United States Court of Appeals

for the Fifth Circuit

No. 22-10387

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, 

Plaintiffs—Appellants,

State of Texas; Texas Racing Commission, 

Intervenor Plaintiffs—Appellants,

versus

Jerry Black; Katrina Adams; Leonard Coleman; MD 

Nancy Cox; Joseph Dunford; Frank Keating; Kenneth 

Schanzer; Horseracing Integrity and Safety 

Authority, Incorporated; Federal Trade Commission; 

United States Court of Appeals

Fifth Circuit

FILED

November 18, 2022

Lyle W. Cayce

Clerk

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2

Commissioner Kelly Slaughter; Commissioner Rohit 

Chopra; Commissioner Noah Phillips; Commissioner 

Christine Wilson, 

Defendants—Appellees.

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 5:21-CV-71

Before King, Duncan, and Engelhardt, Circuit Judges.

Stuart Kyle Duncan, Circuit Judge:

We consider challenges to the Horseracing Integrity and Safety Act 

(“HISA” or the “Act”).1 Enacted in 2020, HISA is a federal law that

nationalizes governance of the thoroughbred horseracing industry. To 

formulate detailed rules on an array of topics, HISA empowers a private 

entity called the Horseracing Integrity and Safety Authority (the 

“Authority”), which operates under Federal Trade Commission oversight.

Soon after passage, HISA was challenged by various horsemen’s

associations, who were later joined by Texas and the state’s racing 

commission. The plaintiffs argued HISA is facially unconstitutional because

it delegates government power to a private entity without sufficient agency 

supervision. The district court acknowledged that the plaintiffs’ “concerns 

are legitimate,” that HISA has “unique features,” and that its structure

“pushes the boundaries of public-private collaboration.” Nonetheless, the 

court rejected the private non-delegation challenge, concluding HISA “stays 

1 Pub. L. No. 116–260, §§ 1201–12, 134 Stat. 1182, 3252–75 (2020) (codified at 15 

U.S.C. § 3051–60).

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within current constitutional limitations as defined by the Supreme Court 

and the Fifth Circuit.”

We cannot agree. While we admire the district court’s meticulous 

opinion, we conclude that HISA is facially unconstitutional. A cardinal 

constitutional principle is that federal power can be wielded only by the 

federal government. Private entities may do so only if they are subordinate to 

an agency. See generally A.L.A. Schechter Poultry Corp. v. United States

[Schechter Poultry], 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 [Adkins], 310 U.S. 381, 399 (1940). But the 

Authority is not subordinate to the FTC. The reverse is true. The Authority, 

rather than the FTC, has been given final say over HISA’s programs. 

While acknowledging the Authority’s “sweeping” power, the district 

court thought it was balanced by the FTC’s “equally” sweeping oversight.

Not so. HISA restricts FTC review of the Authority’s proposed rules. If 

those rules are “consistent” with HISA’s broad principles, the FTC must

approve them. And even if it finds inconsistency, the FTC can only suggest

changes. What’s more, the FTC concedes it cannot review the Authority’s 

policy choices. When the public has disagreed with those policies, the FTC 

has disclaimed any review and instead told the public to “engag[e] with the 

Authority.”2 An agency does not have meaningful oversight if it does not 

write the rules, cannot change them, and cannot second-guess their 

substance. As the district court correctly put it: “Only an Act of Congress 

could permanently amend any Authority rule or divest it of its powers. The 

FTC may never command the Authority to change its rules or divest it of its 

2 See Order Approving the Assessment Methodology Rule Proposed by the Horseracing 

Integrity and Safety Authority 20, Federal Trade Comm’n (Apr. 1, 2022).

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powers.” Horsemen’s Benevolent & Protective Ass’n v. Black [Black], No. 5:21-

CV-071, 2022 WL 982464, at *69 (N.D. Tex. Mar. 31, 2022). The end result 

is that Congress has given a private entity the last word over what rules 

govern our nation’s thoroughbred horseracing industry.

The Constitution forbidsthat. For 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. The 

Authority’s power outstrips any private delegation the Supreme Court or our 

court has allowed. We must therefore declare HISA facially unconstitutional. 

In doing so, we do not question Congress’s judgment about problems in the 

horseracing industry. That political call falls outside our lane. Nor do we 

forget that “[t]he judicial power to declare a law unconstitutional should 

never be lightly invoked.” Sveen v. Melin, 138 S. Ct. 1815, 1831 (2018) 

(Gorsuch, J., dissenting). We only apply, as our duty demands, the settled 

constitutional principle that forbids private entities from exercising 

unchecked government power.

The district court’s judgment is reversed and the case is remanded for 

further proceedings consistent with this opinion. 

I. Background

A. Facts

American horseracing is older than the founding. “Despite the 

disapproval of the Puritan hierarchy, by the mid 1600s, horse racing had 

become a popular and largely unregulated recreation throughout the 

colonies.” Joan S. Howland, Let’s Not “Spit The Bit” In Defense Of “The Law 

Of The Horse”: The Historical and Legal Development of American 

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Thoroughbred Racing, 14 Marq. Sports L. Rev. 473, 483 (2004).3 For 

nearly all our subsequent history, horseracing has been regulated by the 

States, local communities, and private organizations. See id. at 491–92.

4 That

changed in 2020. Alarmed by a spate of doping scandals and racetrack 

fatalities, Congress enacted HISA. See 15 U.S.C. § 3051–60.5 It passed with 

wide bipartisan support on December 21, 2020, and was signed by President 

Trump six days later.

1. HISA Framework. HISA creates a framework for enacting

nationwide rules governing racetrack safety, anti-doping, and medication 

control. See § 3054(a). The Act’s reach is broad. It applies to all “covered” 

horses, persons, and horseraces. See §§ 3055(a)(1), 3056(a)(1), 3057(a)(1).

“Covered horses” means “any Thoroughbred,” but other breeds may be 

brought under the Act’s purview by a State racing commission or breed 

governing organization. § 3051(4); see also § 3045(l). “Covered horseraces” 

are those with “a substantial relation to interstate commerce.” § 3051(5). 

“Covered persons” includes “all trainers, owners, breeders, jockeys, 

racetracks, [and] veterinarians”; licensees of State racing commissions and 

their “agents, assigns, and employees”; and “other horse support personnel 

who are engaged in the care, training, or racing of covered horses.” § 3051(6). 

2. The Authority. To “develop[] and implement[]” the rules it 

envisions, HISA empowers a “private, independent, self-regulatory, 

3 See generally Joan S. Howland & Michael J. Hannon, A Legal 

Research Guide to American Thoroughbred Racing Law for 

Scholars, Practitioners, and Participants 112 (1998); Roger 

Longrigg, The History of Horse Racing 10 (1972).

4 See also Lauren Stelly, Uniform Drug Reform in Horseracing, 6 Miss. Sports 

L. Rev. 71, 73 (2016) (noting that states “realize that more trainers will want to run their 

horses in the more lenient states”).

5 Unless otherwise noted, all statutory references are to HISA.

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nonprofit corporation, to be known as the ‘Horseracing Integrity and Safety 

Authority[.]’” § 3052(a). The Authority’s board of directors is set at nine 

members—five of whom “shall be independent members selected from 

outside the equine industry.” § 3052(b)(1). Choosing board members is left 

up to a nominating committee. § 3052(d). The Act contains provisions to 

protect the board from conflicts of interest.6 The Authority is placed under 

the “oversight” of the Federal Trade Commission (the “FTC”). See § 3053.

3. Rule Enactment, Approval, and Preemption. HISA divides

responsibility for enacting rules between the Authority and the FTC. The 

Authority formulates proposed rules. The Act provides that the Authority

“shall establish . . . program[s]” in the three key areas of anti-doping,

medication control, and racetrack safety. See §§ 3055(a)(1), 3056(a)(1). 

Additionally, the Authority “shall issue . . . a description of safety, 

performance, anti-doping, and medication control rule violations[.]”

§ 3057(a)(1). The Act outlines various “considerations,” “activities,” or 

“elements” the Authority must incorporate into the programs and rule 

violations. See §§ 3055(b)–(g), 3056(b)–(c), 3057(a)(2)–(e). 

