Editor's Note:  The following is the response of the Walking Horse Trainers' Association (WHTA) to the USDA's Horse Protection Act proposed rulemaking.  The rulemaking, if successful, would require HIOs to enforce mandated penalties from the USDA.


APHIS DOCKET NO. 2011-0030 



       Walking Horse Trainer’s Association, Inc.
       Fax:  931/684-5895    Date:  July 26, 2011 


As a sign of its commitment to compliance with the Horse Protections Act (“HPA”) in 2009, the Walking Horse Trainers’ Association, Inc. (hereinafter “WHTA”) Board of Directors voted unanimously to dissolve the National Horse Show Commission, a Horse Industry Organization (“HIO”) which had been in existence and controlled, in-part, by the WHTA since 1989.  The board of the WHTA asked the Tennessee Walking Horse Celebration to activate its HIO, SHOW, Inc., and to assume all duties of HIO enforcement of the HPA thereby removing all potential conflicts of interest, whether perceived or real, associated with self-regulation.  Since 2009, the WHTA has had no involvement in enforcement of the HPA, but instead, its members are those who are subject to regulation under the HPA each time a member presents a horse for inspection pursuant to the terms of the Act, its corresponding regulations and the rulebook of the HIO.
The WHTA is proud of the strides the TWH industry has made in recent years in presenting horses compliant with the HPA and its regulations.  Despite the misinformation contained in the Petition for Rulemaking, USDA statistics prove the fact that, while not perfect, the current HIO system is working and the sore horse is quickly becoming a thing of the past.  As recently as the May 2011 Fun Show held in Shelbyville, Tennessee – a three-day event at which USDA inspectors were present for all events – no USDA inspector found a single instance of a violation of the Act, which had not been previously detected by industry inspectors (i.e. Designated Qualified Persons or “DQPs”).  Additionally, the compliance rate for all three (3) nights of this event – with USDA inspectors present – was 92.2%. 
The WHTA is also taking proactive steps to enhance professionalism and compliance with the HPA and Regs.  Most recently, the WHTA received a grant for a new program to enable the association to issue photo identification to each of its members to ensure correct, reliable information is presented at all times by its members.  Additionally, over the past year, the WHTA has worked with SHOW HIO to establish new judging criteria and standards, which include penalties for any judge who fails to dismiss a nonstandard horse from the show ring.  
The WHTA files the following in response to the Animal and Plant Health Inspection Service’s (hereinafter “APHIS”) request for rulemaking Requiring Horse Industry Organizations to Assess and Enforce Minimum Penalties for Violations.  See 76 Fed. Reg. No. 103 (May 27, 2011).  
APHIS claims the proposed rulemaking will “strengthen enforcement” of the HPA.  However, as discussed
below, just the opposite will be true.  Additionally, the penalty system proposed by APHIS is unlawful under the clear language of the Horse Protection Act as well as constitutional considerations.  The proposals set forth by APHIS simply are not in the best interest of the horse and do not protect the constitutional rights of those who would be regulated under it.  Instead of acknowledging the strides made by the legitimate TWH industry as a whole and working with those individuals committed to HPA compliance, APHIS has, instead, chosen to present a plan which does not comport with the law or fundamental principles of fairness.

Respondent Walking Horse Trainers’ Association, Inc. (“WHTA”) is a corporation existing under the laws of the State of Tennessee with its principle place of business in Shelbyville, Tennessee.  The WHTA was established in 1968 for the purpose of promoting and developing activities on behalf of and in the interest of the Tennessee Walking Horse and those individuals employed in the Tennessee Walking Horse industry – specifically, individuals whose chosen profession was as a Tennessee Walking Horse trainer.
Each member of the WHTA accepts and abides by a Code of Ethics, which includes that he or she will “[t]reat all horses in their care humanely, and with dignity and respect.”  Each WHTA member vows to, among other things, “not utilize techniques known to inflict pain for the purposes of performance enhancement.”  The WHTA currently has approximately 650 members and offers support to many worthwhile projects including the WHTA scholarship fund, the WHTA Youth Council and WHTA Auxiliary.  Each member of the WHTA  receives his primary source of compensation through his or her employment in the TWH industry.
Members of the WHTA are those individuals most directly affected by the enforcement of the HPA and its regulations as they rely on the exhibition, show and sale of TWH for their livelihood. 
As stated hereinabove, the WHTA is not involved in enforcement of the HPA and/or its regulations.  Members of the WHTA are, in fact, among the individuals and entities regulated by the Act and regs.  Members of the WHTA are the individuals most directly affected by the actions of APHIS as it is their livelihoods and way of life which are immediately impacted.  As set out in detail below, the WHTA believes the rulemaking proposed by the USDA exceeds its authority under the constitution and the Horse Protection Act and should not be allowed to proceed.


