In 2021, the walking horse industry has experienced a generally successful year for our show horse including an increased number of horse shows and sustained entry numbers at the 2021 Celebration.  As we enter into the final quarter of the year, industry organizations and leadership are turning their attention toward the 2022 year.  
Before that, I want to highlight a few of FAST’s recent accomplishments.

1. Not long ago, there was an effort by a metro Nashville commissioner to introduce an ordinance that would prevent the performance horse from being exhibited within the metro Nashville area.  FAST financially supported the deployment of a lobbyist to serve on behalf of the industry to successfully educate the commission regarding the Tennessee Walking Horse and how such an ordinance would be disproportionate to the concerns that were expressed regarding the horse.  The industry was successful in mitigating that issue.

2. In 2021, FAST has continued to support new or newly revived horseshows in and outside of Tennessee through its UDHP with grants to financially assist with the administration of those shows.

3. After the 2016 Celebration, APHIS filed complaints against 190 participants alleging violations of the HPA. This unprecedented assault on the industry threatened the continued existence of competitive walking horse events. This attack appeared to be retaliation for two lawsuits against the USDA supported by FAST, the Celebration and SHOW HIO. The first lawsuit successfully challenged APHIS’ Rule requiring HIOs to assess mandatory suspension penalties on entrants whose horses did not pass DQP’s inspections. The second lawsuit resulted in APHIS removing from its website about 15 misleading lists and tables that falsely identified thousands of participants as HPA violators, though they had never been charged or found liable for any HPA violation.

The lawyers in these two cases agreed to help the industry in defending against these charges. Mr. Broiles would develop defenses that could be made available to any party to use in their defense. Ms. Cagle had been retained by several respondents to defend them. Few people can afford to pay lawyers to try or appeal these cases because the chance of prevailing is low and the cost prohibitive. 

The attorneys were contacted to help in a case in which eight respondents were defaulted because their answer was about five days late. No trial would be permitted. The only avenue for relief was an appeal to the Judicial Officer. Ms. Cagle agreed to represent the eight defaulted respondents and assert the legal challenges that could help all 190 respondents. Mr. Broiles would assist without charge to the individuals, but with assistance from FAST. The Judicial Officer affirmed the ALJ’s default orders and penalties. The cases were appealed to the D.C. Circuit. 

Three constitutional challenges were asserted in the appeals. First, respondents challenged the appointment of the Administrative Law Judge as unconstitutional. This issue was raised Lucia v. SEC, pending in the D.C. Circuit. Mr. Broiles filed a friend of the court brief in Lucia on behalf of the industry, but the court held ALJs were lawfully appointed. Lucia was appealed to the Supreme Court, and in late November 2017, the Solicitor General conceded ALJs were not constitutionally appointed. With the USDA cases also on appeal, the USDA began staying HPA cases until the Supreme Court decided the issue. Mr. Broiles submitted a friend of the court brief supporting Lucia. 

The Supreme Court decided ALJs were not constitutionally appointed in June 2018. Between November 2017 and June 2018, when no HPA cases were tried, many cases settled. Most Consent Decisions resulted in a $550 fine and four-month disqualification. After the Supreme Court decision, the USDA conceded error in the HPA cases the attorneys had appealed, but remand was opposed because there were other serios issues to decide. 

The first concerned what kind of proceeding the appellants would receive in the USDA on remand. The agency eventually conceded and represented to the court that the appellants’ default orders would be vacated and they would receive a new trial before a different ALJ, who would not rely on the prior proceedings. This benefitted all respondents in pending cases where decisions had been made by an ALJ before that Judge was constitutionally appointed by the Secretary. 

Second, the lawyers argued that USDA ALJs and the Judicial Officer were still not constitutionally appointed because the ALJs’ and Judicial Officer’s decisions became final without permission from a principal officer appointed by the President after Senate confirmation. Third, the attorneys argued the ALJs’ appointment violated the Constitution’s separation of powers because the ALJs had two levels of tenure protection that infringed on the President’s power to see the laws are faithfully executed. Fourth, the attorneys argued that under HPA §1825(c), a person who had not previously been determined to have violated the HPA could not be disqualified from entering events. 

The federal appeals, filed in the fall 2017, were not decided until February 2021, after multiple briefs and two oral arguments.  A majority of two judges decided the appellants default orders would be vacated and their cases remanded for trials before another ALJ. However, as they had the discretion to do, the majority did not decide whether the ALJs’ and Judicial Officer’s appointments were unconstitutional. Judge Rao, a recognized authority in administrative law, dissented, arguing USDA ALJs’ appointments as inferior officers violated separation of powers. 

Two subsequent decisions by the Supreme Court support the conclusion the ALJs’ and Judicial Officer’s appointments contravene separation of powers and the Appointments clause. The USDA appears unable to solve these problems with its adjudicatory scheme. Any person charged with violating the HPA under the USDA’s present system, can assert these undecided constitutional challenges with a high degree of confidence that, on appeal, they will prevail. These problems, well known to the USDA as a result of appellants successful appeals, help in negotiating settlements that avoid expensive trials and appeals. The legal arguments and briefs are available on request. 

4. The PAST Act was reintroduced a couple of weeks ago.  Congressman Cohen from TN is the lead on refiling the bill but no other Tennessee member of Congress has signed on to the bill as of this memo.  The only representative from Kentucky that has signed on to the bill is Congressman Yarmuth, a democrat.  At this time, the bill has the fewest republicans signed on as a percentage at 15% versus what has normally been 27% or more.  The PAST Act was reintroduced in the exact same form and includes no provisions from the NAS study.
The industry is working on and will introduce an alternative bill.  The alternative bill will be a version of the former Blackburn/Alexander bill and will include provisions that support the industry from the NAS study.  The compromise bill will not be introduced at this time and no negotiations are taking place.
5. Rulemaking
It is the belief of leadership that the old rule which would have greatly impacted the show horse as we know it today will remain just that and will not be introduced despite the efforts of HSUS to have it done.  

We do, however, believe Secretary Vilsack and his administration is working on new rulemaking that will be introduced at some point in the future.  The USDA sets their rulemaking agenda twice a year so the next opportunity would be in the spring of 2022.  The new rulemaking is not made public nor are its contents, but we do expect changes from the old rule, especially considering the recommendations from the NAS study.
In preparation for rulemaking and the likelihood that we will have to seek representation to potentially challenge the disproportionate impacts of the rule making, the industry is proactively interviewing several recommended firms to represent the industry in the comment period as well any further legal actions that may be deemed necessary.

6. Call to Action.  What do we need to do?

Contact your representatives outside of Tennessee and Kentucky, and urge them not to sign on to the PAST Act.  For example, states like North Carolina have damaged us with their republican representatives signing onto the PAST Act, and they have done so again.

FAST will remain engaged as law firms are interviewed in preparation for potential action in response to rule making.  Unlike occasions in the past where the industry has had to react, the industry wants to be proactive.  FAST will be actively engaged in fundraising by privately seeking capital gifts in addition to our fall show and a New Year’s Eve Denim and Diamonds event with silent and live auctions to raise funds expressly for the purpose of seeing that alternative legislation is filed and that the industry is adequately and legally prepared to respond rule making.