Jose Corrales, In the Matter of — Order on Application for Review and Application for Stay

PUBLIC
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
OFFICE OF ADMINISTRATIVE LAW JUDGES
__________________________________________
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In the Matter of 	)
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Jose Corrales, 	) 	Docket No. 9455
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Appellant. 	)
__________________________________________)
ORDER ON APPLICATION FOR REVIEW
AND APPLICATION FOR STAY
On October 7, 2026, Jose Corrales (“Appellant”) concurrently filed a Notice of Appeal
and Application for Review (“Application for Review”) and Application for Stay before the
Federal Trade Commission (“FTC”). Appellant seeks review of the imposition of final civil
sanctions by the Horseracing Integrity and Safety Authority (“Authority”) based on a September
30, 2026 final decision (“Decision”) by an arbitrator (“Arbitrator”). The Arbitrator concluded
that Appellant violated the Horseracing Integrity and Safety Act’s (“HISA”) Anti-Doping and
Medication Control (“ADMC”) Program Rule 3212 based on the presence of Nikethamide, a
banned substance, and its metabolite N-Ethylnicotinamide in a post-race urine sample from the
horse Curlene’s Spirit, for whom Appellant was the trainer. The Arbitrator further found that
Appellant failed to demonstrate his lack of fault or significant fault for the presence violation and
awarded sanctions. Accordingly, by a Notice of Final Civil Sanctions Under the ADMC Program
dated October 2, 2026, the Authority imposed the following sanctions against Appellant: (1) a
two-year ineligibility period commencing on October 3, 2026; (2) a 60-day ineligibility period
for Curlene’s Spirit (already served); (3) disqualification of Curlene’s Spirit’s race results,
forfeiture of all purses and other compensation or recognition, and repayment or surrender to the
race organizer; (4) a fine of $10,000; and (5) public disclosure of the violation (“Sanctions”).
Appellant challenges the Sanctions primarily on the basis that the Authority failed to
meet its burden to establish that he committed a violation. Alternatively, Appellant seeks reversal
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or mitigation of the Sanctions under ADMC Rule 3224 on the basis that he bore no fault or
negligence (“NF”) and/or on the basis that he bore no significant fault or negligence (“NSF”)
under ADMC Rule 3225 for the presence of Nikethamide and its metabolite
N‑Ethylnicotinamide in Curlene’s Spirit’s post-race urine sample. To that end, Appellant
requests an evidentiary hearing as further explained below.
Appellant also raises constitutional arguments under the Seventh Amendment for a right
to a jury trial, under the Eighth Amendment for unlawfully excessive punishment, and under the
Fourteenth Amendment for the right to due process. Further, Appellant asserts that this case
should be dismissed or stayed until the Supreme Court of the United States decides HISA’s
constitutionality in light of Nat’l Horsemen’s Benevolent & Protective Ass’n v. Black, 178 F.4th
224 (5th Cir. 2026).
Appellant requests a stay of the Sanctions pending this review.
On October 14, 2026, the Authority filed its Response to Appellant’s Application for
Review, opposing Appellant’s request for an evidentiary hearing. On the merits, the Authority
argues that the Arbitrator applied the correct legal standards, that the Horseracing Integrity and
Welfare Unit (“HIWU”) met its burden to establish Appellant’s violation of ADMC Rule 3212,
and that Appellant could not meet his burden to demonstrate NF or NSF. Accordingly, the
Authority requests that the Sanctions be upheld.
With respect to Appellant’s constitutional arguments, the Authority asserts that this is not
the proper forum for such a challenge.
The Authority concurrently filed its response to Appellant’s Application for Stay
(“Response”), opposing Appellant’s request for a stay of the Sanctions pending review.
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I. 	Application for Review
Appellant’s Request for Evidentiary Hearing
A person aggrieved by a final civil sanction imposed by the Authority may seek de novo
review of the sanction by an Administrative Law Judge. 15 U.S.C. § 3058(b)(1). Pursuant to the
FTC’s Procedures for Review of Final Civil Sanctions Imposed under HISA:
In reviewing the final civil sanction and decision of the Authority, the
Administrative Law Judge may rely in full or in part on the factual record
developed before the Authority through the disciplinary process under 15 U.S.C.
