Notice2022-15972
HISA Enforcement Rule Modification
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 26, 2022
Effective
September 26, 2022
Issuing agencies
Federal Trade Commission
Abstract
The Horseracing Integrity and Safety Act of 2020 recognizes a self-regulatory nonprofit organization, the Horseracing Integrity and Safety Authority, which is charged with developing proposed rules on a variety of subjects. Those proposed rules and proposed rule modifications take effect only if approved by the Federal Trade Commission. The proposed rules and rule modifications must be published in the Federal Register for public comment. Thereafter, the Commission has 60 days from the date of publication to approve or disapprove the proposed rule or rule modification. The Authority submitted to the Commission a proposed rule modification on Enforcement on June 5, 2022. The Office of the Secretary of the Commission determined that the proposal complied with the Commission's rule governing such submissions. This document publicizes the Authority's proposed rule modification's text and explanation, and it seeks public comment on whether the Commission should approve or disapprove the proposed rule modification.
Full Text
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<title>Federal Register, Volume 87 Issue 142 (Tuesday, July 26, 2022)</title>
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[Federal Register Volume 87, Number 142 (Tuesday, July 26, 2022)]
[Notices]
[Pages 44393-44404]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-15972]
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FEDERAL TRADE COMMISSION
[File No. P222100]
HISA Enforcement Rule Modification
AGENCY: Federal Trade Commission.
ACTION: Notice of Horseracing Integrity and Safety Authority (HISA)
proposed rule modification; request for public comment.
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SUMMARY: The Horseracing Integrity and Safety Act of 2020 recognizes a
self-regulatory nonprofit organization, the Horseracing Integrity and
Safety Authority, which is charged with developing proposed rules on a
variety of subjects. Those proposed rules and proposed rule
modifications take effect only if approved by the Federal Trade
Commission. The proposed rules and rule modifications must be published
in the Federal Register for public comment. Thereafter, the Commission
has 60 days from the date of publication to approve or disapprove the
proposed rule or rule modification. The Authority submitted to the
Commission a proposed rule modification on Enforcement on June 5, 2022.
The Office of the Secretary of the Commission determined that the
proposal complied with the Commission's rule governing such
submissions. This document publicizes the Authority's proposed rule
modification's text and explanation, and it seeks public comment on
whether the Commission should approve or disapprove the proposed rule
modification.
DATES: If approved, the HISA proposed rule modification would take
effect upon approval, and the Commission must approve or disapprove the
proposed rule modification September 26, 2022. Comments must be
received on or before August 9, 2022.
ADDRESSES: Interested parties may file a comment online or on paper by
following the instructions in the Comment Submissions part of the
SUPPLEMENTARY INFORMATION section below. Write ``HISA Enforcement Rule
Modification'' on your comment and file your comment online at <a href="https://www.regulations.gov">https://www.regulations.gov</a> under docket number FTC-2022-0044. If you prefer to
file your comment on paper, mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW, Suite CC-5610 (Annex B), Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Austin King (202-326-3166), Associate
General Counsel for Rulemaking, Office of the General Counsel, Federal
Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Self-Regulatory Organization's Statement of the Background,
Purpose of, and Statutory Basis for, the Proposed Rule Modification
a. Background and Purpose
b. Statutory Basis
II. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Modification and Discussion of
Alternatives
III. Self-Regulatory Organization's Summary of Comments Received
Pre-Submission and Its Responses to Those Comments
IV. Legal Authority
V. Effective Date
VI. Request for Comments
VII. Comment and Submissions
VIII. Communications by Outside Parities to the Commissioners or
Their Advisors
IX. Self-Regulatory Organization's Proposed Rule Language
[[Page 44394]]
Background
The Horseracing Integrity and Safety Act of 2020 \1\ recognizes a
self-regulatory nonprofit organization, the Horseracing Integrity and
Safety Authority, which is charged with developing proposed rules on a
variety of subjects. Those proposed rules and proposed rule
modifications take effect only if approved by the Federal Trade
Commission.\2\ The proposed rules and rule modifications must be
published in the Federal Register for public comment.\3\ Thereafter,
the Commission has 60 days from the date of publication to approve or
disapprove the proposed rule or rule modification.\4\
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\1\ 15 U.S.C. 3051 through 3060.
\2\ 15 U.S.C. 3053(b)(2).
\3\ 15 U.S.C. 3053(b)(1).
\4\ 15 U.S.C. 3053(c)(1).
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Pursuant to Section 3053(a) of the Horseracing Integrity and Safety
Act of 2020 and Commission Rule 1.142, notice is hereby given that, on
June 5, 2022, the Horseracing Integrity and Safety Authority (``HISA''
or the ``Authority'') filed with the Federal Trade Commission an
Enforcement proposed rule modification and supporting documentation as
described in Items I, II, III, and IX below, which Items have been
prepared by the Authority. The Office of the Secretary of the
Commission determined that the filing complied with the Commission's
rule governing such submissions.\5\ The Commission publishes this
notice to solicit comments on the proposed rule modification from
interested persons.
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\5\ 16 CFR 1.140 through 1.144; see also Fed. Trade Comm'n,
Procedures for Submission of Rules Under the Horseracing Integrity
and Safety Act, 86 FR 54819 (Oct. 5, 2021), <a href="https://www.federalregister.gov/documents/2021/10/05/2021-21306/procedures-for-submission-of-rules-under-the-horseracing-integrity-and-safety-act">https://www.federalregister.gov/documents/2021/10/05/2021-21306/procedures-for-submission-of-rules-under-the-horseracing-integrity-and-safety-act</a>.
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I. Self-Regulatory Organization's Statement of the Background, Purpose
of, and Statutory Basis for, the Proposed Rule Modification
a. Background and Purpose
The Horseracing Integrity and Safety Act of 2020 (``Act'')
recognizes that the establishment of a national set of uniform
standards for racetrack safety and medication control will enhance the
safety and integrity of horseracing. The racetrack safety standards are
established in the Rule 2000 Series, the ``Racetrack Safety Program,''
filed by the Authority with the Commission on December 6, 2021. The
Rule 2000 Series was published in the Federal Register on January 5,
2022 \6\ and subsequently approved by the Commission by Order dated
March 3, 2022.\7\ On December 20, 2021, the Authority filed with the
Commission the Rule 8000 Series, which establish penalties and
adjudicatory procedures for the enforcement of rules promulgated by the
Authority. The Rule 8000 Series was published in the Federal Register
January 26, 2022 \8\ and approved by the Commission by Order dated
March 25, 2022.\9\
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\6\ See Fed. Trade Comm'n, Notice of HISA Racetrack Safety
Proposed Rule (``Notice''), 87 FR 435 (Jan. 5, 2022), <a href="https://www.federalregister.gov/documents/2022/01/05/2021-28513/hisa-racetrack-safety">https://www.federalregister.gov/documents/2022/01/05/2021-28513/hisa-racetrack-safety</a>.
\7\ See Fed. Trade Comm'n, Order Approving the Racetrack Safety
Rule Proposed by the Horseracing Integrity & Safety Auth. at 1,
__F.T.C.__ (Mar. 3, 2022), <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/order_re_racetrack_safety_2022-3-3_for_publication.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/order_re_racetrack_safety_2022-3-3_for_publication.pdf</a>.
\8\ See Fed. Trade Comm'n, HISA Enforcement Rule, 87 FR 4,023,
4,028 (Jan. 26, 2022), <a href="https://www.federalregister.gov/documents/2022/01/26/2022-01663/hisa-enforcement-rule">https://www.federalregister.gov/documents/2022/01/26/2022-01663/hisa-enforcement-rule</a>.
\9\ See Fed. Trade Comm'n, Order Approving the Enforcement Rule
Proposed by the Horseracing Integrity & Safety Auth., at 1,
__F.T.C.__ (Mar. 25, 2022) (``Enforcement Rule Order''), <a href="https://perma.cc/H9SJ-F9WA">https://perma.cc/H9SJ-F9WA</a>.
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In its Order, the Commission directed the Authority to file
modifications to three provisions in the Rule Series 8000, stating as
follows: ``The Commission directs the Authority (1) to not impose the
proposed sanction in Rule 8200(b)(6) on a covered person until such
time as the Authority has proposed, and the Commission has approved, a
rule modification that is more narrowly tailored; (2) to file with the
Commission, by July 1, 2022, a supplemental proposed rule modification
explicitly stating guidelines for confidentiality and public reporting
at the different stages of the processes outlined in the Enforcement
rule; and (3) to file with the Commission, by July 1, 2022, a
supplemental proposed rule modification in which the Authority further
defines the meaning of `object' and `device' within proposed Rule
8400(a)(2)'s list of items eligible for seizure and provides a process
for the return of seized property if no violation is found.'' \10\
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\10\ Id. at 35-36.
