PEREZ v. HORSERACING INTEGRITY AND SAFETY AUTHORITY (2025)

MEMORANDUM AND ORDER

Pending before the Court are two letter motions requesting a premotion conference for anticipated motions to dismiss the Complaint of Plaintiff Dr. Luis Jorge Perez (“Perez”). The requests are from two separate sets of Defendants: first, the Federal Trade Commission (“FTC”), and second, the Horseracing Integrity and Safety Authority, Inc. (“HISA”) and the Horseracing Integrity and Welfare Unit (“HIWU,” and with HISA, “Horseracing Defendants”). (FTC's Mot. for Premot. Conference dated June 6, 2025 (“FTC's Mot.”), Dkt. No. 19; Horseracing Defs.’ Mot. for Premot. Conference dated June 6, 2025 (“Horseracing Defs.’ Mot.”), Dkt. No. 17). For the reasons explained below, the Court concludes that a premotion conference and full briefing are unnecessary. The Court deems the requests for a premotion conference as having made the motion, and the Complaint is dismissed with leave to amend.

LEGAL STANDARDS

“The purpose of a motion to dismiss for failure to state a claim under Rule 12(b)(6) is to test the legal sufficiency of ․ claims for relief.” Amadei v. Nielsen, 348 F. Supp. 3d 145, 155 (E.D.N.Y. 2018) (citing Patane v. Clark, 508 F.3d 106, 112 (2d Cir. 2007)). In deciding such a motion, the Court must “construe the complaint liberally, accepting all factual allegations in the complaint as true, and drawing all reasonable inferences in the plaintiff's favor.” Palin v. N.Y. Times Co., 940 F.3d 804, 809 (2d Cir. 2019) (quotations and alteration omitted); Amadei, 348 F. Supp. 3d at 155 (“[W]hen reviewing a complaint on a motion to dismiss for failure to state a claim, the court must accept as true all allegations of fact in the complaint and draw all reasonable inferences in favor of [the non-moving party].”).

For the purpose of this motion, the Court is “required to treat” the Complaint's “factual allegations as true, drawing all reasonable inferences in favor of Plaintiffs to the extent that the inferences are plausibly supported by allegations of fact.” In re Hain Celestial Grp., Inc. Sec. Litig., 20 F.4th 131, 133 (2d Cir. 2021). The Court “therefore recite[s] the substance of the allegations as if they represented true facts, with the understanding that these are not findings of the court, as we have no way of knowing at this stage what are the true facts.” Id. In addition to the Complaint, the Court considers documents that are incorporated by reference, documents which are integral to the pleading, and documents of which the Court takes judicial notice, including those filed in another court proceeding. DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010) (“In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may consider the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint. Where a document is not incorporated by reference, the court may neverless consider it where the complaint relies heavily upon its terms and effect, thereby rendering the document integral to the complaint.” (quotations and citation omitted)); Glob. Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 157 (2d Cir. 2006) (“A court may take judicial notice of a document filed in another court not for the truth of the matters asserted in the other litigation, but rather to establish the fact of such litigation and related filings.” (quotations omitted)).

Once the facts are construed in the light most favorable to the non-moving party—here, Perez—to avoid dismissal, there must be sufficient facts that allege a plausible claim. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (“To survive a motion to dismiss [pursuant to Rule 12(b)(6)], a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” (quotations omitted)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. A complaint must contain more than “naked assertion[s] devoid of further factual enhancement.” Id. (quotations omitted). In other words, a plausible claim contains “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.; Fed. R. Civ. P. 8(a)(2). “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citation omitted). The determination of whether a party has alleged a plausible claim is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679, 129 S.Ct. 1937; see also Herrera v. Comme des Garcons, Ltd., 84 F.4th 110, 113 (2d Cir. 2023).

The FTC's letter also asserts the absence of subject matter jurisdiction. Where a party has made both a Rule 12(b)(1) motion and a Rule 12(b)(6) motion, and the court concludes that there is no subject matter jurisdiction, it is appropriate to avoid a decision on the Rule 12(b)(6) motion in the absence of subject matter jurisdiction. See J.J. Cranston Constr. Corp. v. City of New York, 602 F. Supp. 3d 373, 377 (E.D.N.Y. 2022) (“When a court is faced with a motion to dismiss pursuant to both Rules 12(b)(1) and 12(b)(6), the court must decide the jurisdictional question first because a disposition of a Rule 12(b)(6) motion is a decision on the merits and, therefore, an exercise of jurisdiction.” (quotations omitted)); 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1350 (4th ed. 2024).

