Nat'l Collegiate Athletic Ass'n v. Governor of N.J.

Decision Date17 September 2013
Docket Number13–1714,Nos. 13–1713,13–1715.,s. 13–1713
Citation730 F.3d 208
PartiesNATIONAL COLLEGIATE ATHLETIC ASSOCIATION, an unincorporated assoc iation; National Basketball Association, a joint venture; National Football League, an unincorporated association; National Hockey League, an unincorporated association; Office of the Commissioner of Baseball, an unincorporated association doing business as Major League Baseball; United States of America (Intervenor in the District Court) v. GOVERNOR OF the State of NEW JERSEY; David L. Rebuck, Director of the New Jersey Division of Gaming Enforcement and Assistant Attorney General of the State of New Jersey; Frank Zanzuccki, Executive Director of the New Jersey Racing Commission New Jersey Thoroughbred Horsemen's Association, Inc.; Stephen M. Sweeney; Sheila Y. Oliver (Intervenors in District Court) Stephen M. Sweeney and Sheila Y. Oliver, Appellants. National Collegiate Athletic Association, an unincorporated association; National Basketball Association, a joint venture; National Football League, an unincorporated association; National Hockey League, an unincorporated association; Office of the Commissioner of Baseball, an unincorporated association doing business as Major League Baseball; United States Of America (Intervenor in the District Court) v. Governor of the State of New Jersey; David L. Rebuck, Director of the New Jersey Division of Gaming Enforcement and Assistant Attorney General of the State of New Jersey; Frank Zanzuccki, Executive Director of the New Jersey Racing Commission New Jersey Thoroughbred Horsemen's Association, Inc.; Stephen M. Sweeney; Sheila Y. Oliver (Intervenors in District Court) New Jersey Thoroughbred Horsemen's Association, Inc., Appellant. National Collegiate Athletic Association, an unincorporated association; National Basketball Association, a joint venture; National Football League, an unincorporated association; National Hockey League, an unincorporated association; Office of the Commissioner of Baseball, an unincorporated association doing business as Major League Baseball; United States of America (Intervenor in the District Court) v. Governor of the State of New Jersey; David L. Rebuck, Director of the New Jersey Division of Gaming Enforcement and Assistant Attorney General of the State of New Jersey; Frank Zanzuccki, Executive Director of the New Jersey Racing Commission New Jersey Thoroughbred Horsemen's Association, Inc.; Stephen M. Sweeney; Sheila Y. Oliver (Intervenors in District Court) Governor of the State of New Jersey; David L. Rebuck and Frank Zanzuccki, Appellants.
CourtU.S. Court of Appeals — Third Circuit

OPINION TEXT STARTS HERE

Theodore B. Olson, Esq., [Argued], Matthew D. McGill, Esq., Ashley E. Johnson, Esq., Robert E. Johnson, Esq., Gibson Dunn & Crutcher, LLP, Washington, DC, John J. Hoffman, Esq., Christopher S. Porrino, Esq., Stuart M. Feinblatt, Esq., Peter M. Slocum, Esq., Office of the Attorney General of the State of New Jersey, Trenton, NJ, for Appellants Governor of the State of New Jersey, David L. Rebuck, Director of the New Jersey Division of Gaming Enforcement, and Frank Zanzuccki, Executive Director of the New Jersey Racing Commission.

Michael R. Griffinger, Esq., [Argued], Thomas R. Valen, Esq., Jennifer A. Hradil, Esq., Gibbons P.C., Newark, NJ, for Intervenors Stephen Sweeney and Sheila Oliver.

Ronald J. Riccio, Esq., [Argued], Eliot Berman, Esq., McElory, Deutsch, Mulvaney & Carpenter LLP, Morristown, NJ, for Intervenor New Jersey Thoroughbred Horsemen's Association, Inc.

Paul D. Clement, Esq., [Argued], Candice Chiu, Esq., William R. Levi, Esq., Erin E. Murphy, Esq., Bancroft PLLC, Washington, DC, William J. O'Shaughnessy, Esq., Richard Hernandez, Esq., McCarter & English LLP, Newark, NJ, Jeffrey A. Mishkin, Esq., Skadden, Arps, Slate, Meagher & Flom LLP, New York, NY, for Appellees National Collegiate Athletic Association, National Basketball Association, National Football League, National Hockey League, and Office of the Commissioner of Baseball d/b/a Major League Baseball.

Paul J. Fishman, Esq., [Argued], Office of the United States Attorney, Newark, NJ, Peter J. Phipps, Esq., Scott McIntosh, Esq., United States Department of Justice, Washington, DC, for Intervenor United States of America.

