA.
Roughly six weeks after the Fifth Circuit’s decision,
Congress enacted, and the President signed into law, an
amendment to HISA. As amended, § 3053(e) now provides the FTC with authority to “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.” 15 U.S.C. § 3053(e).
The defendants sought rehearing in the Fifth Circuit in
light of the amendment, but the panel remanded the case
65a
to this Court for further proceedings. Nat’l Horsemen’s,
No. 22-10387, Dkt. Nos. 223-24 (5th Cir. Jan. 31, 2023)
(denying rehearing and issuing mandate).
I.
The plaintiffs allege several post-remand emergencies.
Following remand, the plaintiffs in National Horsemen’s filed a Motion for a Preliminary Injunction (Dkt.
No. 116), asking the Court to enjoin the Authority from
implementing and enforcing HISA while the parties dispute whether Congress’s recent modification to HISA
makes the statute constitutional. Id. at 6. The plaintiffs
proposed that the Court order an expedited briefing
schedule on the motion so the Court could issue its order
by March 27, 2023—the date an anti-doping rule was
scheduled to (and eventually did) go into effect. Dkt.
No. 117. After considering the parties’ respective positions, the Court declined to order expedited briefing and
instead set a regular briefing schedule. Dkt. No. 121.
On March 27, 2023—the very day that the anti-doping rule was approved and went into effect—the plaintiffs filed their Motion for an Emergency Preliminary
Injunction Against the Medication Rule. Dkt. No. 124.
The emergency motion focused specifically on the antidoping rule, alleging that it violated the Administrative
Procedure Act. Id. The Court ordered expedited briefing for the emergency motion only. Dkt. No. 127. In its
order, the Court found that the anti-doping rule issued
without the notice required under the APA and delayed
the Rule’s effective date until May 1, 2023. Dkt. No. 134.
Five days later, the plaintiffs in Gulf Coast—a case
originally pending in the Amarillo Division—moved for
a temporary restraining order and preliminary injunction, seeking to enjoin the defendants from enforcing
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HISA while the Court resolved the pending dispositive
motions. No. 2:22-CV-146-Z, Dkt. No. 50. This case was
transferred to the Lubbock Division of this Court because of the substantial overlap of the claims in Gulf
Coast and National Horsemen’s, the similarity of the
parties, and the likelihood that the evidence involved
and objective of the plaintiffs in both cases would be
nearly identical. Gulf Coast, No. 5:23-CV-077-H, Dkt.
No. 53 at 4. After the transfer, the Court denied the
motion for temporary restraining order but reserved its
ruling on the motion for preliminary injunction. Gulf
Coast, No. 5:23-CV-077-H, Dkt. No. 59.
J.
The plaintiffs bring numerous constitutional
claims.
The Court found that Gulf Coast and National
Horsemen’s involved “a common question of law or fact”
and consolidated the two cases pursuant to Federal Rule
of Civil Procedure 42(a)(2). Dkt. No. 135 at 1.
i.
Gulf Cost Racing
The Gulf Coast plaintiffs’ operative complaint makes
the following constitutional claims: (1) the Authority’s
leadership-appointment process violates Article II’s Appointments Clause, (2) the Authority leadership-removal process violates Article II’s Vesting Clause, (3)
the Authority’s rulemaking constitutes “a naked delegation” of legislative power, (4) the rulemaking authority
that is delegated to the Authority violates the nondelegation doctrine because Congress has not supplied an
intelligible principle, (5) the delegation of power to the
Authority violates the private-nondelegation doctrine,
(6) the Authority’s power to seek civil penalties from
covered persons violates the Seventh Amendment right
to a jury trial, (7) the Authority’s ability to adjudicate
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private rights violates Article III, (8) HISA’s elect-orpreempt provision violates the Tenth Amendment’s
guarantee that the federal government cannot command
States to enforce federal law, and (9) HISA Rule 8400,
which requires covered persons to consent to inspection
as a condition of registration, violates the Fourth Amendment. Dkt. No. 142.