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The Authority therefore proposes the rule changes described in this
Notice in order to fulfill the Commission's directives. In addition,
the Authority on its own initiative proposes to amend the Rule 8000
Series and to supplement it with additional provisions. Some of these
amendments and supplements have been prompted by comments and
suggestions received from interested members of the horseracing
industry since the rules were filed on December 20, 2021.
The violations, adjudications, and search procedures in the Rule
8000 Series are tailored to the unique aspects of horseracing in that
violations of the rules of horseracing do arise in the sport and must
be penalized. Violations must be effectively penalized to deter future
violations and to ensure that horseracing is conducted in a fair and
transparent manner that ensures public confidence in the integrity of
the sport. Various specific violations are established in Rule 8100,
and the schedule of sanctions set forth in Rule 8200 provides the
specific penalties that are the consequence of committing a rule
violation. The schedule is tailored to the unique aspects of
horseracing in that it imposes revocations, suspensions, substantial
fines, exclusions from racetrack grounds, and other penalties that are
commonly imposed upon licensed participants in horseracing.
Before a penalty is imposed, persons alleged to have committed
violations are entitled to a fair hearing at which they are afforded an
opportunity to present evidence in defense of a charged violation.
While a full process hearing is available on appeal of cases to the
Commission pursuant to 15 U.S.C. 3058(b), hearing processes are also
necessary before various bodies of the Authority to make sure that any
penalties imposed upon Covered Persons are adjudicated carefully and
fairly. This ensures that violations are consistently and fairly
penalized. The provisions set forth in Rule 8300 establish the rules
and parameters of the various hearing processes. These provisions also
provide for appeals to the Board of the Authority to review any
decisions rendered against a Covered Person who is charged with a
violation. The various hearing procedures are keyed to the unique
organizational structure of the Authority. Rules 8200(d) and 8360 also
establish procedures for notices of violations and hearings to
adjudicate the denial, suspension, or revocation of racetrack
accreditation in those instances in which racetracks are alleged to
have committed violations of the Racetrack Safety rules. Racetrack
safety is of course unique to horseracing and is essential to ensure
that horseracing is conducted safely and in a fair and transparent
manner.
The successful prosecution of violations requires the investigation
of all the circumstances surrounding an alleged violation. Central to
any investigation is the power to gain access to the books, records,
and certain premises of persons believed to have committed a violation;
to subpoena witnesses; and to take testimony under
[[Page 44395]]
oath of any person with knowledge of the circumstances regarding a
violation. Rule 8400 specifically confers these powers upon the
Authority and penalizes any obstruction or failure to comply with the
investigatory powers set forth in the section.
The proposed rule modification is described in detail in Item II of
this Notice. Various rules pertaining to horseracing and equestrian
sports that were consulted in the development of this proposed rule
modification are available as Exhibit A at the docket at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. In conformity with 15 U.S.C. 3057(d)(2) of the
Act, the various modifications described take into account the unique
aspects of horseracing, are designed to ensure fair and transparent
horseraces, and will serve to deter safety and performance violations.
Anti-doping and medication control rule violations will be established
in detail in proposed rules to be filed later this year.
On May 13, 2022, HISA representatives shared a draft of the
proposed rule modification with a number of interested stakeholders for
input. Those interested stakeholders included: Racing Officials
Accreditation Program; Racing Medication and Testing Consortium
(Scientific Advisory Committee); Water Hay Oats Alliance; National
Thoroughbred Racing Association; The Jockey Club; The Jockeys' Guild;
Thoroughbred Racing Association; Arapahoe Park; Grants Pass Downs;
Arizona Downs; Colonial Downs; Thoroughbred Owners of California;
California Horse Racing Board; National Horsemen's Benevolent and
Protective Association; Thoroughbred Horsemen's Association Mid-
Atlantic Safety Coalition; Thoroughbred Owners and Breeders
Association; Kentucky Thoroughbred Association; American Association of
Equine Practitioners; American Veterinary Medical Association; Delaware
Racing Commission; New York Racing Association, Stronach Racing Group
(5 thoroughbred racetracks); Churchill Downs (6 thoroughbred
racetracks); Keeneland; and Del Mar. On May 13, 2022, the rule
modification proposal was made available to the public for review and
comment on the HISA website at <a href="https://www.hisausregs.org">https://www.hisausregs.org</a>. Several
comments were received from various stakeholders, which are outlined in
Item III of this Notice. Available at the docket on <a href="https://www.regulations.gov">https://www.regulations.gov</a> as Exhibit B are copies of all pre-submission
comments received concerning the proposed rule modification.
With the review, input, and ultimate approval of the Authority's
Board of Directors, the proposed rule modification to the Rule 8000
Series modifies and enhances the penalties and adjudication procedures
for the enforcement of rules promulgated by the Authority.
b. Statutory Basis
The Horseracing Integrity and Safety Act of 2020, 15 U.S.C. 3051
through 3060.
II. Self-Regulatory Organization's Statement of the Terms of Substance
of the Enforcement Proposed Rule Modification and Discussion of
Alternatives
Rule 8200(b)(6), as originally filed with the Commission on
December 20, 2021, established a penalty that operated to ``bar a
Covered Person from associating with all Covered Persons concerning any
matter under the jurisdiction of the Commission and the Authority
during the period of a suspension.'' The Commission directed the
Authority to ``not impose this sanction on a covered person until such
time as the Authority has proposed, and the Commission has approved, a
rule modification that is more narrowly tailored.'' \11\ In response to
this directive, the Authority considered alternative sanctions
currently in place in various state racing jurisdictions. The Authority
now proposes to replace the penalty language quoted above with a
different sanction in Rule 8200(b)(6), which will authorize the
Authority to ``deny a Covered Person or a Covered Horse access to any
location under the jurisdiction of the Authority during the period of a
suspension.'' With this revision, Rule 8200(b)(6) will no longer place
broad restraints upon a Covered Person's association with other Covered
Persons but instead will prohibit a Covered Person from entering upon
grounds under the jurisdiction of the Authority. The provision will
accomplish the same basic end, which is to restrict Covered Persons
from direct involvement with racing activities on grounds under the
jurisdiction of the Authority during the period of a suspension. The
restriction makes the suspension meaningful and deters future
violations, thus furthering the goal of ensuring fair and transparent
horseraces in a manner consistent with 15 U.S.C. 3057(d). By operating
to exclude a Covered Person from horseracing grounds, the provision is
tailored to the unique aspects of horseracing and is similar to
provisions in the regulations of Kentucky and Minnesota, as well as the
Model Rules of the Association of Racing Commissioners International
(``ARCI'').
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\11\ Id. at 15.
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In its Order, the Commission also directed the Authority ``to file
with the Commission by July 1, 2022 a supplemental proposed rule
modification explicitly stating guidelines for confidentiality and
public reporting at the different stages of the processes outlined in
the Enforcement rule.'' \12\ The Authority proposes to amend the Rule
Series 8000 to include a new Rule 8380, entitled ``Guidelines for
Confidentiality and Public Reporting.'' The rule draws upon a similar
provision in the rules of the International Equestrian Federation
(``FEI'') that governs public disclosure and confidentiality in the
realm of equestrian sports.\13\ Provisions of this kind in horseracing
regulations are typically spare and lacking in detail, but the FEI
Rules provide a sound framework for the development of the Authority's
proposed rule.
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\12\ Id. at 29.
\13\ See FEI Equine Anti-Doping and Controlled Medication
Regulations, Article 13.
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The rule serves the interest of providing greater transparency to
the public concerning the adjudication of rule violations. In many
cases involving the violation of medication rules in particular, little
is known by the public of the details of an alleged violation beyond
rumor and speculation. This is because, in many racing jurisdictions,
regulators--particularly at the initial level of adjudication before
the state stewards--are prohibited from disclosing information
concerning the alleged violation. The proposed Rule 8380 will loosen
these restrictions and require the Authority to disclose basic facts
about the alleged violation, including ``(1) the identity of the
Covered Person who is the subject of the alleged violation, (2) the
identity of any applicable Covered Horse, and (3) the rule violated
and, where appropriate, the basis of the asserted violation.'' The rule
also permits the Authority to comment on any information disclosed by
the Covered Person charged with the alleged violation. In some
instances, persons charged have made public statements concerning
contested facts, and regulators should have the ability to respond to
inaccurate comments if they cast unfounded doubt upon the legitimacy of
the disciplinary process or of horseracing in general.