The Authority submits proposed rules to the FTC, § 3053(a), which 

publishes them in the Federal Register for public comment, § 3053(b)(1). A

proposed rule “shall not take effect” unless the FTC approves it,

§ 3053(b)(2), which must occur no later than 60 days after publication, 

§ 3053(c)(1). The FTC “shall approve” a proposed rule if it finds the rule 

6 For example, no board member or independent committee member may (1) have 

a “financial interest in, or provide[] goods or services to, covered horses”; (2) be “[a]n 

official or officer . . . of an equine industry representative” or serve in a “governance or 

policymaking capacity for an equine industry representative”; (3) be “[a]n employee of, or 

an individual who has a business or commercial relationship with” people who have

financial interests in covered horses or equine industry officers; or (4) be “[a]n immediate 

family member of” an individual described in (1) or (2). § 3052(e)(1–4).

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“consistent” with the Act and with “applicable rules approved by the 

[FTC].” § 3053(c)(2). Conversely, the FTC can “make recommendations” 

to the Authority to modify proposed rules, and the Authority “may 

resubmit” proposed rules incorporating those modifications. § 3053(c)(3). 

The FTC itself may adopt an “interim final rule” under the APA’s good 

cause standard, provided it finds this “necessary to protect—(1) the health 

and safety of covered horses; or (2) the integrity of covered horseraces and 

wagering on those horseraces.” § 3053(e); see also 5 U.S.C. § 553(b)(B).

Rules promulgated by the Authority in accordance with HISA “shall 

preempt any provision of State law or regulation with respect to matters 

within the jurisdiction of the Authority[.]” § 3054(b).7

4. Enforcement. The Authority can investigate violations (including 

by issuing subpoenas) and enforce the rules by imposing civil sanctions or by 

suing to enforce sanctions or obtain injunctive relief. §§ 3058(a), 3057(j), 

3054(h–j). Any civil sanction is subject to de novo review by both an 

administrative law judge and the FTC. § 3058(b)(1), (c)(3)(B). Additionally, 

the Authority must seek an agreement with the United States Anti-Doping 

Agency (or comparable entity) to act as the enforcement agency for antidoping and medication control rules. § 3054(e)(1). It may enter into similar 

agreements with State racing commissions. § 3054(e)(2). The Authority may 

also issue guidance on how it interprets or enforces the rules, which must be 

submitted to the FTC but which “shall take effect” upon submission.

§ 3054(g)(1–3). Finally, as a condition of participating in covered races, 

7 The rules, however, do not preempt state or federal laws “relating to criminal 

conduct, cruelty to animals, matters unrelated to antidoping, medication control and 

racetrack and racing safety of covered horses and covered races, and the use of medication 

in human participants in covered races.” § 3054(k)(3).

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covered persons must register with the Authority, agree to comply with the 

rules, and cooperate with enforcement measures. § 3054(d). 

5. Funding. After an initial stage funded by loans obtained by the 

Authority, the Authority is primarily funded by fees collected from covered 

persons or State racing commissions. § 3052(f)(1–4). As with other proposed 

rules, the Authority must submit for the FTC’s approval its “formula or 

methodology for determining [fee] assessments.” § 3053(a)(11).

6. Approved Rules. To date, the FTC has approved the Authority’s 

proposed fee assessment methodology, in addition to three sets of rules 

concerning racetrack safety, enforcement procedures, and registration 

requirements and procedures.8 These rules cover numerous topics and they 

are minutely detailed. For example, the rules regulate necropsies on horses 

that die at racetracks;specify continuing education requirements for thirteen 

categories of persons including trainers, owners, grooms, jockeys, and 

starters; set out comprehensive regulations for veterinarians; regulate the 

“traction devices” (such as “toe grabs”) on horseshoes; regulate jockeys’ 

health, safety, and equipment; and specify the composition, weight, length, 

and diameter of riding crops, as well as the maximum number of times a 

jockey may use a crop to “activate and focus” a horse during a race (“6 times 

8 See HISA Assessment Methodology Rule, 87 Fed. Reg. 9349 (Feb. 18, 2022); 

HISA Racetrack Safety, 87 Fed. Reg. 435 (Jan. 5, 2022); HISA Enforcement Rule, 87 Fed. 

Reg. 4023 (Jan. 26, 2022); HISA Registration Rule, 87 Fed. Reg. 29862 (May 17, 2022).

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. . . in increments of 2 or fewer strikes”).9 The rules also create a detailed 

scheme of sanctions.

10

B. Procedural History

In March 2021, the National Horsemen’s Benevolent and Protective 

Association and twelve affiliates (collectively, “Horsemen”) sued the FTC

and the Authority (collectively, “Appellees”) in federal district court. The 

Horsemen claimed HISA was facially unconstitutional on various grounds, 

including the private non-delegation doctrine and the Fifth Amendment’s 

Due Process Clause.11 Appellees moved to dismiss, while the Horsemen 

moved for summary judgment on their private non-delegation and due 

process claims. After briefing was completed, the State of Texas and the 

Texas Racing Commission (collectively, “Texas”) intervened and joined the 

Horsemen’s summary judgment motion. Texas’s complaint added an anticommandeering claim. The district court ruled it would not consider that 

claim until it had resolved the outstanding motions.

On March 31, 2022, the district court denied the Horsemen’s 

summary judgment motion and granted Appellees’ motion to dismiss. Black,

2022 WL 982464. We discuss the district court’s reasoning below. A few 

days after the ruling, the court ordered the parties to confer and file a joint 

status report regarding Texas’s remaining anti-commandeering claim. On 

9 See HISA Racetrack Safety, 87 Fed. Reg. at 453 (§ 2170) (necropsies); id. at 453 

(§ 2182) (continuing education); id. at 454–57 (§§ 2220–72) (veterinarians); id. at 457 

(§ 2276) (horseshoes); id. at 457 (§§ 2280–82) (riding crops); id. at 458 (§§ 2290–93) 

(jockeys).

10 See HISA Enforcement Rule Modification, 87 Fed. Reg. at 4025.

11 The Horsemen also claimed HISA was unconstitutional under the public nondelegation doctrine and the Appointments Clause. The district court did not rule on those 

claims and so they are not before us.

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April 14, 2022, Texas filed a notice dismissing that claim under Federal Rule 

of Civil Procedure 41(a), leading to the court’s entry of a final judgment on 

April 19, 2022. The Horsemen and Texas each filed notices of appeal on 

April 19 and 20, 2022, respectively.

In the district court, Appellants subsequently filed an emergency 

motion under Federal Rule of Civil Procedure 59(e) to amend the final 

judgment, realizing that the district court had improperly dismissed the case 

based on Texas’s Rule 41(a) dismissal. On April 25, 2022, the district court 

denied the Rule 59(e) motion, ruling instead that the previous final judgment 

was a “nullity” and certifying the court’s March 31 order as a final judgment 

under Rule 54(b). As the district court explained, it did so to remove any 

doubt as to our court’s jurisdiction over the pending appeal. The district 

court then entered a new final judgment on April 25, 2022. 

C. District Court Ruling

The district court upheld HISA in a thorough opinion which we only 

summarize here. The court first concluded the Horsemen had standing to 

bring their private non-delegation and due process claims. Black, 2022 WL 

982464 at *4–8. The Horsemen faced a concrete, “certainly impending 

injury,” because HISA requires passage of regulations that will aggrieve the 

Horsemen. Id. at *7. That injury is fairly traceable to HISA and would be 

redressed by a decision finding HISA unconstitutional, because the 

Horsemen “would no longer be subject to certainly impending regulatory 

control . . . and would be able to continue administering the race-day 

medications to their horses that the Authority’s rules would inevitably 

prohibit.” Id. at *8. The court also concluded that the claims were ripe. Id. at 

*8–10. It reasoned that the case “requires the [c]ourt to resolve a dispute 

over Congress’s choice to create a hybrid rulemaking scheme and the words 

it used to do so.” Id. at *10.

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Turning to the merits, the district court first considered the claim that 

HISA unconstitutionally delegates government power to a private entity.

Synthesizing precedent from the Supreme Court and our circuit, the court

framed the pertinent inquiry as (1) whether HISA contains an “intelligible 

principle guiding the Authority and the FTC”; and (2) whether the 

Authority “function[s] subordinately to the FTC.” Id. at 13. On the first 

question, the court concluded that HISA laid down sufficiently intelligible 

principles to guide the Authority and the FTC. Id. at *14–16.

