By Brittany Tellex
Overview of the Case
In December 2011, the citizens of New Jersey voted in favor of amending the State Constitution to permit gambling “on the results of any professional, college, or amateur sport or athletic events” (N.J. Const., art. IV, sec. VII para. 2(D)). Following this vote, the New Jersey State Legislature enacted the Sports Wagering Law authorizing sports betting in Atlantic City casinos and horse racing tracks around the State. On July 2, 2012, the New Jersey Division of Gaming Enforcement implemented a series of regulations permitting private parties to obtain sports betting licenses in accordance with the Sports Wagering Law.
Shortly thereafter, on August 7, 2012, the National Collegiate Athletic Association (“NCAA”), National Basketball Association (“NBA”), National Football League (“NFL”), National Hockey League (“NHL”), and Major League Baseball (“MLB”) (collectively “Leagues” or “Plaintiffs”) filed suit against New Jersey Governor Chris Christie and other high ranking State officials (collectively “Defendants” or “New Jersey”) seeking an injunction preventing Defendants from implementing the Sports Wagering Law. Plaintiffs asserted that the Sports Wagering Law violated the federal Professional and Amateur Sports Protection Act (“PASPA”). PASPA, enacted by Congress in 1992, prohibits government entities from “licensing or authorizing…[a] betting, gambling, or wagering scheme based…on competitive games in which professional or amateurs participate,” and prohibits private individuals from engaging in betting pursuant to any such scheme (28 U.S.C. § 3702). Also, PASPA gives sports organizations a civil remedy to combat sports betting. “A civil action to enjoin a violation of section 3702 may be commenced in an appropriate district court of the United States…by a professional sports organization or amateur sports organization whose competitive game is alleged to be the basis of such violation” (28 U.S.C. § 3703). PASPA also contains a “grandfather clause” which exempts states, like Nevada, that already have gambling schemes in place (28 U.S.C. § 3704).
Judge Michael Shipp of Federal District Court for the District of New Jersey initially heard the case and issued a ruling in favor of the Leagues. New Jersey appealed the case to the Third Circuit Court of Appeals, arguing that PASPA violated the 10th Amendment of the Constitution. The Third Circuit affirmed judges Ship’s ruling in a 2-1 decision, and held that PASPA was a permissible use of Congress’s power to regulate state activity. Following it’s defeat in the Third Circuit, New Jersey successfully petitioned the Supreme Court for a writ of certiorari, and the case is currently awaiting review by the Court. This paper will examine in detail the amicus briefs filed by various parties in support of New Jersey’s petition for certiorari.
Amicus Briefs
Numerous organizations filed briefs in support of New Jersey’s petition for certiorari. Among these groups are the Pacific Legal Foundation (“PLF”) and Cato Institute (“Cato”). Both foundations are non-profit legal institutions dedicated to advocating in support of limited government and strict federalist separation as protections of constitutional liberty.
PLF and Cato begin their brief by taking issue with PASPA’s grandfather clause, and urging that the federalist system of the U.S. Constitution requires that, absent compelling circumstances, each state be treated equally under federal laws. They argue that this principle of equal state sovereignty extends to congressional regulations enacted under the Commerce Clause, like PASPA. The Framers of the Constitution “maintained as perhaps their single most important goal…vesting Congress with the power to enact regulations and duties governing interstate commerce, so long as those regulations and duties were uniform throughout the United States” (Thomas B. Colby, Revitalizing the Forgotten Uniformity Constraint on the Commerce Clause Power, 91 Va. L. Rev 249, 273 (2005)). Despite this historical backdrop, recent Supreme Court decisions have held that the “doctrine of equality of the States…applies only to the terms upon which States are admitted to the Union, and not to the remedies for local evils which have subsequently appeared” (South Carolina v. Katzenbach, 383 U.S. 301, 328-29 (1966)). The brief takes issue with this position as contrary not only to the Constitution’s history, but to its plain text as well: “[A]ll duties, Imposts and Excises shall be uniform throughout the United States” (U.S. Const. art. I, § 8, cl. 1).
