The state of New Jersey filed its opening brief on April 29 in the U.S. Court of Appeals for the 3rd Circuit, in a case that could ultimately decide the fate of sports betting in the United States,
In February, U.S. District Court Judge Michael Shipp struck down New Jersey’s new sports betting law, finding it invalid as conflicting with federal law. The federal law at issue is the Professional and Amateur Sports Betting Act of 1992 (PASPA), which prohibits any state from offering sports betting unless the state had a sports betting scheme in place between 1976 and 1990.
In 2011, New Jersey voters approved a referendum by a 2-1 margin to amend the state’s constitution to allow sports betting in the state’s casinos and racetracks. The state legislature then passed a bill legalizing sports betting in the state and it was signed into law by Gov. Chris Christie (R). The New Jersey law would allow wagering on all major professional and collegiate sporting events, except collegiate sporting events involving New Jersey colleges, and on all sporting events, professional or collegiate, taking place in the state.
In August, the four major professional sports leagues and the National Collegiate Athletic Association (NCAA) filed suit against New Jersey arguing that the sports gambling law violated federal law. The U.S. Department of Justice (DOJ) later intervened as a plaintiff in the suit, joining the leagues.
The district court agreed with the plaintiffs and held that PASPA was a rational exercise of congressional power.
There have been prior challenges to PASPA in federal court, but none of those cases directly addressed the constitutionality of the statute, which the Third Circuit is being asked to do in this case.
New Jersey argues that PASPA is unconstitutional because it violates the anti-commandeering principle that Congress may not “require the States in their sovereign capacity to regulate their own citizens.” The Third Circuit’s view on the application of the anti-commandeering principle to PASPA is likely the key to this case for both sides. The district court held that PASPA did not violate the anti-commandeering principle because the doctrine is limited to laws that require some affirmative act by a state, and here New Jersey does not have to affirmatively take any action under the law.
New Jersey argues in its brief that there is no doctrinal basis for this requirement of affirmative conduct for “commandeering,” and that PASPA’s requirement to maintain existing laws is indistinguishable from a requirement to pass new laws. New Jersey cites case law stating that the anti-commandeering precedent turns on whether a law seeks “to control or influence that manner in which States regulate private parties.”
New Jersey also argues that PASPA violates the principle of equal sovereignty, which requires any discrimination among the states to be justified by “a showing that a statute’s geographic coverage is sufficiently related to the problem that it targets.” New Jersey argues that PASPA plainly discriminates among the states and that sports wagering is not the type of “local problem” that justifies different treatment among them. The justification in PASPA for the different treatment of the states was that some states already permitted sports wagering, a difference that does not justify the different treatment between the states.
New Jersey also challenged the leagues’ standing to bring the suit, arguing that although PASPA granted the leagues a right of action to enforce PASPA, “that act does not alter Article III’s jurisdictional requirements.” A separate hearing on just the standing issue was held by the district court in December, and the court found that the leagues did have standing to bring the suit. New Jersey argued that the district court relied on the general harm caused by illegal sports wagering, but that this harm was not traceable to the legalization of sports wagering in New Jersey. New Jersey also noted that the district court placed heavy emphasis on the 3rd Circuit decision in Office of the Commissioner of Baseball v. Markell, a decision that did not address the issue of standing.
The state argues that the standing of DOJ to enforce the law is irrelevant here because “intervention will not be permitted to breathe life into a ‘nonexistent’ law suit.” The court will sometimes treat the pleadings of an intervenor such as DOJ as a separate action, but New Jersey argues that this would not be justified here since DOJ’s intervention cannot be construed as a separate action because it did not sue to enforce the law; rather, DOJ intervened to defend PASPA’s constitutionality.
Intervenor defendants, the New Jersey Thoroughbred Horseman’s Association, Inc. as well as State Senate President Stephen Sweeney and Speaker of the New Jersey General Assembly Sheila Y. Oliver, also filed briefs arguing that PASPA is unconstitutional.
The deadline for the response from the leagues is May 23 and New Jersey will have an opportunity to file a reply brief by May 30. Oral arguments are scheduled in the appeals court on June 26.
The ruling in this case will have very far-reaching implications. A decision in favor of New Jersey will allow states to offer sports betting within their borders. It was not surprising that the district court ruled that New Jersey’s sports wagering law was invalid, but the law may have a different fate in the 3rd Circuit. New Jersey has some very compelling arguments that PASPA is unconstitutional and later this year we will find out if the appeals court agrees.
