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National Collegiate Athletic Association v. Christie

United States District Court, D. New Jersey

November 21, 2014

NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, et al., Plaintiffs,
v.
CHRISTOPHER J. CHRISTIE, et al., Defendants. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, et al., Plaintiffs,
v.
CHRISTOPHER J. CHRISTIE, et al., Defendants.

OPINION

MICHAEL A. SHIPP, District Judge.

This matter comes before the Court on application for a preliminary injunction by Plaintiffs National Collegiate Athletic Association ("NCAA"), National Basketball Association ("NBA"), National Football League ("NFL"), National Hockey League ("NHL"), and Office of the Commissioner of Baseball, doing business as Major League Baseball ("MLB"), (collectively "Plaintiffs" or the "Leagues") to enjoin Christopher J. Christie, 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 ("State Defendants"); the New Jersey Sports and Exposition Authority ("NJSEA"); and New Jersey Thoroughbred Horsemen's Association ("NJTHA") (collectively "Defendants").[1] (ECF No. 12; 12-4947, ECF No. 174.)[2] On November 10, 2014, the Court notified the parties of its intent to consolidate the Leagues' application for a preliminary injunction with a final disposition on the merits. (ECF No. 50; 12-4947, ECF No. 192.) The Court conducted oral argument on November 20, 2014. The Court, having considered the parties' submissions and arguments, and for the reasons stated below, finds that the Leagues are entitled to summary judgment on Count One of the Complaint and a concomitant permanent injunction.

I. Introduction

Sports betting continues to be an issue of great importance to New Jersey. In 2011, the people of New Jersey passed a referendum, approving a constitutional amendment that authorized sports gambling in the state at casinos and racetracks. Subsequently, New Jersey enacted legislation in 2012 that legalized and regulated sports gambling at New Jersey racetracks and casinos for individuals age twenty-one and older, with the exception of wagering on college sporting events that take place in New Jersey or on New Jersey college teams (the "2012 Law"). The Leagues then sued, and the Defendants challenged the constitutionality of the Professional and Amateur Sports Protection Act ("PASPA"). The State Defendants, the Legislature Defendants, and the NJTHA vigorously litigated the issue before the Undersigned and the Third Circuit Court of Appeals. Both courts found PASPA constitutional, and the United States Supreme Court declined certiorari. On October 17, 2014, the State enacted legislation repealing the 2012 Law and other provisions of state law related to gaming insofar as they bar sports wagering in certain contexts (the "2014 Law"). Defendants assert that the 2014 Law results in legal sports gambling at New Jersey racetracks and casinos for individuals age twenty-one and older, with the exception of wagering on college sporting events that take place in New Jersey or on New Jersey college teams. This case requires the Court to determine whether New Jersey's recent attempt to do indirectly what it could not do directly-bring sports wagering to New Jersey in a limited fashion-conflicts with PASPA.

It is a well-known principle that "the rule of law is sacrosanct, binding on all Americans." (Leagues' TRO Br., Decl. of Anthony J. Dreyer ("Dreyer Decl."), Ex. 8, Governor Christie's Statement Vetoing S. 2250, ECF No. 12-11.) The Supremacy Clause makes the Constitution and the laws passed pursuant to it the supreme law of the land and provides the mechanism to enforce uniform national policies. When state law contradicts with federal law, the Supremacy Clause operates to preclude states from following policies different than those set forth by federal law. As the Third Circuit noted in Christie I, to allow states to follow policies contrary to federal law would be "revolutionary, " reducing the Constitution to the same impotent condition that existed under the Articles of Confederation. See Nat'l Collegiate Athletic Ass'n v. Governor of N.J., 730 F.3d 208, 230 (3d Cir. 2013), cert. denied sub nom., Christie v. Nat'l Collegiate Athletic Ass'n, 134 S.Ct. 2866 (2014) (" Christie I ").

