Nat'l Collegiate Athletic Ass'n v. Christie

926 F.Supp.2d 551

NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, et al., Plaintiffs,

v.Christopher J. CHRISTIE, et al., Defendants.

Civil Action No. 12–4947(MAS)(LHG).

United States District Court, D. New Jersey.

Feb. 28, 2013.

Preempted

N.J.S.A. 5:12A–1, 5:12A-2, 5:12A-3, 5:12A-4, 5:12A-5, 5:12A-6, 5:12-24, 5:12-194.

Anthony Joseph Dreyer, Jeffrey A. Mishkin, Skadden Arps, New York, NY, William J. O'Shaughnessy, Richard Hernandez, Sara Frances Merin, McCarter & English LLP, Newark, NJ, for Plaintiffs.

Christopher S. Porrino, John Jay Hoffman, Peter Matthew Slocum, Stuart Mark Feinblatt, Office of the Attorney General, Department of Law and Public Safety, Trenton, NJ, for Defendants.

OPINION

SHIPP, District Judge.

This matter comes before the Court upon several motions filed by the Parties. The 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”) filed their Complaint on August 7, 2012. (Compl., ECF No. 1.) On August 10, 2012, Plaintiffs filed a “Motion for Summary Judgment and, If Necessary to Preserve the Status Quo, a Preliminary Injunction” seeking to enjoin Defendants 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, and Frank Zanzuccki, Executive Director of the New Jersey Racing Commission (collectively, “Defendants” or the “State”), from implementing N.J. Stat. Ann. 5:12A–1, et seq. (2012) (“New Jersey's Sports Wagering Law” or “Sports Wagering Law”). (Pls.' Br., ECF No. 10–2.) On November 21, 2012, Defendants filed a Cross Motion for Summary Judgment and Opposition to Plaintiffs' Motion for Summary Judgment. (Defs.' Br., ECF No. 76–1.) Defendants' Cross Motion challenged the constitutionality of the Professional and Amateur Sports Protection Act (“PASPA”), 28 U.S.C. § 3701, et seq. On November 21, 2012, the New Jersey Thoroughbred Horsemen's Association, Inc. (“NJTHA”), and Sheila Oliver and Stephen Sweeney (“Legislative Intervenors”) filed Motions to Intervene, which included opposition to Plaintiffs' Summary Judgment Motion. (NJTHA's Mot. to Intervene, ECF No. 72; Legislative Intervenors' Mot. to Intervene, ECF No. 75.) NJTHA's and the Legislative Intervenors' Motions to Intervene were subsequently granted on December 11, 2012. (ECF No. 102.) ¹

On November 27, 2012, the Court entered an Order Certifying Notice of a Constitutional Challenge to the United States Attorney General. (ECF No. 84.) The Leagues filed a Reply in support of their Motion for Summary Judgment, as well as Opposition to Defendants' Cross Motion, on December 7, 2012. (Pls.' Reply & Opp'n, ECF No. 95.) That submission included a request for a permanent injunction. ( Id. at 20.)

On January 22, 2013, the United States filed a Notice of Intervention. (ECF No. 128.) On the same date, the Court entered an Order granting the Department of Justice (“DOJ”) leave to file a brief regarding the constitutionality of PASPA. (ECF No. 129.) The DOJ filed its brief on February 1, 2013. (DOJ's Br., ECF No. 136.) On February 8, 2013, NJTHA, Legislative Intervenors, and Defendants filed additional submissions in response to the DOJ's brief. (NJTHA's Reply to DOJ, ECF No. 138) (Legislative Int.'s Reply to DOJ, ECF No. 139) (Defs.' Reply to DOJ, ECF No. 140.)

The Court heard oral argument on the Cross Motions for Summary Judgment on February 14, 2013. (ECF No. 141.)

The Court, having considered the Parties' submissions, for the reasons stated below, and for other good cause shown, finds that Plaintiffs are entitled to summary judgment and a permanent injunction.

I. Summary of the Court's Opinion

This case requires the Court to determine whether an act of Congress is unconstitutional because it purportedly violates New Jersey's sovereign rights. After careful consideration, the Court has determined that Congress acted within its powers and the statute in question does not violate the United States Constitution.