In a recent decision, U.S. District Judge Susan Illston of the Northern District of California struck down the FBI’s use of National Security Letters (NSLs) as unconstitutional. Unbeknownst to most Americans, the FBI has been issuing thousands of NSLs every year. The letters demand that recipients, such as banks and telephone companies, provide customers’ information such as their transactional records, phone numbers dialed, and email addresses mailed to and from. This doesn’t involve the content of the phone calls or emails but does involve the names of addressees or participants. One reason most Americans didn’t know about these letters is because more than 95 percent of them contain gag orders, barring the recipient from disclosing their content or even their existence.
This case began nearly two years ago, in May 2011, when a nonprofit advocacy group, the Electric Frontier Foundation (EFF), filed suit on behalf of an unnamed telecom company that had received an NSL. In defense of the NSLs, the government argued that this level of secrecy is necessary to protect the nation against potential security threats. NSLs were designed in the 1970s as a means to gather information on suspected foreign spies during terrorism and espionage investigations. However, the Patriot Act greatly expanded their reach to allow the FBI to secretly compel companies to provide data on American citizens.
The constitutionality of NSLs is dubious for two distinct reasons. Not only does the nondisclosure clause infringe on their recipients’ free speech, but, unlike a standard subpoena or search warrant, the NSLs do not have to be authorized by a judge. Accordingly, Illston concluded that NSLs and their nondisclosure provisions violate the First Amendment and separation of powers principles, and she ordered the FBI to stop issuing NSLs and cease enforcing all gag provisions. That said, we are uncertain whether Illston’s order will ever go into effect. Due to the gravity of the First Amendment and national security issues at stake, Illston issued a 90-day stay, giving the government time to appeal her decision to the U.S. Court of Appeals for the 9th Circuit.
Although the lawsuit was filed anonymously, various media sources have suggested that the unnamed defendant may be Credo Mobile, a phone provider that supports progressive causes. The day after the ruling was released, Credo’s CEO Michael Kieschnick released the following statement:
“This decision is notable for its clarity and depth. From this day forward, the US government’s unconstitutional practice of using national security letters to obtain private information without court oversight and its denial of the first amendment rights of national security letter recipients have finally been stopped by our courts.”
According to Matt Zimmerman, an EFF attorney, the NSL gags “have truncated the public debate on these controversial surveillance tools,” and his unnamed client “looks forward to the day when it can publicly discuss the issue.”
As we await the higher court’s ruling, which we hope leaves Illston’s decision in place, one thing has already been accomplished of a positive nature. A federal district judge has shined some light on a little-known and highly dubious federal law enforcement technique.
The vast increase in the use of wireless data networks has led to new legal issues regarding network users’ right to privacy. A recent opinion issued by the U.S. District Court for the District of Oregon indicates that, under some circumstances, individuals on an unsecured wireless network have a reasonable expectation of privacy entitling them to Fourth Amendment protection. As a result, police officers must obtain a warrant prior to accessing files on that network.
In United States v. Ahrndt, defendant John Henry Ahrndt moved to suppress evidence that a police officer obtained by accessing Ahrndt’s wireless home network and opening files without a search warrant.
In February 2007, one of Ahrndt’s neighbors connected to Ahrndt’s unsecured wireless internet network. When she opened her iTunes program, she was able to see “shared” files from Ahrndt’s iTunes and LimeWire accounts, and saw a number of titles indicative of child pornography.
The neighbor did not open any of the files, but called the police to report what she saw. A deputy came to her house and she showed him the file names as she had seen them. The deputy asked her to open one of the files. When she did, it opened an image of child pornography.
The deputy questioned the neighbor about whom the unsecured wireless network might belong to. She indicated that the network had been available since she moved into the building, and at the time Ahrndt’s home was the only other one that was occupied. The police ran the license plate of a car parked outside of the home and identified it as belonging to Ahrndt, a convicted sex offender.
Using a general description of what the neighbor and deputy recalled seeing in the list of file names, the police applied for and received a search warrant to access the wireless network again in order to get an IP address. The police then served a summons on the Internet provider. The provider disclosed that Ahrndt was the subscriber in question.
Using that information, the police obtained a search warrant for Ahrndt’s home. They ran a forensic search of his computer and identified images of child pornography in various folders. The forensic report did not mention either iTunes or LimeWire.
In considering the motion to suppress the evidence obtained through the initial warrantless search, the court concluded that it would have been appropriate for the deputy to view the titles of the files without a warrant, since a private party (the neighbor) had already viewed those files and told the police about them. However, the court concluded that it was a violation of Ahrndt’s Fourth Amendment rights for the police to instruct the neighbor to open the file, which she had not previously done. The opened image was no longer within the purview of private search, but a government search.
