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| Daniel Wallach |
New Jersey officials had asked the Supreme Court to review the decision in February, arguing that PASPA violates two important federalism principles that underlie our system of dual state and federal sovereignty: one known as the "anti-commandeering" doctrine, on the ground that PASPA impermissibly prohibits states from exercising their sovereignty; the other known as the "equal sovereignty" principle, in that PASPA permits Nevada to license sports gambling, while banning all other states from doing so.
After seeking and obtaining two separate extensions of time to file their response brief, the leagues and the NCAA (represented by former U.S. Solicitor General Paul Clement) made good use of the extra time. Their brief is a fascinating read, and possesses all of the usual hallmarks of a Paul Clement brief — including a theme of the case that cascades across the entire brief. Pulling no punches, Clement repeatedly characterizes New Jersey's arguments as "novel," "meritless" and "splitless" (the latter apparently a rebuke of Third Circuit Judge Thomas I. Vanaskie's dissenting opinion), pointing out that the constitutionality of PASPA has never been challenged in its 22-year existence, and that no other court has considered, let alone accepted, New Jersey's arguments.
Another persistent theme of the leagues' brief centers on New Jersey's failure to legalize sports wagering when it had an opportunity to do so. Seizing upon New Jersey's failure to legalize sports wagering in the one-year window provided by PASPA, the leagues argue that "[h]aving failed to take advantage of the statutory provision designed for its own unique reliance interests, New Jersey is in no position to begrudge Nevada, Delaware, Oregon, and Montana [i.e., the grandfathered states]."
The leagues also question whether this case is even "cert-worthy," pointing to the absence of any intercircuit conflict on the questions raised by New Jersey, and suggesting that "in the unlikely event that another state raises similar arguments and succeeds in producing a circuit split, there will be time enough for this Court to consider them" and "to do so with the benefit of the views of more than one court of appeals."
Adding further to that point, the leagues note that PASPA "has spawned just four cases in its two decades on the books — all within the bounds of the Third Circuit. And in the 22 years since its enactment, states have expressed little or no concern about PASPA, let alone about its constitutionality. New Jersey identifies nothing even suggesting that any states other than New Jersey and its three amici are troubled in the slightest by PASPA's prohibitions."
The leagues also argue that any review by the high court would be "premature" and "largely academic" because New Jersey has overlooked subsection (2) of PASPA, which prohibits individuals from sponsoring, operating, advertising, or promoting sports gambling pursuant to state law. 28 U.S.C. § 3702(2). Thus, as the leagues argue, "even if PASPA's prohibitions relating to state conduct were constitutionally infirm (and they are not), PASPA 'would still plainly render [New Jersey's] Sports Wagering Law inoperative by prohibiting private parties [i.e., casinos and racetracks],' as a matter of federal law, 'from engaging in gambling schemes pursuant to that [state] authority.'" (Leagues' Response, p. 17). "That," according to the leagues, "not only puts the lie to [New Jersey's] assertion that PASPA is an anomalous effort to regulate only states, not private parties, but also confirms that the answer to the commandeering question is ultimately of little practical significance." (Id.). New Jersey, however, maintains that subsection (2) of PASPA is "entirely derivative" of subsection (1), and, thus, if subsection (1) is invalidated, so should subsection (2).
Since the response brief is not available on PACER (and will not be accessible online unless and until certiorari is granted), I will try my best to summarize the arguments made by the leagues and the U.S. Department of Justice (which also filed a far-less-colorful response last week). The leagues' 36-page brief principally addresses the "anti-commandeering" and "equal sovereignty" arguments raised in the New Jersey petitions.
The Leagues' "Anti-Commandeering" Argument
Addressing New Jersey's contention that Congress may not preempt state law without setting forth any federal regulatory or deregulatory scheme (a key argument in both the petitions for writ of certiorari and the amicus briefs), the leagues point to the Interstate Wire Act of 1961 as an example of the federal regulation of sports betting, stating:
Congress has long recognized a federal interest in protecting the integrity of professional and amateur sports from the harms of sports gambling. In the Interstate Wire Act of 1961, Congress prohibited the interstate wire transmission "of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest," exempting only those states where the activity was legal. 18 U.S.C. § 1084(a). In 1964, Congress made it a federal crime to fix or attempt to fix any sports contest. See id. § 224.