In addition, Rule 8380 also contains provisions that permit the
Authority to refrain from any public disclosure in situations that
would compromise an
[[Page 44396]]
ongoing investigation or in circumstances in which the Covered Person
charged with a violation is a minor. Conversely, the Authority is
permitted in the interest of public safety to make any disclosure that
concerns a violation or circumstance that poses a serious and imminent
risk of harm to Covered Persons, Covered Horses, or the public. Rule
8380 further provides for the disclosure of detailed information within
20 days of the imposition of a sanction, the resolution of a matter
between the parties, or the dismissal of the action.
By providing the public with information concerning alleged
violations, the public disclosure rule works toward the goal of
ensuring fair and transparent horseraces in a manner consistent with 15
U.S.C. 3057(d). It takes into account the unique aspects of the
adjudication of alleged violations of the rules of horseracing, and by
strengthening the system of adjudication it helps to deter future
violations while at the same time enhancing public confidence in the
sport.
In its Order, the Commission directed the Authority ``to submit to
the Commission a supplemental proposed rule modification by July 1,
2022, in which the Authority further defines the meaning of `object'
and `device' within proposed Rule 8400(a)(2)'s list of items eligible
for seizure (`medication, drug, substance, paraphernalia, object, or
device') and that provides a process for the return of seized property
if no violation is found.'' \14\
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\14\ Enforcement Rule Order at 34-35.
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It is difficult to define ``object'' or ``device'' with precision,
and other racing rules consulted by the Authority do not provide
definitions for these or similar terms in a seizure context.
Nevertheless, the proposed modification amends the language of the Rule
as originally filed to specify that the Authority may seize ``any
object or device reasonably believed to have been used in furtherance
of the violation or suspected violation.'' Objects that might be used
in furtherance of prohibited activity include intravenous tubing, oral
dosing syringes, needles, nasal gastric tubes, various types of
container bags and vials, and many other items. The language is broad
enough to include devices such as computers and phones if there is
reason to believe that these devices have been used in furtherance of a
violation. In doping and medication-violation cases in particular, it
is often found that information concerning medications and drugs
administered to horses are stored on computers and phones. Rather than
try to construct definitions of ``object'' or ``device'' that will
likely be vague and fail to include certain items while including
others in an overly expansive manner, the Authority has proposed
language that closely ties the terms ``object'' and ``device'' to the
violation being investigated; seizure is justified only if the object
or device is reasonably believed to have been used in furtherance of
the violation or suspected violation.
Additionally, and pursuant to the directive of the Commission, the
proposed rule modification includes a new provision in Rule 8400(a)(3)
that requires the Authority to return seized property upon the final
resolution of a violation, so long as the possession of the property is
not specifically prohibited by the Act or the rules of the Authority.
Many racing jurisdictions return property as a matter of course, though
not specifically required to do so; the Authority's rule requires
property to be returned unless specifically prohibited.
The changes to the language referencing the words ``object'' and
``device,'' as directed by the Commission, take into account the unique
aspects of horseracing violation investigations, especially the
necessities of seizure in medication-violation cases. By providing
effective measures to seize evidence, the modification enhances the
investigation and successful adjudication of violations, thus deterring
future violations in a manner consistent with 15 U.S.C. 3057(d). An
effective enforcement system builds public confidence in the sport by
ensuring that horseracing is conducted in a fair and transparent
manner. The return policy is adopted as a matter of fairness to Covered
Persons whose property has been seized; property that is not
specifically prohibited under the Authority's rules shall be returned
upon the final resolution of a violation.
In addition to the amendments directed by the Commission, the
Authority has also proposed several modifications on its own
initiative. And, in some instances, rule changes have been prompted in
response to comments previously received during the formal comment
period after the filing of the Rule 8000 Series with the Commission on
December 20, 2021.
Rule 8400(a)(2) gives the Authority the power to ``seize any
medication, drug, substance, paraphernalia, object, or device in
violation or suspected violation of any provision of 15 U.S.C. Chapter
57A or the regulations of the Authority.'' As noted in the Commission's
Order, some commenters to the Rule 8000 Series expressed concerns that
the seizure provisions were overbroad, though the referenced language
in the Rule 8000 Series as originally filed was approved by the
Commission.\15\ The language of the rule tracked the statutory language
at 15 U.S.C. 3054(c)(1), which states in pertinent part that the
Authority ``shall develop uniform procedures and rules authorizing--(i)
access to offices, racetrack facilities, other places of business,
books, records, and personal property of covered persons that are used
in the care, treatment, training, and racing of covered horses.'' It
should also be noted that statutes in other state racing jurisdictions
are similarly broad (such as Kentucky). The Commission addressed this
matter in detail in the Order approving the Enforcement rules, noting
that the commenters' objections are really with the Act itself.\16\
Nevertheless, to allay the concerns expressed, the Authority has filed
a proposed rule modification that restricts the scope of Rule
8400(1)(a). Specifically, the new language authorizes the Commission,
the Authority, or their designees to have free access to books,
records, offices, racetrack facilities, and other places of business of
both Covered Persons and any person who owns a Covered Horse or
performs services on a Covered Horse, but the language requires that
the items and locations subject to access must relate to the care,
treatment, training, and racing of Covered Horses. This provision is
included to clarify that items and locations unrelated to horseracing
may not be accessed by the Authority.
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\15\ See id. at 30-35.
\16\ See id. at 34.
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Rule 8100(g) is modified to include as a violation the ``failure of
a Responsible Person to register a Covered Horse.'' After the Rule 8000
Series was filed on December 20, 2021, the Authority developed and
filed, on April 25, 2022, the Rule 9000 Series, ``Registration of
Covered Persons and Covered Horses.'' The Commission approved the
Registration rule by Order dated June 29, 2022.\17\ Rule 9000(i)
requires Responsible Persons to ensure that Covered Horses are
registered with the Authority. A penalty is therefore added to Rule
8100(g) to authorize the imposition of sanctions for failure to do so.
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\17\ See Fed. Trade Comm'n, Order Approving Registration Rule
Proposed by Horseracing Integrity & Safety Auth., at 1 (June 29,
2022), <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/P222100CommissionOrderRegistrationRuleFinal.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/P222100CommissionOrderRegistrationRuleFinal.pdf</a>.
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In Rule 8200(b), ``Imposition of Sanctions,'' the Authority
proposes to
[[Page 44397]]
modify this provision to specify that any penalties imposed under that
Rule shall be ``in proportion to the nature, chronicity, and severity
of the violation.'' This language provides a rubric or standard to
guide discretion in the imposition of penalties. In the same paragraph,
a scrivener's error is corrected to refer to the Rule 8000 Series to
make clear that sanctions are imposed after hearings conducted under
the rules of both the Rule 7000 and 8000 Series. Additionally, the
Authority proposes to modify Rule 8200(b)(2)(ii) concerning the fines
that may be imposed for second violations of Authority rules. Under the
Rule as originally filed, the fine was established at $50,000.00 to
$100,000.00; the Rule will be modified to state that a fine may be
imposed in an amount ``up to $100,000.00.'' This modification will give
the Authority greater flexibility in assessing a fine in proportion to
the nature, chronicity, and severity of the violation.
Rule 8200(d) is amended to recognize that ``one or more stewards''
may issue a Notice of Suspected or Actual Violation, in addition to the
Authority and the Racetrack Safety Committee. In addition, the
Authority proposes to amend Rule 8200(d)(iii) to permit the Authority
to consider ``any other relevant factor'' in establishing the time
period allowed for a Covered Person to respond to a Notice of Suspected
or Actual Violation. This catch-all provision is added to allow
consideration of all relevant factors pertaining to the response time,
in addition to the seriousness of the violation and the imminence of
risk to Covered Persons, Covered Horses, Covered Horseraces or the
public.
The Authority is proposing modifications to several provisions in
Rule 8300 to elaborate upon the procedures to be followed by track-
level stewards in adjudicating penalties. The provisions to be amended
are Rule 8320(a), Rule 8320(b)(3), and Rule 8330(c), and the language
of the amendment is similar in each rule. The amendment states more
explicitly than the original language in the rules that the stewards
shall adjudicate all alleged violations of Rules 2271(b) or 2272
relating to the use of Shock Wave Therapy, violations of Rule 2280
relating to the use of the riding crop, and violations of Rule 2273
relating to the use of other electrical or mechanical devices. The
amendment also makes clear that the stewards shall utilize the hearing
procedures of the state jurisdiction in which a violation is alleged to
have occurred.
The amendment further addresses the broader issue of whether a
state racing commission has entered into an agreement under which the
state stewards serve in an adjudicatory capacity under the Rule 8000
Series and enforce the Rule 2200 Series. In those states in which the
state racing commission has not entered into an agreement with the
Authority, the amendment provides that stewards appointed by the
Authority to enforce the Rule 2200 Series shall adjudicate these cases.