The court also found that Ahrndt’s privacy expectations were not eliminated by accessing an unsecured wireless network. There was no evidence that Ahrndt had intentionally enabled sharing for those files; rather, the default setting of the LimeWire program enabled sharing. It was Ahrndt’s reasonable belief that those files were contained only on his hard drive, and not shared on a public network. The court said that “[i]n short, the government does not dispute a person has a reasonable expectation of privacy in the files on his home personal computer.”
The court concluded that, lacking specific file names and a description of images, a magistrate would not have found probable cause to issue a search warrant. The only evidence that the police viewed lawfully was the file names, which the neighbor and deputy could not remember with specificity. Since the “partial recollections and characterizations” were too general to support a warrant, all related evidence from the unlawful search must be suppressed.
The court came to the right conclusion on this one. Our reliance on the Internet has become such that what is on our computers is as personal and private as the inside of our homes. The government is no more entitled to search our computer without probable cause than to search our homes. This case does not represent a free pass to intentionally share information on wireless networks and then assert Fourth Amendment rights when the government comes knocking. Rather, it is only that information to which an user has a reasonable expectation of privacy—such as files that he is not aware are accessible to others—that is protected against the government’s unlawful search and seizure.
It’s easy to see how this has implications for potential white-collar cases: the government might try to use financial information unintentionally made available to a neighbor through an unsecured network as a basis to initiate a financial fraud investigation. We hope that the courts will rely on this case and suppress any evidence obtained as a result of this type of unlawful search.
Last night, U.S. District Court Judge Michael Shipp released an opinion in the widely watched New Jersey sports betting case, stating that New Jersey’s sports betting law is invalid as conflicting with federal law. Now, the future of sports betting in the United States will be decided by the U.S. Court of Appeals for the Third Circuit.
The Professional and Amateur Sports Betting Act of 1992 (PASPA), prohibits any state from offering sports betting unless that state had a sports betting scheme in place between 1976 and 1990. Under the law Delaware, Oregon and Montana were granted limited sports betting schemes and Nevada is the only state authorized to offer single-game sports betting.
In 2011, New Jersey voters approved a referendum by a 2-1 margin to amend the state constitution to allow for sports betting in the state’s casinos and racetracks. The state legislature then passed a bill legalizing sports betting in the state and it was signed into law by New Jersey Governor Chris Christie (R). The New Jersey law would allow wagering on all major professional and collegiate sporting events, except collegiate sporting events involving New Jersey colleges, and all sporting events, professional or collegiate, taking place in the state.
In August, the four major professional sports leagues and the National Collegiate Athletic Association (NCAA) filed suit against New Jersey arguing that the state’s sports gambling law was in violation of federal law.
In December, the court heard oral arguments on the leagues’ standing to bring the suit and found that they did have standing. After that ruling, the U.S. Department of Justice (DOJ) announced its intention to intervene and join the four major sports leagues and the NCAA as plaintiffs in the case. The DOJ filed a brief on February 1 defending the constitutionality of PASPA.
Judge Shipp heard oral arguments on February 14, 2013, on the constitutionality of PASPA. The oral arguments focused on three main constitutional issues: Congress’s power to regulate sports betting under the Commerce Clause and the applicability of the uniformity and equal sovereignty principles under the Commerce Clause, due process and equal protection issues under the Fifth Amendment, and the contention that the law violates the anti-commandeering principle that prohibits the federal government from imposing duties on state legislators or executive officials to carry out a federal initiative.
After a very lengthy analysis, the court found that PASPA did not violate the anti-commandeering principle because it “neither compels nor commandeers New Jersey to take any action.” One point of contention during oral arguments was if the anti-commandeering principle applies only when a state is required to engage in affirmative activity. The court agreed with the leagues on this point, by stating that the case law makes it clear that, “Congress cannot, via the Commerce Clause, force States to engage in affirmative activity” and noted that the difference between forcing a state to affirmatively do something and being prohibited from doing something “is not merely academic or insubstantial.”
The court’s opinion also made it clear that it does not believe that PASPA violates any Tenth Amendment principles. The state has argued that Nevada was essentially granted a monopoly on single game sports betting through PASPA and that was a challenge to its state sovereignty. The court did not agree that PASPA usurps state sovereignty and noted that “the fact that gambling might be considered an area subject to the States’ traditional police powers does not change this conclusion.”
The court found that PASPA’s grandfathering clause that allows a few states to offer sports betting comports with the Commerce Clause. The court pointed to the legislative findings of PASPA stating that, “Congress has determined that the substantial reliance interests of the grandfathered states merit preservation and protection,” and therefore, the grandfather clause contained in PASPA passed the rational basis review.
