799 F.3d 259
3d Cir.2015Background
- Congress enacted the Professional and Amateur Sports Protection Act (PASPA) in 1992 to prohibit governmental entities from sponsoring, operating, advertising, promoting, licensing, or "authorizing by law" sports gambling. PASPA allows private suits by affected sports leagues.
- New Jersey historically prohibited sports betting; voters approved a 2011 constitutional amendment allowing the Legislature to "authorize by law" sports wagering at Atlantic City casinos and certain racetracks, subject to limits (e.g., no wagering on NJ college teams).
- The Legislature passed a regulatory Sports Wagering Act in 2012, which this Court held violated PASPA in Christie I, 730 F.3d 208 (3d Cir. 2013). The Supreme Court denied certiorari.
- In 2014 New Jersey enacted SB 2460 (the 2014 Law), which repealed statutory prohibitions as to casinos and racetracks (while leaving age and college-team limits) — effectively permitting sports betting at those locations without creating a new regulatory licensing scheme.
- Leagues sued to enjoin the 2014 Law as violating PASPA. The district court granted summary judgment for the Leagues and entered a permanent injunction; New Jersey appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2014 Law violates PASPA’s prohibition on states "authorizing by law" sports gambling | Leagues: SB 2460 affirmatively authorizes and/or licenses sports gambling by selectively removing prohibitions for casinos/racetracks | New Jersey: 2014 Law is a repeal (not an authorization); Christie I permits repeal; no state "authorization" because repeal leaves conduct unprohibited rather than affirmatively authorized | Held: Violates PASPA — the 2014 Law authorizes sports gambling by law because it selectively removes prohibitions for specific venues and persons |
| Whether the State may avoid PASPA by labeling the statute a "repeal" or including a construction clause disclaiming state authorization | Leagues: Labeling cannot evade federal supremacy; substance controls | New Jersey: Construction provision states act is not intended to cause the State to "sponsor, operate, advertise, promote, license, or authorize by law" sports wagering | Held: Construction clause ineffective; courts look to substance, not labels, and Supremacy Clause prevents evasive drafting |
| Whether injunction relief should be limited to contests of plaintiff leagues or apply more broadly | Leagues: PASPA allows leagues to enjoin violations generally | NJTHA: Injunction should be limited to plaintiffs’ games | Held: Injunction is nationwide in scope as to the statute because PASPA permits enjoining violations of §3702 without limiting remedy to only the plaintiffs’ contests |
| Whether Leagues are barred from equitable relief by unclean hands | NJTHA: Leagues profit from or tolerate other forms of betting (fantasy, events abroad), so unclean hands bars relief | Leagues: Their conduct is not unconscionable or directly related to this litigation | Held: Unclean hands doctrine does not apply; allegations do not meet the required standard |
Key Cases Cited
- National Collegiate Athletic Ass'n v. Governor of New Jersey, 730 F.3d 208 (3d Cir. 2013) (held PASPA constitutional and rejected that repeal = authorization)
- Haywood v. Drown, 556 U.S. 729 (2009) (Supremacy Clause cannot be evaded by formalistic drafting)
- Howlett ex rel. Howlett v. Rose, 496 U.S. 356 (1990) (labels cannot evade federal preemption)
- Ex parte Young, 209 U.S. 123 (1908) (allows suits against state officials to enjoin ongoing violations of federal law)
- Pennhurst State School & Hospital v. Halderman, 465 U.S. 89 (1984) (federal courts may enforce federal rights against state officials)
- Marx v. General Revenue Corp., 568 U.S. 371 (2013) (canon against surplusage when interpreting statutes)