The language of the Horse Protection Act could not be clearer - ONLY the Secretary has the authority to assess a penalty for an alleged violation of the Act after being given notice and hearing before the Secretary who must consider certain factors in assessment of a penalty.  Additionally, an alleged violator is entitled to appeal the Secretary’s decision to a United States Court of Appeals.  The proposed penalty plan does not comply with these requirements.
15 U.S.C. § 1825 “Violations and penalties” states
(b) Civil Penalties, review and enforcement
(1) . . . No penalty shall be assessed unless such person is given notice and opportunity for a hearing before the Secretary with respect to such violation.  The amount of such civil penalty shall be assessed by the Secretary by written order.  In determining the amount of such penalty, the Secretary shall take into account all facts relevant to such determination, including the nature, circumstances, extent, and gravity of the prohibited conduct and, with respect to the person found to have engaged in such conduct, the degree of culpability, any history of prior offenses, ability to pay, effect on ability to continue to do business, and such other matters as justice may require.
(2) Any person against whom a violation is found and a civil penalty assessed under paragraph (1) of this subsection may obtain review in the court of appeals of the United States for the circuit in which such person resides or has his place of business . . . .  The findings of the Secretary shall be set aside if found to be unsupported by substantial evidence.
(c) Disqualification of offenders; orders; civil penalties applicable; enforcement procedures
In addition to any fine, imprisonment, or civil penalty authorized under this section, any person who was convicted under subsection (a) or this section or who paid a civil penalty assessed under subsection (b) of this section . . . may be disqualified by order of the Secretary after notice and an opportunity for hearing before the Secretary, from showing or exhibiting any horse, judging or managing any horse show, horse exhibition, or horse sale or auction. . . .

The provisions of subsection (b) of this section respecting the assessment, review, collection, and compromise, modification, and remission of a civil penalty apply with respect to civil penalties under this subsection.
(d) Production of witnesses and books, papers and documents; depositions; fees; presumptions; jurisdiction
(1) The Secretary may require by subpoena the attendance and testimony of witnesses and production of books, paper and documents . . . .
(2) The attendance of witnesses, and the production of books, papers and documents, may be required . . . in the case of disobedience to a subpoena the Secretary, or any party . . . may invoke the aid of any appropriate district court of the United States . . . .
(5) The United States district courts . . . are vested with jurisdiction     specifically to enforce, and to prevent and restrain violations
of this chapter, and shall have jurisdiction in all other kinds of cases arising under this chapter, except as provided in subsection (b) of this section.

15 U.S.C. § 1825 (emphasis added).

The use of the word “shall” indicates a mandatory duty imposed on the USDA by Congress.  The duty is not discretionary - only the Secretary may issue a penalty under the HPA after notice and opportunity for hearing before the Secretary with right of appeal to a United States Court of Appeals.  The plan proposed by APHIS violates the language of 15 U.S.C. § 1825 and should not be allowed to proceed.

In 15 U.S.C. § 1823(c), Congress mandated that the USDA “prescribe by regulation requirements for the appointment by the management of any horse show, horse exhibition, or horse sale or auction of persons qualified to detect and diagnose a horse which is sore or to otherwise inspect horses for the purposes of enforcing this chapter.”  The express language of this enabling statue provides that industry inspectors may only “detect”, “diagnose” and “inspect”.  The enabling statute does NOT provide industry inspectors with the authority to impose any agency penalty whatsoever. 
Congress provided protection of individuals’ due process rights by prohibiting a nongovernmental entity from imposing penalties under the Act.  The penalty plan which APHIS now proposes violates the express language of the enabling statute, 15 U.S.C. § 1823(c), and should not be allowed to proceed.


