Churchill Downs Filing an "Inquiry" into the Constitutionality of the Texas Racing Act

By: Amanda Stubblefield, Staff Member

On Sunday, October 28th, racing commences at Churchill Downs, and in approximately two weeks, one of the most lucrative events in horse racing, the Breeders' Cup, will take place. Unfortunately for Texans, it may be the last time they can use the Internet to bet on these out-of-state races.

In the horse racing industry, advance deposit wagering (ADW) is the "fastest growing segment" of parimutuel betting.[1] ADW is a mechanism for placing bets where people can place funds into an account and "place wagers via telephone, mobile device, or through the Internet."[2] With ADW comprising an increasingly large part of the industry, companies are aware of the importance of being able to offer their ADW services to as many potential customers as possible.  Therefore, after Texas decided to start enforcing its law which prohibits a person from accepting "in person, by telephone, or over the Internet, a wager for a horse race... conducted inside or outside" the state,[3] Churchill Downs was quick to file suit to protect its interests.

On September 21, 2012, Churchill Downs Incorporated (doing business as Twinspires.com) filed suit in the Western District of Texas against the Executive Director, Chuck Trout, and other members of the Texas Racing Commission.[4] Churchill Downs is seeking declaratory and injunctive relief and has framed their complaint around an interesting constitutional doctrine, the dormant Commerce Clause.

Congress has enormous power under the Constitution to "regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."[5] The United States Supreme Court has construed the commerce power broadly to prohibit state laws and regulations that burden interstate commerce, even in the absence of congressional action.  In order to be successful on their merits, Churchill Downs will have to prove either: (1) the Texas Racing Act's prohibition is discriminatory and thus invalid, unless it advances a legitimate local purpose that could not be adequately served by a reasonable nondiscriminatory alternative, or (2) that even though the discrimination is only incidental, the burden imposed on interstate commerce is clearly excessive in relation to the putative local benefits.[6]

Although Churchill Downs appears to have a strong argument, Texas appears to be the "odds on favorite" in this litigation.  Churchill Downs' argument will likely encounter three major problems: the federal government appears to have given the states wide latitude in regulating horse racing, the broad application of the Texas Racing Act which bands internet gambling on horse races instate as well as out-of-state, and the states' traditionally strong power in regulating moral and social issues.  If Texas prevails, Churchill Downs and other companies operating ADW systems will likely be significantly burdened by this prohibition.

Nevertheless, one thing you

can

bet across the board, all in the industry will be watching this litigation, and Churchill Downs, as well as their competitors, have a lot to lose in the Texas market.

__________________________

[1] Churchill Downs, Inc., Annual Report (Form 10-K), 6, (Mar. 13, 2008),

available at

 http://www.sec.gov/Archives/edgar/data/20212/000119312508055581/d10k.htm.

[2]

Id.

[3] Tex. Rev. Civ. Stat. Ann. art. 179c, 

§ 11.01(a) (West 2011).

[4] Churchill Downs (dba Twinspires.com) v. Trout, et. al., 1:12-cv-00880-LY (W.D. Tex. filed Sep. 21, 2012).

[5] U.S. Const. Art. 1, 

§ 8, cl. 3.

[6] Dep't of Revenue of Ky. v. Davis, 553 US 328, 339-40 (2008). 

EPA Approved E15 Gasoline Does More Harm Than Good

By: Tyler Brewer, Staff Member 

This past August, the D.C. Circuit for the United States Court of Appeals refused to adjudicate a suit implicating the E.P.A. in yet another exercise of power beyond what is legally granted.[1]  Specifically, a suit arguing the illegality of the E.P.A’s waiver to introduce a 15% ethanol blend (E15) in gasoline was dismissed for lack of standing.[2]

Generally, ethanol is an alcohol-based fuel derived from starch-and-sugar-based feedstocks (primarily corn grain and sugar cane).[3]  Today, more than 95% of U.S. gasoline contains ethanol, and more significantly, blending ethanol in gasoline is required by the federally enacted Renewable Fuel Standard (RFS).[4]  Currently, a blend of 10% ethanol and 90% unleaded gasoline (E10) is sold nationwide, and has been approved by all auto manufacturers for use in their gasoline engines.[5] However, introducing E15 into commerce has significant ramifications in various industries, particularly auto-manufacturing and petroleum.[6]