The second question—whether the Authority is subordinate to the 

FTC—was more difficult. The court candidly “recognize[d] that HISA’s 

regulatory model pushes the boundaries of public-private collaboration.” Id. 

at *27. Nonetheless, the court found no violation of the private nondelegation doctrine, at least “within current constitutional limitations as 

defined by the Supreme Court and the Fifth Circuit.” Ibid. Principally, the 

court reasoned that while the Authority drafts and proposesrules, those rules 

become law only after “the FTC’s independent review and approval.” Id. at 

*17. In this regard, HISA draws on the securities-regulation framework, 

which uses private organizations (like FINRA and its predecessor, the 

NASD)12 to govern industry members under SEC oversight. Ibid. “[T]he 

SEC-FINRA model, which inspired the FTC-Authority relationship,” the 

court pointed out, has been “uniformly” upheld against private nondelegation challenges. Ibid. (citing Sorrell v. SEC, 679 F.2d 1323, 1325–26 

(9th Cir. 1982); Todd & Co. v. SEC, 557 F.2d 1008, 1012 (3d Cir. 1977); R. H. 

Johnson & Co. v. SEC, 198 F.2d 690, 695 (2d Cir. 1952)). And while our 

12 FINRA stands for the “Financial Industry Regulatory Authority.” See, e.g., Saad 

v. S.E.C., 873 F.3d 297, 299 (D.C. Cir. 2017). NASD stood for the “National Association 

of Securities Dealers.” See, e.g., Nat’l Ass’n of Securities Dealers, Inc. v. S.E.C., 431 F.3d 

803, 804 (D.C. Cir. 2005).

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circuit has not addressed any such challenges, we recently upheld an 

agency’s subdelegating to a private body the authority to certify state 

medicaid-reimbursement rates. Id. at *17–18 (discussing Texas v. Rettig, 987 

F.3d 518 (5th Cir. 2021)). There was no private non-delegation problem, we 

found, because the agency “independently” reviewed the private entity’s 

activities. Rettig, 987 F.3d at 532 (citation omitted). So too here, thought the 

district court: while the Authority’s rule-drafting authority “appears 

sweeping,” the FTC’s “review is equally so.” Black, 2022 WL 982464 at 

*18.

All the same, the district court acknowledged that the challengers 

raised “compelling arguments” against HISA’s “novel regulatory scheme” 

and its delegation to the Authority. Id. at *1, *10, *19. For instance, the court 

noted that the FTC’s “limited ability to draft rules” was an “uncommon 

feature in public-private partnerships.” Id. at *19. And while the FTC itself

could adopt interim final rules under a “good cause” standard, the 

narrowness of that emergency power made it “not much of an answer to the 

Horsemen’s concerns.” Ibid. Still, the court found the restrictions on the 

agency did not render it subordinate to the Authority under existing 

precedent. Id. at *19–21 (relying principally on Currin v. Wallace, 306 U.S. 1 

(1939) and Ass’n of Am. R.R.s v. U.S. Dep’t of Transp. [Amtrak IV], 896 F.3d 

539 (D.C. Cir. 2018)).

The court also acknowledged that the FTC can review the Authority’s 

proposed rules only for “consistency” with HISA and existing rules, thus 

giving the Authority unreviewable power to “fill up the details” of regulation 

and relegating the FTC to an “adjudicative, rather than a regulatory, 

function.” Id. at *22 (quoting Gundy v. United States, 139 S. Ct. 2116, 2136

(2019) (Gorsuch, J., dissenting)). Still, the court noted that the Act sought to 

cabin “consistency” review by incorporating various “elements, 

considerations, baseline rules, and express prohibitions.” Ibid. And the court

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pointed out that the SEC also reviews FINRA rules only for consistency with 

the enabling statute. Ibid. (citing 15 U.S.C. § 78s(b)(2)(C)(i)).

Finally, the court conceded that, unlike the agencies examined in any 

other private non-delegation case, the FTC lacked any power “to formally

modify the Authority’s rules.” Id. at *23. But this was “not fatal” to the 

Act’s constitutionality, because relevant precedents did not turn on the 

agency’s power to modify the private entity’s rules, only on its power to 

“approve or disapprove” them. Ibid.(discussing Adkins, 310 U.S. 381; Rettig, 

987 F.3d at 532; Todd & Co., 557 F.2d at 1012). Nonetheless, the court 

conceded that “the Horsemen’s grievance is understandable” and 

highlighted the following:

Unlike the SEC-FINRA relationship, the FTC needs the 

Authority to function as a typical regulator. Only an Act of 

Congress could permanently amend any Authority rule or 

divest it of its powers. The FTC may never command the 

Authority to change its rules or abolish its role in the 

administrative process.

Ibid. (citations omitted). Yet the court again found no private non-delegation 

problem, based on what it deemed controlling precedents from the Supreme 

Court and our court. Id. at *23–24 (discussing Currin, 306 U.S. at 16; Rettig, 

987 F.3d at 532; Boerschig v. Trans-Pecos Pipeline, LLC, 872 F.3d 701, 708–09 

(5th Cir. 2017)). Given that “the FTC controls the promulgation of binding 

rules,” there was no private non-delegation problem. Id. at *24.

The district court then turned to the due process challenges. The 

court dismissed those claims, concluding that the Authority is not a selfinterested industry competitor because: the Act requires a majority 

independent board and standing committees; includes a conflicts-of-interest 

section that precludes those with financial and familial relations from serving 

on the board; and enrolls impartial hearing officials or tribunals to conduct 

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adjudications for rule violations, which are approved by the FTC. Id. at *25–

26.13

In sum, the district court concluded that (1) the Horsemen had 

standing; (2) their claims were ripe; (3) and HISA did not violate the private 

non-delegation doctrine or the Due Process Clause. 

II. Standard of Review

“We review de novo a district court’s rulings on a motion to dismiss 

and a motion for summary judgment, applying the same standard as the 

district court.” TOTAL Gas & Power N. Am., Inc. v. FERC, 859 F.3d 325, 332 

(5th Cir. 2017).

Appellants facially challenge HISA’s constitutionality. To sustain 

such a challenge, they must show “that no set of circumstances exists under 

which the [statute] would be valid.” United States v. McGinnis, 956 F.3d 747, 

752 (5th Cir. 2020) (alteration in original) (quoting United States v. Salerno, 

481 U.S. 739, 745 (1987)). “Facial challenges to the constitutionality of 

statutes should be granted sparingly and only as a last resort.” Id. at 752–53 

(citations omitted).

III. Appellate Jurisdiction

We must first address our appellate jurisdiction. See Chandler v. 

Phoenix Servs., L.L.C., 45 F.4th 807, 812 (5th Cir. 2022). The Authority14

argues we lack jurisdiction because the Horsemen did not file a timely notice 

of appeal from a valid final judgment and because Texas lacks appellate 

standing. We reject the first argument and so need not reach the second.

13 The Authority’s ability to charge fees also did not disturb the district court 

because the Authority is not obligated to operate as a for-profit corporation. Id. at *26.

14 The FTC does not contest our jurisdiction. 

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The district court entered final judgment on April 19, 2022. That 

same day, the Horsemen filed a notice of appeal seeking review of the March 

31, 2022 order dismissing all of their claims with prejudice. The April 19 final 

judgment was invalid, however, because it also purported to dismiss without 

prejudice Texas’s anti-commandeering claim under Rule 41(a). Our 

precedent does not allow that.15 As a result, the Horsemen’s notice of appeal

was premature. See Fed. R. App. P. 4(a)(2) (referring to a notice of appeal 

“filed after the court announces a decision or order . . . but before the entry 

of the judgment or order”).

16

But the district court subsequently cured any problem with the 

premature notice. On April 25, 2022, the court certified its March 31, 2022 

order as final and appealable under Federal Rule of Civil Procedure 54(b).17

That Rule 54(b) certification made the Horsemen’s original notice effective 

to appeal the March 31, 2022 order. “Under [Federal Rule of Appellate 

Procedure] 4(a)(2), an appeal from a nonfinal decision may serve as an 

effective notice of appeal from a subsequently entered final judgment if the 

nonfinal decision ‘would be appealable if immediately followed by the entry of 

judgment.’” Cousin v. Small, 325 F.3d 627, 631 (5th Cir. 2003) (quoting 

15 See Exxon Corp. v. Maryland Cas. Co., 599 F.2d 659, 662–63 (5th Cir. 1979) 

(explaining Rule 41(a) does not allow dismissal of individual claims); see also Williams v. 