Since the burden of enforcing these rules will not be heavy in many
jurisdictions, only one steward may be necessary to adjudicate
violations under the Rule 2200 Series. If this is the case in a
particular jurisdiction, the amendment makes clear that one steward may
adjudicate these violations regardless of whether the state
jurisdiction's rules require two or three stewards to rule on
violations. In addition, the amendment to Rule 8320(a) further provides
that all testimony at a stewards' hearing shall be given under oath,
and a record of the hearing shall be kept by use of an audio recorder,
video recording, or court reporter's transcript. While this is already
routinely done in many jurisdictions, the new language makes the
requirement explicit.
The Authority proposes to amend Rule 8320(b)(1) and Rule 8330(a) in
an identical manner to specify that when a case is referred to the
National Stewards Panel by the Racetrack Safety Committee or the Board,
``one or more members'' of the Panel may be designated to adjudicate
the case. This amendment is included to bring Rule 8330 in conformity
with Rules 3000 and 7000 Series, which will establish and set forth the
procedures applicable to the National Stewards Panel. These rules are
under development and will be filed with the Commission prior to
January 1, 2023.
Several amendments are proposed to modify Rule 8340, ``Initial
Hearings Conducted Before the Racetrack Safety Committee or the Board
of the Authority.'' Rule 8340(3) as previously filed states that
``[a]ll testimony in proceedings before the Board or the Racetrack
Safety Committee shall be given under oath;'' that paragraph is amended
to further state that ``a record of the proceedings shall be kept in
stenographic or recorded form.'' Rule 8340(h) is amended to make clear
that a party to initial hearings before the Board or the Racetrack
Safety Committee is entitled to be represented by counsel at the
party's expense.
Additional rules are proposed for inclusion in Rule 8340 that
permit the Board and the Racetrack Safety Committee to appoint a
presiding officer to assist in the conduct of hearings. Rule 8340(i)
specifies that the presiding officer may be assigned to exercise
various powers similar to those that are performed by administrative
law judges in contested proceedings at the state and federal level.
These powers are set forth with specificity in the proposed rule and
generally serve to ensure the orderly conduct of the presentation of
evidence and witnesses and to regulate the conduct of parties and their
attorneys. The Authority consulted and closely followed similar
provisions in the ``Hearing Rules and Procedures'' of the New York
Racing Association in developing these rules.
The presiding officer may also be directed by the Board and the
Racetrack Safety Committee under Rule 8340(j) to prepare a hearing
report with a recommended penalty, if applicable, and the parties may
be required to file briefs for consideration by the hearing officer in
preparing the hearing report. The rule states that once the hearing
report has been received by the Racetrack Safety Committee or the
Board, these bodies may adopt, modify, or reject any or all the hearing
report, including any recommended penalty. These rules parallel similar
concepts in Kentucky's statutory scheme concerning the conduct of
administrative hearings by an administrative law judge. Rule 8350,
``Appeal to the Board,'' is amended in paragraphs (h) and (i) to permit
the Board in appeal proceedings to appoint a hearing officer under the
same rules set forth in Rule 8340 concerning the conduct of initial
hearings and the preparation of a hearing report. Additionally, Rule
8350(e) is amended to specify that the Board has the discretion to
decide an appeal solely upon written submissions or in the alternative
to conduct a hearing upon the issues raised by the appeal. In the same
rule, the word ``heard'' is replaced with the word ``reviewed'' to
conform to the change. Rule 8350(c) is modified to provide that a stay
may be issued on appeal not only by the Board but also ``by any
official or body of the Authority to whom the Board delegates the
authority to review requests for stay.''
Rule 8360, ``Accreditation Procedures,'' is amended in several
places to include the words ``suspended'' or ``suspension,'' to conform
to Rule 2116, ``Suspension and Revocation of Accreditation,'' which
authorizes suspension as a penalty. Rule 8360(f)(1) is revised to refer
more precisely to the ``Board'' in the context of the rule, rather than
the ``Authority.'' The word ``an'' is added to correct a scrivener's
error in Rule 8360(f)(2). A
[[Page 44398]]
short provision, Rule 8011, is added to specify that time is calculated
under the Rule 8000 Series in calendar days and that, if the last day
of a specified period of time falls on a Saturday, Sunday, or holiday,
the last day shall be considered to be the next working day following
the Saturday, Sunday, or holiday.
III. Self-Regulatory Organization's Summary of Comments Received Pre-
Submission and Its Responses to Those Comments
As encouraged by the Commission's procedural rule, the Authority,
before finalizing this submission to the Commission, made a draft of
the Enforcement proposed rule modification available to the public for
review and comment on the HISA website, <a href="https://www.hisausregs.org/">https://www.hisausregs.org/</a>.
Comments on the proposed rule modification were received from five
individuals and groups in the horseracing industry: The Jockey Club,
The Jockeys' Guild, Racing Officials Accreditation Program (``ROAP''),
Colonial Downs Racetrack, and the American Association of Equine
Practitioners (``AAEP'').
Two of the commenters, Colonial Downs Racetrack and AAEP, stated
that they had reviewed the proposed rule modification and had no
suggested changes to offer. The three other commenters, The Jockey
Club, The Jockeys' Guild, and ROAP, did not question or critique the
proposed rule modifications as a whole but instead offered constructive
suggestions to fine-tune various provisions in the initial drafts of
the proposed rule modification. The Authority adopted a number of these
suggested changes into the proposed rule modification as it developed
into its final form.
ROAP suggested that a lengthy sentence in an initial draft of Rule
8320(a) concerning adjudication by the stewards be broken into two
sentences for clarity. The Authority amended the sentence according to
the suggestion, with some additional modifications. The Jockeys' Guild
suggested that a short provision be added to Rule 8200(d), Notice of
Suspected or Actual Violation, to clarify that the Authority may make a
finding of no violation after review of a Covered Person's response to
a Notice. Language was added in conformity with the suggestion.
The Jockey Club suggested that Rule 8340(c)(3), which requires
notice to be provided in advance of a hearing before the Board or the
Racetrack Safety Committee, be amended to replace ``alleged violation''
with ``rule or rules allegedly violated.'' This suggestion is well
taken and is included in the proposed rule modification for clarity.
The Authority also implemented a suggestion from The Jockey Club
that language be added to permit hearings by the Board and the
Racetrack Safety Committee under Rules 8340(a) and (b) and Rule 8350 to
be conducted both in-person and through the use of audio-visual
teleconferencing. This language was included in the draft, and the
Authority added language to permit the use of telephone audio systems
as well.
The Jockey Club also helpfully suggested that, if a hearing report
is created, the parties should be permitted to file exceptions to the
reports ``as a matter of right.'' The draft language of Rule 8340(j)
was therefore amended to make clear that exceptions may be filed by the
parties to a hearing report.
The Authority declined to make some of the changes suggested by the
commenters. Two of the suggestions were of more significance than the
rest. The Jockey Club suggested that the seven-day deadline for a
Covered Person's response to a Notice of Suspected or Actual Violation
in Rule 8200(d)(1)(iii) be extended to twenty or thirty days. The
Authority declined to make this change because some violations may
present a hazard to racing participants and the public, and a rapid
resolution of the matter is necessary. Nevertheless, the Rule provides
for a longer response time ``as deemed appropriate and specified in the
notice,'' based on the seriousness of the violation and the imminence
of risk to Covered Persons, Covered Horses, and the public. In cases
where those concerns are not present, it is anticipated that a longer
response time will be specified in the notice as appropriate to the
case.
The Jockeys' Guild suggested that the term ``good cause'' be
further defined in Rule 8350, which provides that a penalty may be
stayed upon good cause shown. The Authority considered this change but
opted to let the rule stand as written. This term is frequently
employed without further definition in many areas of the law, and it is
difficult to enumerate all of the factual circumstances that may
qualify as a showing of ``good cause.''
The remaining suggestions that the Authority declined to adopt
involved minor revisions to various rules that the Authority believed
were unnecessary to effectuate the intention of the rules. Some of the
comments received posed questions about the application of a provision,
rather than suggesting specific changes. In such instances no change
was made, but the Authority is working diligently to educate and inform
the racing community about the new rules to be implemented by the
Authority.
All of the changes proposed in the proposed rule modification are
intended to enhance the Rule 8000 Series in a manner consistent with 15
U.S.C. 3057(d). An effective enforcement system builds public
confidence in the sport by ensuring that Covered Horseraces are
conducted in a fair and transparent manner. The proposed rules are
carefully tailored to the unique character of horseracing and to the
organizational structure of the Authority. Covered Persons will benefit
from the effective enforcement of the rules, the standards of integrity
in racing that the rules establish, and the deterrence of violations.
