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Media Alerts - NCAA v. Governor of New Jersey - Third Circuit
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September 18, 2013
  NCAA v. Governor of New Jersey - Third Circuit
Headline: New Jersey sports gambling law violates federal prohibition on sports gambling

Area of Law: Constitutional law

Issues Presented: Whether the leagues had standing to challenge state law authorizing sports gambling, whether the Professional and Amateur Sports Protection Act, the federal law which bans most states from licensing gambling, is constitutional, and whether PASPA impermissibly commandeers states or violates the principle of equal sovereignty

Brief Summary: New Jersey has a proposed law to legalize gambling for certain professional and amateur sporting events. The NCAA, NBA, NFL, NHL, and MLB contend that this law is in violation of the federal Professional and Amateur Sports Protection Act, which prohibits states from licensing sports gambling. The Third Circuit holds that the Leagues have the standing to based on the reputational harm they may suffer from legalized gambling. The Court further determined that Congress' Commerce Clause powers extend to sports gambling, that PASPA does not impermissibly commandeer the states or violate the equal sovereignty of states.

Significance (if any):

Extended Summary: This case centers on New Jersey's proposed law to legalize gambling for certain professional and amateur sporting events. A conglomerate of sports leagues including the National Collegiate Athletic Association, National Basketball Association, National Football League, National Hockey League, and the Office of the Commissioner of Baseball, as well as the United States allege that this proposed law violates the Professional and Amateur Sports Protection Act of 1992 (PASPA). PASPA is a federal law that prohibits most states, excluding Nevada and others engaged in limited sports lotteries at the time, from licensing sports gambling. The purpose of PASPA is to "prohibit sports gambling conducted by or authorized under the law of any State of governmental entity" and to "stop the spread of State-sponsored gambling." The Senate Report specifically cites the concern for maintaining the integrity of amateur and professional sports.

The court first holds that the leagues have standing to bring the case, recognizing that reputational injury is a legally cognizable harm and the evidence in the record supports the District Court's finding that New Jersey's law will result in an increase in fans' negative perceptions of the leagues.

The court then determined that wagering and national sports are commercial transactions that substantially affect interstate commerce and thus can be regulated by Congress through the PASPA. It rejects the argument that PASPA impermissibly reaches activity that does not affect interstate commerce, noting that Congress can regulate gambling because it had a rational basis for concluding that the activity in the aggregate has a substantial effect on interstate commerce.

Next the court determined that PASPA does not impermissibly commandeer the states. The language in PASPA which makes it "unlawful for a governmental entity to... authorize by law or compact" gambling on sports is preemptive language that operates through the Constitution's Supremacy Clause invalidating any state laws that are contrary to federal statutes. PASPA preempted state law and provided that either the states could implement a complete ban on sports gambling or accept complete deregulation of that field as per the federal standard. The law does not commandeer the states because it only tells them what they cannot do. The law does not require the states to expend any state funds, does not coerce them into participating in federal regulations, and does not require the enactment or implementation of federal standards. PASPA does not require the states to do anything and statutes prohibiting the states from taking certain actions have never been struck down even if they requires the states to spend some time and effort in invalidation and modification of contrary state laws. PASPA still gives states the choice of whether to repeal the ban on sports wagering or keep a complete ban and then decide how much of an enforcement priority it is.

Finally the court held that PASPA does not violate the equal sovereignty of the states. Although PASPA singles out Nevada as the only state that can maintain state sponsored sports gambling, the court rejects the argument that this exception is invalid under the recent Supreme Court decision invalidating section 4 of the Voting Rights Act. It notes that the Framers intended that the States keep the power to regulate elections which limits Congress' power by guaranteeing uniformity in treatment of the states. There is no such guarantee in the Commerce clause. The court finds that PASPA does not violate the equal sovereignty of the states.

Judge Vanaskie concurred in part and dissented in part. He agreed that the Leagues had standing to bring the case and that PASPA does not violate equal sovereignty. However he would hold that PASPA is unconstitutional because it commandeers the states to implement congressional policy against state authorized gambling even though PASPA provides no direct federal regulatory scheme preempting state regulation.

To read the full opinion, please visit http://www2.ca3.uscourts.gov/opinarch/131713p.pdf

Panel (if known): Fuentes, Fisher, and Vanaskie, Circuit Judges

Argument Date: June 26, 2013

Argument Location: Philadelphia

Date of Issued Opinion: Sept. 17, 2013

Docket Number: No. 13-1713, 13-1714, 13-1715

Decided: Affirmed

Case Alert Author: Cheri Snook

Counsel: Theodore B. Olson, Esq., Matthew D. McGill, Esq., Ashley E. Johnson, Esq., Robert E. Johnson., John J. Hoffman, Esq., Christopher S. Porrino, Esq., Stuart M. Feinblatt, Esq., Peter M. Slocum, Esq., for the appellants; Michael R. Griffinger, Esq., Thomas R. Valen, Esq., Jennifer A. Hradil, Esq., for the intervenors Stephen and Sheila Oliver; Ronald J. Riccio, Esq., Eliot Berman, Esq., for the intervenor New Jersey Thoroughbred Horsemen's Association; Paul D. Clement, Esq., Candice Chiu, Esq., William R. Levi, Esq., Erin E. Murphy, Esq., William J. O'Shaughnessy, Esq., Richard Hernandez, Esq., Jeffrey A Mishkin, Esq., for appellees; Paul J, Fisherman, Esq., Peter J, Phipps, Esq., Scott McIntosh, Esq., for intervenor United States of America; Christopher S. Dodrill, Esq., Elbert Lin, Esq., for Amici Curiae

Author of Opinion: Judge Fuentes

Circuit: 3rd Circuit

Case Alert Circuit Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 09/18/2013 02:24 PM     3rd Circuit  

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