The Horseracing Case and How It Misunderstands Private Delegation
Jonathan had a post on Friday about the Fifth Circuit’s new case, National Horsemen’s Benevolent & Protective Ass’n v. Black. It has a few fun features: (1) it’s one of the rare cases to strike down a federal statute based on the non-delegation doctrine, and (2) it’s one of the even rarer cases to do based on a supposed theory that delegations to private parties are judged by a stricter standard—or are even per se unconstitutional.
In this case, the statute is the Horseracing Integrity and Safety Act, and the private entity is the Horseracing Integrity and Safety Authority. (The case calls the statute HISA and the entity the Authority, so I’ll follow the same convention.) The Authority is supposedly subject to the FTC, but the Fifth Circuit finds that the extent of FTC oversight is not nearly great enough, so the Authority wields a lot of coercive power all by itself, which makes this an unconstitutional private delegation.
Now I think the supposed “private nondelegation doctrine”, which the Fifth Circuit calls a “commonsense principle”, actually doesn’t exist. Not just that it’s a bad idea: actually, no Supreme Court case gives it any support, and several Supreme Court cases cut the other way and uphold private delegations under the nondelegation doctrine. (The D.C. Circuit’s first Amtrak opinion does give it support, but that opinion was vacated by the Supreme Court.) Plus, such a doctrine would also be a bad idea. (My broader thesis is that there are a bunch of different doctrines that could be called “nondelegation doctrines”, but here we’re only talking about the Article I Nondelegation Doctrine, so for now I’ll stick to that. But I’m working on an article on the broader issue, which I’ll probably post here eventually.)
This view is radically at odds with the popular understanding of several Supreme Court cases, mainly A.L.A. Schechter Poultry Corp. v. United States (1935) and Carter v. Carter Coal Co. (1936), so I’ll spend some time discussing those. Today, I’ll just focus on Schechter Poultry.
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Schechter Poultry concerned section 3 of the National Industrial Recovery Act, which allowed the president to promulgate “codes of fair competition” for various industries. I’ll quote the Supreme Court on what the involved:
That section [section 3 of the NIRA] . . . authorizes the President to approve “codes of fair competition.”
Such a code may be approved for a trade or industry, upon application by one or more trade or industrial associations or groups, if the President finds (1) that such associations or groups “impose no inequitable restrictions on admission to membership therein and are truly representative,” and (2) that such codes are not designed “to promote monopolies or to eliminate or oppress small enterprises and will not operate to discriminate against them, and will tend to effectuate the policy” of Title I of the Act. Such codes “shall not permit monopolies or monopolistic practices.”
As a condition of his approval, the President may “impose such conditions (including requirements for the making of reports and the keeping of accounts) for the protection of consumers, competitors,
Article from Reason.com