United States: A Summary Of The Third Circuit Argument On PASPA

On June 26, 2013, the United States Court of Appeals for the Third Circuit heard oral argument in NCAA v. Christie, concerning New Jersey's efforts to implement sports betting at casinos and racetracks.  New Jersey's legislation allowing sports betting was enjoined by the district court because the court held that the legislation violates the Professional and Amateur Sports Protection Act, or PASPA.  The appeal was heard by Circuit Judges Julio M. Fuentes, D. Michael Fisher, and Thomas I. Vanaskie.  The panel took the case under advisement, and, shortly after argument, issued an order directing the parties to file a transcript of the argument by July 11.  Obviously, there will be no decision before that date.

The argument covered two key issues - first, whether the professional sports leagues have standing under Article III to enforce PASPA, and, second, whether PASPA is constitutional.  On the standing point, the state argued that the leagues have not established that the regulation of sports betting by a state leads to a specific, concrete injury that could be remedied by a federal court.  The court asked about the leagues' position that the perception of the games is injured by sports betting, to which the state replied that standing cannot be based on the conduct or perception of third parties like the public - the leagues themselves must suffer an actual injury.  The state emphasized the point that PASPA does not prohibit sports betting in and of itself - only state regulation of sports betting.  The court was also interested in the fact that PASPA grants the leagues the right to bring a cause of action to enforce it, but the state responded saying that while a statute can create a cause of action, it cannot create standing in and of itself. 

On standing, the leagues argued that when a state grants legitimacy to a form of gambling, the overall dynamic is changed and integrity and perception concerns arise.  Moreover, according to the leagues, the leagues have an interest in the perception of their games, and Congress decided that the leagues are the proper parties to enforce PASPA.  The leagues argued that sports betting appropriates the leagues' rights in their games, which is enough of an "identifiable trifle" to convey Article III standing.

On the constitutional questions, the first key issue was the application of the "anticommandeering" doctrine under the Tenth Amendment.  In essence, anticommandeering stands for the principle that the federal government cannot command a state's legislative or regulatory apparatus.  Much of the debate among the state, leagues, and DOJ centered around whether PASPA was an affirmative command or a negative prohibition.  According to the state, this is a distinction without a difference because virtually every affirmative command could be stated as a negative prohibition and vice versa.  The leagues and the DOJ both argue, however, that the only cases that have found an anticommandeering violation have found that violation based on affirmative commands - for example, where Congress required a state to take title to radioactive waste (New York v. United States) and where Congress required state law enforcement officers to perform federal background checks (Printz v. United States).  The DOJ and the leagues both argued that this distinction is crucial, and that PASPA does not require New Jersey to do anything at all.   Although the panel had a number of questions regarding this point, it was difficult to get any sense from the panel regarding where they might ultimately come out.

There was also discussion about the Supreme Court's decision in Shelby County as it relates to the equal sovereignty doctrine.  (We covered this aspect here).  The court seemed to think that there was more to equal sovereignty in light of Shelby County than there may have been prior to that decision.  The DOJ and the leagues, however, argued that Shelby County dealt with legislation that Congress enacted (the Voting Rights Act) pursuant to its powers under the 15th Amendment, not the Commerce Clause, and, therefore, Shelby County was distinguishable.  The court asked what the proper remedy was if equal sovereignty were violated.  The state argued that the entire statute should be set aside; the leagues argued that only PASPA's preference provisions should be stricken (a result that would shut down all legal sports betting in the United States). 

The DOJ and the leagues emphasized that PASPA was within Congress' power under the commerce clause, and should, therefore, be subject only to rational basis review.  The state countered that the Tenth Amendment is a check on Congress' power under the commerce clause.

The panel was a "hot bench," peppering the lawyers for all sides with many questions, but, as is common with many appellate arguments, it was difficult to predict where the Court might be heading with a decision. 

Whatever the Court decides, however, it could be the final word.  This appeal is the only appeal that a party gets as of right.  A party disappointed with the decision in this case could either ask for rehearing en banc - i.e., where all of the judges of the Court of Appeals hear the case, or ask the Supreme Court to grant certiorari and hear the case.  Both of these, however, are rather rare, and are within the Court's discretion to grant or deny.

This article is for general information and does not include full legal analysis of the matters presented. It should not be construed or relied upon as legal advice or legal opinion on any specific facts or circumstances. The description of the results of any specific case or transaction contained herein does not mean or suggest that similar results can or could be obtained in any other matter. Each legal matter should be considered to be unique and subject to varying results. The invitation to contact the authors or attorneys in our firm is not a solicitation to provide professional services and should not be construed as a statement as to any availability to perform legal services in any jurisdiction in which such attorney is not permitted to practice.

Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets. Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets. The Duane Morris Institute provides training workshops for HR professionals, in-house counsel, benefits administrators and senior managers.

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