PLF and Cato call on the Supreme Court to reconsider the issue and decide once and for all whether the principle of equal state sovereignty applies to Commerce Clause legislation. They argue that the Court’s resolution of this matter is critical because it will affect a number of important federalism issues facing the country today. One such issue is the Clean Air Act, which allows California to set its own standards for air pollution, while making all other states subject to federal emissions regulations. This gives voters in California the ability to directly affect their state’s pollution standards, while leaving citizens in other states with no similar sovereignty. This imbalance in freedom to affect local regulations is similar to that created by PASPA, which would afford Nevada residents the unique opportunity to affect the gambling laws in their state. PLF and CATO argue that a Supreme Court decision on whether the equal sovereignty principle prevents Congress from creating such disparate electoral accountability is necessary to guide the decision-making of lower courts and of Congress itself.
Another group that filed a brief in support of New Jersey’s petition is the states of West Virginia, Wisconsin, and Wyoming (collectively “West Virginia”). Their brief focuses on whether PASPA’s prohibition on state licensing of sports wagering commandeers the regulatory authority of the States in violation of the 10th Amendment. Their enumerated concern is not with state or federal sports wagering laws, but rather with the federalism issues implicated by the Third Circuit’s decision.
West Virginia begins by arguing that the Third Circuit’s ruling is inconsistent with Supreme Court precedent on the issue of preemption. Pursuant to the Supremacy Clause of the Constitution, the preemption doctrine dictates that federal laws take precedence over any conflicting state laws (Black’s Law Dictionary (9th ed. 2009), preemption). West Virginia notes that Supreme Court decisions allow state laws to be preempted only where they conflict with an existing federal scheme directly regulating citizens’ conduct. “The Supremacy Clause has been held to give primacy to valid federal laws over contrary state laws, but it has never been construed as a license to Congress to prohibit state lawmaking whenever and however it desires” (New York v. United States, 505 U.S. 144, 178 (1992)). The Third Circuit’s decision, they argue, runs contrary to this principle by permitting Congress to pass laws that do not regulate individual conduct, but operate only to directly preempt state law. West Virginia rejected the Third Circuit’s contention that PASPA does impose an affirmative federal regulatory scheme to control individuals’ gambling conduct, noting that PASPA’s sole purpose is to control the states’ regulation of sports wagering.
West Virginia next argues that the Third Circuit’s decision is at odds with the Supreme Court’s anti-commandeering jurisprudence. In holding that PASPA did not improperly commandeer the states’ regulatory authority, the Third Circuit distinguished between affirmative and negative regulatory commands. The court explained that federal laws like PAPSPA, which simply give a negative command to prevent states from doing something, do not run afoul of the anti-commandeering principle. West Virginia urges that this distinction misunderstands the purpose of the anti-commandeering clause: to ensure that the state and federal governments remain directly accountable for their own actions. Under this understanding, they argue, Congress runs afoul of the anti-commandeering doctrine anytime is obscures its electoral responsibility by forcing states to effectuate federal policy. Congress can create this type of impermissible obfuscation both with negative and affirmative regulatory commands.
The brief goes on to point out that direct political accountability to the electorate is the core concern of the Constitution’s federalist structure. “The Framers determined that the new National Government must carry its agency to the persons of the citizens…[and] address itself immediately to the hopes and fears of individuals” (New York, 505 U.S. at 163). The anti-commandeering principle protects electoral accountability by ensuring that state and federal governments act to regulate citizens separately and directly, and are therefore forced to bear the political consequences for their actions. West Virginia argues that laws like PASPA, which force the states to implement federal policy, unjustly put state lawmakers at the mercy of their electorate’s disapproval, while insulating from political consequences the federal officials who devised the regulation.
West Virginia closes their brief by noting that the Supreme Court has never endorsed the Third Circuit’s “affirmative versus negative” anti-commandeering doctrine test. They argue that the Third Circuit improperly relied on the fact that recent Supreme Court cases invalidating laws under the anti-commandeering doctrine involved affirmative regulatory commands. The Court could not have intended to allow all negative commands because Congress can exert just as much control over states by preventing actions as it can by requiring affirmative actions. Finally, West Virginia closes by highlighting the injury that could be done to state sovereignty if the Third Circuit’s decision is allowed to stand.
Three sports law analytics scholars by the names of Ryan M. Rodenberg, Anastasios Kaburakis, and John T. Holden (collectively “Scholars”) also filed a brief supporting New Jersey’s petition for certiorari. The Scholar’s interest as amici is in ensuring that sports-wagering and intellectual property laws comply with the Constitution. Accordingly, their brief focuses on PASPA’s purported violation of the Intellectual Property Clause of the Constitution.