This decision on the constitutionality of PASPA will almost inevitably be appealed to the U.S. Court of Appeals for the Third Circuit and the state will have 30 days to file its appeal. The Third Circuit has heard prior appeals regarding PASPA, but has never directly addressed the constitutionality of the statute, which it will need to in this case.
New Jersey could also appeal the decision by Judge Shipp granting the leagues standing to bring this lawsuit. The leagues have stated in court filings that “the impact of state-sponsored gambling on the public perception of their games and their relationships with their fans are sufficient to confer constitutional standing in this case.” The leagues also argue that Congress expressly recognized that they would suffer from the spread of state-sponsored gambling on their games and provided them with a cause of action under PASPA.
The two sides disagree on what precedent has been set by the Third Circuit on standing issues related to PASPA. In 2009, the Third Circuit ruled in Office of the Commissioner of Baseball v. Markell, that Delaware’s plan to expand its sports betting offerings violated PASPA. Standing was not discussed in the opinion in Markell and lawyers for the leagues argued that this was because the standing of the leagues was so obvious that the court did not need to address it. At oral arguments, Judge Shipp directly asked the state how it could reconcile its argument that the league lacked standing with the Third Circuit’s decision.
The Supreme Court has never addressed PASPA.
This decision is a minor setback for New Jersey, and the future of sports betting in America will be played out in the Third Circuit. It would have been a bold step for a federal district court judge to overturn a federal law that had been existence for two decades. Judge Shipp’s ruling shows that he was being conservative in deferring to Congress in this case, even noting that “judicial intervention is generally unwarranted no matter how unwise a court considers a policy decision of the legislative branch.”
On February 5, 2013, the Bipartisan Legal Advisory Group of the U.S. House of Representatives filed a brief urging the U.S. Court of Appeals for the D.C. Circuit to hold that U.S. legislators and their aides cannot be forced to testify about their legislative activities, even when their expected testimony might help exonerate a criminal defendant.
The case raises interesting questions about the balancing of constitutional imperatives – here, the separation of powers and a criminal defendant’s right to present a defense. Fraser Verrusio, a former House staffer, is hoping for a balance struck in favor of defendants’ rights.
In 2011, Verrusio was convicted of accepting an illegal gratuity in connection with his duties as then policy director of the House Transportation Committee. According to the prosecution, Verrusio accepted and failed to report an all-expenses-paid trip to New York City that included a ticket to the World Series and an outing to a strip club. The trip was funded by United Rentals, a construction-equipment company that had stepped up its lobbying efforts to get favorable amendments into the federal highway bill. United Rentals wooed senior staff member Verrusio, who reportedly advised the chair of the House Transportation Committee (as well as the committee) on legislative strategies and policy. Prosecutors alleged that when Verrusio accepted the $1,200 trip, he knew that United Rentals was compensating him for future assistance on the highway bill.
One key piece of evidence against Verrusio was an e-mail that United Rentals lobbyist James Hirni sent to Vivian Curry, legislative director for then-House Committee member John Boozman. In his e-mail, Hirni said, “I have spoken to [Verrusio] and he is good to go. I am resending him the language in the Senate bill, with changes which would represent the 100 percent victory for [United Rentals. Verrusio] asked us to give him the language plus what we would want in the perfect world.”
To address the possible inferences from that e-mail, Verrusio’s attorneys issued a trial subpoena to Curry. The defense expected her to testify that Verrusio had not inserted himself into the legislative process and had not pressured her. But Curry moved to quash the subpoena on grounds that her testimony was privileged under the Speech or Debate Clause of the Constitution. She argued that the testimony sought was protected because it concerned “information gathering for legislative purposes.”
Verrusio countered that the inability to call Curry would violate his rights to due process and to present a complete defense. During the hearing on Curry’s motion, the defense made a potentially critical error when it acknowledged the “high hurdle” imposed by the Speech or Debate Clause and then conceded that the clause “in fact did “appear to cover [the e-mail] communications.” The court held that Curry had properly invoked the privilege and could not be forced to testify.
After the jury returned a guilty verdict on all counts, Verrusio appealed. Among other things, he claims that the trial court erred when it prevented him from calling Curry as a witness. In his view, one of two results must follow. First, Verrusio contends that protections under the Speech or Debate Clause are not absolute but, in some cases, must give way to a defendant’s right to compulsory process. He argues that trial judges should balance a defendant’s need for otherwise-protected testimony against the potential burden on Congress. When the case involves an aide’s testimony regarding informal, passive information gathering from a third party, the potential burden is minimal to non-existent. In such cases, the next question to ask is whether the testimony sought is material. In cases like his — where the jury verdict is already of questionable validity — the “materiality” bar is lower. Thus, he argues, any evidence calling into question the government’s theory could have created reasonable doubt.