Studies have shown E15 fuel use in post-2001 engines causes “substantial damage” due to the increased ethanol blend corroding many of the engine and fuel system components.[7] The EPA’s “fix” to this problem is a small black and orange sticker (less than four-squared inches) designed to warn consumers.[8] Yet, in order for the EPA to issue the E15 waiver, the EPA “had to find that E15 would not cause any car models made after 1974 to fail to meet emissions standards.”[9]

In the petroleu

m industry, underground storage tanks at service stations are not certified to hold an ethanol blend higher than 10%.[10] In order to provide E15 to consumers, the new E15 waiver requires station owners to spend tens of thousands of dollars to replace each station with E15 suitable tanks.[11]

The D.C. Circuit failed consumers and businesses by not adjudicating this matter; especially after reading the very compelling dissent discussing how all plaintiffs possessed standing to raise their complaint.[12] Without adjudication over the EPA’s exercise in granting this “partial” waiver, everyone is at the EPA’s mercy.

[1] 

See generally,

Grocery Mfrs. Ass’n v. E.P.A

., No. 10-1380, 2012 WL 3538217 (D.C. Cir. Aug. 17, 2012).

[2] 

Id.

at *9.

[3] 

Ethanol Fuel Basics

,

Alternative Fuels Data Center

, http://www.afdc.energy.gov/fuels/ethanol_fuel_basics.html (last updated Oct. 9, 2012).

[4] 

Id.

[5] 

Ethanol

,

Fueleconomy.gov

, http://www.fueleconomy.gov/feg/ethanol.shtml (last updated Oct. 5, 2012).

[6] 

See generally Grocery Mfrs. Ass’n

, 2012 WL 3538217, at *4-9.

[7] 

John O’Dell,

Controversial E15 Fuel Blend Is on the Way

,

Edmonds.com

(May 29, 2012), http://www.edmunds.com/fuel-economy/controversial-e15-fuel-blend-is-on-the-way.html.

[8] 

Id.

[9] 

See Grocery Mfrs. Ass’n

, 2012 WL 3538217, at *9 (Kavanaugh, J., dissenting).

[10] 

Ryan Tracy,

Standoff at Pump over New Fuel: Ethanol Lobby vs. Station Owners

,

Wall St. J.

(Oct. 3, 2012),  http://online.wsj.com/article/SB10000872396390444549204578020403867106388.html?mod=googlenews_wsj.

[11] 

Id.

[12] 

See Grocery Mfrs. Ass’n

, 2012 WL 3538217, at *9-20 (Kavanaugh, J., dissenting).

Hydrofracking: Environmental Boom or Environmental Nightmare?

By: Ted Walter, Staff Member 

The recent emergence of hydrofracking has made natural gas a prime player in the energy field.  And various groups support hydrofracking for different reasons.  Environmentalists claim natural gas is better for the environment because it burns more efficiently than coal or oil.

[1]

  Politicians love it because hydrofracking is a source of new jobs.

[2]

  But, just like anything else, hydrofracking raises some cause for concern. 

One concern is with the water used for extracting the natural gas from the rock below.  This water can be classified in three different categories: fracking fluid, flowback water, and produced water.

[3]

  Fracking fluid is the water that goes down to start the well, flowback water is the water that comes back in the very beginning, and produced water is the water that comes back over the life of the well.

[4]

  Additionally, “[w]ith hydrofracking, a well can produce over a million gallons of wastewater that is often laced with highly corrosive salts, carcinogens like benzene and radioactive elements like radium, all of which can occur thousands of feet underground.”

[5]

  Furthermore, “[o]ther carcinogenic materials can be added to the wastewater by the chemicals used in the hydrofracking itself.”

[6]

  Essentially, the water that goes down to start the well in the beginning is contaminated, and the water that comes back up is more contaminated than in the beginning.

The issue becomes what to do with the water that comes back to the surface.  A

simple solution, and an option sometimes chosen, is to take the water to a wastewater treatment plant.  But this may not be the best solution because “design of wastewater treatment plants is usually based on the need to reduce organic and suspended solid loads to limit pollution of the environment.”

