NCAA v. Governor of New Jersey , 799 F.3d 259 ( 2015 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 14-4546, 14-4568, and 14-4569
_____________
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION,
an unincorporated association; NATIONAL BASKETBALL
ASSOCIATION, a joint venture; NATIONAL FOOTBALL
LEAGUE, an unincorporated association; NATIONAL
HOCKEY LEAGUE, an unincorporated association; OFFICE
OF THE COMMISSIONER OF BASEBALL, an
unincorporated association doing business as MAJOR
LEAGUE BASEBALL
v.
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; NEW JERSEY
THOROUGHBRED HORSEMEN’S ASSOCIATION, INC.;
NEW JERSEY SPORTS & EXPOSITION AUTHORITY
STEPHEN M. SWEENEY, President of the New Jersey
Senate; VINCENT PRIETO, Speaker of the New Jersey
General Assembly (Intervenors in District Court),
Appellants in 14-4568
Governor of New Jersey; David L. Rebuck; Frank Zanzuccki,
Appellants in 14-4546
New Jersey Thoroughbred Horsemen’s Association, Inc.,
Appellant in 14-4569
On Appeal from the United States District Court
for the District of New Jersey
(District Court No.: 3-14-cv-06450)
District Judge: Honorable Michael A. Shipp
Argued on March 17, 2015
Before: RENDELL, FUENTES and BARRY, Circuit Judges
(Opinion filed: August 25, 2015)
John J. Hoffman, Esquire
Acting Attorney General of the State of New Jersey
Jeffrey S. Jacobson, Esquire
Geoffrey S. Brounell, Esquire
Stuart M. Feinblatt, Esquire
Ashlea D. Newman, Esquire
Peter M. Slocum, Esquire
Office of Attorney General of New Jersey
25 Market Street
Trenton, NJ 08625
2
Matthew Hoffman, Esquire
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, CA 90071
Ashley E. Johnson, Esquire
Gibson, Dunn & Crutcher
2100 McKinney Avenue
Suite 1100
Dallas, TX 75201
Theodore B. Olson, Esquire (ARGUED)
Matthew D. McGill, Esquire
Gibson, Dunn & Crutcher
1050 Connecticut Avenue, N.W.
9th Floor
Washington, DC 20036
Counsel for Appellants Governor of the State of
New Jersey, David L. Rebuck, and Frank
Zanzuccki in 14-4546
Elliott M. Berman, Esquire
McElroy, Deutsch, Mulvaney & Carpenter
570 Broad Street
Newark, NJ 07102
Ronald J. Riccio, Esquire (ARGUED)
Edward A. Hartnett, Esquire
3
McElroy, Deutsch, Mulvaney & Carpenter
1300 Mount Kemble Avenue
P.O. Box 2075
Morristown, NJ 07962
Counsel for Appellant New Jersey
Thoroughbred Horsemen’s Association, Inc.
in 14-4569
Michael R. Griffinger, Esquire (ARGUED)
Thomas R. Valen, Esquire
Jennifer A. Hradil, Esquire
Gibbons P.C.
One Gateway Center
Newark, New Jersey 07102
Counsel for Appellants Stephen M. Sweeney
and Vincent Prieto in 14-4568
Paul D. Clement, Esquire (ARGUED)
Erin E. Murphy, Esquire
William R. Levi, Esquire
Taylor Meehan, Esquire
Bancroft PLLC
500 New Jersey Avenue, N.W.
7th Floor
Washington, DC 20001
Jeffrey A. Mishkin, Esquire
Anthony J. Dreyer, Esquire
Skadden, Arps, Slate, Meagher, & Flom
4
4 Times Square
New York, NY 10036
William J. O’Shaughnessy, Esquire
Richard Hernandez, Esquire
McCarter & English
100 Mulberry Street
Four Gateway Center, 14th Floor
Newark, NJ 07102
Counsel for Appellees National Collegiate
Athletic Association; National Basketball
Association; National Football League;
National Hockey League; Office of the
Commissioner of Baseball
Joyce R. Branda, Esquire
Acting Assistant Attorney General, Civil Division
Paul J. Fishman, Esquire
United States Attorney of the District of New Jersey
Scott R. McIntosh, Esquire
Peter J. Phipps, Esquire (ARGUED)
Attorneys, Civil Division
U.S. Department of Justice
P.O. Box 883
Washington, DC 20044
Counsel for Amicus United States of America
OPINION
5
RENDELL, Circuit Judge:
The issue presented in this appeal is whether SB 2460,
which the New Jersey Legislature enacted in 2014 (the “2014
Law”) to partially repeal certain prohibitions on sports
gambling, violates federal law. 2014 N.J. Sess. Law Serv.