Verrusio contends in the alternative that, if the Speech or Debate Clause privilege is absolute, the indictment must be dismissed.
The prosecution replies that Verrusio waived his right to appeal the trial judge’s order to quash. Not only did the defense concede that Curry’s testimony was protected; it first introduced the “balancing test” argument on appeal. Therefore the appellate court may not consider it.
Speaking as friends of the court, the House’s Bipartisan Legal Advisory Group framed the issue as one upon which “the whole American fabric” rests – separation of powers. The decision is simply whether an individual’s right to evidence trumps American liberty in general – an impossible bar to meet. After summarizing the history of the Speech or Debate Clause, the House brief argues that the clause is absolute, regardless of whether the proceedings are civil or criminal. Moreover, the testimony Verrusio sought from Curry was unquestionably protected because it concerned “activities that were ‘an integral part of the deliberative and communicative processes by which Members participate in committee and House proceedings.’” According to the House brief, no court has held that the Speech or Debate Clause privilege is subject to a balancing test. And Verrusio’s reliance on cases recognizing some flexibility with respect to executive privilege is unavailing since executive privilege is not expressly mandated in the Constitution.
But the House brief glosses over the fact that executive privilege is rooted in separation of powers just like the speech or debate privilege. That leaves the question of why the separation of powers in executive-privilege cases need not be guarded so jealously.
Courts decline to address thorny constitutional questions if they can resolve a case on other grounds. It seems likely that the D.C. Circuit will home in on Verrusio’s alleged failure to preserve his argument and save the speech or debate issue for another day. Verrusio’s reply brief is due to be filed by March 13, 2013; the D.C. Circuit will likely issue its decision sometime mid-year.
New Jersey will likely learn within two weeks if it will be able to move forward with its plan to implement sports betting in the state’s casinos and racetracks.
U.S. District Judge Michael Shipp heard oral arguments in Trenton on February 14, 2013, on the constitutionality of the 1992 Professional and Amateur Sports Protection Act (PASPA) and will decide the initial fate of the bill passed last year by the state legislature to legalize sports betting in the state.
The implications of this ruling will be far-reaching, since a decision in favor of the state would remove the biggest hurdle for New Jersey and other states that wish to implement sports betting plans. A favorable ruling could bring live sports betting to New Jersey within a few months.
In December, the court heard oral arguments on the plaintiffs’ standing to bring the suit and found that they did have standing. Next, the U.S. Department of Justice (DOJ) announced its intention to intervene and join the four major sports leagues and the NCAA as plaintiffs in the case. The DOJ filed a brief on February 1 defending the constitutionality of PASPA.
Paul Fishman, the U.S. attorney for the District of New Jersey, argued on behalf of the DOJ at the hearing and emphasized that PASPA was intended to stop the spread of state-sponsored gambling. Fishman’s arguments focused on the constitutional soundness of the statute, emphasizing that as long as there was a rational basis to pass the law, it was a valid exercise of Congress’s power under the Commerce Clause.
Ted Olson, the former United States Solicitor General who was arguing on behalf of the state, opened his arguments by making reference to the jobs and revenue that legalized sports betting would create for New Jersey. Olson also emphasized how state voters, the legislature, and the governor had all backed a law last year that would permit sports wagering but are prevented from implementing the law because of PASPA.
Fishman ended his initial arguments by discussing a 1991 memo written by the DOJ when PASPA was under consideration in Congress – a memo that the DOJ did not address in its brief on the constitutionality of PASPA. This memo noted that determinations of how to raise revenue are typically left to the states and since PASPA was seeking to regulate how states generate revenue, “it raises federalism issues.” Fishman tried to downplay the significance of the letter and argued that the “federalism issues” that the letter refers to were taken out of context.
The arguments covering the anti-commandeering principle, which prohibits the federal government from imposing duties on state legislators or executive officials to carry out a federal initiative, seemed to be of particular interest to Judge Shipp. Both sides argued at length about any costs or burden that New Jersey has been forced to take on in order to be in compliance with PASPA. Jeffrey Mishkin, representing the sports leagues, argued that for anti-commandeering issues to arise, the law must require some affirmative conduct from the state and that PASPA does not compel New Jersey to do anything. Olson also pointed out that there are costs and burdens imposed on New Jersey for complying with PASPA. Olson emphasized that the federal government should not be allowed to impose its will on the state, especially since Nevada has essentially been given a monopoly on single sports game betting under the statute.