3057(c) and disciplinary hearings under Authority Rule Series 8300. The record
may be supplemented by an evidentiary hearing conducted by the Administrative
Law Judge to ensure each party receives a fair and impartial hearing. Within 20
days of the filing of an application for review, based on the application submitted
by the aggrieved party . . . and on any response by the Authority, the
Administrative Law Judge will assess whether:
(i) 	The parties do not request to supplement or contest the facts found by the
Authority;
(ii) 	The parties do not seek to contest any facts found by the Authority, but at
least one party requests to supplement the factual record;
(iii) 	At least one party seeks to contest any facts found by the Authority; . . . or
(v) 	In the Administrative Law Judge’s view, the factual record is insufficient
to adjudicate the merits of the review proceeding.
16 C.F.R. § 1.146(c)(2).
In this case, Appellant requests to supplement the factual record or contest facts found by
the Authority. In his Application for Review, Appellant explains that he “intends to present
evidence . . . that the cause of the positive test results came from the use of Vitamin B 3
supplement or plants of the Cordalis family. [Appellant] used a feed supplement known as Red
Cell which among other things contained Niacin (Vitamin B3).” Appellant continues, “the
alleged prohibited substances w[ere] found in race horses that had been provided a Vitamin B
Supplement such as the one used by the Appellant.” Application for Review at 2. Appellant
references a 2025 University of Kentucky publication which he asserts contains an article that
“opines that N’Ethylnicotinamide has been identified as a trace impurity in Vitamin B3
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nicotinamide supplements administered to horses. Nikethamide has also been identified in
certain Corydalis plants, another potential source . . . .” Application for Review at 2-3 (internal
quotation marks omitted). Appellant indicates that he also “intends to present evidence . . . that
the cause of the purported positive more than likely comes from contamination. [Appellant]’s
barn at Laurel Park has open access . . . to anyone on the grounds . . . .” Application for Review
at 3. Further, Appellant requests to provide expert testimony on “the studies regarding vitamin
B” and “with respect to the reliability of the sample result(s) relied upon by the authority,
additional chain of custody issues not addressed at the arbitration hearing and whether the
alleged prohibited substance had any performance enhancing effects.” Application for Review at
4.
Notably absent from Appellant’s request for hearing, however, is any explanation for
why Appellant failed to raise these solidified arguments or offer what he suggests would be
exculpatory or mitigating evidence before the Arbitrator. “Except for good cause shown, no
assignment of error by the aggrieved party may rely on any question of fact or law not presented
to the Authority.” 16 C.F.R. § 1.146(a)(1). Appellant was free to develop these theories
regarding Vitamin B in the arbitration. Appellant has not argued that the 2025 University of
Kentucky publication was unknown or unavailable to him prior to those proceedings. In fact,
Appellant’s testimony indicates that he was aware of these resources.1 However, without
explanation, he failed to offer the University of Kentucky publication or specific article before
the Arbitrator. Regarding what Appellant characterizes as contamination, the record already
1 See Appeal Book (“AB”) at 754-55.
[00:14:46] [Counsel]: We provided a list of substances or supplements and feed, which has been admitted
as Exhibit One. I think you and your wife prepared that, is that correct?
[00:14:58] [Appellant]: Yes, my wife do all the feeding and everything like that, and prepare all the feed for
the horses.
[00:15:06] [Counsel]: The feed, as far as you know, had those substances in there?
[00:15:12] [Appellant]: No, the only thing I know that it’s like, they talk about just the vitamin B and
everything like that, but we use oats and sweet feed, and we use anything you have to do normal feeding to
the horses. I really don’t know anything about anything else that we do.
[00:15:33] [Counsel]: I mean, one of the things you put in there was Red Cell, which had vitamin B3.
[00:15:36] [Appellant]: Yes, Red Cell, we use it, but I never even pay attention to the B3, you know what I
mean? That’s just something that we just give it to the horsey just to help them out with everything like
that, but it’s just part of electrolytes or anything like that we do.