Imposition of mandatory government penalties by an HIO would implicate the HIO as a state actor and thereby require that due process be provided before any such “mandatory penalty” could be enforced.  The USDA would likely be held liable for the actions of HIOs in the imposition of such penalties and any corresponding deprivation of rights of the individuals affected.  A governmental entity may be held liable for the actions of a private organization if (1) “the State creates the legal framework governing the conduct”; (2) if it delegates its authority to the private sector”; or (3) “if it knowingly accepts the benefits derived from unconstitutional benefits derived from the unconstitutional behavior.”   Nat. Collegiate Athletic Assc. v. Tarkanian, 488 U.S. 179, 192 (1988).  Private parties may also be “found to be state actors if they were ‘jointly engaged with state officials in the challenged action’” or there existed a “sufficiently close nexus between the State and the challenged action of the regulated entity.”  Id. at 192, 200.  “In determining whether an ostensibly private organization is a state actor for purposes of the Federal Constitutions’ Fourteenth Amendment, public entwinement in the organization’s management and control will support a conclusion that the organization ought to be charged with a public character and judged by constitutional standards.”  Brentwood Academy v. Tennessee Secondary School Athletic Assc., 531 U.S. 288 (2001).  Furthermore, as discussed hereinabove, an attempt by the USDA to impose “mandatory penalties” through the HIO system would result in said HIOs being considered “state actors” compelled to comply with due process requirements.  Consequently, the USDA would be liable for the actions of the HIOs as there would exist a sufficiently “close nexus” and “entwinement” to compromise “the independence of the enforcing officer.”  See Lugar v. Edmondsom Oil Co., Inc., et al., 457 U.S. 922 (1982).  The Agency’s attempt to “entwine” itself in the activities of private organizations through the imposition of mandatory penalties would be “contrary to constitutional right, power, privilege or immunity” under 5 U.S.C. § 706(2)(B) and would, therefore, be set aside.

The mandatory penalty scheme of enforcement and the proposed “appeal” process in no way satisfies the requirements of due process.  The Department is proposing to require the HIOs to develop an appeal process in which an appeal would be granted by the HIO and would have to be “heard and decided by the HIO or the violator would have to begin serving the penalty within 60 days . . . .”  Further, “HIOs would be free to set whatever policies they determine to be necessary to meet that requirement.”  76 FED. REG. No. 103, at 30867 (emphasis added).  WHTA members which show in front of multiple HIOs during the course of a show season would be required to submit each HIO’s appeal process and hope for the best with no right to appeal to the Secretary and/or an Article III Court of law.  The system proposed in the current rulemaking is patently unfair and a violation of the constitutional rights of the this Respondent’s members. 
Due process requires, at a minimum, (1) notice and (2) a hearing appropriate to the nature of the case.  To determine if due process requirements have been satisfied, Courts look to three (3) factors:  (1) the private interest affected by the official action; (2) the risk of an erroneous deprivation of a protected interest; and (3) the government interest(s) at stake.
As discussed above, Congress has specifically mandated that only the Secretary has the authority to impose penalties under the HPA after a hearing before the Secretary and taking into account specific, enumerated factors.  15 U.S.C. § 1825(b).  Furthermore, under the HPA, each alleged violator is entitled to an appeal to a United States Court of Appeals.  For APHIS to take the position that each HIO must institute its own appeals process and enforce mandatory penalties but that individuals have no right to have an HIO’s decision reviewed by the Secretary and/or a court of law is outrageous.     
If the initial stages of a state-action disciplinary proceeding is delegated to a private party (such as a HIO), the agency which has delegated the authority must grant a de novo review of the decision.  Such is not the case in the proposed rulemaking and is a clear violation of the rights of those affected. 

The imposition of a “mandatory penalty” scheme would also subject individuals to the threat of double jeopardy.  Under the Act, regulations and current case law, the Department has the authority to file a federal case even if an individual has served a HIO mandated penalty.  See McConnell v. USDA, 2006 WL 2430314 (C.A. 6); Derickson v. USDA, 546 F.3d 335 (6th Cir. 2008).  Additionally, under proposed regulation § 11.25(e), APHIS would retain “the authority to initiate enforcement proceedings with respect to any violation of the Act, including violations for which penalties are assessed in accordance with proposed § 11.25, and to impose the penalties authorized by the Act if the Department determines that such actions are necessary to fulfill the purpose of the Act and the regulations.”  76 FED. REG. No. 103, at 30867.  In light of the mandatory penalties and “appeal system” proposed, § 11.25(e) would violate not only due process but also double jeopardy – in addition the HPA.  
Apparently, APHIS would like to reserve for itself the right to impose it own penalties TWICE – once at the HIO level and again if it sees fit after “review” and initiating an enforcement proceeding.  Each member of the WHTA who receives an APHIS-mandated penalty from an HIO for an alleged violation would then be subjected to the possibility of additional penalties by APHIS.  
The Fifth and Fourteenth Amendments of the United States Constitution protect individuals “against prosecution for the same offense after acquittal or conviction, and against multiple punishments for the same offense.”  BLACK’S LAW DICTIONARY.  The rulemaking proposed by APHIS could not fit more squarely within this definition and is clearly a violations of the constitutional rights of those it affects.

Due process requires (1) notice and (2) a hearing appropriate to the nature of the case.  The notice requirement of due process includes that a party be able to identify with “ascertainable certainty” the standards with which an agency expects a party to conform.  However, the “standards” set forth in the HPR, specifically the “scar rule”, are so outdated and vague as to render them unenforceable.  Furthermore, APHIS’s inability to consistently interpret and enforce its regulations creates a total lack of notice as is required for due process.
If an agency’s regulations, interpretations and enforcement are so vague and inconsistent that a reasonable person is unable to identify with “ascertainable certainty” the standards with which the agency expects the parties to conform, then the agency has violated the due process notice requirement.  Such is the case with the subjective language of the current regulations as well as APHIS’ interpretation and enforcement of the regulations.  When WHTA members present horses for inspection, on many occasions, the VMOs charged with enforcing the Act are unable to agree on what is, or is not, a violation – especially when attempting to interpret and/or apply the “scar rule” regulation.  Additionally, despite joint training on these issues, VMOs and industry DQPs are often in disagreement as to what constitutes a violation of the HPA and/or HPR.  Furthermore, in recent years, APHIS VMOs have articulated varying “standards” during training sessions for both industry inspectors and the general public.  
Members of the WHTA present the vast majority of horses for inspection for determination of compliance with the HPA and HPR.  Respondent’s members are subjected to an ever-changing standard of subjective interpretation and inspections by VMOs and industry inspectors.  The subjectivity and inconsistency makes it impossible to determine the standard to which APHIS expects each Trainer to conform – especially as it relates to the “scar rule.”  This dilemma is exactly what is prohibited by the notice requirement of due process.  APHIS’ ever-changing, subjective standards are, by law, unenforceable and a violation of the due process rights of those affected. 
The mandatory penalty structure proposed by APHIS would not effectuate the purposes of the Act – the elimination of soring.  In fact, just the opposite could occur if mandatory penalties were to be imposed.  Soring could actually INCREASE under the scenario proposed by APHIS.
First, the HIOs, such as SHOW, who are actually effectuating the purpose of the Act through a fair and consistent process, would, for all practical purposes, be destroyed.  If the USDA requires mandatory penalties and the other items they are proposing as stated in the APHIS response to the OIG Audit, the HIOs would have no other independent responsibility other than to assign DQPs. This would be more than a close nexus under case law – the HIOs would be agents or subcontractors of the USDA itself. Therefore, owners and trainers would automatically gravitate to the HIOs who are involved in lax and/or ineffective enforcement of the Act and their Rules in order to avoid receiving tickets, which would result in the imposition of a “mandatory penalty.”  Trainers and owners - especially non-compliant trainers and owners - would have no incentive to affiliate their events with HIOs who fairly and consistently follow the Act and its regulations.  As a result, those HIOs who are actually doing their job through fair and consistent enforcement of their Rules would be penalized and likely driven out of existence. 
Secondly, Petitioners have wholly ignored the existence of an entire segment of the industry, which participates at non-affiliated events sometimes referred to as “outlaw shows.”  At these “outlaw shows” there is absolutely no inspection process as required by the HPA and its regulations.  By failing, or refusing, to have mandatory inspections as required by HPA and its regulations, management of these shows is, by definition, in violation of the Act and Regs.  See 15 U.S.C. § 1824.  These shows number in the hundreds each year with thousands of horses shown with little to no inspection process.   
The USDA has been aware of the existence of the “outlaw shows” for years but has wholly failed to address their existence or the undetected, undocumented violations, which occur at these shows.  In 2002, the USDA recognized that it needed to “devote its limited resources toward increasing its inspections at shows that are not affiliated with an HIO.”  See Am. Horse Protection Assc. v. USDA, Civil Action No. 01-00028 (D.C. July 9, 2002).  However, since 2002, to this Respondent’s knowledge, the USDA has attended no unaffiliated or “outlaw” shows prior to this year.  Additionally, to this Respondents knowledge, the USDA has never pursued a case against the management of one of these unaffiliated/outlaw shows despite management’s refusal to comply with 15 U.S.C. § 1824. 
The weakening of HIOs which are committed to consistent enforcement of the HPA and its Regs, and increasing the number of participants at unaffiliated/outlaw shows through the imposition of “mandatory penalties” would not effectuate the stated purpose of the Act – the elimination of soring.  Consequently, the adoption of the proposed penalty scheme would not give effect to Congress’ express intention, and therefore, could not be upheld.  See Chevron U.S.A., Inc. v. Nat. Resources Defense Council, 467 U.S. 837 (1984)(holding that if Congress has clearly spoken on the issue, that intention is law and must be given effect). 

For the reasons stated hereinabove, Respondent WHTA asks the Secretary to withdraw its proposed amendment to the horse protection regulations to require HIOs to assess and enforce minimum penalties for violations of the Horse Protection Act.
Respectfully submitted,

__________________________________                                                   Date:  July 26, 2011
Fax:  931/684-5895