The decision in this case will likely be appealed to the U.S. Court of Appeals for the Third Circuit. That court has heard prior appeals involving PASPA, but none of those cases addressed the issue of the constitutionality of the statute. The Supreme Court has never addressed PASPA.
It remains to be seen how Judge Shipp will rule in this case. State Sen. Raymond Lesniak, who has spearheaded New Jersey’s efforts to bring sports gambling to the state, has stated that sports betting could be live within 60 days if New Jersey receives a favorable ruling in the case. We support New Jersey’s efforts to legalize sports wagering in the state in the interests of helping its economy and citizens.
On Friday, February 1, 2013, the U.S. Department of Justice filed a brief in the U.S. District Court for the District of New Jersey defending the constitutionality of the Professional and Amateur Sports Protection Act of 1992 (PASPA), the hotly contested federal law that prohibits sports betting in most states. New Jersey is seeking to have the court find this law unconstitutional. A win for the state would have far-reaching ramifications by eliminating the primary hurdle that individual states have in implementing legal sports betting within their borders.
PASPA prohibits any state from offering sports betting unless that state had a sports betting scheme in place between 1976 and 1990. New Jersey had a one-year period to enact sports betting, but its legislature failed to act. Delaware, Oregon and Montana have limited sports betting schemes in place, and Nevada is the only state that is authorized to offer single-game sports betting under the law.
On January 22, DOJ announced that it planned to intervene in the lawsuit brought by the four major professional sports leagues and the NCAA challenging the New Jersey state law. DOJ could have brought a case when the law was initially passed, but chose not to.
The DOJ brief raises three main constitutional issues: the anti-commandeering principles of the Tenth Amendment, Congress’s power to regulate sports wagering under the Commerce Clause and the applicability of the uniformity and equal sovereignty principles under the Commerce Clause, and due process and equal protection clause issues under the Fifth Amendment.
DOJ argues in its brief that the anti-commandeering principle applies only when a federal statute requires specific, affirmative action by a state and that since PASPA does not require New Jersey to take any action but merely to refrain from starting a betting program, the principle is inapplicable.
New Jersey replies that the anti-commandeering principle does apply because a federal law is imposing constraints on the state. PASPA’s stated purpose is “to require States to govern according to Congress’ instructions.” The Supreme Court case that established the anti-commandeering principle, New York v. United States (1992), states that “the Constitution has never been understood to confer upon Congress the ability to require the States to govern according to Congress’ instructions.”
Additionally, under the Tenth Amendment, the power of the federal government is limited. Courts have typically viewed the ability to raise revenue, such as through gambling, as one of those rights reserved to the states. New Jersey has successfully regulated gambling for decades but has been prohibited from regulating sports betting simply because it did not have a betting scheme in place before enactment of PASPA over 20 years ago.
DOJ argues that PASPA is a valid exercise of federal power under the Commerce Clause because sports gambling has an effect on interstate commerce and PASPA is a rational method of achieving regulation of it. DOJ also does not give any credence to the argument that the law violates the principle of equal sovereignty.
New Jersey argues that the principle of equal sovereignty does apply under the Commerce Clause. The plain text of the Commerce Clause does not make clear that all states must be treated uniformly, but the state believes that the case law makes it applicable.
New Jersey argues that contrary cases cited by DOJ deal with regulations that fell unevenly on the states because of circumstances that were not spread through the country, largely based on geography. However, the rationale for allowing some states to authorize sports betting and not others was the pre-existing scheme in place before PASPA and nothing else. The grandfathering clause of PASPA has served to grant a monopoly to Nevada while discriminating against all other states. This federal government-sponsored monopoly denies to the states the equal sovereignty that they are guaranteed under the Constitution.
The DOJ brief states that the arguments that PASPA violates the due process and equal protection guarantees of the Fifth Amendment are inapplicable because they protect only “persons” and not states from actions of the federal government. New Jersey argues that the discrimination between the states that PASPA has produced, by essentially granting Nevada a monopoly on single games sports betting, rises to the level of “injurious character” as to violate due process. This is likely the weakest argument that the state is making, and the court will likely rule in favor of DOJ on this point.
When PASPA was being debated in Congress, DOJ sent a letter to then Senator Joseph Biden (D-Del.), then the Judiciary Committee chairman, discussing the views of DOJ on PASPA. The letter noted that determinations of how to raise revenue are typically left to the states and since PASPA was seeking to regulate how states generate revenue, “it raises federalism issues.” DOJ chose not to address that letter in its brief.