Taylor Seidenbach, Inc., 958 F.3d 341, 345 (5th Cir. 2020) (en banc) (citing Exxon Corp. for 

this proposition).

16 See also, e.g., Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 539 n.1 (5th Cir. 

2005) (notice of appeal was “premature” because filed “before the district court entered 

a final decision”); Young v. Equifax Credit Info. Serv’s, Inc., 294 F.3d 631, 634 n.2 (5th Cir. 

2002) (a notice of appeal was “technically premature” because district court’s order was 

not a valid final judgment).

17 See Fed. R. Civ. P. 54(b) (providing “the [district] court may direct entry of 

a final judgment as to one or more, but fewer than all, claims or parties, only if the court 

expressly determines that there is no just reason for delay”). Here, the district court’s Rule 

54(b) order expressly determined that no just reason for delay existed.

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FirsTier Mortg. Co. v. Investors Mortg. Ins. Co., 498 U.S. 269, 276 (1991)). Our 

court “has applied [this] rule in the context of the entry of a rule 54(b) 

certification after a prematurely filed notice of appeal, precisely the situation 

presented by this case.” Ibid. (citing Barrett v. Atl. Richfield Co., 95 F.3d 375

(5th Cir. 1996)). The Horsemen’s notice of appeal, then, is deemed filed on 

the date of and after entry of the Rule 54(b) judgment. Fed. R. App. P.

4(a)(2). It was therefore timely and effective to bring the March 31, 2022 

order before us.

Appellees nevertheless contend that Appellants’ joint Rule 59(e) 

motion—filed on April 22, 2022—made the previously filed notices of appeal 

“nullities,” thus requiring the Horsemen to file a new or amended notice.

Appellees cite no authority for that proposition. Rather, they cite cases 

holding that a notice of appeal is ineffective if filed while a Rule 59(e) motion 

remains pending before the district court.

18 Those cases, however, do not 

mean that a Rule 59(e) motion somehow “nullifies” a previously filed notice 

of appeal. Here, the district court denied the Rule 59(e) motions in the same 

order that it certified its March 31, 2022 order under Rule 54(b). As 

discussed, that Rule 54(b) certification had the effect of perfecting the 

18 See, e.g., Lawson v. Stephens, 900 F.3d 715, 717–20 & n.3 (5th Cir. 2018) 

(explaining notice of appeal was “ineffective” because district court had never ruled on 

pending Rule 59(e) motion); see also Fed. R. App. P. 4(a)(4)(B)(i) (a notice of appeal 

filed before court disposes of various motions, including a Rule 59(e) motion, “becomes 

effective” only upon court’s disposing of the pending motion); Banister v. Davis, 140 S. Ct. 

1698, 1703 (2020) (explaining that, whereas a timely Rule 59(e) motion means “there is no 

longer a final judgment to appeal from,” the disposition of that motion “restores the finality 

of the original judgment, thus starting the 30-day appeal clock” (cleaned up)); Osterneck v. 

Ernst & Whinney, 489 U.S. 169, 177 (1989) (explaining “Federal Rule of Appellate 

Procedure 4(a)(4) renders ineffective any notice of appeal filed while a Rule 59(e) motion 

is pending”).

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premature notice of appeal. Fed. R. App. P. 4(a)(2); Cousin, 325 F.3d at 

621; Barrett, 95 F.3d at 379.

The Horsemen’s notice of appeal was therefore timely and effective 

to appeal the district court’s March 31, 2022 order. No one disputes the 

district court’s conclusion that the Horsemen have standing. We therefore 

need not consider whether Texas does also. See Rumsfeld v. F. for Acad. & 

Institutional Rts., Inc., 547 U.S. 47, 52 n.2 (2006) (“[T]he presence of one 

party with standing is sufficient to satisfy Article III’s case-or-controversy 

requirement.”).

We proceed to the merits.

IV. Private Non-Delegation Doctrine

Our Constitution permits only the federal government to exercise

federal power. This is why each of the first three articles begins by

“vest[ing]” legislative, executive, and judicial power “in” specific entities: 

“a Congress,” “a President,” and a “supreme Court” and other federal

“Courts.”19 If it were otherwise—if people outside government could wield

the government’s power—then the government’s promised accountability 

to the people would be an illusion. See The Federalist No. 51 (“A 

19 See U.S. Const. art. I, § 1 (“All legislative Powers herein granted shall be 

vested in a Congress of the United States, which shall consist of a Senate and House of 

Representatives.”); art. II, § 2 (“The executive Power shall be vested in a President of the 

United States of America.”); art. III, § 1 (“The judicial Power of the United States, shall 

be vested in one supreme Court, and in such inferior Courts as Congress may from time to 

time ordain and establish.”); see also Dep’t of Transp. v. Ass’n of Am. R.R.s [Amtrak II], 575 

U.S. 43, 67 (2015) (Thomas, J., concurring) (“[T]he Constitution identifies three types of 

governmental power and, in the Vesting Clauses, commits them to three branches of 

Government. . . . These grants are exclusive.”); Steven G. Calabresi, The Vesting Clauses 

As Power Grants, 88 Nw. U.L. Rev. 1377, 1390 (1994) (“[T]he three powers of 

government described in the Vesting Clauses constitute a finite set of all the governmental 

powers that our Constitution sanctions.”).

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dependence on the people is, no doubt, the primary control on the 

government[.]”); Amtrak II, 575 U.S. at 61 (Alito, J., concurring) (“The 

principle that Congress cannot delegate away its vested powers exists to 

protect liberty.”). This point is reflected in the Supreme Court’s nondelegation cases. While the Court has allowed limited delegations of 

authority to government agencies, see Whitman v. Am. Trucking Ass’ns, 531 

U.S. 457, 472–76 (2001), it has set its face against giving public power to 

private bodies. “Such a delegation of legislative power,” the Court 

thundered nearly a century ago, “is unknown to our law, and is utterly 

inconsistent with the constitutional prerogatives and duties of Congress.” 

Schechter Poultry, 295 U.S. at 537; see also Amtrak II, 575 U.S. at 62 (Alito, J., 

concurring) (“When it comes to private entities, . . . there is not even a fig 

leaf of constitutional justification” for delegation). Not content merely to 

reject the idea, the Court has also called it insulting names. See Carter Coal 

Co., 298 U.S. at 311 (conferring power on private persons is “legislative 

delegation in its most obnoxious form”). 

This commonsense principle has come to be known as the “private 

non-delegation doctrine.” See, e.g., Tex. v. Comm’r of Internal Revenue, 142 S. 

Ct. 1308 (2022) (statement of Alito, J., respecting the denial of certiorari) 

(noting “the need to clarify the private non-delegation doctrine”).20 Key to 

applying the doctrine are two eighty-year-old Supreme Court cases, Carter 

Coal (1936) and Adkins (1940). In Carter Coal, the Court invalidated a federal 

law that authorized a majority of coal producers to fix wages and hours for all 

producers. 298 U.S. at 311–12. Giving regulatory power to “private persons 

20 See also, e.g., Alexander Volokh, The New Private-Regulation Skepticism: Due 

Process, Non-Delegation, and Antitrust Challenges, 37 Harv. J. L. & Pub. Pol’y 931, 

970 (2014) (discussing the “private non-delegation doctrine”); Emily Hammond, Double 

Deference in Administrative Law, 116 Colum. L. Rev. 1705, 1721–28 (same).

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whose interests may be and often are adverse to the interests of others in the 

same business” was, the Court held, an unconstitutional “legislative 

delegation” of a “governmental function.” Id. at 311. Congress then rewrote 

the law and, four years later, the Court upheld it in Adkins. 310 U.S. at 388. 

Under the new law, private boards only proposed prices—and those prices

now had to be “approved, disapproved, or modified by the [agency].” Ibid.

The private entities “operate[d] as an aid” to the agency “but [were] subject 

to its pervasive surveillance and authority.” Ibid. The Court found the new 

scheme “unquestionably valid.” Id. at 399. The Court emphasized that the 

private entities “function[ed] subordinately to the [agency],” that the agency 

and not the private entities “determine[d] the prices,” and that the agency 

had “authority and surveillance over the [private entities].” Ibid.

From these decisions, courts have distilled the principle that a private 

entity may wield government power only if it “functions subordinately” to 

an agency with “authority and surveillance” over it.