New Jersey's current desire to allow sports wagering within its borders is not unique to the State. While New Jersey is at the forefront of this movement, many states around the country appear poised to join should New Jersey provide a roadmap around PASPA. New Jersey's most recent legislation does not provide such a roadmap. While novel, the recent legislation still conflicts with PASPA and thus must yield to the federal law. As a result, to the extent the people of New Jersey disagree with PASPA, their remedy is to repeal the state's prohibition consistent with the Third Circuit's directive or work towards a repeal or amendment of PASPA in Congress. "Ignoring federal law, rather than working to reform federal standards, is counter to our democratic traditions and inconsistent with... Constitutional values." (Leagues' TRO Br., Dreyer Decl., Ex. 8, Governor Christie's Statement Vetoing S. 2250, ECF No. 12-11.)

II. Background

A. The Professional and Amateur Sports Protection Act

Congress enacted PASPA, 28 U.S.C. §§ 3701-3704, in 1992 "to prohibit sports gambling conducted by, or authorized under the law of, any State or governmental entity' and to stop the spread of State-sponsored sports gambling.'" Christie I, 730 F.3d at 216 (quoting S. Rep. 102-248, at 4 (1991), reprinted in 1992 U.S.C.C.A.N. 3553, 3555). To that end, 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. PASPA includes a grandfather clause, which exempts states with preexisting sports wagering laws. Id. § 3704. Additionally, PASPA granted New Jersey a one-year window to legalize wagering on sports, but New Jersey chose not to exercise that option. Christie I, 730 F.3d at 216 (citing § 3704). At the time Congress enacted PASPA, " all but one state prohibited broad state-sponsored gambling, " but states, including New Jersey, were beginning to consider different laws that would allow sports wagering in their states. Id. at 234; see also S. Rep. 102-248, at 5. PASPA's legislative history makes clear that Congress enacted PASPA to "keep sports gambling from spreading" pursuant to a state scheme. S. Rep. 102-248, at 5.

B. Christie I : The 2012 Law

Roughly twenty years after the enactment of PASPA, New Jersey sought to adopt legalized sports wagering within its borders. In 2010, the New Jersey Legislature held public hearings regarding sports wagering and ultimately asked New Jersey voters to consider an amendment to the State's Constitution, [3] to make it "lawful for the Legislature to authorize by law wagering... on the results of any professional, college, or amateur sport or athletic event." N.J. Const. art. IV, § 7, ¶ 2(D), (F). In the November 2011 general election, New Jersey voters approved the referendum, and the constitutional amendment became effective on December 8, 2011. On January 17, 2012, pursuant to this constitutional amendment, New Jersey enacted the 2012 Law, N.J. Stat. Ann. §§ 5:12A-1 to -4, -5 to -6 (2012). In response to the enactment of the 2012 Law, on August 7, 2012, the Leagues filed a complaint against the State Defendants claiming that the 2012 Law violated PASPA.[4] (12-4947, ECF No. 1.)

On February 28, 2013, after careful consideration of the positions advanced during the course of the litigation, this Court found that "Congress acted within its power and [PASPA] does not violate the United States Constitution, " and entered a permanent injunction. Christie I, 926 F.Supp.2d 551, 554 (D.N.J. 2013). On September 17, 2013, the Third Circuit, in a de novo review, affirmed this Court's decision. The Third Circuit held that: (1) the Leagues had standing to bring the action; (2) PASPA's enactment was within Congress's power under the Commerce Clause; (3) PASPA did not violate the anti-commandeering principle; and (4) PASPA was not invalid under the doctrine of equal sovereignty. See Christie I, 730 F.3d at 215. On June 23, 2014, the United States Supreme Court denied certiorari. See Christie I, 134 S.Ct. 2866 (2014).