The safety and well-being of Covered Horses, always a primary concern
to the Authority, will be safeguarded by the elaborate Rule 2000 Series
Racetrack Safety rules promulgated by the Authority, and by the Rule
8000 Series that ensures that the Racetrack Safety rules are
effectively enforced.
IV. Legal Authority
This rule modification is proposed by the Authority for approval or
disapproval by the Commission under 15 U.S.C. 3053(c)(1).
V. Effective Date
If approved by the Commission, this proposed rule modification will
take effect immediately.
VI. Request for Comments
Members of the public are invited to comment on the Authority's
proposed rule modification. The Commission requests that factual data
on which the comments are based be submitted with the comments. The
supporting documentation referred to in the Authority's filing, as well
as the written comments it received before submitting the proposed rule
modification to the Commission, are available for public inspection at
<a href="https://www.regulations.gov">https://www.regulations.gov</a> under docket number FTC-2022-0044.
The Commission seeks comments that address the decisional criteria
provided by the Act. The Act gives the Commission two criteria against
which to measure proposed rules and rule modifications: ``The
Commission shall approve a proposed rule or modification if the
Commission finds that the proposed rule or modification is consistent
with--(A) this chapter; and (B) applicable rules approved by the
Commission.'' \18\ In other words, the Commission will evaluate the
proposed
[[Page 44399]]
rule modification for its consistency with the specific requirements,
factors, standards, or considerations in the text of the Act as well as
the Commission's procedural rule.
---------------------------------------------------------------------------
\18\ 15 U.S.C. 3053(c)(2).
---------------------------------------------------------------------------
Although the Commission must approve the proposed rule modification
if the Commission finds that the proposed rule modification is
consistent with the Act and the Commission's procedural rule, the
Commission may consider broader questions about the health and safety
of horses or the integrity of horseraces and wagering on horseraces in
another context: ``The Commission may adopt an interim final rule, to
take effect immediately, . . . if the Commission finds that such a rule
is necessary to protect--(1) the health and safety of covered horses;
or (2) the integrity of covered horseraces and wagering on those
horseraces.'' \19\ The Commission may exercise its power to issue an
interim final rule on its own initiative or in response to a petition
from a member from the public. If members of the public wish to provide
comments to the Commission that bear on protecting the health and
safety of horses or the integrity of horseraces and wagering on
horseraces but do not discuss whether the Authority's Enforcement
proposed rule modification is consistent with the Act or the applicable
rules, they should not submit a comment here. Instead, they are
encouraged to submit a petition requesting that the Commission issue an
interim final rule addressing the subject of interest. The petition
must meet all the criteria established in the Rules of Practice (Part
1, Subpart D); \20\ if it does, the petition will be published in the
Federal Register for public comment. In particular, the petition for an
interim final rule must ``identify the problem the requested action is
intended to address and explain why the requested action is necessary
to address the problem.'' \21\ As relevant here, the petition should
provide sufficient information for the public to comment on, and for
the Commission to find, that the requested interim final rule is
``necessary to protect--(1) the health and safety of covered horses; or
(2) the integrity of covered horseraces and wagering on those
horseraces.'' \22\
---------------------------------------------------------------------------
\19\ 15 U.S.C. 3053(e).
\20\ 16 CFR 1.31; see Fed. Trade Comm'n, Procedures for
Responding to Petitions for Rulemaking, 86 FR 59851 (Oct. 29, 2021).
\21\ 16 CFR 1.31(b)(3).
\22\ 15 U.S.C. 3053(e).
---------------------------------------------------------------------------
VII. Comment Submissions
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before August 9, 2022.
Write ``HISA Enforcement Rule Modification'' on your comment. Your
comment--including your name and your State--will be placed on the
public record of this proceeding, including, to the extent practicable,
on the website <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Because of the public health emergency in response to the COVID-19
outbreak and the Commission's heightened security screening, postal
mail addressed to the Commission will be subject to delay. The
Commission strongly encourages that comments be submitted online
through the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website. To ensure that the
Commission considers online comment, please follow the instructions on
the web-based form.
If you file your comment on paper, write ``HISA Enforcement Rule
Modification'' on your comment and on the envelope, and mail your
comment to the following address: Federal Trade Commission, Office of
the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex B),
Washington, DC 20580.
Because your comment will be placed on the public record, you are
solely responsible for making sure that your comment does not include
any sensitive or confidential information. In particular, your comment
should not contain sensitive personal information, such as your or
anyone else's Social Security number; date of birth; driver's license
number or other State identification number or foreign country
equivalent; passport number; financial account number; or credit or
debit card number. You are also solely responsible for making sure your
comment does not include any sensitive health information, such as
medical records or other individually identifiable health information.
In addition, your comment should not include any ``[t]rade secret or
any commercial or financial information which . . . is privileged or
confidential''--as provided in Section 6(f) of the FTC Act, 15 U.S.C.
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)--including in
particular competitively sensitive information such as costs, sales
statistics, inventories, formulas, patterns, devices, manufacturing
processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c), 16 CFR 4.9(c).
In particular, the written request for confidential treatment that
accompanies the comment must include the factual and legal basis for
the request and must identify the specific portions of the comment to
be withheld from the public record. See FTC Rule 4.9(c). Your comment
will be kept confidential only if the General Counsel grants your
request in accordance with the law and the public interest. Once your
comment has been posted publicly at <a href="https://www.regulations.gov">https://www.regulations.gov</a>--as
legally required by FTC Rule 4.9(b), 16 CFR 4.9(b)--we cannot redact or
remove your comment, unless you submit a confidentiality request that
meets the requirements for such treatment under FTC Rule 4.9(c), and
the General Counsel grants that request.
Visit the FTC website to read this document and the news release
describing it. The FTC Act and other laws that the Commission
administers permit the collection of public comments to consider and
use in this proceeding as appropriate. The Commission will consider all
timely and responsive public comments it receives on or before August
9, 2022. For information on the Commission's privacy policy, including
routine uses permitted by the Privacy Act, see <a href="https://www.ftc.gov/siteinformation/privacypolicy">https://www.ftc.gov/siteinformation/privacypolicy</a>.
VIII. Communications by Outside Parties to the Commissioners or Their
Advisors
Written communications and summaries or transcripts of oral
communications respecting the merits of this proceeding, from any
outside party to any Commissioner or Commissioner's advisor, will be
placed on the public record. See 16 CFR 1.26(b)(5).
IX. Self-Regulatory Organization's Proposed Rule Language
The following language reflects the Enforcement rule with the
proposed modifications incorporated. A redline version that shows every
way in which the previously approved Enforcement rule would be modified
by the proposed rule modification is available as Exhibit C on the
docket at <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
8000. Violations, Sanctions, Hearing Procedures, and Investigatory
Powers
8011. Calculation of Time
In calculating any period of time prescribed in the Rule 8000
Series, time shall be calculated in calendar days. If the last day of a
specified period of time falls on a Saturday, Sunday, or holiday, then
the last day of the period shall be considered to be the next working
day immediately following the Saturday, Sunday, or holiday.
[[Page 44400]]
8100. Violations
Violations under this Rule shall include:
(a) Failure to cooperate with the Authority or an agent of the
Authority during any investigation;
(b) Failure to respond truthfully, to the best of a Covered
Person's knowledge, to a question of the Authority or an agent of the
Authority with respect to any matter under the jurisdiction of the
Authority;
(c) Tampering or attempted tampering with the application of the
safety, performance, or anti-doping and medication control rules or
process adopted by the Authority, including:
(1) Intentional interference, or an attempt to interfere, with an
official or agent of the Authority;
(2) Procurement or the provision of knowingly false information to
the Authority or agent of the Authority; and
(3) The intimidation of, or an attempt to intimidate, a potential
witness;
(d) Assisting, encouraging, aiding, abetting, conspiring, covering
up, or any other type of intentional complicity involving a racetrack
safety violation, or the violation of a period of suspension or
ineligibility;
(e) Threatening or seeking to intimidate a person with the intent
of discouraging the person from the good faith reporting to the
Authority, an agent of the Authority, or the Commission, of information
that relates to:
(1) A suspected or alleged violation of a rule in the Rule 2200
Series; or
(2) A suspected or alleged noncompliance with a rule in the Rule
2200 Series;
(f) Failure to comply with a written order or ruling of the
Authority or an agent of the Authority pertaining to a racing matter or
investigation;
(g) Failure to register with the Authority, failure of a
Responsible Person to register a Covered Horse, making a knowingly
false statement or omission of information in an application for
registration with the Authority, or failure to advise the Authority of
material changes in the application information as required under any
provision in Authority regulations;
(h) Perpetrating or attempting to perpetrate a fraud or
misrepresentation in connection with the care or racing of a Covered
Horse;
(i) Failure to remit fees as required under 15 U.S.C. 3052(f)(3);
and
(j) Failure by a Racetrack to collect equitable allocation amounts
among Covered Persons in conformity with the funding provisions of 15
U.S.C. 3052(f)(3) and any rules pertaining thereto.
