FAST Status Report June 2017

Dear Friends of the Tennessee Walking Horse Industry:

It has been several months since the last update and much of that is due to static activity while the new administration has been transitioning into office in Washington, D.C. Since that time, we have begun to see some movement as follows:

RULE MAKING

Who are the clients: The Celebration and its Board of Directors represented by Mike Inman, CEO

How is this suit funded: This suit is being funded by donations from friends of the industry.

Fund balance is as follows:

Total Funds Raised in FY 2017 (includes gala proceeds) $450,775.35
Less invoices/expenses for show and gala               $101,261.57
Less Attorney payments                                 $264,686.04
Balance                                                $ 84,824.74

Who provides direction for the attorney’s in this case:

The Celebration Board of Directors represented by Mike Inman, CEO has appointed a Leadership Council comprised of Frank Eichler, attorney, Mike Inman, Celebration CEO, Jeffrey Howard, Celebration and FAST board member, David Howard, past Celebration board member, Steve Smith, TWHBEA President, Terry Dotson, PSHA board member and Duke Thorson, WHOA board member. The leadership council appointed Frank Eichler as the point of contact for KDW.

The FAST Board President is privy to the invoices and work of KDW prior to approving payment of their bills. The Celebration is also monitoring the progress and privy to the work of KDW.

Summary of the case and its progress:

Since our last update, several matters have happened. As you recall APHIS’s final rule that would have banned the use of pads and action devices with Tennessee Walking Horses and Racking Horses and replaced the DQP program with APHIS administered inspector program has been effectively suspended until further notice; presently, we do not expect it to be reintroduced—at least with the elimination of the performance horse. In late March the Performance Show Horse Association sent a letter the Office of General Counsel asking that they suspend all complaints and review the underlying information including previous inspections of the scar rule in light of the material the Industry has previously provided. Earlier this year, and as identified in the PSHA letter, APHIS implemented a new focus on the inspection process which has aligned their inspection process and SHOWs much more closely with very positive results. The year over year results for SHOW affiliated events demonstrate this result.

2016 SHOW Affiliated Events Where USDA Present (Through Columbia Spring Jubilee)

USDA Violations Bilateral Unilateral Scar Rule Other Totals
Laurel Charity – Laurel, MS
3
4
2
1
10
Trainers Show – Shelbyville, TN
16
22
12
10
60
MS Charity – Jackson, MS
6
14
3
2
25
Cajun Classic – Monroe, LA
0
4
3
0
7
Gulf Coast Charity – PC, FL
12
14
12
3
41
FAST Spring Showcase – Shelbyville, TN
3
7
4
2
16
Upper Cumberland – Cookeville, TN
2
2
5
2
11
Manchester Lions Club – Manchester, TN
3
4
3
0
10
Petersburg Lions – Petersburg, TN
1
2
3
2
8
Spring Fun Show – Shelbyville, TN
6
10
22
4
42
Totals:
52
83
69
26

 

2017 SHOW Affiliated Events Where USDA Present (Through Columbia Spring Jubilee)

USDA Violations Bilateral Unilateral Scar Rule Other Totals
Laurel Charity – Laurel, MS
0
0
0
0
0
Trainers Show – Shelbyville, TN
3
3
0
0
6
FAST Showcase – Shelbyville, TN
0
0
0
0
0
Manchester Lions – Manchester, TN
0
0
0
0
0
Spring Fun Show – Shelbyville, TN
0
0
1
0
1
Columbia Spring Jubilee – Columbia, TN
0
1
0
0
1
Totals:
3
4
1
0

 

Scar Lawsuit

As described above the Rulemaking is most likely not going to be reintroduced as previously drafted. The Scar lawsuit has been drafted and can be filed at the appropriate time. However, given the new inspection process and other discussions with the USDA and the General Counsel’s Office, we do not believe it necessary or appropriate to do so. The research and data collection that has been done and funded by the industry has proved to be highly effective in generating the needed dialogue to find a resolution with the USDA and GCO.

Mr. Perdue was appointed Secretary in April.