On the same day the Supreme Court denied Defendants' certiorari petition, legislation was introduced in the New Jersey Senate "[p]artially repealing prohibitions against sports wagering at racetracks and casinos in New Jersey." S. 2250, 216th Leg. (N.J. 2014) (vetoed). Three days later, the Senate and the Assembly both passed the legislation without any recorded debate or discussion. Id. On August 8, 2014, Governor Christie vetoed the legislation. Governor Christie said the legislation was "a novel attempt to circumvent the Third Circuit's ruling" in Christie I. (Leagues' TRO Br., Dreyer Decl., Ex. 8, Governor Christie's Statement Vetoing S. 2250, ECF No. 12-11.) Governor Christie stated that, while he did "not agree with the Circuit Court's conclusion, [he] believe[s] that the rule of law is sacrosanct, binding on all Americans." ( Id. ) Governor Christie acknowledged: "[i]gnoring federal law, rather than working to reform federal standards, is counter to our democratic traditions and inconsistent with the Constitutional values I have sworn to defend and protect." ( Id. )

One month later, on September 8, 2014, New Jersey's Acting Attorney General issued a Law Enforcement Directive to all New Jersey law enforcement personnel regarding the 2012 Law. The Directive concluded that, based on the severability clause in the statute, the central provisions of the 2012 Law, which establish that casinos or racetracks may operate sports pools, remained in effect, and thus, such activity was exempted from criminal and civil liability. (State Defs.' Clarification Mot. 1-2, 12-4947, ECF No. 161.) On the same day, the State Defendants filed a motion in Christie I requesting that the Court clarify its permanent injunction or modify its injunction to conform to this interpretation of the Third Circuit's decision. ( Id. at 8-9.) In connection with this request, the State Defendants secured a moratorium on sports wagering in New Jersey from all casinos and racetracks until October 26, 2014. (Oct. 9, 2014 Ltr., Ex. A, 12-4947, ECF No. 168.) On October 17, 2014, the State Defendants withdrew their motion for clarification or modification and notified the Court that Governor Christie signed New Jersey Senate Bill 2460 into law. (Oct. 17, 2014 Ltr., 12-4947, ECF No. 173.)

C. Christie II : The 2014 Law

The 2014 Law was first introduced in the Senate on October 9, 2014. S. 2460, 216th Leg. (N.J. 2014) (enacted). On October 14, 2014, the Senate and the Assembly passed the bill with a 28-1 vote and 73-4-0 vote, respectively. Id. There is no recorded floor debate or discussion for the 2014 Law. One of the 2014 Law's sponsors, however, touted the legislation as "a short step away from getting this done and a lot closer to bringing sports betting to New Jersey." (Leagues' TRO Br., Dreyer Decl., Ex. 10, ECF No. 12-13 (quoting State Senator Raymond J. Lesniak).) On October 17, 2014, Governor Christie signed the legislation into law. (Oct. 17, 2014 Ltr., 12-4947, ECF No. 173.)

The 2014 Law is designed to partially repeal all state laws and regulations prohibiting sports wagering, but only in certain circumstances. The 2014 Law "partially repeal[s] the prohibitions, permits, licenses, and authorizations concerning wagers on professional, collegiate, or amateur sport contests or athletic events." S. 2460, 216th Leg. (2014) (enacted). In addition to repealing the 2012 Law, the 2014 Law repeals provisions of New Jersey law governing criminal penalties for gambling, N.J. Stat. Ann. §§ 2C:37-1 to -9, civil penalties for gambling, N.J. Stat. Ann. §§ 2A:40-1 to -9, the regulation of equine breeding and racing, N.J. Stat. Ann. §§ 5:5-1 to -189, and the Casino Control Act, N.J. Stat. Ann. §§ 5:12-1 to -233, as well as "any rules and regulations that may require or authorize any State agency to license, authorize, permit or otherwise take action to allow any person to engage in the placement or acceptance of any wager on any professional, collegiate, or amateur sport contest or athletic event, or that prohibit participation in or operation of a pool that accepts such wagers." N.J. Stat. Ann. § 5:12A-7. The 2014 Law, however, only repeals these laws "to the extent they apply or may be construed to apply [to sports wagering] at a casino or gambling house operating in this State in Atlantic City or a running or harness horse racetrack in this State, ... by persons 21 years ...


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