Andrew Cohen on HISA and the USTA

The following is the latest “Keeping Pace” weekly column at the Paulick Report by harness racing owner and breeder Andrew Cohen.

The U.S. Supreme Court voted 7-2 last Thursday to uphold the constitutionality of the Consumer Financial Protection Bureau, an Obama-era federal agency that is supposed to do what its title suggests; help consumers have access to financial products in a market that is “fair, transparent, and competitive.” The justices weren’t split along the usual ideological lines and before the day was done, I was inundated with questions from my horse friends asking if the justices were telling us something in their Protection Bureau ruling about what they think about the constitutionality of the Horseracing Integrity and Safety Act.

My short answer is: No, probably not. My longer answer is: The ruling is only a tiny bit encouraging for HISA supporters.

I won’t bore you with the details of the Court’s ruling upholding the Protection Bureau. The justices decided to take the case and save the CFPB from the clutches of the Fifth U.S. Circuit Court of Appeals, the reactionary federal appeals court that struck down HISA once and now is reconsidering it in light of changes made to HISA’s governing structure. That alone makes last week’s ruling interesting to the racehorse world.

Broadly speaking, seven justices think the Fifth Circuit went too far in limiting the act of Congress that created the CFPB. Those same seven justices could form a strong majority in favor of another act of Congress, the one that enacted HISA and created the new federal regulatory regime for Thoroughbred racing in the U.S.

But that’s broadly speaking. There are enough factual and legal differences between the issues in the Protection Bureau case and the issues presented in the HISA case for the justices to vote one way in one case and another in another. The Protection Bureau case was about the Appropriations Clause in the Constitution, for example, while the HISA case sounds under other provisions of the Constitution.

Anyway, the big news last week was not the CFPB case. It was two late-Friday fillings at the Supreme Court in the Sixth Circuit HISA case. After months of waiting, we finally know details of the arguments HISA and the Justice Department are making in defense of the racing law. That’s way more important than what happened in the CFPB case.

Here is the link to the Justice Department’s brief filed on Friday, May 17. Take the time to read it; it’s only 16 pages long. In it, federal attorneys make a succinct and persuasive case for why the justices should leave intact the Sixth Circuit’s ruling upholding the Horseracing Integrity and Safety Act. (A decision rendered by conservative appeals court judges; you should know).

Here is the link to the HISA Authority’s brief in support of the new law. Take the time to read it as well. The essence of HISA’s argument isn’t hard to follow: The law, as amended in 2022 by Congress to “fortify” the role of the Federal Trade Commission, easily overcomes the concerns some federal judges had about the original language of the statute.

Here’s one key passage from the HISA brief: “Two administrations have now supported HISA and two bipartisan Congresses have embraced it – including through an amendment in late 2022 that fortified the FTC‘s oversight. All three federal courts that have resolved challenges to the amended Act have reached the same conclusion: HISA is constitutional.”

Here is another: “Petitioners’ worst-case assumptions about how the FTC might exercise that oversight, including their new focus on ancillary and unripe features of the Act that have never materialized, do not warrant this Court’s review.” The anti-HISA arguments have always been about “worst case assumptions,” many of which we now know haven’t materialized.

To read the rest of the article, click here.

by Andrew Cohen, republished from the Paulick Report