At the April 18, 2023 pretrial conference, the parties
discussed with the Court the possibility that the claims
might be narrowed in advance of trial. Dkt. No. 163 at
16-17. During the conference, the Gulf Coast plaintiffs
indicated they were abandoning an argument related to
the breed-expansion authority, which they called a subclaim of the private-nondelegation challenge. Id. at 13.
The next day, the Gulf Coast plaintiffs filed an advisory
that they would be willing to abandon “Claims 3-4 (public nondelegation), Claim 6 (Seventh Amendment),
Claim 7 (Article III), and Claim 9 (Fourth Amendment),” provided the defendants would not hold that
abandonment against them in another case or in an enforcement proceeding. Dkt. No. 161. The defendants
filed a notice advising that they agreed to these conditions (Dkt. Nos. 164; 165), so the Gulf Coast plaintiffs
have abandoned their third, fourth, sixth, seventh, and
ninth claims.
Thus, the Gulf Coast plaintiffs’ remaining claims are:
• An Article I, Section 2, Clause 2 Appointments
Clause challenge (Claim 1)
• An Article II, Section 1 removal challenge (Claim
2)
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• A private-nondelegation challenge (Claim 5),7 and
• An anti-commandeering challenge under the
Tenth Amendment (Claim 8).
ii.
National Horsemen’s
The Horsemen plaintiffs’ Original Complaint (Dkt.
No. 1) and First Amended Complaint (Dkt. No. 23)—
which was the operative complaint when the Court previously heard the defendants’ motions to dismiss and the
plaintiffs’ partial motion for summary judgment—
included an intelligible-principle claim and an Appointments Clause claim, but those were recognized as abandoned in the Court’s memorandum opinion and order
(Dkt No. 92 at 60 (“The plaintiffs abandoned their Appointments Clause claim (Claim II) and public nondelegation claim (Claim III), so they are dismissed.”)).
The Horsemen plaintiffs’ live complaint (Dkt. No.
149) asserts that HISA violates the Constitution in three
claims, none of which are abandoned:
• Delegation of legislative powers to a private entity in violation of Article I, Section 1,
• Delegation of executive powers to a private entity
in violation of Article II, Section 1, and
• A violation of the Fifth Amendment’s Due Process Clause—alleging that self-interested indus-
The plaintiffs do not identify the constitutional source of this
claim. Dkt. No. 142 at 45-49. The Fifth Circuit noted that “[c]ourts
and commentators differ over the locus of the constitutional violation” (Nat’l Horsemen’s, 53 F.4th at 881 n.23), but the parties do not
dispute that such a violation is cognizable under the Constitution, so
the Court does not reach this question.
7
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try participants are given regulatory power over
their competitors.
iii. The intervenor-plaintiffs
The claims in the intervenor-plaintiffs’ operative
complaint mirror those in the Horsemen plaintiffs’ complaint. The intervenor-plaintiffs assert that HISA violates the constitution in two claims:
• Delegation of legislative and executive powers to
a private entity under Article I, Section I and Article II, Section II, and
• Violation of the Due Process Clause because selfinterested industry participants regulate their
competitors.
K.
Multiple motions are currently pending.
Pending before the Court is the Horsemen plaintiffs’
Motion for a Preliminary Injunction (Dkt. No. 116).
Also before the Court is the Gulf Coast plaintiffs’ Motion
for Summary Judgment (Dkt. No. 136) and Motion for a
Preliminary Injunction (Dkt. No. 139); the Authority
Defendants’ Motion to Dismiss (Dkt. No. 137); and the
FTC Defendants’ Motion for Summary Judgment (Dkt.
No. 138).
The Horsemen plaintiffs’ Motion for Preliminary Injunction (Dkt. No. 116) asserts that HISA is facially unconstitutional on three bases: First, the Horsemen argue that “the Authority is not subordinate when exercising legislative powers.” Id. at 8. They argue that the
Authority is delegated with rulemaking authority, more
so (according to the plaintiffs) than other permissible
private delegations. Id. at 8-9. They also argue that,
post-amendment, HISA still requires the FTC to ap-
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prove rules that are consistent with the statute. Id. at
9-12. The Horsemen argue that the FTC must be able
to approve, disapprove, or modify a rule at the time the
Authority proposes it. Id. at 11. And they argue that
the FTC is subordinate to the Authority because the
FTC cannot initiate rulemaking. Id. at 12-13. They say
the FTC cannot issue interim final rules. Id. at 13. And
they argue that the Authority has behaved inconsistently with the Act and the Rules by, for instance, extending effective dates of Rules without FTC permission. Id. at 13-14. They also argue that the Authority
exercises taxing-and-spending powers by issuing assessments. Id. at 15-16.