The Leadership Council continues to work on the Independent HIO and Objective Inspection process as we believe that is the only way to ensure the elimination of the subjective inspection process and eliminate soring in the industry once and for all.

CONTENDER II

Who are the clients: Mike and Lee McGartland, Contender Farms and SHOW, an affiliate owned by The Celebration.

How is this suit funded: This suit is being funded by legal fee recovery from Contender I/Contender I appeal. Fund balance is as follows:

Total fee recovery                             $268,148.04
Less invoices/Expenses paid through 06-08-2017 $149,986.61
Total Balance                                  $118,161.43

Who provides direction for the attorney’s in this case: Mike and Lee McGartland and SHOW/The Celebration represented by Mike Inman, CEO.

Summary of the case and its progress:

The year-end report on the status of Contender II stated that 2016 closed with a mixture of good news and bad news. The good news was that all the lists were down except the APHIS Enforcement Actions List on its FOIA Reading Room website, on which APHIS identified individuals as violators and posted Form 7060 official warnings and administrative complaints. Even though APHIS had removed more than a dozen lists, it had provided no explanation for taken down these lists and could change its mind. However, or attorneys had filed a complaint in early October that they felt nailed the plaintiffs’ position, by showing how the postings violated the Freedom and Information Act (FOIA) and Privacy Act. The bad news was that the lawsuit was bogged down because numerous motions had not been decided, and we predicted a long drawn-out battle.

Unexpectedly, in early 2017, the good news got better, and the bad news became moot. On February 3, 2017, APHIS posted a lengthy statement about its new position and at the same time it took down the last HPA list together with all Animal Welfare Act (AWA) lists and reports. APHIS reported that it, the Office of General Counsel, and attorneys with the Department of Justice had been reviewing APHIS’ publication of enforcement activities in light of recent litigation involving claims based on the FOIA and Privacy Act. Based on its analysis of the law, APHIS would not post Official Warnings or complaints, and these could only be released to the public pursuant to individual FOIA request, where the agency would weigh the requestor’s interest in disclosure against the individual privacy interests of those who might be identified in the records.

The Humane Society of the United States immediately complained to the USDA about the decision, and filed to intervene in Contender II as a defendant on behalf of the government. This new complication, along with the fact that we had achieved almost all the relief we sought, raised the question whether or not to proceed, or voluntarily dismiss the lawsuit. There was no assurance the Agency would not change its mind and repost the lists; a concern that increased when APHIS said it would put some information it had taken down back up over time after further evaluation of the records and law. In spite of the risk, we decided to nonsuit, and see if APHIS changed its position. We felt the further expenditure of funds could be a waste of precious resources that could better be used elsewhere.

Thus far the decision to dismiss Contender II has worked out in our favor. Though Contender II is over, the fight over the issues it raised continues. First, there were dozens of articles about APHIS’ removal of the lists, all unfavorable to APHIS. We avoided comment. But Contender II was singled out as the lawsuit that caused APHIS to reevaluate its position, and some animal advocacy groups blamed and named the Contender II plaintiffs.

The most vocal critics complained about the AWA records being taken down. Two lawsuits were immediately filled; one in the district court in the District of Columbia by PETA and others against APHIS, the second was filed by the Animal Legal Defense Fund against the USDA in U.S. District Court in San Francisco. Both lawsuits sought court orders compelling APHIS to put the lists and records for the HPA and AWA enforcement activities back on the FOIA Reading Room website.

Those two lawsuits have now reached the stage where the USDA has taken a position justifying its decision to take the enforcement lists down. In doing so, the DOJ attorneys have explained that in September 2016, APHIS began to reexamine its public dissemination of enforcement records, one reason being a lawsuit raising FOIA and Privacy Act concerns. APHIS decided that previously posted enforcement records, like Official Warnings and administrative complaints, should not be publically disclosed just because these categories of documents are frequently requested. Such documents, like official warnings and administrative complaints, will only be released under the guidelines of the FOIA and Privacy Act in response to a specific FOIA request.