[7]

  Furthermore, “[t]reatment to remove wastewater constituents that may be toxic or harmful to crops, aquatic plants (macrophytes) and fish is technically possible but is not normally economically feasible.”

[8]

  As a result, “most of the facilities cannot remove enough of the radioactive material to meet federal drinking-water standards before discharging the waste water into rivers, sometimes just miles upstream from drinking-water intake plants.”

[9]

  As far as flowback water from hydrofracking in Kentucky, you shouldn’t worry. Apparently, “[t]he shales in Kentucky have much more clay, and that discourages hydrofracking in the state because water makes clay formations swell, inhibiting the release of natural gas.  Instead, Kentucky drillers frack with liquid nitrogen.”

[10]

So, what does this mean for Kentuckians?  One, just because water isn’t used for hydrofracking in Kentucky, doesn’t mean that contaminated water from hydrofracking that occurred elsewhere can’t end up here.  Two, liquid nitrogen may not present water quality issues, but that doesn’t mean liquid nitrogen won’t present other types of environmental issues later on.

[1]

Ian Urbina,

Regulation Lax as Gas Wells’ Tainted Water Hits Rivers

, THE NEW YORK TIMES, (Feb. 26, 2011) http://www.nytimes.com/2011/02/27/us/27gas.html?pagewanted=all.

[2]

Id

.

[3]

Bill Chameides, Natural Gas, Hydrofracking and Safety: The Three Faces of Fracking Water, THEGREENGROK, (Sept. 20, 2011) http://blogs.nicholas.duke.edu/thegreengrok/frackingwater/.

[4]

Id

.

[5]

Urbina,

supra

note 1.

[6]

Id

.

[7]

M.B. Pescod,

Wastewater treatment and use in agriculture – FAO irrigation and drainage paper 47

, (1992) http://www.fao.org/docrep/T0551E/t0551e05.htm.

[8]

Id

.

[9]

Urbina,

supra

note 1.

[10]

Kristin Tracz,

Hydraulic fracturing rare in Ky., but Appalachian Forum poses questions about regulations and pollution of gas drilling

, APPALACHIAN TRANSITION, (Feb. 24, 2012) http://www.appalachiantransition.net/content/hydraulic-fracturing-rare-ky-appalachian-forum-poses-questions-about-regulation-and-pollutio.

New High Tech Thermostat Promises Energy Cost Savings

By: Toney Robinette, Staff Member

Heating and cooling are very expensive energy expenditures for families.  The thermostat in your home controls around 50% of your energy cost.

[1]

  For colder climates, your heating and cooling costs can be as much as two-thirds of your energy bill.

[2]

  The United States is currently the second largest energy using country in the world,

[3]

and a large part of our energy expenditure comes from heating and cooling.  In addition to a high cost, energy expenditure also has a large environmental impact, and our houses are large contributors.  Home cooling with natural gas causes around 6,400 pounds of CO² emissions, while heating causes 4,200 pounds of CO² emissions,

[4]

and CO² is a major cause of global warming.

[5]

While methods of regulating home heat have been around for a while, they are often too expensive, like new insulation, or are simply unappealing.  However, new technology may be offering us a chance to comfortably and cheaply decrease our home energy spending by up to 25%.  The Nest Thermostat just entered its second iteration, and with it comes the promise of an affordable way to regulate your home energy usage without making a large cash outlay or suffering through the elements.  Nest essentially learns your habits through an algorithm that requires initial manual adjustments. Eventually, the thermostat begins to regulate itself automatically to adjust for when you leave, come home, go to sleep, and wake up.  Through a simple learning algorithm the thermostat can decrease your heating and cooling usage by 26%.

[6]

  While this may sound like the technophilia of Silicon Valley, the Nest may soon become a national phenomenon.  Apple agreed to allow the thermostat to be sold at their stores this month.  They should be starting to sell them immediately.

[7]

[1] 

Heat & Cool Efficiently,

U.S. Environmental Protection Agency,

http://www.energystar.gov/ index.cfm?c=heat_cool.pr_hvac.

[2] 

The Energy Costs of Cooling and Heating a Home,

NPR (Aug. 27, 2007),

http://www.npr.org/templates/story/story.php?storyId=13941744.