New Jersey and the New Jersey Thoroughbred Horseman’s Association will have an opportunity to file a reply brief with the court by February 8. Oral arguments on the constitutionality of PASPA will be held on February 14.
The arguments made in the DOJ brief, for the most part, have already been made by counsel for the sports leagues. However, it remains to be seen if the court will give the arguments more weight because they were made by the U.S. government.
If the court accepts any of the arguments made by New Jersey that PASPA is unconstitutional, then New Jersey will prevail. It remains to be seen how the court will rule, but the constitutionality of PASPA will surely be tested and the consequences of this ruling will be very far-reaching. Whichever side loses the battle in the district court will likely appeal, meaning it may be some time before it is settled whether New Jersey can proceed with its plan to implement sports betting.
In a January 23, 2013, ruling, the U.S. Court of Appeals for the 7th Circuit held that an Indiana law that prohibited most registered sex offenders from using social media websites was unconstitutional because it was “not narrowly tailored to protect the state’s interest.” The decision was restricted to the Indiana statute on sex offenders and did not extend its reasoning to another, related issue – whether courts can permissibly, as a condition of probation or supervised release, restrict white-collar criminals from using the Internet.
The fatal flaw of the Indiana law, the appeals court held, was that it was overbroad because it targeted substantial protected speech, rather than retaining a narrow focus on the specific evil of improper communication to minors.
The 7th Circuit noted that the Indiana statute affected First Amendment rights because it controlled expression via social media and limited the ability to receive information and ideas.
In recent cases of various sorts, including e-commerce cases, federal courts have proved all too willing to imposed Internet bans that trample on various constitutional rights. We focused on this problem in a National Law Journal article a couple of years ago that argued that courts go too far when they impose a broad ban on the use of the Internet against a defendant who had committed online fraud.
In the sex-offender case, Doe v. Marion County Prosecutor, the 7th Circuit acknowledged the strong state interest in protecting minors from harmful online communication, but explained that the ban must be narrowly tailored to target only the appropriate evil. All parties agreed that there is nothing inherently dangerous about using social media – except when a sex offender communicates with minors, which is only a “minuscule subset of the universe of social network activity.”
The same principle ought to be applied to restrictions on Internet use placed upon those who have been found guilty of fraud in e-commerce. Not all Internet usage should be treated as suspect.
Towards the end of its opinion, the court discussed Internet restrictions in the context of conditions of probation or supervised release. The court distinguished between a criminal statute, as in Indiana, that governs the protected speech of the general populace (including registered sex offenders) and the sentences imposed by district courts that may govern Internet usage.
The court said its opinion “should not be read to affect district courts’ latitude in fashioning terms of supervised release.” It elaborated that “Our penal system necessarily implicates various constitutional rights . . . a court could conceivably limit a defendant’s Internet access if full access posed too high a risk of recidivism.”
Somewhat ironically, the court noted that “The alternative to limited Internet access may be additional time in prison, which is surely more restrictive of speech than a limitation on electronics.” Although the 7th Circuit was not willing to expand its protection of Internet usage to the sentencing and probation context, we still think that its strong protection of Internet usage in the First Amendment context bodes well for future challenges in that context.
The U.S. Department of Justice announced on January 22, 2013, that it plans to intervene in the lawsuit brought by the four major professional sports leagues and the NCAA challenging a New Jersey state law that legalized sports betting in the state.
The leagues have argued in court papers that the New Jersey law is invalid because it directly contravenes a 1992 federal law, the Professional and Amateur Sports Protection Act (PASPA) that imposes a ban on sports betting unless the individual state had its own sports betting scheme in place between 1976 and 1990. New Jersey was given a one year window to put in place a sports betting scheme, but the legislature failed to act.
The DOJ has requested that it have until February 1 to respond to the two briefs that challenge the constitutionality of PASPA. The DOJ has also requested the opportunity to participate in oral argument on the constitutionality of PASPA on February 14.
A year ago, New Jersey Governor Chris Christie signed legislation allowing sports betting in New Jersey after it was approved by a 2-1 margin in a nonbinding voter referendum in November 2011.
The DOJ could have brought this lawsuit when the law was initially passed, but chose not to. Instead, the case was brought by the four major professional sports leagues and the NCAA. New Jersey has argued that the leagues lacked standing to bring the suit. However, last month, after briefs were filed an oral arguments were held, a district court judge in New Jersey ruled that the leagues do have standing to bring the suit.