Christopher S. Dodrill, Esq., Elbert Lin, Esq., Attorney General of West Virginia, Charleston, WV, for Amici Curiae States of West Virginia, Georgia, and Kansas, and the Commonwealth of Virginia in Support of Appellants and Reversal.

Before: FUENTES, FISHER, and VANASKIE, Circuit Judges.

OPINION OF THE COURT

FUENTES, Circuit Judge:

Betting on sports is an activity that has unarguably increased in popularity over the last several decades. Seeking to address instances of illegal sports wagering within its borders and to improve its economy, the State of New Jersey has sought to license gambling on certain professional and amateur sporting events. A conglomerate of sports leagues, displeased at the prospect of State-licensed gambling on their athletic contests, has sued to halt these efforts. They contend, alongside the United States as intervening plaintiff, that New Jersey's proposed law violates a federal law that prohibits most states from licensing sports gambling, the Professional and Amateur Sports Protection Act of 1992 (PASPA), 28 U.S.C. § 3701 et seq.

In defense of its own sports wagering law, New Jersey counters that the leagues lack standing to bring this case because they suffer no injury from the State's legalization of wagering on the outcomes of their games. In addition, alongside certain intervening defendants, New Jersey argues that PASPA is beyond Congress' Commerce Clause powers to enact and that it violates two important 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 the states from enacting legislation to license sports gambling; the other known as the “equal sovereignty” principle, in that PASPA permits Nevada to license widespread sports gambling while banning other states from doing so. The District Court disagreed with each of these contentions, granted summary judgment to the leagues, and enjoined New Jersey from licensing sports betting.

On appeal, we conclude that the leagues have Article III standing to enforce PASPA and that PASPA is constitutional. As will be made clear, accepting New Jersey's arguments on the merits would require us to take several extraordinary steps, including: invalidating for the first time in our Circuit's jurisprudence a law under the anti-commandeering principle, a move even the United States Supreme Court has only twice made; expanding that principle to suspend commonplace operations of the Supremacy Clause over state activity contrary to federal laws; and making it harder for Congress to enact laws pursuant to the Commerce Clause if such laws affect some states differently than others.

We are cognizant that certain questions related to this case—whether gambling on sporting events is harmful to the games' integrity and whether states should be permitted to license and profit from the activity—engender strong views. But we are not asked to judge the wisdom of PASPA or of New Jersey's law, or of the desirability of the activities they seek to regulate. We speak only to the legality of these measures as a matter of constitutional law. Although this “case is made difficult by [Appellants'] strong arguments” in support of New Jersey's law as a policy matter, see Gonzales v. Raich, 545 U.S. 1, 9, 125 S.Ct. 2195, 162 L.Ed.2d 1 (2005), our duty is to “say what the law is,” Marbury v. Madison, 5 U.S. 137, 1 Cranch 137, 177, 2 L.Ed. 60 (1803). “If two laws conflict with each other, the courts must decide on the operation of each.” Id. New Jersey's sports wagering law conflicts with PASPA and, under our Constitution, must yield. We will affirm the District Court's judgment.

I. LEGAL FRAMEWORK

Wagering on sporting events is an activity almost as inscribed in our society as participating in or watching the sports themselves. New Jersey tells us that sports betting in the United States—most of it illegal—is a $500 billion dollar per year industry. And scandals involving the rigging of sporting contests in the interest of winning a wager are as old as the games themselves: the infamous Black Sox scandal of the 1919 World Series, or Major League Baseball's (MLB) lifetime ban on all-time hits leader Pete Rose for allegedly wagering on games he played in come to mind. And the recent prosecution of Tim Donaghy, a National Basketball Association (NBA) referee who bet on games that he officiated, reminds us of problems that may stem from gambling.

However, despite its pervasiveness, few states have ever licensed gambling on sporting events. Nevada alone began permitting widespread betting on sporting events in 1949 and just three other states—Delaware, Oregon, and Montana—have on occasion permitted limited types of lotteries tied to the outcome of sporting events, but never single-game betting. Sports wagering in all forms, particularly State-licensed wagering, is and has been illegal elsewhere. See, e.g.,18 Pa. Cons.Stat. Ann. § 5513; Del.Code Ann. tit. 11, § 1401, et seq. Congress took up and eventually enacted PASPA in 1992 in response to increased efforts by states to begin licensing the practice.

A. The Professional and Amateur Sports Protection Act of 1992

PASPA's key provision applies for the most part identically to “States” and “persons,” providing that neither may

sponsor, operate, advertise, or promote ... a lottery, sweepstakes, or other betting, gambling, or wagering scheme based directly or indirectly (through the use of geographical references or otherwise), on one or more competitive games in which amateur or professional athletes participate, or are intended to participate, or on one or more performances of such...

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