In the last week the Supreme Court of the United States has issued two rulings that could impact the USDA-APHIS’ ability to interpret the Horse Protection Act through rulemaking as well as how they adjudicate enforcement actions. In the first ruling, which came in the case of the Securities and Exchange Commission (SEC) vs. Jarkesy, the court ruled that the SEC could no longer use in-house proceedings through Administrative Law Judges (ALJ) and Judicial Officers. The court ruled that those accused by SEC of fraud have a right to a jury trial in federal court.

The Tennessee Walking Horse industry has long held that this system, which is used by the USDA to punish alleged violators of the Horse Protection Act violates the accused’s constitutional rights.  This decision by the Supreme Court should stop the current enforcement scheme of the USDA and ensure those accused of violating the HPA will be given a Constitutionally approved adjudication.  Attorney David Broiles, the attorney who defeated the USDA’s Minimum Penalty Protocol in district court, has fought this issue for years in the complaints he was defending for industry participants.  There is at least one such case currently in the industry where the lawyers representing the parties accused of violating the HPA are also raising this exact issue in front of the ALJ.

In the second case, commonly referred to as the “Chevon” case, the Supreme Court’s 6-3 ruling on Friday overturned a 1984 decision commonly known as Chevron that has instructed lower courts to defer to federal agencies when laws passed by Congress are not crystal clear.  As the Industry has identified for years the USDA commonly changes interpretations of the HPA and its Regulations and is currently using rulemaking to change Congress’ action and intent when passing the HPA.

The industry is preparing to challenge the new USDA rulemaking in federal court and this recent Supreme Court decision will potentially be key in determining the power of the USDA to use federal regulation to implement arbitrary and capricious policy changes.