[00:15:52] [Counsel]: You read there’s some school of thought that that could give a false positive report
for nikethamide or its metabolite.
[00:15:59] [Appellant]: That’s when I find out. Now, I’m trying to figure it out, why can this happen? I’m
trying to figure it out, all that. That’s why I know a little bit more about it.
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contains evidence that his barn was openly accessible.2 Accordingly, Appellant seeks on review
only to contest the weight the Arbitrator gave certain evidence.
Further, the record fails to indicate that Appellant made any effort below to offer the
expert testimony he now requests to provide. Regarding the “additional chain of custody issues
not addressed at the arbitration hearing,” beyond the issue raised regarding the sample shipping
label, Appellant has neither explained what those specific chain of custody issues are nor why he
was not free to raise them in the arbitration proceedings. See 16 C.F.R. § 1.146(a)(1) (“Each
issue must be plainly and concisely stated. . . . [T]he applicant must provide support for each
issue raised, citing to the Authority’s record when assignments of error are based on the record,
and citing to the principal legal authorities the applicant relies upon, whether statutes,
regulations, cases, or other authorities.”). And under HISA’s strict liability framework, whether
the alleged prohibited substance had any performance enhancing effects is of no consequence.
See ADMC Rule 3212(a) (“The Responsible Person is therefore strictly liable for any Banned
Substance or its Metabolites or Markers found to be present in a Sample collected from his or her
Covered Horse(s).”).
When requested by a person aggrieved by a final civil sanction, an evidentiary hearing on
review is to ensure that the person receives a fair and impartial opportunity to be heard. See 16
C.F.R. §§ 1.146(c)(2); (c)(5)(i). When that opportunity was made available at the arbitration
proceedings and the person failed to fully avail themselves of it, absent any good cause shown,
see id. § 1.146(a)(1), a hearing on review may improperly allow that party a second bite at the
proverbial apple. In this case, Appellant has not argued (nor would any such argument be
supported by the record) that he was not afforded a fair and impartial hearing or opportunity to
be heard in the arbitration proceedings. In fact, the Arbitrator explicitly provided such an
opportunity to the parties3 and Appellant offered additional statements in response.
2 See AB at 755, 760.
3 See AB at 767 (“[Arbitrator]: Parties, is there anything else that you’d like to say today? I want to make sure that
all the parties feel that they’ve been heard.”); AB at 768-69 (“[Arbitrator]: Parties, do you feel that I’ve given you a
fair and impartial hearing today? . . . . [Counsel]: Thank you, [Arbitrator]. I believe you’ve been fair and impartial. I
believe my clients think so as well. I think what bothers my clients is the process and the strict liability.”).
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For these reasons, Appellant’s request for an evidentiary hearing is DENIED.
Accordingly, the factual record will be deemed closed and proceedings will be limited to briefing
by the parties. Id. § 1.146(c)(3).
Briefing by the Parties
The parties are directed to concurrently file with the FTC’s Office of the Secretary, by
November 6, 2026, proposed findings of fact, conclusions of law, a proposed order, and a
supporting legal brief providing the party’s reasoning. Such filings are limited to 7,500 words,
must be served on the other party, and must contain references to the record and authorities on
which they rely. Reply findings of fact, conclusions of law and briefs, limited to 2,500 words,
may be filed by each party within ten days [November 18, 2026] of service of the initial filings.
Id.
With respect to Appellant’s constitutional arguments, in their supporting legal briefs, the
parties are directed to address the following:
• 	whether this is the proper forum to address Appellant’s constitutional arguments
(see Axon Enter. v. FTC, 598 U.S. 175 (2023));
• 	whether Appellant’s argument under the Seventh Amendment for a right to a jury
trial is foreclosed by the FTC’s decision In the Matter of Philip Serpe, No. 9441,
2026 WL 1906387 (June 30, 2026);
• 	whether Appellant raised in the arbitration proceedings any argument under the
Eighth Amendment for unlawfully excessive punishment;
• 	whether Appellant raised in the arbitration proceedings any argument under the
Fourteenth Amendment for the right to due process and the applicability of the
Fourteenth Amendment; and
• 	the applicability (if any) of the United States Court of Appeals for the Fifth
Circuit’s decision in Nat’l Horsemen’s Benevolent & Protective Ass’n v. Black,
178 F.4th 224 (5th Cir. 2026) to Appellant (as a Maryland resident and trainer)
and the status of the case, including whether the Supreme Court of the United
States has granted a writ of certiorari or any other mechanism for review.
