The latest twist in the legal odyssey involving Phil Serpe and the agencies that regulate racing at the federal level was made public late on Tuesday, when the Federal Trade Commission (FTC) issued an order staying the issuance of a $25,000 fine that had been imposed against the veteran Thoroughbred trainer barely one day earlier by an administrative law judge (ALJ).That ALJ, Jay Himes, had been assigned by the FTC itself to adjudicate Serpe's FTC-level appeal of banned-substance charges. In addition to re-imposing the fine that the Horseracing Integrity and Safety Authority (HISA) and the Horseracing Integrity and Welfare Unit (HIWU) had withdrawn earlier this year, the 130-page decision by Himes also criticized various aspects of the agencies' handling of the case.For nearly half a year, Serpe, a currently suspended, 66-year-old, East Coast-based conditioner, has claimed that the non-pursuit of a fine by HISA and HIWU is an alleged end-around by those agencies to stymie his efforts to prove in a federal lawsuit that he has been wrongfully denied a constitutional right to a jury trial.Bradford Beilly, an attorney from Serpe's legal team, told TDN on Wednesday that the FTC's order staying the just-imposed fine was abrupt, unexpected and possibly unprecedented with regard to how the FTC has handled previous ALJ decisions involving banned-substance appeals.“The FTC's so-called 'stay' of the $25,000 fine doesn't change anything,” Beilly told TDN. “The ALJ never said Serpe had to pay it right away in the first place. Under HISA, fines are normally due at the end of a suspension–not up front. I'm not aware of a single case where someone had to pay a fine immediately after getting a two-year suspension.“The FTC's order looks like more of the same tactics we've seen from HISA–an attempt to sidestep Serpe's Seventh Amendment challenge and block the court from addressing the real harm he's facing,” Beilly said.Johnny ElHachem, a lawyer representing HISA, wanted the judge handling Serpe's lawsuit to know right away about this latest development by the FTC.ElHachem wrote in a Wednesday federal court filing that, “Within one business day of the ALJ's decision, the Commission exercised its authority [to] review that decision, issue a briefing schedule, and stay the fine pending its review. That order and the ALJ's decision both underscore why this Court should deny Plaintiff's request for the 'extraordinary and drastic remedy' of a preliminary injunction while administrative proceedings are ongoing…”ElHachem continued: “…the [FTC's] order staying the imposition of the fine effectively puts the parties back into the same position they were in before the ALJ's decision: [HISA] is not seeking (and has not sought) a fine, and Plaintiff does not owe one. So Plaintiff does not face any imminent, irreparable harm connected to his Seventh Amendment claim.”Because the FTC's two-page Sept. 15 order did not state any reasons or findings about why the stay was necessary or appropriate, TDN on Wednesday reached out to April Tabor-the secretary of the FTC, who signed that document-to explain the reasoning behind the order and to put the FTC's decision in context.But that attempt to get the FTC's side of the story did not yield any reply from Tabor prior to deadline for this article.Last year, when Serpe was first charged by HIWU with a clenbuterol positive in one of his trainees at Saratoga Race Course–a violation that carried a possible two-year ban and $25,000 fine as punishment–the case seemed to hinge on whether or not Serpe would be able to disprove or mitigate the banned-substance findings.That seemed like a tall task, because since the effective date of HIWU's rules in mid-2023, 12 of the agency's 15 adjudications for clenbuterol had resulted in fines of at least $15,000 and varying suspensions. In just two instances, the anti-doping violations were withdrawn, and in one other case the split sample did not confirm the presence of the drug, so the charge was dropped.But even as Serpe followed the proper administrative procedures to contest his case via the rules mandated by the FTC, HISA and HIWU, he concurrently filed a federal lawsuit against HISA and the FTC, bringing up a legal point no other trainers facing similar banned-substance penalties had ventured to try: His Oct. 17, 2024, civil complaint cited a United States Supreme Court case that ruled that a federal regulatory agency's enforcement for civil monetary penalties must be brought in a federal court, subject to the Seventh Amendment's jury trial right.Phil Serpe in 2021 | Sarah AndrewPut more simply, if HIWU and HISA were going to threaten a fine against Serpe, the trainer asserted that because of that Supreme Court precedent, he was entitled to have his entire case heard in a federal court before a jury, where broader rules of discovery would be in play.Both the HIWU/HISA proceedings and the lawsuit lingered for eight months until this past spring, when HIWU, at the behest of HISA, withdrew the threat of the $25,000 fine just as Serpe's case was about to go to HIWU arbitration.At that time, attorneys for the FTC and HISA wrote in an Apr. 24 federal court filing that the move to make the monetary fine go away “moots Plaintiff's Seventh Amendment claim and removes any risk of cognizable harm with respect to it.”Subsequently, a HIWU arbitrator issued a decision that meted out the exact penalties sought by HIWU and HISA–a two-year suspension, plus a race disqualification and forfeiture of purse winnings.Over the summer, Serpe's legal team responded with its own series of filings, alleging in a July 15 court document that the agencies' decision to take the fine off the table was “gamesmanship” intended to stymie Serpe's efforts to prove that he has been wrongfully denied a constitutional right to a jury trial.HISA, in an Aug. 15 legal filing, denied those allegations, writing that Serpe “has completely turned this case on its head.”After the decision by the HIWU arbitrator, Serpe next appealed to the FTC. The agency assigned Himes as the ALJ, and his decision (dated Sept. 12 but not publicly released until Monday, Sept. 15) contained scathing criticisms of HISA and HIWU in addition to “modifying” the penalty to add back in a $25,000 penalty.Himes wrote in his decision that HISA's reasoning behind withdrawing the threat of a fine against Serpe “misses the forest for the trees” and put Serpe in a “catch-22” by setting up a situation whereby “Serpe cannot have his Seventh Amendment claim heard either on this review or in his Federal Action.”Hines continued in his Sept. 12 decision: “That cannot be right…..Suffice it to say at this point that, in my view, the Authority and HIWU have sought to deprive Serpe of the opportunity to have his Seventh Amendment claim heard and resolved….As Serpe rhetorically asks in the Federal Action: 'Will Defendants run this set of plays every time a Covered Person is prosecuted under HISA and seeks to vindicate his Seventh Amendment right?….In executing the Authority's directive, HIWU became complicit in the Authority's wrongful conduct.”The FTC's response, dated Sept. 15, was swift: Serpe's fine (but not suspension) was stayed, and the FTC ordered a “further review” that the FTC itself will undertake.The FTC also set a briefing schedule, ordering Serpe's legal team to file the first brief by Oct. 16–but without stating specifically what aspects of the case are going to be reviewed.Meanwhile, in the separate federal court case, Serpe's renewed motion for a preliminary injunction is still awaiting the judge's decision.On Monday–after the ALJ's decision re-imposing the fine, but before the FTC stayed it–Serpe's attorney, Beilly, implored the court to rule in the trainer's favor on the injunction.“No longer 'imminent,' the FTC has now in fact violated Serpe's Seventh Amendment Right,” Beilly wrote. “Regardless of what transpired during the Arbitration hearing, the ALJ has independently (i) found Serpe liable for [the] violation, (ii) confirmed the continuance of the two-year suspension, and (iii) imposed a $25,000 fine–all without a jury trial…“The FTC's violation has caused Serpe irreparable harm through the various injuries arising out of his two-year suspension, which itself was imposed based upon the administrative proceeding rather than a prior jury trial,” Beilly wrote.The post Day After FTC Judge Issues Criticisms Of HISA And HIWU In Serpe Case, FTC Orders Halt To Re-Imposed Fine appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.