21 The D.C. Circuit has 

expressed the idea more precisely: “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 modif[y]’ them.” Ass’n of Am. R.R.s v. U.S. Dep’t of Transp.

[Amtrak I], 721 F.3d 666, 671 (D.C. Cir. 2013) (quoting Adkins, 310 U.S. at 

21 See, e.g., Rettig, 987 F.3d at 532 (“Agencies may subdelegate to private entities 

so long as the entities ‘function subordinately to’ the federal agency and the federal agency 

‘has authority and surveillance over [their] activities.’” (alternation in original)); Pittston 

Co. v. United States, 368 F.3d 385, 394 (4th Cir. 2004) (delegation to a private entity 

impermissible unless the entity “function[s] subordinately” to an agency with “‘authority 

and surveillance’ over [it]”); United States v. Frame, 885 F.3d 1119, 1128 (3d Cir. 1989) 

(same) (all quoting Adkins, 310 U.S. at 399).

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388), vacated and remanded on other grounds by Amtrak II, 575 U.S. 43.

22 If the 

private entity does not function subordinately to the supervising agency, the 

delegation of power is unconstitutional.23

In this case, the parties agree on these basic parameters, as did the 

district court. See Black, 2022 WL 982464, at *25. But they differ sharply 

over whether the Authority functions subordinately to the FTC. As noted, 

the district court found the Authority subordinate because the Authority’s 

proposed rules become law only after the FTC “independently” reviews and 

approves them. Id. at *17. Appellants say the reverse is true: the FTC’s arms22 The D.C. Circuit’s Amtrak I decision was vacated and remanded because the 

Supreme Court found Amtrak was a governmental entity, not the private entity it 

purported to be. Amtrak II, 575 U.S. at 46, 50–55. The Supreme Court thus had no occasion 

to discuss the circuit court’s private non-delegation analysis. See ibid.

23 Courts and commentators differ over the locus of the constitutional violation. 

Some suggest the Due Process Clause. See, e.g., Alexander Volokh, The Shadow Debate over 

Private Nondelegation in DOT v. Association of American Railroads, 2014–2015 Cato Sup. 

Ct. Rev. 359, 376 (2015)(“[D]elegation to a private, self-interested party is a due process 

problem, not a non-delegation problem.”); Volokh, supra note 11, at 932 (“The Due 

Process Clause is a potential limit on the private exercise of regulatory power.”). Others 

suggest the Vesting Clauses. See, e.g., Pittston Co., 368 F.3d at 394 (“[W]hen the 

Constitution vests ‘all legislative Powers’ in a Congress of the United States, ‘the executive 

Power’ in a President of the United States, and ‘the judicial Power’ in one Supreme Court 

and such courts as Congress may establish, . . . a non-delegation principle serves both to 

separate powers as specified in the Constitution, and to retain power in the government 

Departments so that delegation does not frustrate the constitutional design.”) (internal 

citations omitted); Thomas W. Merrill, Rethinking Article I, Section 1: From Nondelegation 

To Exclusive Delegation, 104 Colum. L. Rev. 2097, 2168 (2004) (“A more plausible 

source of constraint on delegations to nonfederal actors is the Constitution’s implicit 

design principle limiting the federal government to three branches.”). We need not weigh 

in. Whatever the constitutional derivation, all parties and the district court agree that the 

outcome turns on whether the private entity is subordinate to the agency. See Amtrak I, 721 

F.3d at 671 n.3 (“While the distinction [in constitutional provenance] evokes scholarly 

interest, . . . neither court nor scholar has suggested a change in the label would effect a 

change in the inquiry.”).

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length oversight makes the agency subordinate to the Authority. We must 

decide which one, agency or Authority, has the whip hand.

24

A. The Authority Has Sweeping Rulemaking Power.

We start where we and the district court firmly agree: the Authority’s 

rulemaking power is “sweeping.” Id. at *18. HISA itself does not create antidoping, medication, or racetrack safety programs. Nor does HISA empower 

the FTC to do so. Instead, as Texas’s brief points out, “HISA delegates the 

task of creating such programs to the Authority.” That follows from the 

Act’s plain terms. It is “the Authority”—not the FTC—that “shall 

establish” the anti-doping, medication, and racetrack safety programs. 

§§ 3055(a)(1), 3056(a)(1). It is “the Authority”—not the FTC—that 

“approv[es]” a request (by a state racing commission or breed governing 

organization) to include breeds other than Thoroughbreds and that 

“consider[s]” how to adapt its programs to those breeds. §§ 3054(l)(1), 

3055(a)(2).25 And it is “the Authority”—not the FTC—that “shall issue” 

24 As discussed, the district court thought the private non-delegation analysis 

includes the question (more familiar in the public non-delegation realm) whether Congress 

has provided an “intelligible principle” to guide the agency and the private entity. Black, 

2022 WL 982464, at *11; see, e.g., Gundy v. United States, 139 S. Ct. 2116, 2123 (2019) 

(public non-delegation question is “whether Congress has supplied an intelligible principle 

to guide the delegee’s use of discretion”). The parties do not join argument on whether the 

intelligible-principle analysis belongs in the private non-delegation context, so we do not 

address the point. We address only whether the Authority functioned subordinately to the 

FTC.All agree that this question is determinative, quite apart from whether HISA provides 

an “intelligible principle” to guide a private delegee. See Black, 2022 WL 982464, at *12

(“An intelligible principle . . . cannot rescue a statute empowering private parties to wield 

regulatory authority” unless “they function subordinately to an agency.” (citing Amtrak I, 

721 F.3d at 671; Adkins, 310 U.S. at 399) (cleaned up))).

25 The Authority’s approval of a request to expand HISA’s reach to other breeds 

appears not to be subject to any FTC review whatsoever. See § 3054(l)(1). Texas argues 

that this feature of HISA independently violates the private non-delegation doctrine and, 

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descriptions of rule violations, § 3057(a)(1), and “shall establish” sanctions 

for them, § 3057(d)(1). As the district court correctly found, in HISA,

Congress empowered “the Authority” with “sweeping” power to make

“myriad” rules for the horseracing industry. Black, 2022 WL 982464, at *18.

To be sure, Congress also included various “considerations” and 

other factors to guide the Authority’s development of the rules. But that only 

underscores the point that it is the Authority, not the agency, that is tasked 

with weighing polices that go into formulating rules. For instance, HISA 

broadly instructs the Authority to create a program that includes “[a] 

uniform set of training and safety standards and protocols consistent with the 

humane treatment of covered horses,” § 3056(b)(2), while leaving the policy 

details up to the Authority. (And, as we shall see, the FTC has affirmatively 

disclaimed any authority to second-guess the Authority’s policy choices).

Keep in mind, moreover, that we are not considering here whether the 

“considerations” provide a sufficiently intelligible principle to satisfy the 

public non-delegation doctrine. See Big Time Vapes, Inc. v. F.D.A., 963 F.3d 

436, 443–444 (5th Cir. 2020) (concluding the Tobacco Control Act provided 

a sufficiently intelligible principle). Instead, we are deciding whether the 

Authority is subordinate to the agency. And, on its face, 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 the saddle.

The district court was candid about this aspect of the FTC-Authority 

relationship, calling it “unique,” “unusual,” and “uncommon.” Black, 

2020 WL 982464, at *19, *22. Still, the court insisted this did “not 

additionally, does not even include an intelligible principle to govern Authority’s exercise 

of power. Appellees respond that Texas waived this argument by not raising it in the district 

court and, in any event, lacks standing to raise it. Because we conclude that HISA is 

unconstitutional on other grounds, we need not address this question.

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necessarily convert the Authority into an insubordinate entity in the 

rulemaking scheme.” Id. at *19. To explain why, the court first pointed to the 

FTC’s power to adopt “interim final rules.” Ibid. (citing § 3053(e)). But in 

the same breath the court acknowledged this was “not much of an answer.” 

Ibid. We agree. After all, as the court noted, the FTC’s interim rulemaking 

power is subject to the APA good cause standard, which means it is

“narrow[]” authority reserved for “emergency situations.” Ibid. (citation 

omitted); see 5 U.S.C. § 553(b)(B) (good cause standard).