[3] 

Personal Energy Meter

,

National Geographic,

http://environment.nationalgeographic.com/environment/energy/great-energy-challenge/global-personal-energy-meter/.

[4] 

The Energy Costs of Cooling and Heating a Home

, 

supra

note 2.

[5] 

The Energy Costs of Cooling and Heating a Home

,

supra

note 2.

[6] 

Saving Energy,

Nest

, http://www.nest.com/saving-energy/.

[7] 

Sarah Kessler,

The Nest Thermostat Is Now for Sale at Apple Stores,

Mashable

(May 30, 2012), http://mashable.com/2012/05/30/nest-apple/.

Maximizing the Great Lakes: An International Effort & An Interstate Struggle

By: Jessica Durden, Staff Member

The Great Lakes represent one-fifth of the world’s fresh surface water supply and cover more than 94,000 square miles of water and 10,900 miles of coastline.

[1]

  A resource of that magnitude demands tremendous maintenance, and nations are once again working together to keep the Great Lakes fresh, clean, and useful.  At the same time, however, extreme drought conditions and population growth are putting strains on the supply.

Canada and the United States recently renewed the Great Lakes Water Quality Agreement, a joint effort designed to “reduce pollution, cleanse contaminated sites and prevent exotic species invasions.”

[2]

  The Obama administration has requested an additional $300 million for fiscal year 2013.

[3]

  Canada slashed many of its government science divisions, although Canadian officials pledged their commitment to carry the Agreement out to the full at the resigning.

[4]

Just as steps were taken to protect the Lakes, drought and local pollution are forcing communities to request tapping the Lakes.  According to NOAA, 39% of the contiguous U.S. suffered “severe to extreme” drought and 55% felt the effects of “moderate to extreme” drought as of the end of August 2012.

[5]

  In response, Waukesha, Wisconsin, a city just outside the Great Lakes Basin that is plagued by high radium levels, approved a letter of intent to buy water from Oak Creek, a Lake Michigan feeder.

[6]

  If Wisconsin state approves the letter, Waukesha’s plan will have to be submitted to the seven states and two Canadian provinces that signed the Great Lakes Compact in 2008.

[7]

The Great Lakes Compact was designed to protect the Lakes against poaching by the dry western U.S. states, as they are prone to drought but have experienced marked population growth in recent years.

[8]

Although it was signed in 2008, Waukesha’s petition would be the first to challenge the Compact.

[9]

  In light of the obvious pollution concerns the Lakes face, and in light of the extreme demand for clean water in growing communities, Waukesha is poised to set a powerful precedent with their petition.

[10]

  The members of the Compact, in conjunction with their related duties to maintain and treat the Lakes’ pollution problem with state and federal dollars under the Water Quality Agreement, will have to tread carefully in considering the petition.  Granting or denying the petition demands a team-oriented effort spanning state and international borders; given that the Lakes account for 95% of the U.S. water supply,

[11]

the Compact’s decision cannot be regarded lightly.

[1]

Great Lakes Facts and Figures

,

Great Lakes Information Network

, http://www.great-lakes.net/lakes/ref/lakefact.html (last visited Oct. 5, 2012).

[2]

Id.

[3]

Id.

[4]

Id.

[5]

State of the Climate: Drought, August 2012

,

National Oceanic & Atmospheric Administration (

Sept. 17, 2012), http://www.ncdc.noaa.gov/sotc/drought/.

[6]

Joe Barrett

,

Great Lakes Compact Faces First Test

,

Wall Street. Journal. (

Oct. 3, 2012), http://online.wsj.com/article/SB10000872396390443493304578034851099308848.html?KEYWORDS=great+lakes+compact+faces+first+struggl.

[7]

Id.

[8]

Id.

[9]

Id.

[10]

Id.

[11]

Great Lakes Inform

ation Network

,

supra

note 1.

The Obesity Epidemic and Its Impact on Agriculture

By: Vanessa Rogers, Staff Member

Childhood obesity is a major problem in the United States.

[1]

It has more than tripled in the past 30 years.

[2]

Today nearly one in three teens qualifies as obese.

[3]

To help combat this problem, Michelle Obama promoted the Healthy, Hunger-Free Kids Act which was signed into law in 2010.

[4]

Three months ago, the Act went into effect.