(Leagues' Response, at p. 2). The leagues describe PASPA as "one small piece of Congress' broader regulation of gambling," which includes the Wire Act and other prohibitions on private conduct. But the Wire Act is not a regulatory scheme in the classic sense; it does not "regulate" or "deregulate" online sports betting. It simply prohibits it. However, to be fair, PASPA can easily be viewed as a logical extension of the Wire Act.
The leagues also maintain that Congress "has long recognized a federal interest in regulating gambling on a nationwide basis," citing a 1903 Supreme Court decision upholding a federal law prohibiting trafficking of lottery tickets as a valid exercise of Congress' commerce power and noting that Congress, in 1975, exempted state lotteries from federal criminal lottery laws. But those examples overlook the more recent congressional statement of intent set forth in the Interstate Horseracing Act, enacted in 1978, which recognizes that "the States should have the primary responsibility for determining what forms of gambling may legally take place within their borders." 15 U.S.C. § 3001(a)(1). PASPA appears to be a significant deviation from that congressional statement of intent.
Curiously, the leagues explain the federal interest in enacting PASPA as purely paternalistic: that, through PASPA, Congress "has chosen to assist states in their efforts to prevent sports and other gambling, rather than preempt the field entirely." As this case no doubt shows, New Jersey does not wish to be "assisted." It just wants to be left alone.
The leagues next address New Jersey's principal argument on the anti-commandeering doctrine, namely, that the doctrine applies not just when Congress forces states to act, but also when Congress prohibits states from acting. Calling such a view "exceedingly expansive," the leagues cite to several federal court of appeals decisions rejecting anti-commandeering attacks where the statute imposed no affirmative obligation on states. Referring to these decisions as "a unanimous body of case law," the leagues dismiss New Jersey's view of the anti-commandeering doctrine as "revolutionary" and "utterly inconsistent" with the Supreme Court's cases and well-settled preemption doctrine.
Predictably, the leagues find great comfort in the favorable decisions rendered below by the Third Circuit and the district court, stating that as both courts correctly concluded, "PASPA lacks the irreducible minimum of any successful commandeering claim: It does not compel states (or state officials) to do anything. Instead, PASPA only prohibits states from licensing or authorizing sports gambling."
As described by the leagues, "PASPA is simply a straightforward exercise of Congress' power to preempt operation of state laws that conflict with federal policy and precludes individuals from relying on such laws to engage in conduct that Congress has deemed contrary to the national interest. There is nothing remotely constitutionally suspect about the manner in which PASPA does so."
The leagues accuse New Jersey of "[w]renching out of context" a single line of dictum from New York v. United States, 505 U.S. 144 (1992), which New Jersey had cited as standing for the proposition that "Congress may 'regulate interstate commerce directly' but cannot 'regulate state governments' regulation of interstate commerce.'" Id. at 506.
According to the leagues, "[t]hat sweeping vision of the commandeering doctrine is wholly divorced from the Court's cases and would have extraordinary consequences for the federal-state balance. The leagues then point to "scores of federal statutes [which] explicitly preclude states from enacting laws that conflict with federal policy." (Id. at 18 n.2).
Among the examples cited by the leagues are federal laws involving aviation, pesticide labeling, trademarks, food and drugs, recreational vessels, rail transportation, vehicles, and air commerce. But in each example, there is a federal regulatory or deregulatory scheme already in place. There is no federal regulatory or deregulatory scheme governing sports gambling; at most, there is a federal "interest" or "policy."
The leagues distinguish New York and Printz as involving scenarios whereby the federal government was attempting to "force" states to do its "bidding." In New York, for example, Congress "required states either to enact particular legislation or take title to radioactive waste." In other words, "the law 'offer[ed] a state government no option other than that of implementing legislation enacted by Congress.'" The leagues explain that Printz "suffers from a variant of the same defect: By requiring state and local law enforcement officers to conduct federally mandated background checks for handgun sales, it unconstitutionally conscripted states' law enforcement officers into federal service."