26 That the agency 

can make temporary rules on a break-glass-in-case-of-an-emergency basis 

does not suggest the agency is superior to the Authority. It suggests the 

opposite—that the Authority is in charge.27

The district court placed heavier reliance on the Supreme Court’s 

Currin decision. In that case, Congress established tobacco regulations that 

would go into effect only if approved by two-thirds of growers in a particular 

market. 306 U.S. at 6. This was not a private delegation, the Court held, 

because it only let the growers “determine exactly when [Congress’s] 

exercise of the legislative power should become effective.” Id. at 16 (quoting 

J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394, 407 (1928)). The 

26 See also United States v. Johnson, 632 F.3d 912, 928 (5th Cir. 2011) (“Further, it 

is well established that the ‘good cause’ exception to notice-and-comment should be read 

narrowly in order to avoid providing agencies with an escape clause from the requirements 

prescribed.” (internal quotation marks omitted)); Util. Solid Waste Activities Grp. v. EPA, 

236 F.3d 749, 754 (D.C. Cir. 2001) (“[T]he ‘good cause’ exception is to be narrowly 

construed and only reluctantly countenanced.” (internal quotation marks omitted)).

27 At oral argument, Appellees suggested the FTC’s interim rulemaking power 

mirrors the SEC’s ability to “abrogate, add to, and delete from” FINRA rules “as the 

[SEC] deems necessary or appropriate to insure the fair administration of the selfregulatory organization . . . .” Id. § 78s(c); see also O.A. Rec. at 24:52–27:30. We disagree. 

As discussed below, see infra Part IV.B.2., the SEC’s power to change FINRA rules is not 

limited to emergency situations or situations meeting the “good cause” standard. 

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Court emphasized, though, that the power to write the regulations “ha[d] 

already been exercised legislatively by the body vested with that power under 

the Constitution.” Ibid.

The district court thought HISA’s restrictions on the FTC’s 

rulemaking power “parallels the private veto allowed in Currin.” Black, 2022 

WL 982464, at *19. We disagree. As the Supreme Court explained, the 

growers’ veto “[wa]s not a case where a group of producers may make the 

law and force it upon a minority.” Currin, 306 U.S. at 15–16 (citing Carter 

Coal, 298 U.S. at 310, 318). Nonetheless, the district court tried to analogize 

the growers’ veto to “ultimately determin[ing] . . . what the substance of that 

rule would be.” Black, 2022 WL 982464, at *19. But this limping analogy was 

rejected by Currin: “While in a sense one may say that [the growers] are 

exercising legislative power, it is not an exact statement, because the power 

has already been exercised legislatively by the body vested with that power 

under the Constitution.” 306 U.S. at 16. The bottom line is that Currin 

involved no delegation of authority to make rules, whereas HISA does. The 

Currin growers had only a veto over regulations—important to them, no 

doubt—but they did not write the regulations. The Authority does.28 

B. The FTC Has Limited Power To Review Proposed Rules.

Despite the Authority’s “sweeping” rulemaking power, the district 

court found the Authority was subordinate to the FTC. The court’s 

reasoning proceeded in multiple steps. First, citing Adkins, the court 

reasoned that the “FTC’s independent review and approval” meant that 

“[l]awmaking . . . [was] ‘not entrusted to the [Authority].’” Black, 2022 WL 

28 As explained below, the Authority also has a veto every bit as effective as the 

growers’ veto in Currin. See infra Part IV.B.4. But the point here is that, in addition to that

veto, the Authority writes the rules, which far outstrips the growers’ role in Currin.

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982464, at *17 (quoting Adkins, 310 U.S. at 399). Second, the court reasoned 

that HISA followed the securities industry model of using private selfregulatory organizations under SEC oversight, a model that has 

“consistently withstood private nondelegation challenges.” Ibid. Third, the 

court believed that our rejection of a private non-delegation claim in Rettig

forecloses the challenge to HISA. Id. at *18. Fourth, the court declined to 

follow the D.C. Circuit’s Amtrak I decision. Id. at *20–21. We address each 

point in turn.

1. The FTC lacks power to review the Authority’s policy choices.

We turn first to the FTC’s supposedly “independent” review and 

approval of the Authority’s proposed rules. Id. at *17. Once the Authority 

submits proposed rules to the FTC, the agency must do two things. See 

§ 3053(a), (c). First, it must publish the proposed rules in the Federal 

Register for public comment. § 3053(b)(1). Second, it must determine within 

60 days whether a proposed rule is “consistent” with HISA and prior rules. 

§ 3053(c)(1)–(2). If so, then the FTC “shall approve” the proposed rule. 

§ 3053(c)(2). The district court principally relied on this “consistency”

review to find the Authority operated subordinately to the agency. Id. at *22.

The court was mistaken. The FTC’s oversight is too limited to ensure the 

Authority “function[s] subordinately” to the agency. Adkins, 310 U.S. at 399.

The FTC’s limited review of proposed rules falls short of the 

“pervasive surveillance and authority” an agency must exercise over a 

private entity. Adkins, 310 U.S. at 388. The district court itself could not even 

define what consistency review entailed. Black, 2022 WL 982464, at *22. 

“At a minimum,” the court supposed the FTC would measure rules against

the Act’s purposes (such as ensuring “the safety, welfare, and integrity of 

covered horses,” etc.), see § 3054(a)(2)(A), or against “the elements, 

considerations, baseline rules, and express prohibitions the Act contains.”

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Black, 2022 WL 982464, at *22. The court likened this to “an 

adjudicative . . . function akin to courts reviewing agency action for whether 

it is ‘in excess of statutory jurisdiction, authority, or limitations.’” Ibid.

(quoting 5 U.S.C. § 706(2)(C)).

Even assuming any of those notions can be read into HISA, such armslength review hardly subjects the Authority’s rules to “independent” 

oversight. What would it mean, for instance, to say a rule is “consistent”

with the proposition that medication “should be the minimum necessary to 

address the diagnosed health concerns identified during the examination and 

diagnostic process”? See § 3055(b)(7). Or the aspiration that a safety 

program include “[a] uniform set of training and racing safety standards and 

protocols consistent with the humane treatment of covered horses”? See

§ 3056(b)(2). Even the “baseline” medication principles the district court 

cited are open-ended: for instance, the Authority must “take into 

consideration” that horses “should compete only when they are free from 

the influence of medications, other foreign substances, and methods that 

affect their performance.” § 3056(b)(1). Saying a rule is or is not

“consistent” with that standard says next to nothing. Such high-altitude 

oversight, the district court itself acknowledged, “largely gives the Authority 

the power to ‘fill up the details’ of the Act in places with less specific 

directives,” and “[f]illing up the details has long been recognized as the very 

business of regulating.” Black, 2022 WL 982464, at *22 (citing Gundy, 139 

S. Ct. at 2136 (Gorsuch, J., dissenting); United States v. Grimaud, 220 U.S. 

506, 517 (1911)).

In any event, whatever “consistency” review includes, we know one 

thing it excludes: the Authority’s policy choices in formulating rules. This 

blunt fact has been repeatedly confirmed by the FTC itself. For example, 

when approving the Authority’s hearing rules (the “Proposed Rule Series 

8300”), the FTC explained it “reviews the Authority’s proposals for their 

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consistency with the Act and the [FTC’s] rule, not for general policy.”29 It 

thus disregarded “comments [that] offered policy recommendations without 

identifying any inconsistency between the proposed rule provisions and the 

Act.”30 Similarly, when reviewing a rule on “toe grabs”—basically, cleats 

for horses—the FTC complained that commenters did not challenge the 

“rule’s consistency with the Act;” instead they “challenge[d] certain details 

in the Authority’s choice of permitted horseshoes, but these are essentially 

policy disagreements.”31 One more example: when addressing complaints 

about the Authority’s fee-assessment methodology, see HISA Assessment 

Methodology Rule, 87 Fed. Reg. 9349 (Feb. 18, 2022), the FTC encouraged

commenters to “continue engaging with the Authority”:

While the [FTC] concludes that the interstate methodology 

proposed by the Authority is consistent with the Act, it is worth 

noting that there are likely multiple methodologies that the 

Authority could have proposed that would be consistent with 

the Act. Accordingly, the [FTC] encourages states that would 

prefer another methodology to continue engaging with the Authority, 

which in its response committed to keeping an open mind 

29 Order Approving the Enforcement Rule Proposed by the Horseracing Integrity and 

Safety Authority (“Order Approving Enforcement Rule”), 26, Federal Trade Comm’n

(Mar. 25, 2022) (emphasis added).

