Enacted in 2020, the Horseracing Integrity and Safety Act (HISA) nationalized the regulation of the horseracing industry. HISA delegates power to the Horseracing Integrity and Safety Authority (Authority) — a private entity that operates under the Federal Trade Commission’s (FTC) oversight — to establish new rules, issue subpoenas, and enforce regulations with civil sanctions or obtain injunctive relief. In a lawsuit brought by horseracing associations against the Authority and FTC commissioners, the Fifth Circuit found the HISA unconstitutional because it “delegated government power to a private entity” without sufficient agency supervision.
The court sided with the horseracing associations and Texas Attorney General Ken Paxton who intervened to support the associations’ fight to prevent the Authority from regulating the industry. In the unanimous decision, the court reversed the district court’s ruling that rejected the private non-delegation challenge because the HISA’s structure “pushes the boundaries of public-private collaboration … and stays within current constitutional limitations … .” The district court acknowledged the Authority’s sweeping powers, but said it was balanced by the FTC’s equally sweeping oversight. The Fifth Circuit, instead, found that the Authority is not subordinate to the FTC since the Authority — not the FTC — has the final say over HISA programs. The court reiterated that “[f]or good reason, the Constitution vests federal power only in the three branches of the federal government. Congress defies this basic safeguard by vesting government power in a private entity not accountable to the people. That is what it has done in HISA.”
Since the decision, nine state AGs, led by the Louisiana AG, sent a letter to Senate Minority Leader Mitch McConnell, urging him not to pass legislation intended to fix HISA issues during the end-of-term session. The state AGs stated that the “HISA has already caused enormous upheaval in our States. A lame-duck session is not the time to slip new language into legislation amending HISA in response to [this decision]. Indeed, language that attempts anything other than repealing this ill-advised legislation will only make a bad situation worse.”
Troutman Pepper State Attorneys General Team
|Ashley Taylor – Co-leader and Firm Vice Chair
Ashley is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. He focuses primarily on federal and state government regulatory and enforcement matters involving state attorneys general, the Consumer Financial Protection Bureau (CFPB), and the Federal Trade Commission (FTC). Drawing upon his experience as a deputy attorney general, Ashley has developed an extensive consumer practice with regard to the consumer financial services industry.
|Clay Friedman – Co-leader
Clay is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. Informed by nearly a decade in a state attorneys general office, and more than 25 years in private practice, Clay spends much of his time representing clients in singular or multistate regulatory actions. Clay has repeatedly led teams before all 50 state attorneys general and also handles matters with the Federal Trade Commission, the Consumer Financial Protection Bureau, and other local, state and federal agencies.
Stephen represents clients interacting with, and being investigated by, state attorneys general and other enforcement bodies, including the CFPB and FTC, as well as clients involved with litigation, particularly in heavily regulated industries.
A former deputy attorney general of New York, Avi applies his experience in bet-the-company matters, representing clients in criminal and civil investigations and enforcement actions before state and federal regulators, prosecutors and enforcement agencies.
Michael handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation.
As a former government official at the state and federal level, Ketan leverages extensive experience in the public and private sectors to skillfully represent client interests.
Tim is an attorney in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, with a primary focus on financial services litigation.
Chris represents clients in regulatory, civil and criminal investigations and litigation. In his practice, Chris regularly employs his prior regulatory experience to benefit clients who are interacting with and being investigated by state attorneys general.
Natalia is an associate in the firm’s business litigation practice. She recently received her J.D from the University of California, Davis School of Law.
Namrata is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. Her work includes advising clients in regulatory investigations and compliance matters, in addition to representing clients in civil litigation matters.
Whitney is an attorney in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. She represents clients facing state and federal regulatory investigations and enforcement actions, as well as related civil litigation.
Stephanie is Troutman Pepper’s senior government relations manager in the state attorneys general department.