When PASPA was being debated in Congress, the DOJ sent a letter to then Senator Joseph Biden (D-Del.), then the Judiciary Committee chairman, discussing the views of the DOJ on PASPA. The letter noted that determinations of how to raise revenue are typically left to the states and since PASPA was seeking to regulate how states generate revenue “it raises federalism issues.”
A successful outcome for New Jersey in this case would allow for other states to pursue legalized sports betting. We support New Jersey’s efforts to legalize sports betting and generate needed revenue and jobs for the state.
On December 18, 2012, oral arguments were heard in the federal lawsuit filed by the professional sports leagues and the NCAA against New Jersey, after the state passed a law that would legalize sports betting in the state’s casinos and racetracks. Last week, U.S. District Judge Michael Shipp ordered that oral argument would be limited to the issue of whether the sports leagues have standing to bring the suit.
The leagues filed suit in August arguing that the New Jersey law was in direct contravention of the Professional and Amateur Sports Protection Act (PASPA) of 1992, a federal statute that imposes a ban on sports betting unless the individual state had its own sports betting scheme in place between 1976 and 1990.
New Jersey has argued in court papers that the leagues have failed to allege that they will suffer a concrete injury as a result of the sports betting law. New Jersey asserts that the leagues have failed to show a particularized injury. The state has argued that given the proliferation of sports gambling, the harms that the leagues claim would flow from the new gambling law would occur in any case, regardless of the law or any relatively modest increase in legal sports betting that it may cause.
The leagues’ lawyer, Jeffrey Mishkin, started his argument today by stating that the standard for the leagues to show that they have standing is an “identifiable trifle” in how the law would affect them. Mishkin argued that the leagues do not have to prove damages or injury for standing, they only have to show that identifiable trifle.
The leagues’ arguments focused on two main points: that the leagues have standing because their games are the vehicles for the betting and that in passing PASPA Congress explicitly authorized the leagues to bring action against the states.
The leagues argued that they will suffer an injury to their reputations if there is an expansion of legalized gambling. Mishkin argued that the fact that New Jersey chose to exempt professional and collegiate sporting events held in the state, as well as collegiate sporting events held outside the state involving schools from New Jersey, from betting, as evidence that the state believes that gambling on these events can cause problems.
Mishkin argued that when Congress passed PASPA it explicitly acknowledged that the leagues would have a personal stake in gambling laws because the perception of the leagues would be adversely affected by gambling. Mishkin said that “every dropped pass” and “every missed free throw” would raise suspicion.
Ted Olson, a former United States Solicitor General arguing on behalf of New Jersey, said the state would be regulating conduct that is already occurring. Olson cited statistics showing how prevalent sports betting is in this country, both legally and illegally.
Olson said the leagues needed to demonstrate more than just the perception that the law would hurt their business; they needed to show an “actual, identifiable, particularized, concrete injury” from the law to have standing to bring the case. He emphasized that Congress cannot remove Article III standing requirements, as there needs to be a finding by the court that the injury is specific and supported by facts.
Olson argued that the leagues are already thriving amidst a huge sports gambling market and the state would be bringing the black market gambling into the light and regulating it. Olson argued that there is no evidence that gambling has hurt the leagues and pointed out the prevalence of fantasy sports, which the leagues have largely embraced. He also pointed out that the leagues are in regular contact with the Las Vegas sports books to monitor shifts in betting on their games and this cannot happen in places where sports betting is occurring on the black market.
There was extensive discussion of the 2009 Third Circuit ruling in Office of the Commissioner of Baseball v. Markell, where the court held that most of Delaware’s plan to expand its sports betting offerings violated PASPA. Delaware, a state that had a PASPA exemption because it had a betting scheme in place before PASPA’s enactment, sought to offer single game bets and bets on any professional or amateur sporting event other than NFL games. This was rebuffed by the court because these were betting schemes that were not in place at the time that PASPA went into effect. Standing was not an issue discussed by the court in its opinion in Markell, and lawyers for the league implied today that this was because standing of the leagues was so obvious that the court did not need to address it. Judge Shipp also directly asked the state how it could reconcile the state’s argument that the leagues lack standing with the Third Circuit decision.
The Department of Justice has until January 20 to intervene, if it chooses to. New Jersey regulators have stated that they will begin granting licenses to offer sports betting beginning on January 9.
Judge Shipp stated that a written decision on the standing issue would be released by Friday, December 21. It remains to be seen how the court will rule. Based on observations from court today, it seemed the judge is inclined to believe that the leagues have the sufficient “identifiable trifle” to challenge the law.
If the court does find that the leagues have standing to bring the suit, the court will proceed to hear the case on the merits and will likely have to decide the constitutionality of PASPA.