8200. Schedule of Sanctions for Violations; Consent Decrees; Notice of
Suspected or Actual Violation
(a) Application. This Schedule shall apply to any violation of, or
failure to comply with, the Act or regulations promulgated by the
Authority by a Covered Person, except for:
(1) Anti-doping and medication control rule violations as
established in the Rule 3000 Series; and
(2) State laws or regulations not pre-empted by 15 U.S.C. 3054(b).
(b) Imposition of Sanction. The Authority, the Racetrack Safety
Committee, the stewards, any steward or body of stewards selected from
the National Stewards Panel, or an Arbitral Body, after any hearing
required to be conducted in accordance with the Rule 7000 Series or
Rule 8000 Series and upon finding a violation or failure to comply with
the regulations of the Authority with the exceptions identified in
paragraph (a), may impose one or more of the following sanctions on a
Covered Person for each violation of the rules of the Authority, in
proportion to the nature, chronicity, and severity of the violation:
(1) For a violation of Rule 2271(b) or 2272 relating to the use of
Shock Wave Therapy, a violation of Rule 2273 relating to the use of
other electrical or mechanical devices, or a violation of Rule 2280
relating to the use of the riding crop, impose the penalties set forth
in Rules 2272, 2274, 2282, and 2283, in addition to any penalty set
forth in Rule 8200(b)(2) through (12);
(2) Impose a fine upon a Covered Person in the following amounts:
(i) Up to $50,000.00 for a first violation, or
(ii) Up to $100,000.00 for a second violation of the same or
similar nature to a prior violation, or any violation that due to its
nature, chronicity, or severity poses an actual or potential threat of
harm to the safety, health, and welfare of Covered Persons, Covered
Horses, or the integrity of Covered Horseraces;
(3) Deny or suspend the registration of a Covered Person for a
definite period, probationary period, or a period contingent on the
performance of a particular act;
(4) Revoke the registration of a Covered Person subject to
reapplication at a specified date;
(5) Impose a lifetime ban from registration with the Authority;
(6) Deny a Covered Person or a Covered Horse access to any location
under the jurisdiction of the Authority during the period of a
suspension;
(7) Impose a temporary or permanent cease and desist order against
a Covered Person;
(8) Require a Covered Person as a condition of participation in
horseracing to take any remedial or other action that is consistent
with the safety, welfare, and integrity of Covered Horses, Covered
Persons, and Covered Horseraces;
(9) Deny or require the forfeiture of purse money, disqualify a
horse, or make changes to the order of finish in Covered Races as
consistent with the safety, welfare, and integrity of Covered Horses,
Covered Persons, and Covered Horseraces;
(10) Censure a Covered Person;
(11) Prohibit a Racetrack from conducting any Covered Horserace; or
(12) Impose any other sanction as a condition of participation in
horseracing as deemed appropriate by the Authority in keeping with the
seriousness of the violation and the facts of the case, and that is
consistent with the safety, welfare, and integrity of Covered Horses,
Covered Persons, and Covered Horseraces.
(c) Consent Decrees. The Authority shall have the discretion to
enter into a consent decree or other similar agreement with a Covered
Person as necessary to promote the safety, welfare, and integrity of
Covered Horses, Covered Persons, and Covered Horseraces.
(d) Notice of Suspected or Actual Violation.
(1) The Authority, the Racetrack Safety Committee, or one or more
stewards may issue a Notice of Suspected or Actual Violation to a
Covered Person in any case in which the Authority has reason to believe
that the Covered Person has violated or has failed to comply with any
provision of regulations of the Authority. The notice shall:
(i) Identify the provision or provisions which the Covered Person
is believed to have violated;
(ii) Specify with reasonable particularity the factual basis of the
Authority's belief that the provision has been violated; and
(iii) Provide the Covered Person at least 7 days to respond, or a
longer period as deemed appropriate and specified in the Notice based
upon:
(A) The seriousness of the violation;
(B) The imminence of risk to Covered Persons, Covered Horses,
Covered Horseraces, or the public; or
(C) Any other relevant factor.
(2) Upon receipt of the Notice of Suspected or Actual Violation,
the Covered Person shall respond in writing to the issuing body within
the time period specified in the notice. The Covered Person shall
include in the response:
[[Page 44401]]
(i) A statement by the Covered Person admitting the violation or
explaining the reasons why the Covered Person believes that a violation
has not occurred;
(ii) All relevant details concerning the circumstances of the
suspected or actual violation, including the results of any
investigation undertaken by the Covered Person of the circumstances,
and identification of any persons responsible for the circumstances;
and
(iii) A detailed explanation of any remedial plan the Covered
Person proposes to undertake to cure the suspected or actual violation
and the date of the expected completion of the remedial plan.
(3) Upon receipt of the written response of the Covered Person, the
issuing body may accept any proposed remedial plan, subject to any
reasonable modifications the issuing body deems necessary, or it may
initiate disciplinary proceedings in conformity with the provisions of
Rule 8300. If the issuing body determines that no violation has
occurred, the issuing body shall so inform the Covered Person and no
further action shall be taken.
8300. Disciplinary Hearings and Accreditation Procedures
8310. Application
An alleged violation or failure to comply with the provisions of
the Rule 2200 Series and any alleged violation of the rules set forth
in Rule 8100 shall be adjudicated in accordance with this Rule 8300
Series, except that:
(a) An alleged violation of the anti-doping and medication control
rule provisions in the Rule 3000 Series shall be adjudicated in
accordance with the procedures set forth therein; and
(b) This regulation shall not apply to the adjudication of
violations arising under state laws, racing rules, and regulations not
preempted under 15 U.S.C. 3054(b).
8320. Adjudication of Violations in the Rule 2200 Series
(a) The stewards shall adjudicate all alleged violations of Rules
2271(b) or 2272 relating to the use of Shock Wave Therapy, Rule 2280
relating to the use of the riding crop, and Rule 2273 relating to the
use of other electrical or mechanical devices. The stewards shall apply
the hearing procedures of the state jurisdiction in which the violation
is alleged to have occurred. Provided, however, that in any state that
has not entered into an agreement with the Authority under which the
state stewards serve in an adjudicatory capacity under the Rule 8000
Series and enforce the Rule 2200 Series, a hearing may be conducted by
one or more stewards, notwithstanding any state rule to the contrary.
All testimony at a stewards' hearing shall be given under oath, and a
record of the hearing shall be kept by use of an audio recorder, video
recording, or court reporter's transcript. Any ruling by the stewards
finding a violation may be appealed to the Board of the Authority under
the procedures described in Rule 8350. An appeal shall be filed in
writing within 10 days of the issuance of the ruling by the stewards.
(b) With regard to any matter involving an alleged violation of a
rule in the Rule 2200 Series other than those set forth in paragraph
(a) above, the Racetrack Safety Committee may, at its discretion and
taking into account the seriousness of the alleged violation and the
facts of the case:
(1) Refer the matter to one or more members of the National
Stewards Panel for adjudication in conformity with the procedures
established in the Rule 7000 Series;
(2) Refer the matter to an independent Arbitral Body for
adjudication in conformity with the procedures established in the Rule
7000 Series;
(3) Refer the matter to the stewards for adjudication in accordance
with the hearing procedures of the applicable state jurisdiction.
Provided, however, that in any state that has not entered into an
agreement with the Authority under which the state stewards serve in an
adjudicatory capacity under the Rule 8000 Series and enforce the Rule
2200 Series, a hearing may be conducted by one or more stewards,
notwithstanding any state rule to the contrary; or
(4) Conduct a hearing upon the matter itself, under the procedures
set forth in Rule 8340.
8330. Adjudication of Rule 8100 Violations
With regard to any matter involving an alleged violation of a rule
established in Rule 8100, the Board of the Authority may, at its
discretion and taking into account the seriousness of the violation and
the facts of the case:
(a) Refer the matter to one or more members of the National
Stewards Panel for adjudication in conformity with the procedures
established in the Rule 7000 Series;
(b) Refer the matter to an independent Arbitral Body for
adjudication in conformity with the procedures established in the Rule
7000 Series;
(c) Refer the matter to the stewards for adjudication in accordance
with the hearing procedures of the applicable state jurisdiction.
Provided, however, that in any state that has not entered into an
agreement with the Authority under which the state stewards shall serve
in an adjudicatory capacity under the Rule 8000 Series and enforce the
Rule 2200 Series, a hearing may be conducted by one or more stewards,
notwithstanding any state rule to the contrary; or
(d) Conduct a hearing upon the matter itself, under the procedures
set forth in Rule 8340.