[5]

The guideline requires that milk be nonfat or low-fat; that one cup of fruit and one cup of vegetable be served per meal each day; that 2 ounces of protein and 2 ounces of grains be served per meal each day.

[6]

In addition, the Act sets forth a minimum/maximum number of calories that is tied to the age of students.

[7]

Districts who do not comply with the guidelines can not apply for federal reimbursements which cover a part of the cost of providing school lunch.

[8]

What does all this mean for the agriculture industry?

As a result of the obesity epidemic and the Healthy, Hunger-Free Kids Act, the agricultural industry will likely need to produce more fruits and vegetables.

The Act eliminated the long standing pizza, fries and brownie line, and pushed the fruits and veggies; thus the agricultural industry will have to account for such demand.

[9]

However, it is also possible that there will be no effect on the agricultural industry at all since there has been an increase in the number of students bringing their lunches (although no official numbers have been reported).[10

]

However, the idea that the agricultural industry will not be impacted will likely prove to be untrue because in many schools students cannot bring fast food for lunch; thus opting to bring lunch from home will not likely be much more advantageous than eating healthy school lunches conveniently already prepared at school.

Thus the agriculture industry should be prepared to plant more fruit and vegetable crops.

[1]

Center for Disease Control and Prevention,

Childhood Obesity Facts

,

CDC.gov

http://www.cdc.gov/healthyyouth/obesity/facts.htm

, (last visited Oct. 1, 2012).

[2]

Id

. 

[3]

Health on Today,

“We are Hungry”: Kids Lament New Lunch Guidelines in Video

,

Today.com

,

http://todayhealth.today.com/_news/2012/09/26/14114174-we-are-hungry-kids-lament-new-lunch-guidelines-in-video?lite#__utma=238145375.117890665.1348757227.1348757227.1348757227.1&__utmb=238145375.1.10.1348757227&__utmc=238145375&__utmx=-&__utmz=238145375.1348757227.1.1.utmcsr=(direct)%7Cutmccn=(direct)%7Cutmcmd=(none)&__utmv=238145375.%7C8=Earned%20By=todayshow%7Ctoday=1%5E12=Landing%20Content=Mixed=1%5E13=Landing%20Hostname=today.msnbc.msn.com=1%5E30=Visit%20Type%20to%20Content=Earned%20to%20Mixed=1&__utmk=101246530

(last visited Oct. 1, 2012).

[4]

Becky Schilling,

Legislating Health

,

FoodServiceDirector.com

,

http://www.foodservicedirector.com/trends/health-and-wellness/articles/legislating-health

(last visited Oct. 1, 2012); Jim McLaughlin, School Lunches:  Students Protest Less Portions, Rising Nutrition, The Christian Science Monitor,

http://www.csmonitor.com/The-Culture/Family/2012/0921/School-lunches-Students-protest-less-portions-rising-nutrition

(last visited Oct. 1, 2012).

[5]

WSAZ News Channel, School Lunches Still Seeing Challenges,

WSAZ.com

(Sept. 10, 2012) available at

http://www.wsaz.com/news/headlines/New-Federal-Mandate-Puts-School-Luhches-Under-Attack--166176356.html

.

[6]

Id

. 

[7]

Id

.

[8]

Bill Landauer,

Federal mandate: Eat your fruits and veggies — or pay more,

The Morning Call

, available at

http://articles.mcall.com/2012-09-18/news/mc-new-lunch-rules-fruits-vegetables-20120912_1_school-lunches-fruits-hunger-free-kids-act

. 

[9]

WSAZ News Channel, School Lunches Still Seeing Challenges,

WSAZ.com

(Sept. 10, 2012) available at

http://www.wsaz.com/news/headlines/New-Federal-Mandate-Puts-School-Luhches-Under-Attack--166176356.html

.

[10]

Id

. 

USDA and Congress Seek to Help Farmers Affected by Summer 2012 Drought

By: Clay Duncan, Staff Member

Almost 40% of the United States, as of August 2012, was affected by “severe to extreme drought,” according to the National Climatic Data Center.

[1]

  It should come as no surprise that those feeling the greatest sting from these conditions are the farmers who rely upon weather that is favorable to crop growth for their livelihood.  Realizing this, the United States Department of Agriculture and Congress are providing relief programs and seeking to pass laws that will extend some programs that have recently expired.