The leagues thus describe New York and Printz as embodying "two related — and limited —principles": "The Federal Government may neither issue directives requiring the States to address particular problems," as in New York, "nor command the States' officers, or those of their political subdivisions, to administer or enforce a federal regulatory program," as in Printz. (Leagues' Response, p. 20)
"PASPA runs afoul of neither of these principles," the leagues insist. PASPA "does not require or coerce the states to lift a finger — they are not required to pass laws, to take title to anything, to conduct background checks, to expend any funds, or to in any way enforce federal law." Instead, as the leagues explain, "PASPA only prohibits states from enacting laws that interfere with federal objectives by licensing or authorizing sports gambling." Note how the leagues never refer to gambling by its common euphemism — "gaming." In virtually every instance, the more sinister-sounding "gambling" is employed.
Accusing New Jersey of "confusing semantics with substance," the leagues warn that New Jersey's expansive interpretation of the anti-commandeering doctrine "would have the effect of "swallow[ing] preemption whole," noting that there are "countless federal statutes" on the books which displace state law through operation of the Supremacy Clause and observing that "the federal code is not replete with commandeering statutes." In other words, the leagues are favorably comparing PASPA to numerous other federal statutes which achieve the same effect of displacing state law, and imply that since none of those other federal laws constitute commandeering, then neither does PASPA.
The leagues also address New Jersey's concern that PASPA impermissibly diminishes the "accountability" of federal officials at the expense of state officials, which is at the root of the Supreme Court's anti-commandeering jurisprudence. The leagues argue that such accountability concerns do not arise where Congress explicitly preempts state law since "it is the federal government that makes the decision in full view of the public, and it will be federal officials that suffer the consequences if the decision turns out to be detrimental or unpopular."
The anti-commandeering doctrine is concerned with the "accountability" problem, the leagues contend, only "'where the Federal Government compels the States to regulate,' thereby creating the appearance that state officials are responsible for policies that Congress forced them to enact. ... Clearly, no such problem exists here."
Indeed, there have been no reported instances of New Jersey elected officials being voted out of office because of the prohibition against sports wagering. As the leagues point out, "to the extent the citizens of New Jersey now are frustrated by their inability to engage in lawful sports gambling, there is no question that PASPA, not New Jersey, is to blame. If there were any confusion on that score, the decisions below surely removed it." But it may still be a little confusing to New Jersey citizens, who, just two short years ago, approved sports wagering by a more than 2-1 margin in a statewide voter referendum.
The Leagues' "Equal Sovereignty" Argument
The final section of the leagues' response addresses New Jersey's equal sovereignty challenge to PASPA, which is largely predicated on the broad exemption provided to Nevada. In arguing that PASPA's facial discrimination between the states violates the equal sovereignty principle, New Jersey relied heavily on Shelby County v. Holder, 133 S.Ct. 2612 (2013). In Shelby County, the Supreme Court applied the equal sovereignty doctrine to strike down portions of the Voting Rights Act because it differentiated between the States (by requiring certain states to obtain "pre-clearance" from the federal government before being permitted to change its voting laws.)
This is significant because the leagues had successfully argued to the district court below that the "equal sovereignty" doctrine was strictly limited to the entry of new states to the union. The Shelby County decision rejects that argument, explaining that the "historic tradition" of equal sovereignty "remains highly pertinent in assessing subsequent disparate treatment of States."
Shelby County is helpful to New Jersey's equal sovereignty challenge for yet another reason — it applies a more stringent standard to any federal effort to distinguish between the states in enacting legislation. Rather than applying the "rational basis" test (as urged by the leagues below), Shelby County states that any departure from the fundamental principle of equal sovereignty "requires a showing that the statute's disparate geographic coverage is sufficiently related to the problem that it targets."
