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Interactive Media v. United States Attorney General Eric H. Holder

March 7, 2011

INTERACTIVE MEDIA ENTERTAINMENT & GAMING ASSOCIATION, INC., NEW JERSEY THOROUGHBRED HORSEMEN'S ASSOCIATION, INC., THOROUGHBRED BREEDERS ASSOCIATION OF NEW JERSEY, AND RAYMOND J. LESNIAK, INDIVIDUALLY AND AS A MEMBER OF THE NEW JERSEY SENATE, PLAINTIFFS,
v.
UNITED STATES ATTORNEY GENERAL ERIC H. HOLDER, JR., AND UNITED STATES FOR THE DISTRICT OF NEW JERSEY RALPH J. MARRA, JR., AND ABC SPORTS ORGANIZATIONS, 1 TO 1000, DEFENDANTS.



The opinion of the court was delivered by: Hon. Garrett E. Brown, Jr.

NOT FOR PUBLICATION

MEMORANDUM OPINION

BROWN, ChiefJudge:

This matter comes before the Court on the motion to dismiss (Doc. No. 40) filed by Defendants Eric H. Holder, the Attorney General of the United States, and Paul J. Fishman, the United States Attorney for the District of New Jersey (collectively, the "Government"). The Government seeks dismissal pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6) for lack of standing and for failure to state a claim. The Court has considered the parties' submissions and decided the matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For the following reasons, the Court will grant the Government's motion and dismiss Plaintiffs' Complaint for lack of standing.

I. BACKGROUND

This matter involves a challenge to the constitutionality of the Professional and Amateur Sports Protection Act of 1992 (PASPA), 28 U.S.C. § 3701 et seq. Plaintiffs include: Interactive Media Entertainment & Gaming Association, Inc. (iMEGA), a New Jersey non-profit corporation that disseminates information regarding electronic gaming via the Internet, and has members that provide Internet gambling services; The New Jersey Thoroughbred Horsemen's Association, Inc., The Thoroughbred Breeders Association of New Jersey, and The Standardbred Breeders & Owners Association of New Jersey (collectively, "N.J. Horsemen's Associations"), who represent various interests of the thoroughbred and standardbred horse industries; and RaymondJ. Lesniak, the New Jersey State Senator for the 20th Legislative District. On April 21, 2010, State Senator and President of the New Jersey Senate Stephen M. Sweeney filed an Intervenor Complaint. By letter of July 12, 2010, Governor Chris Christie declined to intervene in this action.

Congress enacted PASPA in 1992 to curtail the expansion of sports gambling. PASPA makes it unlawful for (1) a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact, or (2) a person to sponsor, operate, advertise, or promote, pursuant to the law or compact of a governmental entity, 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 athletes in such games.

28 U.S.C. § 3702. To enforce these restrictions, PASPA authorizes the United States Attorney General or "a professional sports organization or amateur sports organization whose competitive game is alleged to be the basis of [a § 3702] violation" to file a civil enforcement action. 28 U.S.C. § 3703. PASPA also included a grandfather provision, which exempted from § 3702's restrictions those States and governmental entities that conducted a sports wagering scheme prior to the Act's passage. Id. § 3704(a)(1)--(2).*fn1 For states that already permitted casino gambling during the ten years prior to enactment, PASPA gave these states one year from the Act's effective date to authorize a sports wagering scheme. Id. § 3704(a)(3). It appears that this bypass provision only applied to the state of New Jersey. Although the New Jersey legislature considered legislation to bypass PASPA's restrictions under this provision, it failed to enact such legislation during the statutory period. See In re Casino Licensees,268 N.J. Super. 469, 470--71 (App. Div. 1993).

Plaintiffs claim that PASPA's limitation on sports-related gambling activities violates the following provisions of the U.S. Constitution: the Commerce Clause, the First Amendment freedoms of expression and assembly, the Tenth Amendment, the Eleventh Amendment, the substantive and procedural protections of the Due Process Clause of the Fifth and Fourteenth Amendments, and the Equal Protection Clause. Plaintiffs ask this Court to find PASPA unconstitutional and permanently enjoin its enforcement. The Government moves to dismiss, arguing (1) that this Court lacks jurisdiction because Plaintiffs lack standing to challenge the constitutionality of PASPA, and (2) that Plaintiffs' constitutional claims fail as a matter of law.

While this motion was pending, the Court permitted supplemental briefing regarding the impact of pending state legislation on the legal issues presented by this motion. Plaintiffs filed their supplemental briefs on January 18, 2011, informing the Court that the New Jersey legislature passed Senate Concurrent Resolution No. 132, which will place a proposed amendment to the New Jersey Constitution on the ballot for voter referendum during the next general election. If approved by the voters, SCR 132, which was sponsored by Senator Lesniak, would amend Article IV, § VII, paragraph 2 of the New Jersey constitution to permit the legislature to authorize sports wagering at Atlantic City casinos and certain horse racetracks, so long as the gambling did not extend to sporting events taking place in New Jersey or involving New Jersey collegiate teams. See SCR 132.

II. ANALYSIS

The Court begins with the Government's standing argument, because standing is a jurisdictional requirement. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560--61 (1992);

St. Thomas-St. John Hotel & Tourism Ass'n, Inc. v. Government of Virgin Islands, 218 F.3d 232, 240 (3d Cir. 2000). Standing derives from Article III of the Constitution, which limits the exercise of judicial power to "cases" and "controversies" arising under the Constitution and laws of the United States and/or between specified parties. U.S. Const. art. III, § 2; see also Allen v. Wright, 468 U.S. 737, 750 (1984) ("Article III of the Constitution confines the federal courts to adjudicating actual 'cases' and 'controversies.'"). Standing jurisprudence consists of both constitutional and prudential "strands." Elk Grove Unified School Dist. v. Newdow, 542 U.S. 1, 11 (2004). "In its constitutional dimension, standing imports justiciability: whether the plaintiff has made out a 'case or controversy' between himself and the defendant within the meaning of Art. III. This is the threshold question in every federal case, determining the power of the court to entertain the suit." Warth v. Seldin, 422 U.S. 490, 498 (1975). Prudential standing "embodies 'judicially self-imposed limits on the exercise of federal jurisdiction,'" such as "'the general prohibition on a litigant's raising another person's legal rights, the rule barring adjudication of generalized grievances more appropriately addressed in the representative branches, and the requirement that a plaintiff's complaint fall within the zone of interests protected by the law invoked.'" Elk Grove, 542 U.S. at 11--12 (quoting Allen, 468 U.S. at 751).

The constitutional "core" of standing requires that "[a] plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief." Allen, 468 U.S. at 751. Put another way, a plaintiff must demonstrate an injury, traceability, and redressability. With regard to injury, a plaintiff must allege an "injury in fact" that is either "(a) concrete and particularized" or "(b) actual or imminent," but "not conjectural or hypothetical." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) (internal quotation marks and citations omitted). "[I]n order to obtain forward-looking relief, a plaintiff must face a threat of injury that is both 'real and immediate . . . .'" In re New Motor Vehicles Canadian Export Antitrust Litig., 522 F.3d 6, 14 (1st Cir. 2008) (quoting O'Shea v. Littleton, 414 U.S. 488, 494 (1974)). The traceability, or causation, element of standing ensures that the correct parties are before the court. "[T]he injury has to be fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the independent action of some third party not before the court." Lujan, 504 U.S. at 560 (internal quotation marks and citation omitted). Lastly, "it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Id. at 561 (internal quotation marks and citation ...


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