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The parties are to provide the Office of Administrative Law Judges with a courtesy copy
of all filings in both hard-copy and electronic formats, as well as to provide two hard copies of
the Appeal Book.
Hardcopies should be sent to:
FTC OALJ
Mail Stop HQ-144
c/o Brightkey Inc.
9050 Junction Drive
Annapolis Junction, MD 20701
II. 	Application for Stay
In general, review by an Administrative Law Judge does not stay a final civil sanction
unless so ordered. 15 U.S.C. § 3058(d); 16 C.F.R. § 1.148(a). A person subject to a final civil
sanction may apply for a stay of all or part of the sanction pending review. 16 C.F.R.
§ 1.148(b)(1). Such an application “must provide the reasons a stay is or is not warranted . . . and
the facts relied upon, and may include supporting affidavits or other sworn statements, and a
copy of the relevant portions of the record.” Id. § 1.148(c). The application must address the
following factors: “(1) The likelihood of the applicant’s success on review; (2) Whether the
applicant will suffer irreparable harm if a stay is not granted; (3) The degree of injury to other
parties or third parties if a stay is granted; and (4) Whether the stay is in the public interest.” Id.
§ 1.148(d).
Appellant’s Position
Addressing these factors, Appellant asserts that a stay of the Sanctions is warranted.4
First, Appellant offers that he has a high likelihood of success on review based on the
Arbitrator’s erroneous ruling that the Authority established a proper chain of custody.
Specifically, Appellant argues a lapse in the chain of custody of the post-race sample based on a
Federal Express shipping label with a ship date of January 13, 2026, which predated the
4 Appellant also references his constitutional arguments in support of his position. As those arguments do not go to
the merits, I do not consider them in resolving the Application for Stay.
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February 20, 2026 race. Alternatively, Appellant argues that he “raised a meritorious defense”
and met his burden to show NF and NSF based on “substantial evidence presented that many
other individuals had access to the horse and barn at all relevant times” and “evidence that the
alleged prohibited substance was found in race horses that had been provided a Vitamin B
Supplement such as the one used by the Appellant.” Application for Stay at 1.
Second, Appellant explains that he has suffered financially, professionally, and
emotionally “already having to deal with this potentially career ending sanction” at the age of 66.
Application for Stay at 2. Appellant references a race on October 24, 2026 for which he “has a
minimum of eight horses set to run . . . in races that each carry a minimum purse of
$100,000.00.” Application for Stay at 3.
Third, Appellant suggests that owners of the horses set to run on the October 24, 2026
race will be injured should a stay not be entered and that “[i]t would be difficult if not impossible
to find other trainers. . . .” Application for Stay at 3. Further, Appellant argues no risk of injury
to HIWU if a stay were granted or that any risk of harm is low.
Fourth, Appellant argues “[a]llowing the consequence[s] to remain in effect when they
arise from the improper application of agency rules compromises the public interest.”
Application for Stay at 4.
Authority’s Position
The Authority opposes Appellant’s Application for Stay on the basis that he has failed to
satisfy the requirements. First, the Authority asserts that HIWU met its burden to establish
Appellant’s violation of ADMC Rule 3212. With respect to the chain of custody, the Authority
argues that “Appellant submitted no evidence that the chain of custody was not intact.” Response
at 3. Further, the Authority disputes that Appellant met his burden to show NF or NSF.
Second, the Authority maintains that possible reputational harm alone cannot justify a
stay, is speculative, and not irreparable. The Authority explains that disqualification of race
results would only occur after Appellant exhausts his appeal. With respect to the October 24,
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2026 race, the Authority argues that Appellant’s “inability to participate in this race is
speculative injury, at best. . . .” Response at 4.