Excluding the abandoned claims, the Gulf Coast
plaintiffs’ Motion for Summary Judgment and Motion
for a Preliminary Injunction argue that HISA violates
Article II’s Appointments Clause because the Authority’s directors are “Officers of the United States” under
Lucia v. SEC, 138 S. Ct. 2044 (2018). No. 5:23-CV-077,
Dkt. No. 36 at 28. They also argue that HISA violates
Article II’s Vesting Clause because the President cannot remove the Authority’s directors. Id. at 34. They
then argue that HISA violates the nondelegation doctrine because the Authority exercises legislative power
in violation of the nondelegation doctrine (regardless of
whether the Authority is a private or public entity). Id.
at 37. The plaintiffs next argue that even if the Authority is a private entity, it violates the nondelegation doctrine. Id. at 45. Finally, the plaintiffs argue that HISA
violates the anti-commandeering doctrine. No. 5:23-CV077, Dkt. No. 36 at 57.
In addition to responding to the plaintiffs’ arguments, the FTC defendants argue in their Motion to Dis-
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miss (Dkt. No. 137) that the plaintiffs do not have standing to assert an anti-commandeering claim because they
cannot enforce the rights of a state and Texas is not
joined in that claim. No. 5:23-CV-077, Dkt. No. 46 at 2730. In their motion for summary judgment, the Authority defendants argue that the plaintiffs’ fail to prove
their claims. Dkt. No. 137.
L.
The Court received evidence and heard argument
at trial.
On April 26, the Court held a trial on the merits consolidated with the hearings of the plaintiffs’ motions for
preliminary injunction. Dkt. No. 178. The plaintiffs admitted a number of exhibits, as well as witness testimony by declaration. Dkt. No. 179. The Horsemen admitted 57 exhibits, including matters of public record
(e.g., HPX 14—HISA Racetrack Safety, 87 Fed. Reg. 435
(2022)); Authority guidance (e.g., HPX 26—Guidance of
the Horseracing Integrity and Safety Authority (November 29, 2022)); and biographies of Authority board
members (e.g., HPX 53-I—Biography of Jerry Black).
The Horsemen also presented three witnesses by declaration, who testified regarding the economic and practical effects of HISA (HPXs 58; 59; 61). The Gulf Coast
plaintiffs admitted exhibits in the public record, as well
as the meeting minutes of the Authority’s board of directors (GPXs 41-53) and the Authority’s balance sheet
(GPX 40). The Gulf Coast plaintiffs also presented three
witnesses by declaration—all agents of the plaintiff
entities—who testified regarding the effect of HISA on
their businesses or association members. GPXs 29-32.
The FTC presented no evidence. The Authority presented seven witnesses, who are agents of the Authority,
veterinarians, and horse trainers. DXs 1-8. Lisa Laza-
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rus, the CEO of the Authority, testified regarding the
benefits of HISA and the Authority on the horseracing
industry. DXs 1-2. The Authority’s CFO, Jim Gates,
disputed the economic impact estimated by the Gulf
Coast plaintiffs. DX 3. Sara Langsam (DX 4), Susan
Stover (DX 7), and Mary Scollay (DX 8) are veterinarians who testified regarding the benefits, in their view,
of the Authority’s anti-doping and medication control
(ADMC) program. And Mark Casse (DX 5) and Graham
Motion (DX 6), horse trainers, testified about the positives of uniform regulation. After the parties closed, the
Court heard oral argument and took its ruling under advisement.
2.
Standard of Review
When challenging the facial constitutionality of a
statute, a plaintiff must show “that no set of circumstances exists under which the [statute] would be valid.”
United States v. McGinnis, 956 F.3d 74
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