30 Id. at 26–27 (emphasis added). As the same order explained elsewhere, the 

FTC’s “statutory mandate to approve or disapprove a proposed Authority rule is limited 

to considering only whether the proposed rule ‘is consistent with’ the Act and the 

Commission’s procedural rule.” Id. at 4 (citing § 3053(c)(2)). “Nevertheless,” the order 

continued, “the [FTC] received many comments that were unrelated to 

[consistency] . . . and those comments have little bearing on the [FTC’s] determination.” Ibid.

(emphasis added). While the FTC would not consider them, the order noted “the Authority

has stated that it will use those comments when it proposes future rule modifications.” Ibid.

(emphasis added).

31 Order Approving Enforcement Rule at 43.

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about the interstate methodology of the Assessment 

Methodology proposed rule . . . .

Order Approving the Assessment Methodology Rule Proposed by the Horseracing 

Integrity and Safety Authority 20, Federal Trade Comm’n (Apr. 1, 

2022) (emphasis added). In short, the conclusion is inescapable that the 

FTC’s consistency review does not include reviewing the substance of the 

rules themselves.32

If the FTC cannot review the policy choices behind the rules, then 

logically the FTC cannot make the Authority modify those policies. That is

again confirmed by HISA’s plain terms. The modification power the Act 

gives the FTC is limited in two ways. It pertains only to whether a rule is 

“consistent” with the Act and does not include review of the policies

informing the rule. See § 3053(c)(3)(A).33 And, even then, the FTC can only

make “recommendations” to the Authority. Ibid. In response, the Authority 

“may resubmit” a rule incorporating the “recommended” modification. 

§ 3053(c)(3)(B). The Act thereby confirms—in the district court’s words—

32 This answers two additional arguments made by the Authority. First, the 

Authority invokes the constitutional-avoidance canon, but that canon applies only to 

“ambiguous” text. FCC v. Fox Television Stations, Inc., 556 U.S. 502, 516 (2009). There is 

nothing ambiguous here: HISA explicitly limits agency review to “consistency.” Second, 

the Authority invokes the distinction between facial and as-applied challenges. But the 

curtailment of agency review appears on the statute’s face. See § 3053(c). Nor does our 

using three examples of the agency’s limited review convert this to an as-applied analysis. 

We do not invoke those examples to critique “a defined subset of [HISA’s] applications,” 

as one would in an as-applied challenge. United States v. Stevens, 559 U.S. 460, 473 n.3 

(2010). Rather, we invoke them to show that the agency is applying HISA exactly as 

written—to cabin the agency’s review to “consistency” and to exclude it from secondguessing the Authority’s policy choices. 

33 That follows from the text and is confirmed by the way the FTC reads the 

provision. As discussed, in responding to commenters, the agency sharply distinguishes

comments as to “inconsistency” with the Act (which the FTC considers) from comments 

as to “policy recommendations” (which the FTC disregards).

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the FTC’s “inability to formally modify the Authority’s rules.” Black, 2022 

WL 982464, at *23. Not only does HISA speak of a mere “recommendation” 

to modify, but it says the Authority “may” choose to modify, or not. See, e.g., 

Lopez v. Davis, 531 U.S. 230, 241 (2001) (“Congress’ use of the permissive 

‘may’ . . . contrasts with the legislators’ use of a mandatory ‘shall’ in the very 

same section.”); cf. § 3053(d)(2) (the FTC “shall publish” proposed rules in 

Federal Register). 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. Indeed, this was conceded by the district court itself: 

“The FTC may never command the Authority to change its rules or abolish 

its role in the administrative process.” Black, 2022 WL 982464, at *23 

(emphasis added). 

Despite finding the FTC unable to modify rules, the district court 

deemed this “not fatal” to HISA. Ibid. Again, we disagree. The district court 

reasoned that “the agency in Currin could not modify its regulation without 

industry approval.” Ibid. But, as explained, the private growers in Currin

could only stop regulations from going into effect; they could not rewrite 

them. Here, the Authority writes the regulations and the FTC cannot modify 

them. The court also reasoned that Adkins “did not rely” on the fact that the 

agency could modify the prices proposed by private parties. Ibid. That is 

mistaken. In finding no delegation, Adkins stated: “The members of the code 

[i.e., the private entity] function subordinately to the Commission [i.e., the 

agency]. It, not the code authorities, determines the prices.” 310 U.S. at 399

(emphasis added). The opposite is true here. The Authority, not the FTC, 

determines the rules. The FTC’s “consistency” review cannot touch the 

Authority’s policy judgments when it does so. 

In sum, we conclude that the FTC’s limited review of proposed rules 

does not make the Authority function subordinately to the agency. 

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2. The FTC has less supervisory power than the SEC.

The district court also relied on sister-circuit cases affirming the 

constitutionality of the Maloney Act, which created the SEC-FINRA model 

and after which Congress modeled HISA. Black, 2022 WL 982464, at *17

(“[E]very court to consider a non-delegation challenge to the Maloney Act 

has concluded that there is ‘no merit in the contention that the Act 

unconstitutionally delegates power to’ a private entity.” (quoting Sorrell v. 

SEC, 679 F.2d 1323, 1326 (9th Cir. 1982))); see also, e.g., Todd & Co., 557 F.2d 

at 1012. Like the Authority, FINRA is a private entity empowered to draft 

and propose regulations to the SEC. See 15 U.S.C. § 78s(b)(1) (providing a 

“self-regulatory organization shall file with the [SEC] . . . copies of any 

proposed rule”). Appellees also press this argument on appeal.

The argument misses a key distinction, however. Unlike HISA, the 

Maloney Act empowers the SEC to “abrogate, add to, and delete from” 

FINRA rules “as the [SEC] deems necessary or appropriate[.]” 15 U.S.C. 

§ 78s(c); see also Aslin v. Fin. Indus. Regul. Auth., Inc., 704 F.3d 475, 476 (7th 

Cir. 2013) (observing that the SEC “may abrogate, add to, and delete from 

all FINRA rules as it deems necessary”) (citation omitted). This rulemaking 

power meaningfully distinguishes the SEC-FINRA relationship from the 

FTC-Authority relationship, as the district court acknowledged: “[B]ecause 

Congress withheld the FTC’s ability to modify proposed rules, the Authority 

wields greater power than FINRA and the private entities in Adkins.” Black, 

2022 WL 982464, at *22. Said another way: although 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.

See Adkins, 310 U.S. at 388. Not so here. The Authority not only formulates 

and proposes horseracing industry rules but, given the limits built into the 

FTC’s oversight, it also has the final word on what those rules are. Again, the 

district court conceded this: “Unlike[] the SEC-FINRA relationship, the 

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FTC needs the Authority to function as a typical regulator.” Black, 2022 WL 

982464, at *23; see also In re Series 7 Broker Qualification Exam Scoring Litig., 

548 F.3d 110, 114 (D.C. Cir. 2008) (“Absent the unique self-regulatory 

framework of the securities industry, [FINRA’s] responsibilities would be 

handled by the SEC.”).

We therefore cannot agree with the district court and Appellees that 

the Maloney Act supports the constitutionality of HISA’s delegation of 

rulemaking power to the Authority.34 For similar reasons, we reject 

Appellees’ argument that the FTC’s “revise-and-resubmit power,” i.e., the 

FTC’s power to deny a proposal and suggest modification, puts the FTC 

here on similar footing to the SEC. See § 3053(c)(3). As explained, the FTC’s 

power to recommend modifications is not equivalent to the power to require

modifications. The SEC itself can make changes to FINRA rules, see 15 

U.S.C. § 78s(c), but the FTC can only recommend changes to the 

Authority’s rules (and then, only to the extent that the rules are 

“inconsistent” with HISA). Because we are considering whether the private 

entity is subordinate to the agency for rulemaking purposes, that distinction 

makes all the difference.35

34 Moreover, as the district court recognized, our circuit has never addressed a 

private non-delegation challenge to the Maloney Act. Black, 2022 WL 982464, at *17. The 

district court observed, however, that in Rettig we “approvingly cited” R.H. Johnson, a

Second Circuit decision that first upheld the Maloney Act on non-delegation grounds. Ibid.; 

see Rettig, 987 F.3d at 532 n.12 (citing R.H. Johnson & Co. v. S.E.C., 198 F.2d 690, 695 (2d 

Cir. 1952)). Respectfully, that reads too much into a “see also” footnote citation. Nothing 

in Rettig suggests our court was adopting wholesale our sister circuits’ non-delegation 

analysis of the Maloney Act. And, as discussed infra Part IV.B.3., Rettig itself is consistent 

with our decision finding in HISA an impermissible private delegation. 