“A case is properly dismissed for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Razi Sch. v. Cissna, 519 F. Supp. 3d 144, 148 (E.D.N.Y. 2021) (alteration omitted) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)). “In resolving a motion to dismiss under Rule 12(b)(1), the district court must take all uncontroverted facts in the complaint (or petition) as true, and draw all reasonable inferences in favor of the party asserting jurisdiction.” Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014). “A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists.” DeMaria v. N.Y. State Unified Court Sys., No. 23-CV-3627, 2024 WL 1076543, at *3 (S.D.N.Y. Mar. 12, 2024) (quoting Morrison v. Nat'l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008)).

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

The following facts are drawn from the Complaint and the final arbitration decision attached to and incorporated by reference in the Complaint. (Compl. dated Sept. 10, 2024 (“Compl.”), Dkt. No. 1 ¶ 1; Final Decision dated Oct. 9, 2023 (“Arbitration Decision”), attached as Ex. A to Compl., Dkt. No. 1-1).

Perez is a licensed veterinarian whose practice includes treating racehorses and non-racehorses. (Compl. ¶¶ 4, 8). HISA is a regulatory body authorized by the FTC to regulate the horseracing industry, and HIWU enforces HISA's regulations. (Id. ¶¶ 5–6). Perez is a “covered person” subject to HISA's Anti-Doping and Medication Control (“ADMC”) Program. (Arbitration Decision ¶ 2.29(1)).

At the Belmont Racetrack on June 9, 2023, a Nassau County fire marshal and investigators from the New York Racing Association and HIWU searched Perez's office trailer. (Compl. ¶ 9; Arbitration Decision ¶¶ 2.29(3)–(4)). During the search, the investigators uncovered Thryo-L, a metabolic hormone banned under the ADMC Program. (Compl. ¶¶ 9–10; Arbitration Decision ¶¶ 2.29(4)–(5)). Thereafter, HIWU charged Perez with Possession of a Banned Substance in violation of Rule 3214(a) of the ADMC Program. (Compl. ¶ 9; Arbitration Decision ¶ 2.29(9)).

An arbitration was held before the HISA ADMC Program Arbitration Panel on September 18, 2023. (Compl. ¶ 14; see Arbitration Decision). The Arbitrator determined that Perez had committed an anti-doping rule violation, suspended him for 14 months, and required him to pay a $5,000 fine. (Compl. ¶ 15; Arbitration Decision ¶ 8.1). Perez appealed the Arbitrator's decision to the FTC Office of Administrative Law Judges. (Compl. ¶ 17). On February 7, 2024, the Chief Administrative Law Judge affirmed the Arbitrator's decision. (Id.). Perez then again appealed, this time to the FTC Board of Commissioners, and the Board denied the request for review on August 12, 2024. (Id. ¶ 18).

Perez's Complaint contains two claims. First, he alleges due process violations of the Fourth and Fifth Amendments under 42 U.S.C. § 1983. (Id. ¶¶ 20–30). Second, he seeks attorney's fees and expenses pursuant to 42 U.S.C. § 1988. (Id. ¶¶ 31–32). This second claim does not allege a separate wrongdoing. In addition, though not labelled as a separate claim, in his prayer for relief, Perez seeks to have the Arbitrator's decision set aside as arbitrary and capricious, as well as an award of damages for lost wages and the return of the $5,000 paid fine. (Id. at 6).

The FTC, in its request for a premotion conference, contends that the Court lacks subject matter jurisdiction over Perez's claims, because they are barred by the doctrine of sovereign immunity, and alternatively, that Perez fails to state a claim under § 1983. (FTC's Mot. at 2–3). In a similar vein, the Horseracing Defendants contend that because the Court lacks subject matter jurisdiction over the FTC—a necessary party—the case cannot proceed. (Horseracing Defs.’ Mot. at 2–4). Alternatively, they also contend that Perez fails to state a claim under § 1983. (Id. at 4–5). For the reasons described below, Perez's claims against the FTC are dismissed for lack of subject matter jurisdiction and for failure to state a claim, and his claims against the Horseracing Defendants are dismissed for failure to state a claim.