[2]

The Food, Conservation, and Energy Act of 2008 authorized substantial funding for agricultural disaster relief programs; however, these programs are now expired.

[3]

  In an attempt to bridge the gap after expiration of the 2008 Act, Congress is currently pushing legislation to extend these relief efforts.

[4]

  The Agriculture Reform, Food, and Jobs Act of 2012, passed by the Senate in June of 2012, seeks to extend previously enacted programs and thereby provide coverage to some farmers suffering from the recent drought.

[5]

  Similarly, the House of Representatives passed the Federal Agriculture Reform and Risk Management Act of 2012 the following month, which includes the same programs found in the Senate bill.

[6]

  Also, the United States Department of Agriculture currently provides Emergency Farm Loans of up to $500,000 to producers hard-hit by disasters for the purpose of restoring or replacing necessary equipment as well as covering costs incurred in the disaster year, among other things.

[7]

It remains to be seen whether Congress and the USDA will make the necessary relief accessible to the agricultural producers in order to mitigate the harsh consequences of the drought.  Otherwise, individual farmers could face crippling losses that will have far-reaching effects on the United States food supply.

[1]

National Drought Overview

,

National Climatic Data Center

(Sept. 25, 2012, 10:30 P.M),

http://www.ncdc.noaa.gov/sotc/drought/#national-overview

.

[2]

See

Dennis A. Shields,

Agricultural Disaster Assistance

,

Agricultural Legislation

(Aug. 27, 2012),

http://agriculture-legislation.blogspot.com/2012/08/agricultural-disaster-assistance_27.html?m=1

.

[3]

Id.

[4]

Id.

[5]

Id.

[6]

Id

.

[7]

Emergency Farm Loans

,

United States Department of Agriculture

,

http://www.fsa.usda.gov/FSA/webapp?area=home&subject=fmlp&topic=efl

.

Circuit Split Over Graphic Label Requirement for Tobacco Products

By: Joe Schuler, Staff Member

In a recent 2-1 decision, the U.S. Court of Appeals for the D.C. Circuit vacated regulations of the Food and Drug Administration that would require graphic warning labels on tobacco products.

[1]

The FDA implemented the warnings in compliance with the Family Smoking Prevention and Tobacco Control Act.

[2]

The warnings adopted by the FDA are viewable on the agency’s website.

[3]

The court concluded that the warnings violate the First Amendment.

[4]

The court reasoned that the graphic warnings went beyond the traditional textual warnings because they are not “purely factual, accurate, or uncontroversial information to consumers."

[5]

 Rather, the court said, the warnings are “unabashed attempts to evoke emotion (and perhaps embarrassment) and browbeat consumers into quitting."

[6]

The ruling creates a circuit split because a panel of the Sixth Circuit upheld the regulations in March, in another 2-1 decision.

[7]

That means the six circuit judges who have considered the issue are evenly split. Given this, it seems that the matter of the Supreme Court’s involvement is a question of when- not if - it will take up the issue. The justices certainly could choose to let other circuits weigh in before it settles the matter, but the fact that it involves regulations of a federal agency mandated by Congress may serve to expedite the Court’s review.

Tobacco growers will be watching the development of this issue closely. Naturally, growers will have a keen interest in anything that could impact the market. Given that the aim here is to motivate smokers to quit and discourage others from picking up the habit, success would obviously mean a reduced demand for tobacco.

So what is the likelihood of success? Studies suggest that the graphic warnings are more effective than plain text, at least when it comes to communicating the anti-smoking message.

[8]

The graphic nature of the label seems to increase a viewer’s recall of the message.

[9]

In other words, more people are likely to notice, and remember, the content of the warning when it is accompanied by the attention-grabbing images.

How that translates to the desired behavior behind the policy- to quit or never begin smoking - is less certain. Ironically, if the Supreme Court adopts the reasoning of the D.C. Circuit, it could prove to be the Achilles’ of the statute and regulations. According to the panel, in order to prevail, the government must show that its asserted interest is substantial and that the regulation directly advances its asserted interest.

[10]

The panel stated that the FDA did not provide a “shred of evidence” that the warnings would lead to a reduction in the number of American smokers.