Congress, pursuant to an 88–5 vote in the Senate and with the vocal support of one of New Jersey's own Senators,² enacted PASPA in 1992 to stop the spread of gambling on professional and amateur sports. To that end, PASPA made it unlawful for States to authorize a sports wagering system. PASPA included a grandfather clause which exempted states with preexisting sports wagering laws. PASPA also granted New Jersey a one year window to legalize wagering on sports. New Jersey did not exercise that option. Over twenty years later, however, New Jersey amended its state constitution and passed a law authorizing gambling on sports. That law directly conflicts with PASPA.

Professional and amateur sports leagues sued the Governor of New Jersey and other State officials to prevent the implementation of New Jersey's Sports Wagering Law. The State, and other Defendants who intervened in the case, argue that PASPA violates the federal Constitution and cannot be used by the Leagues to prevent the implementation of legalized sports wagering. The Leagues disagree. If Defendants are correct, they will be permitted to enact their proposed sports wagering scheme. If they are not, Defendants will be prohibited from enacting sports wagering in New Jersey because PASPA is a federal law which overrides New Jersey's law.

This case presents several issues. Specifically, it is alleged that PASPA violates: 1) the Commerce Clause; 2) the Tenth Amendment; 3) the Due Process Clause and Equal Protection Principles; and 4) the Equal Footing Doctrine. The Court begins its analysis of these issues with the time-honored presumption that PASPA, enacted by a co-equal branch of government, is constitutional. Moreover, the Court is required to adopt an interpretation that would deem the statute constitutional so long as that reading is reasonable. Pursuant to this mandate, the Court has determined that PASPA is a reasonable expression of Congress' powers and is therefore constitutional.

First, PASPA is a rational expression of Congress' powers under the Commerce Clause. The fact that PASPA allows legalizedsports wagering to continue in those states where it was lawful at the time of its enactment does not deprive the statute of constitutionality because Supreme Court precedent permits “grandfathering.” Second, PASPA does not violate the Tenth Amendment because it does not force New Jersey to take any legislative, executive or regulatory action. PASPA also does not raise the political accountability concerns outlined by the Supreme Court's Tenth Amendment jurisprudence. Third, regarding Defendants' additional allegations, the Court has determined that Congress had a rational basis to enact PASPA in the manner it chose.

Although some of the questions raised in this case are novel, judicial intervention is generally unwarranted no matter how unwise a court considers a policy decision of the legislative branch. As such, to the extent the people of New Jersey disagree with PASPA, their remedy is not through passage of a state law or through the judiciary, but through the repeal or amendment of PASPA in Congress.

II. Background

Congress enacted PASPA in 1992 to prevent the spread of state-sponsored sports gambling and to protect the integrity of professional and amateur sports. S.Rep. No. 102–248, at 4 (1992), reprinted in 1992 U.S.C.C.A.N. 3553, 3555. PASPA renders 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.

In considering PASPA, the Senate Judiciary Committee stated, “[a]lthough the committee firmly believes that all such sports gambling is harmful, it has no wish to apply this new prohibition retroactively ... or to prohibit lawful sports gambling schemes ... that were in operation when the legislation was introduced.” S.Rep. No. 102–248, at 8, reprinted in 1992 U.S.C.C.A.N. 3553, 3559. Accordingly, PASPA provided the following exceptions:

(a) Section 3702 shall not apply to—

(1) a lottery, sweepstakes, or other betting, gambling, or wagering scheme in operation in a State or other governmental entity, to the extent that the scheme was conducted by that State or other governmental entity at any time during the period beginning January 1, 1976, and ending August 31, 1990;

(2) a lottery, sweepstakes, or other betting, gambling, or wagering scheme in operation in a State or other governmental entity where both—

(A) such scheme was authorized by a statute as in effect on October 2, 1991; and

(B) a scheme described in section 3702 ... actually was conducted ... at any time during the period beginning September 1, 1989, and ending October 2, 1991, pursuant to the law of that State or other governmental entity;

(3) a betting, gambling, or wagering scheme ... conducted exclusively in casinos located in a municipality, but only to the extent that—

(A) such scheme or a similar scheme was authorized, not later than one year after the effective date of this chapter, to be operated in that municipality; and

(B) any commercial casino gaming scheme was in operation in such municipality throughout the 10–year period ending on such effective date pursuant to a comprehensive system of State regulation....

....

28 U.S.C. § 3704.

PASPA's “grandfather clause” resulted...