Third, the Authority contends that third parties will not be harmed by the denial of a stay,
even if Appellant is unable to participate in the upcoming race. Instead, “[g]ranting the stay will
undermine the Authority’s efforts to protect the integrity of horseracing.” Response at 5.
Fourth, the Authority argues that “[t]he public interest is served by individual compliance
with the rules and regulations validly promulgated by federal agencies.” Response at 5. To grant
a stay in this case where Appellant has not met his burden of satisfying the requirements, the
Authority maintains, would not be in the public interest.
Analysis
Likelihood of Success on Review
I first consider Appellant’s likelihood of success on review. Appellant primarily argues
that the Authority failed to meet its burden to establish that he committed a violation of ADMC
Rule 3212. He points to what he characterizes as a “lapse in the chain of custody” of the post-
race sample based on a Federal Express shipping label with a ship date of January 13, 2026,
which predated the February 20, 2026 race in question. Application for Review at 2. At the
arbitration, HIWU suggested that this was the result of a pre-printed shipping label. AB at 766.
Even assuming that the use of a pre-printed shipping label constituted a departure from the
applicable Testing and Investigations Standards and the Laboratory Standards, Appellant has not
established that the departure “could reasonably have caused the Adverse Analytical Finding.”
ADMC Rule 3122(d).
Alternatively, Appellant argues that he is entitled to mitigation of the Sanctions for NF or
NSF stemming from possible Vitamin B supplement or other contamination given the widely
available barn access. See ADMC Rules 3224, 3225. However, without more evidence and on
this record, such possibilities or theories of contamination fail to meet the high evidentiary
showing required. Appellant “must . . . establish how the Prohibited Substance entered the
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Covered Horse’s system” to avail himself of NF or NSF. ADMC Rule 1020 (definitions of NF
and NSF) (emphasis added).
For these reasons, a preliminary review of the record at this juncture and for the purposes
of resolving the Application for Stay indicates that Appellant has not shown a sufficient
likelihood of prevailing on the merits.
Irreparable Harm
With respect to irreparable harm, Appellant laments the financial, professional, and
emotional toll that this matter has taken on him at this stage in his career. Appellant also cites an
upcoming race day in which he stands to potentially earn large purse awards. Although I am
sympathetic to Appellant’s position, more is required to demonstrate irreparable harm. “Mere
injuries, however substantial, in terms of money, time and energy necessarily expended in the
absence of a stay, are not enough.” Sampson v. Murray, 415 U.S. 61, 90 (1974) (internal citation
omitted). Though the upcoming race day offers large purse awards, whether Appellant would in
fact earn them is speculative. See Wisconsin Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir.
1985) (holding that “speculative allegations” are insufficient to establish irreparable injury to
warrant a stay). Furthermore, though Appellant himself is ineligible to participate in the
upcoming race day, by operation of the Sanctions currently in place, there would be no
prohibition on his horses entering the races as scheduled.
A stay pending review is an “extraordinary” form of relief—the exception, not the rule.
See, e.g., KalshiEX LLC v. CFTC, 119 F.4th 58, 63 (D.C. Cir. 2024). As explained above,
Appellant’s asserted injuries are not irreparable.
Degree of Injury to Others
The degree of injury to the Authority if a stay is granted is low and the Authority has not
argued that it faces any specific injury beyond its efforts to protect the integrity of horseracing.
There also appears to be a low degree of injury to third parties if a stay is granted. Appellant
argues that if a stay is not granted, however, other horse owners for whom Appellant trains will
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be injured. Much like the second factor considered above, any such injury is financial in nature
and speculative.
Public Interest
Appellant has not articulated any specific reason for which a stay is in the public interest.
He argues that allowing the Sanctions to remain in effect while challenging the application of the
rules from which they resulted compromises the public interest. However, this argument could
be made in every case on review involving an ineligibility period. Therefore, Appellant has not
presented a distinct public interest justification that favors granting a stay.
Weighing the relevant factors and for the reasons stated above, I conclude that a stay of
the Sanctions pending review is not warranted. Accordingly, Appellant’s Application for Stay is
DENIED.
ORDERED: 	Dania L. Ayoubi
Dania L. Ayoubi
Acting Chief Administrative Law Judge
Date: October 23, 2026
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