[11]

Although many countries have adopted similar warnings, the court found that the FDA had offered no evidence to show that the warnings actually resulted in decreased smoking rates in those countries.

[12]

Thus, although the concern of tobacco growers and manufacturers is seemingly that the warnings will decrease demand for their products, they may ultimately prevail because the government cannot prove that very thing.

[1]

 R.J. Reynolds Tobacco Co. v. Food and Drug Admin., No. 11-5332 Consolidated with No. 12-50632012 U.S. App. LEXIS 12925 (D.C. Cir. Aug. 24, 2012). 

[2]

Id.

at *4.

[3]

Cigarette Health Warnings

, FDA, (Aug. 22, 2012)

http://www.fda.gov/TobaccoProducts/Labeling/Labeling/ CigaretteWarningLabels/default.htm

.

[4]

Reynolds,

2012 U.S. App. LEXIS 17925, at *45.

[5]

Id.

at *30.

[6]

Id.

[7]

Disc.Tobacco City & Lottery, Inc. v. United States,

674 F.3d 509, 537 (6th Cir. Ky. 2012).

[8]

See e.g.

Ryan Jaslow,

Study: Graphic Warning Labels More Effective at Delivering Anti-smoking Message

,

CBS

News

, (June 15, 2012) http://www.cbsnews.com/8301-504763_162-57454112-10391704/study-graphic-tobacco-warning-labels-more-effective-at-delivering-anti-smoking-message/.

[9]

Id.

[10]

Reynolds,

2012 U.S. App. LEXIS 17925, at *32.

[11]

Id.

at *36.

[12]

Id.

Update on Instant Racing

By: Matt Hassen, Staff Member

Last year, Taryn DeVeau blogged about a decision out of the Franklin Circuit Court that held instant racing to be a pari-mutuel form of wagering and thus within the authority of the Kentucky Horse Racing Commission.

[1]

Since that decision, instant racing has taken off at Kentucky Downs, the subject of the original suit. In eleven months, $130 million was bet on instant racing; average daily purses jumped from $179k to $409k; and handle increased from $4.3 million last September to $17 million in August.

[2]

The Kentucky Court of Appeals, however, vacated the Franklin Circuit Court’s decision.

Instant Racing consists of a video of a race that was run in the past. Bettors are allowed to wager on the outcome based on a provided data set, but the race does not occur at the moment a patron observes it; rather, they wager on the result of a race that already happened.

[3]

Several horse racing organizations originally filed a petition for a declaration of rights following instant racing regulations adopted by the Racing Commission.

[4]

Subsequently, the Family Foundation intervened, arguing that the regulations violated Kentucky’s gambling laws.

[5]

After Family Foundation intervened, the circuit court denied its request for discovery.

[6]

That denial of discovery proved fatal for the circuit court’s decision. According to the Kentucky Court of Appeals, “the parties had a right to develop proof and to present evidence to establish that the wagers made by patrons at electronic gaming machines do or do not meet the definition of pari-mutuel wagering on a horse race.”

[7]

Because of the lack of evidentiary support for its decision, the appellate court foun

d review of the circuit court’s decision “impossible” and ordered further proceedings in order to determine such factual issues as the precise manner in which wagers are pooled and how the odds are calculated for instant racing wagering.

[8]

[1]

Taryn DeVeau,

Instant Racing: A Possible Trifecta for

Kentucky,

Ky. J. Eq. Ag. & Nat’l Res. L. Blog

, (Oct. 21, 2011) http://www.kjeanrl.com/2011/10/instant-racing-possible-trifecta-for.html.

[2]

Janet Patton,

With instant racing, Kentucky Downs goes from sleepy track to very much alive

,

Lexington Herald-Leader

, (Sept. 2, 2012) http://www.kentucky.com/2012/09/02/2320364/with-instant-racing-kentucky-downs.html.

[3]

Family Trust Found, of Ky., Inc. v. Ky. Horse Racing Comm'n,

No. 2011–CA–000164–MR,

2012 WL 2160190, 3, (Ky. Ct. App. 2012).

[4]

Id.

at 4.

[5]

Id.

[6]

Id.

at 8.

[7]

Id.

at 9.

[8]

Id.

at 9-10.