DISCUSSION

I. Absence of Full Briefing and Decision Based on Premotion Letters

The Second Circuit has “occasionally approved the practice of construing pre–motion letters as the motions themselves under appropriate circumstances.” Kowalchuck v. Metro. Transp. Auth., 94 F.4th 210, 217 (2d Cir. 2024) (quotations omitted). This is such a circumstance. And, although less common than a district court denying a dispositive motion, the Second Circuit has also “occasionally affirmed the granting of dispositive motions without full briefing ․ only when the issues were predominantly legal and the complaint had ‘substantial deficiencies[.]’ ” Id. (quoting Grossman v. GEICO Cas. Co., No. 21-2789, 2022 WL 1656593, at *4 (2d Cir. May 25, 2022)). See, e.g., Kapitalforeningen Lægernes Inv. v. United Techs. Corp., 779 F. App'x 69 (2d Cir. 2019) (affirming district court's dismissal of an action by way of premotion letter construed as a motion to dismiss); In re Best Payphones, Inc., 450 F. App'x 8, 15 (2d Cir. 2011) (affirming district court's denial of a motion to dismiss by way of premotion letter construed as said motion). Here, the issues are purely legal in nature and straightforward, with substantial deficiencies in the Complaint, and as such, the FTC and the Horseracing Defendants’ premotion letters are deemed as having made the motions to dismiss. Therefore, the Court decides the motions based on the papers submitted without any additional briefing.

II. Lack of Subject Matter Jurisdiction

“Absent a waiver, sovereign immunity shields the Federal Government and its agencies from suit.” F.D.I.C. v. Meyer, 510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994). Sovereign immunity is a jurisdictional bar: “[i]t is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite for jurisdiction.” United States v. Mitchell, 463 U.S. 206, 212, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983).

The Administrative Procedure Act (“APA”) contains a waiver of sovereign immunity for certain actions against federal agencies:

A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party.

5 U.S.C. § 702. This provision “waives the federal government's sovereign immunity in actions [for non-monetary relief against an agency or officer thereof] brought under the general federal question jurisdictional statute.” Sharkey v. Quarantillo, 541 F.3d 75, 91 (2d Cir. 2008) (alteration in original) (quoting Lunney v. United States, 319 F.3d 550, 558 (2d Cir. 2003)). And this waiver applies regardless of whether a suit is actually brought under the APA or some other law. See Trudeau v. Fed. Trade Comm'n, 456 F.3d 178, 186 (D.C. Cir. 2006) (“There is nothing in the language of the second sentence of § 702 that restricts its waiver to suits brought under the APA.”); Pacnet Servs. Ltd. v. Off. of Foreign Assets Control of United States Dep't of the Treasury, 521 F. Supp. 3d 181, 200 (E.D.N.Y. 2021) (“Second Circuit precedent indicates that the waiver in § 702 applies to non-APA claims.”) (collecting cases), appeal dismissed and remanded, No. 21-1069, 2022 WL 2561204 (2d Cir. July 8, 2022).

However, the waiver does not apply where “the action also seeks monetary relief.” Polanco v. DEA, 158 F.3d 647, 652 (2d Cir. 1998); 5 U.S.C. § 702 (waiver applies to “[a]n action in a court of the United States seeking relief other than money damages”); Cnty. of Suffolk, N.Y. v. Sebelius, 605 F.3d 135, 140 (2d Cir. 2010) (“[I]n this context, the term ‘money damages’ refers to compensatory relief that functions as a substitute for lost property. Thus, sovereign immunity bars [plaintiffs] from seeking [monetary] compensation under § 702.” (alterations in original) (internal citations and quotations omitted)). Here, the FTC is a federal agency subject to the APA. Perez seeks monetary relief (lost wages, return of the paid fine, and attorney's fees and costs) as well as non-monetary relief (to have the Arbitrator's decision “set aside” as an “arbitrary and capricious application” of the ADMC Program). (Compl. at 6). There is no waiver of sovereign immunity by the FTC for Perez's claims for monetary relief, and any claims seeking such relief are dismissed without prejudice. See, e.g., Brennan v. DOJ, 768 F. App'x 95, 96 (2d Cir. 2019) (affirming dismissal of damages claims against the Department of Justice, the Securities and Exchange Commission, and the Federal Bureau of Investigation for sovereign immunity); Goncharuk v. IRS, No. 21-1868, 2022 WL 893689, at *1 (2d Cir. Mar. 28, 2022) (dismissing claims against the IRS as barred by sovereign immunity).

However, to the extent Perez seeks non-monetary relief against the FTC for its actions against Perez, the waiver of sovereign immunity applies, and the Court has subject matter jurisdiction to review any such claims. But as explained below, that claim is also dismissed.