8340. Initial Hearings Conducted Before the Racetrack Safety Committee
or the Board of the Authority
(a) An initial hearing before the Board shall be conducted by a
panel of three Board members. The Board chair shall appoint the panel
members and shall also designate one of them as the chair of the panel.
At the discretion of the panel of the Board, an initial hearing may be
conducted in person or by means of an audio-visual teleconferencing
system or a telephone audio system.
(b) An initial hearing before the Racetrack Safety Committee shall
be heard by a quorum of the Racetrack Safety Committee. The Racetrack
Safety Committee Chair shall act as the chair of the hearing panel
unless the Chair is unavailable, in which case the Racetrack Safety
Committee Chair shall designate a member of the quorum to act as the
chair of the panel. At the discretion of the Racetrack Safety
Committee, an initial hearing may be conducted in person or by means of
an audio-visual teleconferencing system or a telephone audio system.
(c) Persons entitled to notice of a hearing before the Board or the
Racetrack Safety Committee shall be informed not less than 20 days
prior to the hearing of:
(1) The time, place, and nature of the hearing;
(2) The legal authority and jurisdiction under which the hearing is
to be held;
(3) A description of the rule or rules allegedly violated,
specifying by number the rule allegedly violated; and
(4) A statement of the factual basis of the alleged violation in
sufficient detail to provide adequate opportunity to prepare for the
hearing.
(d) At any time prior to, during, or after the hearing, the Board
or the Racetrack Safety Committee in its discretion may require the
submission of written briefs or other information as will assist in the
hearing of the matter.
(e) All testimony in proceedings before the Board or the Racetrack
Safety Committee shall be given under oath,
[[Page 44402]]
and a record of the proceedings shall be kept in stenographic or
recorded form.
(f) The burden of proof shall be on the party alleging the
violation to show, by a preponderance of the evidence, that the Covered
Person has violated or failed to comply with a provision of or is
responsible for a violation of a provision of the Authority's
regulations.
(g) The Board or the Racetrack Safety Committee shall allow a full
presentation of evidence and shall not be bound by the technical rules
of evidence. However, the Board or the Racetrack Safety Committee may
disallow evidence that is irrelevant or unduly repetitive of other
evidence. The Board or the Racetrack Safety Committee shall have the
authority to determine, in its sole discretion, the weight and
credibility of any evidence or testimony. The Board or the Racetrack
Safety Committee may admit hearsay evidence if it determines the
evidence is of a type that is commonly relied on by reasonably prudent
people. Any applicable rule of privilege shall apply in hearings before
the Board or the Committee.
(h) A party shall be entitled to present its case or defense by
oral or documentary evidence, to be represented by counsel at the
party's expense, to submit rebuttal evidence, and to conduct such
limited cross-examination as may be required for a full and true
disclosure of the facts.
(i) Presiding Officer for the Conduct of the Hearing. The Board or
the Racetrack Safety Committee may appoint a presiding officer to
assist in regulating the orderly conduct of and presentation of
evidence at the hearing. The Board or the Racetrack Safety Committee
may assign to the presiding officer any or all of the following powers,
in any manner that the Board or Racetrack Safety Committee determines
is most appropriate based upon the nature and complexity of the subject
matter of the hearing. The presiding officer may be granted the power
to:
(1) Rule upon requests, including all requests for adjournments;
(2) Set the time and place of hearing, recesses, and adjournments;
(3) Administer oaths and affirmations;
(4) Summon and examine witnesses, including the authority to direct
a party
to appear and to testify;
(5) Order that opening and closing statements be made;
(6) Admit or exclude evidence;
(7) Allow oral argument, so long as it is recorded;
(8) Issue orders limiting the scope and length of cross-
examination, the length of briefs, and other similar matters;
(9) Order the parties to appear for a prehearing conference to
consider matters that may simplify the issues or expedite the
proceeding; and
(10) Perform all acts and take all measures necessary for the
maintenance of order and the efficient conduct of the hearing.
(j) Presiding Officer for the Submission of a Hearing Report. The
Board or the Racetrack Safety Committee may direct a presiding officer
to issue in writing a hearing report at the conclusion of the hearing
and to submit it to the Board or the Racetrack Safety Committee and all
parties. A copy of the record of the hearing shall accompany the
hearing report. The hearing report shall set forth findings of fact,
conclusions of law, and a recommended disposition. If the presiding
officer finds that imposition of a penalty under Rule 8200 upon a party
to the hearing is warranted, the recommended penalty shall be set forth
in specific detail, including the length of any suspension and the
amount of any fine. If so directed by the Board or the Racetrack Safety
Committee, the presiding officer shall establish a schedule for the
filing by the parties of:
(1) Briefs to be considered by the presiding officer prior to the
presiding officer's preparation of the hearing report; and
(2) Exceptions to the presiding officer's hearing report after the
hearing report has been delivered to the parties. The exceptions may
include for consideration and adoption by the Board or the Racetrack
Safety Committee the particular findings of fact, conclusions of law,
and recommendations for disposition with which the party disagrees and
the reasons for such disagreement, any general comments by the party on
the suitability of the hearing report, and the party's alternative
proposed findings of fact, conclusions of law, and recommendations for
disposition. A party shall send a copy of its exceptions to all other
parties or their attorneys and presiding officer.
(k) Review by the Board or the Racetrack Safety Committee. Upon
receipt of the record of the hearing, and of any hearing report and
exceptions thereto submitted pursuant to paragraph (j), the Board or
the Racetrack Safety Committee shall review the record and submissions.
The period for review shall not exceed 20 days unless extended by the
Board or the Racetrack Safety Committee upon notice to all parties.
(l) Written Decision. The Board or the Racetrack Safety Committee
shall issue to all parties within 30 days of the close of the review
period a written decision setting forth findings of fact, conclusions
of law, and the disposition of the matter including any penalty
imposed. If a hearing report has been received, the Board and the
Racetrack Safety Committee shall have discretion to adopt, modify, or
reject any or all of the hearing report including, but not limited to,
the appropriate disposition of the proceeding and any penalty
recommended.
8350. Appeal to the Board
(a) Any decision rendered by the Racetrack Safety Committee, the
stewards, the National Stewards Panel, or an Arbitral Body may be
appealed on the record to the Board. The decision may be appealed by a
party to the decision, or the decision may be reviewed upon the Board's
own initiative and at its discretion.
(b) Any decision rendered by an initial Board hearing panel may be
appealed on the record to the Board, to be reviewed by a quorum of the
Board which shall not include the Board members who were on the panel
in the initial hearing. The decision may be appealed by a party to the
decision, or the decision may be reviewed upon the Board's own
initiative and at its discretion.
(c) An appeal shall not automatically stay the decision. A party
may request the Board to stay the decision. A stay may be issued by the
Board, or any official or body of the Authority to whom the Board
delegates the authority to review requests for stay, for good cause
shown.
(d) A party to the decision may appeal to the Board by filing with
the Board a written request for an appeal within 10 days of receiving a
written order. The appeal request shall contain the following
information:
(1) The name, address, and telephone number, if any, of the
appellant;
(2) A description of the objections to the decision;
(3) A statement of the relief sought; and
(4) Whether the appellant desires to have a hearing of the appeal.
(e) The Board may in its discretion review a decision based solely
upon written submissions scheduled for filing with such timing and
response requirements as the Board may require. Alternatively, or in
addition to written submissions, the Board may set a date, time, and
place for a hearing. Notice shall be given to the appellant in writing
and shall set out the date, time, and place of the hearing, and shall
be served personally or sent by electronic or U.S. mail to the last
known address of the
[[Page 44403]]
appellant. If the appellant objects to the date of the hearing, the
appellant may obtain a continuance, but the continuance shall not
automatically stay imposition of a sanction or prolong a stay issued by
the Board. At the discretion of the Board, the hearing may be conducted
in person or by means of an audio-visual videoconferencing system or a
telephone audio system.
(f) Upon review of the decision that is the subject of the appeal,
the Board shall uphold the decision unless it is clearly erroneous or
not supported by the evidence or applicable law.
(g) Upon completing its review, the Board may:
(1) Accept the decision;
(2) Reject or modify the decision, in whole or in part;
(3) Remand the matter, in whole or in part, to the stewards,
Racetrack Safety Committee, the National Stewards Panel, or an Arbitral
Body, as the case may be, for further proceedings as appropriate; or
(4) Conduct further proceedings on the matter as appropriate,
including but not limited to requiring the submission of written briefs
or, in extraordinary circumstances and at the Board's discretion, the
taking of additional testimony before the Board under oath.