This was our argument in Contender II, and since the government is now asserting it, we believe Contender II was a success. This has been reinforced by a May 31, 2017, decision in the district court in San Francisco. The Judge refused to order APHIS to put the records that it had taken down back on its website. APHIS, using an affidavit of Mr. Shea, contended that as to small entities and individuals, it must comply with the Privacy Act prohibition on publically disclosing official warns and complaints, which are unadjudicated and not final orders.

The Judge concluded:

In turn, the USDA, and regulated individuals and entities, have an interest in ensuring that the USDA is not posting documents that unnecessarily reveal private individual information. Plaintiffs assert that this interest is negligible as the USDA posted these documents for many years without incident. But, as the USDA has explained, they are currently engaged in Privacy Act litigation regarding the information contained in publically posted APHIS documents. The USDA has a clear interest in ensuring that they are not in violation of the Privacy Act, and regulated individuals have an interest in ensuring that their private information is not publically disclosed.

Animal Legal Defense Fund v. U.S.D.A., 2017 WL 2352009, *9, Case No. 17-cv-00949-WHO (N.D. Ca. 5/31/17).

We will keep up with the two federal cases, because an adverse decision is still possible, and we may need to reassess our options. But for now, Contender II is closed.

With a silver lining, there must be dark clouds. In 2017, APHIS filed more than 100 cases against about 200 participants in the 2016 Celebration. This shocking response to the industry’s opposition to recent APHIS actions and proposals has resulted in a broad challenge by respondents to APHIS’ complaints. Several challenges have been filed in pending cases and appeals. They include:

1. A challenge to the constitutionality of the appointments and authority of the USDA’s Administrative Law Judges (ALJs) and the Judicial Officer (JO). The Celebration and SHOW filed an amicus brief in a pending case in the Circuit Court for the District of Columbia, asserting that the USDA’s ALJs and JO are not constitutionally appointed as inferior or principal officers of the United States. This Court heard oral arguments on this issue in a SEC case on May 24, 2017. The whole court, sitting en banc, will decide the issue. The Tenth Circuit Court has already decided that the SEC’s ALJs are not constitutionally appointed. We contend this decision governs the issue raised about the USDA’s ALJs and JO.

2. When these numerous cases were filed, the Office of General Counsel included many distinct cases in one complaint, with as many individuals as 15 to 21 in one complaint. Further, APHIS listed and described any Official Warnings it had issued to a respondent in the complaint. This, however, violates the USDA’s policy that official warnings and complaints should be disseminated only in response to a specific FOIA request. When the Hearing Clerk sent the complaint to the numerous named respondents, APHIS disclosed to third parties the allegations against each individual respondent and the official warnings that might have been issued. This action by APHIS is being challenged.

3. Finally, some respondents have contended that a disqualification penalty under HPA §1825(c) cannot be issued unless the respondent has previously paid a fine or had a final order entered under §1825(b). This challenges APHIS’ practice of seeking a fine and disqualification in one proceeding against those who have not been previously in an enforcement action and had a fine assessed.

These challenges are in the preliminary stages of the proceedings before the ALJs, but also have been asserted in several appeals to the Judicial Officer.

FAST in review:

Zero dollars of your donations are used to offset any foundation administrative expenses; 100% of donations are used for their designated purpose. A few months ago, FAST hosted its first show of the year along with our Gala and auction. After expenses, we raised $105,000.00. The majority of the funds raised from the show and auction will be used for continued legal funding with a modest amount to offset the costs of administering the foundation’s efforts: this includes a required annual audit, bookkeeping and donation acknowledgements. No FAST board member is compensated for their efforts; instead each board member not only volunteers their time but has also contributed to the fundraising efforts of the foundation. The impact of the foundation on the industry has been nothing short of transformational, and it will continue to be our mission to serve the best interests of the show horse.

On behalf of the FAST board of directors, I wish to thank every donor who has made a contribution to the Foundation. However large or small the gift, the support of the industry is paramount to our success and collectively we can have a positive impact on the future of the industry.

Our very best wishes for a healthy and prosperous 2017. Working together for this common cause, it is my fervent hope that the future of the show horse will remain bright for future generations of walking horse enthusiasts to enjoy!

Dr. Kasey C. Kesselring
President, FAST

© FAST 2017. Do not duplicate without permission.