III. Failure to State a Claim

“In order to state a claim under § 1983, a plaintiff must allege that he was injured by either a state actor or a private party acting under color of state law.” Ciambriello v. Cnty. of Nassau, 292 F.3d 307, 323 (2d Cir. 2002). Section 1983 “applies only to actions taken under the color of state law,” not those claims “purely federal in nature.” Yalkut v. Gemignani, 873 F.2d 31, 35 (2d Cir. 1989); see also Dotson v. Griesa, 398 F.3d 156, 162 (2d Cir. 2005) (“[The Second Circuit] has long construed the phrase ‘under color of state law’ as used in ․§ 1983[ ] to apply only to state actors, not federal officials.”); Joseph v. Ulster Cnty. Cmty. Action Comm. Inc., 475 F. Supp. 944, 947 (S.D.N.Y. 1979) (“[I]t has generally been held that actions taken under color of federal law are not cognizable under [§] 1983.”) (collecting cases).

As a federal agency, the FTC's actions are governed by and carried out pursuant to federal statute. The act Perez challenges is the FTC's denial of review of an administrative law judge's affirmation of the Arbitrator's sanctions—i.e., an act itself governed by and taken pursuant to a federal statute.¹ (Compl. ¶¶ 17–18). As such, any claims brought against the FTC are “purely federal” and not cognizable under § 1983. See, e.g., Azzarmi v. Donnelly, No. 21-CV-0012, 2021 WL 405491, at *1 n.1 (E.D.N.Y. Jan. 20, 2021) (“To the extent Plaintiff seeks to bring a 42 U.S.C. § 1983 claim, it is dismissed for failure to state a claim on which relief may be granted because Defendants are federal, not state, actors.”).

The Horseracing Defendants argue that Perez's claims fail because he alleges that they acted pursuant to federal law. (Horseracing Defs.’ Mot. at 4).² Indeed, Perez only alleges wrongdoing by the Horseracing Defendants under HISA's ADMC Program. (Compl. ¶¶ 20–30). And the HISA, he alleges, is “a regulatory body empowered by” a federal agency—the FTC—“to regulate the horseracing industry.” (Id. ¶ 5).³ In other words, his alleged due process violations were the result of actions taken by defendants who exercised authority reviewable by a federal agency (the FTC), and who conducted an arbitration proceeding and rendered a decision that was ultimately affirmed by that agency. There is no action under color of state law to be found anywhere in such circumstances. In response, Perez does not grapple with this argument (or frankly, any argument raised by any defendant) about his failure to state a cognizable § 1983 claim. (See Pl.’s Resp. in Opp'n dated June 23, 2025 (“Pl.’s Opp'n”), Dkt. No. 20).

Because Perez has failed to allege a constitutional violation by a defendant acting under color of state—as opposed to federal—law, his § 1983 claims against the FTC and the Horseracing Defendants must be dismissed. See, e.g., Dotson, 398 F.3d at 162 (“In this case, it is undisputed that all complained-of actions by the named defendants were conducted pursuant to their authority under federal, not state, law. Thus, because Dotson cannot satisfy the ‘under color of state law’ requirement ․, we affirm the district court's dismissal of this part of his complaint.”); Herbst v. U.S. Postal Serv., 953 F. Supp. 2d 463, 466 (E.D.N.Y. 2013) (dismissing § 1983 claims where the “alleged discriminatory conduct constitute[d] action under color of federal law because the USPS is a federal agency and defendants ․ all acted pursuant to their duty as federal officers of the USPS,” and “[m]oreover, none of the allegedly discriminatory conduct involved actions taken under color of state law”).⁴

CONCLUSION

For the reasons explained above, Perez's claims against the FTC for monetary relief are dismissed without prejudice because of sovereign immunity. His § 1983 claim against the FTC for non-monetary relief is dismissed with prejudice for failure to state a claim; and his claim against the Horseracing Defendants is likewise dismissed with prejudice for failure to state a claim.

In his response to Defendants’ premotion requests, Perez did not seek leave to amend his Complaint. (See Pl.’s Opp'n). In any event, leave to amend may be denied if amendment would be futile. Grullon v. City of New Haven, 720 F.3d 133, 140 (2d Cir. 2013). Any amendment for the claims for monetary relief brought against the FTC—a defendant dismissed for lack of subject matter jurisdiction based on sovereign immunity—would be futile. See, e.g., Jacubovich v. State of Israel, 816 F. App'x 505, 510 (2d Cir. 2020) (affirming denial of leave to amend against defendant with sovereign immunity on futility grounds, where appellant provided no facts suggesting a waiver of immunity). Because the § 1983 claim is based on the FTC and the Horseracing Defendants’ actions taken pursuant to federal law, any amendment to it could not, as a matter of law, survive futility, since § 1983 requires actions taken under color of state law. And this is why the dismissal of this claim is with prejudice.

