62 F.4th 221
6th Cir.2023Background
- In 2020 Congress enacted the Horseracing Integrity and Safety Act (HISA) to create national regulation of thoroughbred horseracing and assigned a private nonprofit, the Horseracing Integrity and Safety Authority (Authority), major rulemaking, enforcement, and fee-collection roles.
- The Authority’s rules preempt state law; it investigates and enforces via internal adjudications and civil suits; it funds operations through industry fees apportioned by State.
- Originally the Federal Trade Commission (FTC) had only limited oversight (consistency review and narrow interim-rule authority), prompting a Fifth Circuit decision (Black) that the statute unlawfully delegated federal power to a private entity.
- Congress amended HISA in the Consolidated Appropriations Act of 2023 to give the FTC express authority to “abrogate, add to, and modify” the Authority’s rules (15 U.S.C. § 3053(e) as amended).
- Oklahoma and other State plaintiffs challenged the amended statute on private non-delegation and anti-commandeering grounds; the Sixth Circuit reviewed whether the amendment mooted the dispute and whether the Authority remained an unlawful private principal rulemaker.
- The court upheld the amended Act: the FTC’s expanded abrogation/modification and review powers render the Authority subordinate (defeating the facial non-delegation challenge) and resolved the States’ anti-commandeering claims (one lacked standing; the fee scheme is conditional preemption, not commandeering).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Non-delegation (private) | HISA gives a private Authority the last word over federal regulation of racing, an unconstitutional private delegation | Amendment vests the FTC with authority to abrogate/modify rules and review enforcement, making Authority subordinate | FTC now has ultimate rulemaking and enforcement oversight; facial non-delegation challenge fails |
| Mootness / Remand | Congressional amendment moots the appeal or requires remand for district-court review | The amendment leaves the same core controversy; no remand needed; court should decide merits | Not moot; no remand necessary (facial legal questions resolved on appeal) |
| Anti-commandeering — §3060(b) (cooperation) | §3060(b) unlawfully orders States to cooperate/share information with Authority/federal agencies | Provision has no enforcement mechanism; no credible threat of enforcement against States | Plaintiffs lack Article III standing to challenge §3060(b) |
| Anti-commandeering — §3052(f) (fee collection) | §3052(f) coerces States: choose to collect fees for Authority or be preempted — unconstitutional commandeering | Provision is conditional preemption (regulate under federal standard or cede field); States have a choice; not coercive | §3052(f) is a permissible conditional preemption scheme, not commandeering |
Key Cases Cited
- Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (concurring opinion on interbranch reciprocity)
- A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (private involvement cannot substitute for governmental lawmaking)
- Carter v. Carter Coal Co., 298 U.S. 238 (invalidating private delegation that exercised governmental power)
- Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381 (upholding statute where private actors acted as aides subject to agency control)
- Whitman v. American Trucking Ass’ns, 531 U.S. 457 (nondelegation and separation-of-powers principles)
- Nat’l Horsemen’s Benevolent & Protective Ass’n v. Black, 53 F.4th 869 (5th Cir.) (invalidating original HISA for private non-delegation)
- Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220 (agency oversight of private self-regulatory organizations)
- New York v. United States, 505 U.S. 144 (distinguishing permissible incentives from unconstitutional commands to States)
- Printz v. United States, 521 U.S. 898 (federal government may not commandeer state officers to implement federal law)
- Hodel v. Virginia Surface Mining & Reclamation Ass’n, 452 U.S. 264 (conditional preemption as permissible encouragement)
- FERC v. Mississippi, 456 U.S. 742 (conditional preemption and federal regulatory schemes)
- United States v. Salerno, 481 U.S. 739 (facial-challenge standard)
- Clapper v. Amnesty Int’l USA, 568 U.S. 398 (no standing based on speculative future enforcement)