In their response, the leagues urge the court to resist the lure of Shelby County, cautioning that the lower federal courts "have had neither the time nor the occasion to explore the implications of Shelby County in any depth — let alone its implications for PASPA, a question never even raised before this case."
Query whether the Supreme Court — the highest court in the land — needs to wait for the lower federal courts to analyze its own decision before determining whether — and how — to apply it in non-Voting Rights Act cases. A potential insight into the court's thinking may be found in Justice Ruth Bader Ginsburg's dissenting opinion in Shelby County, which specifically refers to PASPA as an example of a federal statute that treats states differently, observing that such statutes are "hardly novelties," but nonetheless asking the following rhetorical question: "Do such provisions remain safe given the Court's expansion of equal sovereignty's sway?"
The leagues also dismiss Shelby County as "unique" and "entirely inapposite" because it involved the "sensitive area" of voting rights. As the leagues would describe it, "[a]llowing four states to continue authorizing sports gambling even though others are prohibited from doing so is not remotely comparable to the 'strong medicine' of creating a federal veto over the [election] laws of only a handful of states." The leagues also note that state authorization of sports gambling "is nothing like state administration of elections, as the Constitution grants Congress, not the states, authority to regulate interstate commerce."
Based on Congress' oversight of interstate commerce, the leagues maintain that "[t]he Framers could hardly have intended the states to 'keep for themselves' the power to regulate sports gambling that has a substantial effect on interstate commerce. As such, laws that intrude upon a state's ability to do so cannot plausibly be understood as encroaching upon the same 'sensitive areas of state and local policymaking' as section 5 of the Voting Rights Act." But the Supreme Court, in Shelby County, did not interpret the equal sovereignty doctrine quite so narrowly, reiterating that it is a "fundamental principle" which remains "highly pertinent in assessing subsequent disparate treatment of States."
Alternatively, the leagues argue that equal sovereignty concerns are not implicated by PASPA because the statute provides "preferential," rather than "unfavorable," treatment for certain states. New Jersey might take issue with that characterization since it is being prevented from authorizing or regulating sports wagering under PASPA, while states such as Nevada have carte blanche to license as many sports books as it desires.
The leagues also point to Congress' broad regulatory authority under the Commerce Clause as justifying its disparate treatment of states when regulating interstate commerce. To illustrate the point, the leagues offer up a host of federal statutes, such as the Clean Air Act, which treat states differently. The leagues caution that New Jersey's equal sovereignty argument "would not only endanger countless federal laws, but also would call into question a central — and century-old — premise of the Court's Commerce Clause jurisprudence."
In an interesting twist, the leagues suggest that even if there were a violation of the equal sovereignty doctrine by virtue of the favorable treatment afforded to the four exempt states, the proper remedy would be to "strike" the exemptions granted to Nevada, Oregon, Montana and Delaware. The leagues argue that "[i]f there were a problem with the favorable treatment of the four states, the logical remedy would be to treat them like the other 46, not vitiate PASPA in toto." This would seem like a real long shot (pun intended), given the fact that the four exempted states are not parties to the New Jersey court action. Nonetheless, the Nevada sports books shudder at the very prospect.
And, finally, the leagues conclude with a "Hunger Games" reference. Seeking to outdo West Virginia Solicitor General Elbert Lin (who quoted Sophocles and Shakespeare in the amici states' brief), the leagues reject as "outlandish" New Jersey's depiction of the federal government as a "tyrannical" majority "subjugating" the rights of a minority of states:
Petitioners invoke the specter of a tyrannical majority dictating "winners and losers" among a hapless minority of subjugated states, see NJTHA Pet. 36 (citing Suzanne Collins, The Hunger Games (2008)), but these outlandish concerns are completely divorced from reality, as there is no conceivable basis for concern that the 46 states "disfavored" by PASPA were deprived of any say in the matter. In short, this case is nothing like Northwest Austin, Shelby County, or Coyle, each of which involved an attempt by a powerful majority to deprive select states of "those attributes essential to its equality in dignity and power with other states." Coyle, 221 U.S. at 568. Here, the situation is the reverse. Should the legislative representatives of the 46 states that PASPA prohibits from sports gambling wish to eliminate that prohibition, they have more than enough political power to do so.