Perez is granted leave to amend to file a claim to set aside the final decision of the FTC as arbitrary and capricious, if he can allege a claim under some other federal statute. The Court notes, however, that it is very unlikely that such a claim, if it even exists, can be brought in federal district court.⁵ Perez may file an amended complaint by September 25, 2025. Should he fail to do, the Clerk of Court will be directed to close this case.

SO ORDERED.

FOOTNOTES

1.   See 15 U.S.C. §§ 3058(c)(2)(A)–(B) (“[A] person aggrieved by a[n] [administrative law judge's] decision ․ may petition the Commission for review of such decision ․ If an application for review ․ is denied, the decision of the administrative law judge shall constitute the decision of the Commission without further proceedings.”).

2.   The Horseracing Defendants also separately contend they are not state actors for the purposes of § 1983, which, if true, would be another independent basis for dismissal under Rule 12(b)(6). See Brook v. Ruotolo, No. 23-1339, 2024 WL 3912831, at *2 (2d Cir. Aug. 23, 2024). But the Court need not reach this issue.

3.   The Horseracing Integrity and Safety Act, 15 U.S.C. §§ 3051–60, provides for the creation of HISA and subjects HISA to FTC oversight. See 15 U.S.C. § 3052(a) (“The private, independent, self-regulatory, nonprofit corporation, to be known as the ‘Horseracing Integrity and Safety Authority’, is recognized for purposes of developing and implementing a horseracing anti-doping and medication control program[.]”), § 3053 (subjecting HISA rulemaking to FTC oversight), § 3058 (outlining process of appeals of decisions by HISA, ultimately culminating in review—or denial thereof—by the FTC). The Act also provides for HISA to enter into an agreement with the HIWU. Id. § 3054(e)(1)(B); see also Horseracing Integrity and Safety Authority Anti-Doping and Medication Control Rule Modification, 88 Fed. Reg. 65683 (Sept. 25, 2023) (“[HISA] has consulted with [HIWU], the anti-doping and medication control enforcement agency with which [HISA] has contracted to enforce the [Equine Anti-Doping and Controlled Medication] Protocol pursuant to 15 U.S.C. [§] 3054(e)(1)(B).”).

4.   Perez's § 1988 claim for attorney's fees is also dismissed, because that claim rises and falls with the underlying § 1983 claim.

5.   Ordinarily, district courts have jurisdiction to hear challenges to federal agency action under 28 U.S.C. § 1331 and the APA, which provides a vehicle to “[a] person suffering legal wrong because of agency action,” including on the grounds that the decision was arbitrary and capricious. 5 U.S.C. § 702; see supra at ––––. But the FTC Act “provides that the party subject to an FTC order may ‘obtain a review of such order’ in a court of appeals,” rather than in a district court. Axon Enter., Inc. v. Fed. Trade Comm'n, 598 U.S. 175, 181, 143 S.Ct. 890, 215 L.Ed.2d 151 (2023) (quoting 15 U.S.C. § 45(c)). And that channeling provision means Perez's challenge, even framed as a due process claim, is only cognizable in the Second Circuit, not in this District Court. See id. at 185, 143 S.Ct. 890 (“Congress ․ may substitute for that district court authority an alternative scheme of review ․ [like in] the FTC Act: review in a court of appeals following the agency's own review process ․ [S]uch a review scheme for agency action divests district courts of their ordinary jurisdiction over the covered cases.”); Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 207–12, 114 S.Ct. 771, 127 L.Ed.2d 29 (1994); Elgin v. Dep't of Treasury, 567 U.S. 1, 9, 132 S.Ct. 2126, 183 L.Ed.2d 1 (2012); e.g., Chau v. Sec. & Exch. Comm'n, 665 F. App'x 67, 73 (2d Cir. 2016) (“[T]he existence of meaningful judicial review under the statutory scheme is sufficient on its own to suggest that the district court here appropriately found that it did not have subject matter jurisdiction[.]”); 1-800 Contacts, Inc. v. Fed. Trade Comm'n, 1 F.4th 102, 112 (2d Cir. 2021) (reviewing appeal of final decision of the FTC after locating jurisdiction in 15 U.S.C. § 45(c)).

BULSARA, United States District Judge: