Excerpt: Summary of Argument
- Whether a particular person is an Officer, and thus subject to the Appointments Clause, is governed by a simple test: whether, as a “continuing and permanent” matter, that person “exercis[es] significant authority pursuant to the laws of the United States.” The members of the Horseracing Integrity and Safety Authority are plainly Officers by that standard.
- Whether the members of the Authority are nominally private is unimportant for Officer status. The statutory labeling of the Authority as private, and the fact that the Authority is organized as a private organization under state law, are constitutionally irrelevant, and in any event Appointments Clause doctrine does not demand that an Officer formally be a public employee.
- The District Court’s use of a rigid public-private distinction here was misguided. First, the fact that the members of the Authority wield quintessentially governmental powers—rulemaking, investigation, and enforcement—means that they should be considered public for Appointments Clause purposes, regardless of whether they are classified as private under the statute or under state law. Second, to the extent some public-private distinction is relevant here, that distinction can apply differently for different doctrines, so it is a mistake to use public-private distinctions from the Appointments Clause, the Nondelegation Doctrine, and the State Action Doctrine interchangeably. Thus, the previous panel’s assumption that the Authority was private for Nondelegation Doctrine purposes does not foreclose this Appointments Clause challenge, even if one believes that the Appointments Clause does not apply to private entities.And third, regardless of the public-private distinction, notions of political accountability demand that the Authority be subject to Appointments Clause constraints.
- Even if the District Court were correct to assume that the State Action Doctrine is relevant here, it was wrong to determine that the Authority is not a state actor. On the contrary, this is an easy case for state action, because rulemaking, investigation, and enforcement of federal law are traditionally exclusive public functions.
- The December 2022 statutory amendment does not change any of the foregoing, because it leaves all of the Authority’s powers intact. In the limited context of rulemaking, it is now true that the FTC may alter any rule promulgated by the Authority. But unless and until the FTC conducts a rulemaking to do so, the Authority’s rules remain binding. At most, this limited FTC oversight is possibly relevant to whether the Authority members are principal or inferior Officers.