The Intellectual Property Clause gives Congress the authority “To promote the Progress of Science and the useful Arts by securing for limited Times to Authors and Inventors the exclusive Right to their perspective Writings and Discoveries” (U.S. Const. art. I, § 8, cl. 8). As mentioned above, PASPA’s civil remedy provision grants professional and amateur sports leagues the right to file an injunction against any state that violates the statute. This injunction remedy is conferred upon Leagues “whose competitive game is alleged to be the basis of such violation” (28 U.S.C. § 3703). The Scholars argue that Congress’ use of the word “whose” in § 3703 gives the Leagues perpetual intellectual property rights in their games that violate the Intellectual Property Clause. Specifically, they argue that these property rights violate the Clause’s “limited Times,’’ “Authors and Inventors,” and “Writings and Discoveries” requirements. Also, they argue that PASPA’s grandfather clause confers intellectual property rights upon exempted states that violate Clause’s “limited Times” requirement.
In addressing the intellectual property rights granted to the Leagues, the Scholars highlight that “whose” is a possessive word that refers to “that which belongs to whom” (Merriam Webster’s Collegiate Dictionary at 1352 (10th ed. 1993)). Therefore, they argue, PASPA’s use of the word “whose” grants League ownership of the “competitive games” referred to in § 3703, and gives the Leagues the right to prevent sports-wagering that would otherwise be permissible under state law. Additionally, the Scholars point to statements made by various parties during the present litigation that serve support their position. For example the DOJ stated that “…the legal protection that PASPA affords to sports leagues is similar to the protections traditionally afforded in fields such as copyright and trademark law, where companies are given the right not to have their creative works exploited by other parties” (Brief for Appellee United States at 22 n. 7, NCAA et. al. v. Christies et. al. (June 7, 2013) (No. 13-1713, 13-1714, 13-1715)). Congress’ conferral of such rights, which have a function similar to patents and copyrights, the Scholars argue, must comply with limitations of the Intellectual Property Clause.
The Scholars assert that these rights violate the Intellectual Property Clause’s “Authors and Inventors” requirement because the Leagues are not the inventors, writers, or authors of the “competitive games” that they are awarded ownership rights in. Additionally, the Leagues’ right to file an injunction excluding states from authorizing regulated sports wagering on “competitive games” mirrors the remedies given to patent holders to exclude others from using their inventions. This de facto patent right violates the Intellectual property clauses’ requirement that such exclusions be granted only to “promote the Progress of Science and the useful Arts.” Also, the Scholars contend that the property rights PASPA grants to Leagues is perpetual, and is therefore in violation of the “limited Times” requirement. The limitations contained in the Intellectual Property Clause apply to “ all of Congress’ power and therefore…Congress may not look to [it’s Commerce Clause] powers to avoid these limits” (Thomas B. Nachbar, Intellectual Property and Constitutional Norms, 104 Columbia L. Rev. 272, 272 (2004)).
The Scholars next address PASPA’s conferral of perpetual intellectual property rights to grandfathered states. They argue that the creation of this right runs contrary to the Intellectual Property Clause’s purpose of protecting desirable, useful creations, because it protects sports wagering — an activity that Congress has deemed undesirable. Further, PASPA’s grandfather clause violates the “limited Times” requirement by granting Nevada and other exempted states an indefinite monopoly on sports wagering. The Scholars close their brief by stating that their Intellectual Property Clause reasoning offers the Supreme Court an alternative, narrower basis to decide the case.
Conclusion
The legal theories offered by the amici to support their contentions that PASPA is unconstitutional are persuasive. The most persuasive of them, and the one that the Supreme Court should base its opinion on, is that PASPA violates the anti-commandeering principle of the 10th Amendment. A ruling on these grounds will have the beneficial effect of shoring up the somewhat eroded condition of the 10th Amendment’s guarantee of state sovereignty. The anti-discrimination theory is an alternative basis that would also help reestablish 10th Amendment protections, but this reasoning would make the opinion narrower because it is a seemingly rare situation in which federal regulations discriminate among the states. Finally, although the intellectual property theories offered by the amici Scholars are likely sufficient grounds on which to invalidate PASPA, the Court should take advantage of this case as an opportunity reaffirm 10th Amendment federalism principles.
Brittany Tellex is a Masters student at Florida State University.