(Leagues' Response, p. 36). But any legislative remedy for New Jersey (the real-life "District 12") is unrealistic given the current political climate and the expectation that Senate Majority Leader Harry Reid, D-Nev., would block any legislation that would dilute Nevada's sports gambling monopoly. For now, New Jersey's best chances reside in the legal arguments crafted by their formidable legal team (playing the part of Katniss Everdeen).
What's Next?
Expect the New Jersey petitioners to file reply briefs no later than May 27, 2014. Under Supreme Court Rule 15.5, the clerk will distribute the petitions and the briefs in opposition for the court's consideration "no less than 10 days after the brief in opposition is filed" (regardless of whether the petitioners intend to file a reply brief. This is why petitioners usually file their responses within 10 days, to ensure that their replies are considered). Thus, a May 14, 2014, opposition brief would correspond to a May 27, 2014, "distribution" date, which, in turn, corresponds to a June 12, 2014, "Conference" date according to the case distribution schedule available online.
The court decides the fate of the petitions at these conferences and publishes the orders on its website the following Monday. However, it is quite possible in this case — given the three separate petitions for writ of certiorari, two groups of respondents (the sports leagues and the Department of Justice) and the fact that there are three amicus briefs — this may very well make it into the court's summer recess with no action being taken. The court's last conference before the summer recess is June 26, 2014. If no action is taken on the petition by that date, then the earliest that the court could conceivably act on the petition is Sept. 29, 2014, which is the date of the court's first conference following the summer recess.
Will the Court Grant Certiorari?
A lone circuit court decision is usually not enough to merit certiorari review, as the majority of cases on the court's docket involve circuit splits. But that is not a hard and fast rule. As we recently saw with the Patient Protection and Affordable Care Act (a.k.a "Obamacare"), the Supreme Court often accepts high-profile cases even in the absence of a circuit split when it believes that "a United States court of appeals has decided an important question that has not been, but should be, settled by this Court."
The Supreme Court has never addressed the constitutionality of PASPA, and this case also presents important questions of federalism (such as whether Congress can dictate how states regulate purely intrastate commercial activity when there is no federal regulatory or derogatory scheme to protect, and the circumstances under which the equal sovereignty doctrine apply). And this is precisely the kind of federalism case that may appeal to the court's conservative wing (comprised of Justices Antonin Scalia, Clarence Thomas, John Roberts and Samuel Alito).
The high-profile nature of this case (pitting two former U.S. solicitor generals, Theodore B. Olson and Paul Clement, on opposite sides and involving a high-profile governor, the four major professional sports leagues, the NCAA, and the Department of Justice as parties) also enhances the prospects for Supreme Court review (certainly above the 2-5 percent success rate for paid petitions). But even if the Supreme Court decides not to hear this case, that does not mean that state-authorized sports wagering is dead and buried. It just means that it would be over for New Jersey (at least for now, absent a legislative fix).
Remember, the denial of certiorari is not a decision on the merits. It is simply the Supreme Court exercising its discretion not to hear the case. If that were to occur, the Third Circuit's decision would remain the highest-ranking decision on the constitutionality of PASPA, and the dissenting opinion from Judge Vanaskie (concluding that PASPA "violates principles of federalism") could be the catalyst that spurs other states that have been monitoring New Jersey's efforts to enact their own sports wagering scheme and test the constitutionality of PASPA in a different federal judicial circuit. These states could then use Judge Vanaskie's dissenting opinion (and the arguments raised by New Jersey and the amici states) as a "playbook" for overturning PASPA.
Thus, the question of PASPA's constitutionality — and the future of state-sponsored sports betting — may be addressed by other federal judicial circuits in the near future, leading eventually to Supreme Court review if there is a split among the circuits on that question.
—By Daniel Wallach, Becker & Poliakoff
Daniel Wallach is a shareholder in Becker & Poliakoff's Ft. Lauderdale, Florida, office.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.