(h) The Board may appoint a presiding officer to assist in
regulating the orderly conduct of and presentation of evidence at a
hearing in accordance with Rule 8340(i). The Board may also direct a
presiding officer to issue in writing a hearing report at the
conclusion of the hearing in accordance with Rule 8340(j).
(i) The Board shall issue its written decision based on the record
and any further proceedings, testimony, or hearing report and
exceptions thereto submitted in accordance with Rule 8340(k). If a
hearing report and exceptions have been submitted, the Board's written
decision shall in accordance with Rule 8340(l) include findings of
fact, conclusions of law, and the disposition of the matter including
any penalty imposed. The Board shall not be bound by the timing
provisions in Rules 8340(k) and (l) relating to the period for review
and the issuance by the Board of its written decision. A copy of the
Board's decision shall be served upon all parties by first class mail,
electronic mail, or personal service.
(j) The decision of the Board shall be the final decision of the
Authority.
8360. Accreditation Procedures
(a) Any decision issued by the Authority denying, suspending, or
revoking racetrack accreditation may:
(1) Be appealed within 10 days by the Racetrack to the Authority
for a de novo hearing reviewing the Authority's decision; or
(2) Reviewed by the Authority on its own initiative.
(b) The Authority's order suspending or revoking accreditation
shall be stayed automatically pending review of the decision by the
Authority.
(c) At its discretion, the Authority may request and consider any
additional information from any source that may assist in the review.
(d) The Racetrack may request to make a presentation before the
Authority concerning racetrack safety and any remedial efforts proposed
to be undertaken by the Racetrack. At its discretion, the Authority may
permit the Racetrack to make such presentation.
(e) In conducting its review, that Authority may consider all
factors that it deems appropriate, including but not limited to:
(1) The extent and magnitude of any deficiencies in racetrack
operations conducted at the Racetrack;
(2) The threat posed by the deficiencies to the safety and
integrity of horseracing conducted at the Racetrack;
(3) The adequacy of the efforts the Racetrack proposes to undertake
or has undertaken to remedy all deficiencies at the Racetrack;
(4) The likelihood and timeframe within which compliance will be
achieved by the Racetrack, given the resources available to the
Racetrack and the past record of the Racetrack in achieving and
maintaining compliance with the rules of the Authority; and
(5) Any other factors the Authority deems relevant to its review.
(f) Upon completing its review, the Authority may take one or more
of the following actions:
(1) Order that the Racetrack's accreditation be denied, suspended,
or revoked, upon a vote in favor of denial or revocation by two-thirds
of a quorum of the members of the Board;
(2) Reinstate accreditation subject to any requirements the
Authority deems necessary to ensure that horseracing will be conducted
in a manner consistent with racetrack safety and integrity. The
Authority may also impose a fine upon reinstatement in an amount not to
exceed $50,000.00. The Authority may require the Racetrack to report at
prescribed intervals on the status of racetrack safety operations and
remedial efforts to improve safety pursuant to the Authority's
racetrack safety rules; or
(3) Prohibit a Racetrack from conducting any Covered Horserace.
8370. Final Civil Sanction
Any decision rendered by the Board of the Authority under Rule
8350, or the Authority under Rule 8360, shall constitute a final civil
sanction subject to appeal and review in accordance with the provisions
of 15 U.S.C. 3058.
8380. Guidelines for Confidentiality and Public Reporting
As used in this Rule, ``public disclosure'' means the dissemination
or distribution of information by the Authority to the general public.
(a) This Rule shall apply to an alleged violation of any provision
of the Act, the Rule 2000 Series, the Rule 8000 Series, or the Rule
9000 Series. It shall not apply to:
(1) An alleged violation of the anti-doping and medication control
rule provisions in the Rule 3000 Series; or
(2) An alleged violation arising under state laws, racing rules,
and regulations not preempted under 15 U.S.C. 3054(b).
(b) After notice of a violation of any provision in the Rule 2200
Series, the Rule 8000 Series, or the Rule 9000 Series has been provided
to a Covered Person by the Authority or any official or body authorized
to adjudicate violations under the Rule 8000 Series, the Authority
shall publicly disclose the following information relating to the
alleged violation:
(1) The identity of any Covered Person who is the subject of the
alleged violation;
(2) The identity of any applicable horse; and
(3) The rule violated and, where appropriate, the basis of the
asserted violation.
(c) Information as described in paragraph (b) concerning a
violation of the Rule 2100 Series shall be disclosed in accordance with
this Rule by the Authority either upon issuance of a Notice of
Suspected or Actual Violation, or at any time thereafter, as deemed
appropriate by the Authority.
(d) If at any time information pertaining to an alleged violation
is publicly disclosed by the Covered Person charged with the violation
or any employee or agent of the Covered Person, the Authority may
comment on the information publicly disclosed by the Covered Person.
(e) The Authority shall not be required to make public disclosure
if public disclosure will compromise an ongoing investigation or
proceeding. When the Authority determines that an ongoing investigation
or proceeding will no longer be compromised by public disclosure, the
Authority shall at such time make any public disclosure required under
this Rule.
[[Page 44404]]
(f) Notwithstanding any provision to the contrary in the rules of
the Authority, the Authority may make public disclosure of any relevant
information at any time, including prior to delivery of notice of a
violation, if the Authority determines that such disclosure:
(1) Concerns a violation or circumstance that poses a serious and
imminent risk of harm to Covered Persons, Covered Horses, or the
public; or
(2) Is otherwise in the best interest of horseracing conducted at
Covered Horseraces.
(g) The Authority shall publicly disclose the resolution of an
alleged violation no later than 20 calendar days after the earlier of:
(1) The imposition of a final civil sanction;
(2) A resolution between the Authority and the Covered Person; or
(3) The dismissal of the allegation or a finding of no violation by
the Authority.
(h) Public disclosure under paragraph (g)(1) & (2) shall include
the following:
(1) The name of the Covered Person who committed the violation and
any Covered Horse affected by the violation;
(2) The Rule violated;
(3) The sanction imposed;
(4) The order or other ruling issued in the matter; and
(5) The results of any appellate decisions concerning the
violation.
(i) Public Disclosure shall not be required under this Rule if the
Covered Person alleged to have committed a violation is a minor. Public
disclosure concerning a case involving a minor shall be at the
discretion of the Authority and in proportion to the facts and
circumstances of the case.
(j) Publication shall be accomplished at a minimum by placing the
required information on the Authority's website or publishing it
through other means.
(k) Pursuant to 15 U.S.C. 3054, this Rule shall preempt any
provision of State law or regulation, including those pertaining to
data practice and privacy laws.
8400. Investigatory Powers
(a) The Commission, the Authority, or their designees:
(1) Shall have free access to:
(i) With regard to Covered Persons, books, records, offices,
racetrack facilities, and other places of business of Covered Persons
that relate to the care, treatment, training, and racing of Covered
Horses; and
(ii) With regard to any person who owns a Covered Horse or performs
services on a Covered Horse, books, records, offices, facilities, and
other places of business that relate to the care, treatment, training,
and racing of Covered Horses.
(2) May seize any medication, drug, substance, or paraphernalia in
violation or suspected violation of any provision of 15 U.S.C. Chapter
57A or the regulations of the Authority, and any object or device
reasonably believed to have been used in furtherance of the violation
or suspected violation.
(b) Upon final resolution of a violation, the Commission, the
Authority, or their designees shall return seized property, including
but not limited to phones, computers, and other repositories of
electronic data, the possession of which is not specifically prohibited
by the Act or the rules of the Authority.
(c) A Covered Person shall:
(1) Cooperate with the Commission, the Authority, or their
designees during any investigation; and
(2) Respond truthfully to the best of the Covered Person's
knowledge if questioned by the Commission, the Authority, or their
designees about a racing matter.
(d) A Covered Person or any officer, employee, or agent of a
Covered Person shall not hinder a person who is conducting an
investigation under or attempting to enforce or administer any
provision of 15 U.S.C. Chapter 57A or the regulations of the Authority.
(e) The Commission or the Authority may issue subpoenas for the
attendance of witnesses in proceedings within their jurisdiction, and
for the production of documents, records, papers, books, supplies,
devices, equipment, and all other instrumentalities related to matters
within the jurisdiction of the Commission or the Authority.
(f) Failure to comply with a subpoena or with the other provisions
of this Rule may be penalized by the imposition of one or more
penalties set forth in Rule 8200.
(g) The Commission or the Authority may administer oaths to
witnesses and require witnesses to testify under oath in matters within
the jurisdiction of the Commission or the Authority.
By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2022-15972 Filed 7-25-22; 8:45 am]
BILLING CODE 6750-01-P
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</html>Indexed from Federal Register on July 26, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.