United States: The US Supreme Court permits, on Monday, a body of thoroughbred racing governing to carry on controlling horse tracks within the United States, even while litigation from the state of Texas and other claimants are bargaining against its authority to coerce compliance with its authoritative rules, as reported by Reuters.
The justices agreed with the Horseracing Integrity and Safety Authority to temporarily set aside an appellate court decision that ruled that its enforcement authority was unconstitutional because it violates a law principle that Congress cannot delegate government power to agencies in the private sector.
The Background of HISA
It was established by lawmakers in Congress in 2020 and is positioned in Lexington, Kentucky, and regulates the thoroughbred industry for the United States; it operates under the Federal Trade Commission. The body has also institutionally appealed the lower court ruling to the Supreme Court.
The case has drawn interest because the remedy could impact similar entities utilized to regulate broker-dealers and auditors of domestic public companies.
The horse-racing authority was established to eliminate a confusing mosaic of state-level regulators that the critics mentioned as incapable of avoiding doping scandals and horse deaths. The authority has stated that the number of thoroughbred fatalities has been falling progressively since it launched its anti-doping program in 2023.
Legal Pushback from Texas and Other States
This authority prompted Texas and several other states and industry groups to strike down the authority, citing that it had unconstitutionally provided enforcement power to a private body with what it deemed inadequate government supervision. The challengers pointed out that such an arrangement is inoperable with a legal rule known as the private nondelegation doctrine that prohibits Congress from surrendering governmental power to groups.
Implications for Other Regulatory Bodies
The structure of the Horseracing Integrity and Safety Authority was based on some private self-governance organizations like the Financial Industry Regulatory Authority, FINRA, which regulates broker-dealers. Courts have stood by FINRA because the United States Securities Exchange Commission has a say on the proposed rules by FINRA as well as its enforcement actions.
Two other federal appeals courts have dismissed challenges to the horse-racing authority. Meanwhile, the New Orleans-based 5th U.S. Circuit Court of Appeals finalised in July that the organization’s enforcement powers were unconstitutional because of inadequate supervision by the Federal Trade Commission, as reported by Reuters.
Conservative Backing and Next Steps
Various conservative organizations, including the Pacific Legal Foundation, have backed the lawsuits against the horse-racing authority.