35 For the same reason, we find irrelevant Appellee’s argument that the SEC 

engages in same “consistency” review as the FTC. See id. § 78s(b)(2)(C)(i) (“The 

Commission shall approve a proposed rule change of a self-regulatory organization if it 

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3. Texas v. Rettig does not foreclose the challenge to HISA.

The district court also concluded our private non-delegation decision 

in Rettig supported the constitutionality of HISA. Black, 2022 WL 982464, 

at *18. We disagree.

In Rettig, we considered a private non-delegation challenge to a 

Department of Health and Human Services (“HHS”) subdelegation rule 

requiring a private board to certify as “actuarially sound” the rates states 

must pay insurers in their Medicaid contracts. 987 F.3d at 526. We rejected 

that challenge, in relevant part, because the private board “function[ed] 

subordinately to” HHS. Id. at 532 (quoting Adkins, 310 U.S. at 399). That 

was so because HHS “reviewed and accepted” the board’s accounting 

standards. Id. at 533 (citation omitted). Moreover, HHS “ha[d] the ultimate 

authority to approve” the states’ contracts and the agency “superintended” 

the contract approval process “in every respect.” Ibid.

We agree with Appellants that Rettig is distinguishable from the 

delegation here. As they point out, in Rettig, HHS “retained the power to 

unilaterally rescind or modify the rule incorporating the private 

organization’s standards.” The power to strip the private organization’s 

power altogether is on par with the SEC’s power to abrogate the private 

organization’s rules—a clear hierarchy exists in both cases. By contrast, the 

FTC has only limited review over the Authority’s primary rulemaking power 

by design and, additionally, lacks the power to change the Authority’s 

proposed rules. § 3053(c). Again, as the district court itself recognized, 

finds that such proposed rule change is consistent with the requirements of this title and 

the rules and regulations issued under this title that are applicable to such organization.”).

This again overlooks the separate provision empowering the SEC to “abrogate, add to, and 

delete from” FINRA rules “as the [SEC] deems necessary or appropriate to insure the fair 

administration of the self-regulatory organization . . . .” Id. § 78s(c).

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“[o]nly an act of Congress could permanently amend any Authority rule or 

divest it of its powers.” Black, 2022 WL 982464, at *23.

Another distinction lies in the scope of the private entity’s power. In 

Rettig, the private board contributed to a small part of the regulatory scheme, 

merely acting as an aid to HHS. Cf. Adkins, 310 U.S. at 388. By contrast, 

HISA entrusts the entire regulatory scheme to the Authority, fettered only 

by the FTC’s limited review. As the district court correctly put it: whereas 

“the subdelegated power in Rettig concerned only ‘a small part of the 

[contract] approval process,’” “[i]n HISA, by contrast, Congress instructs 

the Authority to draft myriad medication control and racetrack safety rules.” 

Black, 2022 WL 982464, at *18 (quoting Rettig, 987 F.3d at 533).

Consequently, Rettig does not compel finding that HISA’s delegation 

to the Authority clears the hurdle of the private non-delegation doctrine.

4. Amtrak I shows why HISA is unconstitutional.

Finally, to support their case against HISA, Appellants rely on the 

Amtrak litigation, which unspooled for years in the D.C. Circuit and the 

Supreme Court. See Amtrak I, 721 F.3d 666; Amtrak II, 575 U.S. 31; Ass’n of 

Am. R.R.s v. U.S. Dep’t of Transp. [Amtrak III], 821 F.3d 19 (D.C. Cir. 2016); 

Amtrak IV, 896 F.3d 539. Those cases addressed a federal law (section 207 of 

the Passenger Rail Investment and Improvement Act of 2008) that 

empowered a putative private entity (Amtrak) and an agency (the Federal 

Railroad Administration or “FRA”) to “jointly develop” railroad 

performance standards. Amtrak I, 721 F.3d at 668. If Amtrak and FRA 

disagreed, either could have an arbitrator settle the disagreement. Id. at 669. 

In Amtrak I, the D.C. Circuit found a private non-delegation problem. Id. at 

677. In Amtrak II, the Supreme Court vacated and remanded because it 

concluded Amtrak was really a government actor. In Amtrak III, the D.C. 

Circuit found section 207 violated due process by giving regulatory power to 

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the “economically self-interested Amtrak.” 821 F.3d at 39. Finally, in 

Amtrak IV, the D.C. Circuit held that striking the arbitration provision cured 

that constitutional problem by “eliminat[ing] Amtrak’s ability and power to 

exercise regulatory authority over its competitors.” 896 F.3d at 548.

We agree with Appellants that the private non-delegation analysis in 

Amtrak I supports their claim that HISA is unconstitutional. The D.C. 

Circuit found the delegation to Amtrak exceeded what the Supreme Court 

approved in either Currin or Adkins. Unlike the private growers in Currin, 

Amtrak helped craft the regulations. 721 F.3d at 671. Unlike the industry 

actors in Adkins, Amtrak could check FRA’s regulatory authority. Ibid. And, 

“more damningly,” the agency in Adkins could “unilaterally change” 

proposed rules, whereas Amtrak’s authority was “equal” to FRA. Ibid. Each 

of those features also condemns HISA. Unlike inCurrin, the Authority writes

the rules. Unlike in Adkins, the Authority can effectively veto the FTC’s 

suggested modifications. And, “more damningly,” the FTC cannot 

unilaterally change the Authority’s proposed rules. Ibid. Indeed, given its 

limited review, the FTC can merely recommend modifications to rules

insofar as they are “inconsistent” with the Act, but the agency cannot 

second-guess the Authority’s policy choices. So, “should the [FTC] prefer 

an alternative to [the Authority’s] proposed [rules], [HISA] leaves it 

impotent to choose its version without [the Authority’s] permission.” Ibid.

These are not the marks of a private entity that “functions subordinately” to

and “in aid of” an agency with “pervasive surveillance and authority” over 

it. Adkins, 310 U.S. at 388, 399. Amtrak I therefore supports our conclusion 

that HISA is unconstitutional.

The district court found more persuasive the D.C. Circuit’s later 

decisions in Amtrak III and Amtrak IV. Black, 2022 WL 982464, at *20–21. 

We disagree. Those decisions sound in public non-delegation and due 

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process and so have little bearing here.

36 And, regardless, the district court 

misapplied them. Severing the arbitration provision in Amtrak IV solved the 

constitutional problem there because, without it, Amtrak no longer had the 

“power to make law” without the FRA’s agreement. Amtrak IV, 896 F.3d at 

548 (quoting Amtrak III). Not so here. If the Authority’s proposed rules pass 

the FTC’s limited consistency review, the FTC has no choice but to approve 

the rules. See § 3053(c)(2). And, as already discussed, HISA gives the FTC 

no power to exercise its own policy judgment during the review process. See 

supra Part IV.B.1. Thus, the district court erred in finding that the FTC 

“always has ‘the final say,’” over the rules. Black, 2022 WL 982464, at *21

(quoting Boerschig, 872 F.3d at 708). The agency in Amtrak IV may have had 

the final say over railway standards, but the Authority has the final say over 

horseracing rules. Instead of Amtrak IV, we conclude that Amtrak I better

illuminates HISA’s constitutional flaws.

V. Conclusion

By delegating unsupervised government power to a private entity, 

HISA violates the private non-delegation doctrine. We therefore 

DECLARE that HISA is unconstitutional on that ground.

37

The district court’s decision is REVERSED and the case is

REMANDED for further proceedings consistent with this opinion.

36 That is because they were both decided after the Supreme Court recognized

Amtrak’s governmental status in Amtrak II, 575 U.S. at 55. 

37 Because we resolve the case on that ground, we do not address the district court’s 

conclusion rejecting the Appellants’ due process claims on the ground that the Authority 

is not a self-interested industry participant. Likewise, we need not examine the Appellants’ 

additional arguments concerning the Authority’s investigative and enforcement 

measures—without the rulemaking authority, the investigative and enforcement powers 

are nugatory and no party suggests otherwise.

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