Ch. 62, codified at N.J. Stat. Ann. §§ 5:12A-7 to -9. The
District Court held that the 2014 Law violates the
Professional and Amateur Sports Protection Act (“PASPA”),
28 U.S.C. §§ 3701-3704. We will affirm. PASPA, by its
terms, prohibits states from authorizing by law sports
gambling, and the 2014 Law does exactly that.
I. Background
Congress passed PASPA in 1992 to prohibit state-
sanctioned sports gambling. PASPA provides:
It shall be 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 . . . on one or more competitive
games in which amateur or professional
athletes participate, or are intended to
participate, or on one or more
6
performances of such athletes in such
games.
28 U.S.C. § 3702 (emphasis added). PASPA defines
“governmental entity” to include states and their political
subdivisions. 28 U.S.C. § 3701(2). PASPA includes a
remedial provision that permits any sports league whose
games are or will be the subject of sports gambling to bring
an action to enjoin the gambling. 28 U.S.C. § 3703.
Congress included in PASPA exceptions for state-
sponsored sports wagering in Nevada and sports lotteries in
Oregon and Delaware, and also an exception for New Jersey
but only if New Jersey were to enact a sports gambling
scheme within one year of PASPA’s enactment. 28 U.S.C.
§ 3704(a). New Jersey did not do so and, thus, the PASPA
exception expired. Notably, sports gambling was prohibited
in New Jersey for many years by statute and by the New
Jersey Constitution. See, e.g., N.J. Const. Art. IV § VII ¶ 2;
N.J. Stat. Ann. § 2C:37-2; N.J. Stat. Ann. § 2A:40-1. In
2010, however, the New Jersey Legislature held public
hearings on the advisability of allowing sports gambling.
These hearings included testimony that sports gambling
would generate revenues for New Jersey’s struggling casinos
and racetracks. In 2011, the Legislature held a referendum
asking New Jersey voters whether sports gambling should be
permitted, and sixty-four percent voted in favor of amending
the New Jersey Constitution to permit sports gambling. The
constitutional amendment provided:
It shall also be lawful for the Legislature
to authorize by law wagering at casinos
or gambling houses in Atlantic City on
the results of any professional, college,
7
or amateur sport or athletic event, except
that wagering shall not be permitted on a
college sport or athletic event that takes
place in New Jersey or on a sport or
athletic event in which any New Jersey
college team participates regardless of
where the event takes place . . . .
N.J. Const. Art. IV, § VII, ¶ 2(D). The amendment thus
permitted the New Jersey Legislature to “authorize by law”
sports wagering at “casinos or gambling houses in Atlantic
City,” except that wagering was not permitted on New Jersey
college teams or on any collegiate event occurring in New
Jersey. An additional section of the amendment permitted the
Legislature to “authorize by law” sports wagering at “current
or former running and harness horse racetracks,” subject to
the same restrictions regarding New Jersey college teams and
collegiate events occurring in New Jersey. N.J. Const. Art.
IV, § VII, ¶ 2(F).
After voters approved the sports-wagering
constitutional amendment, the New Jersey Legislature
enacted the Sports Wagering Act in 2012 (“2012 Law”),
which provided for regulated sports wagering at New Jersey’s
casinos and racetracks. N.J. Stat. Ann. §§ 5:12A-1 et seq.
(2012). The 2012 Law established a comprehensive
regulatory scheme, requiring licenses for operators and
individual employees, extensive documentation, minimum
cash reserves, and Division of Gaming Enforcement access to
security and surveillance systems.
8
Five sports leagues1 sued to enjoin the 2012 Law as
violative of PASPA.2 The New Jersey Parties did not dispute
that the 2012 Law violated PASPA, but urged, instead, that
PASPA was unconstitutional under the anti-commandeering
doctrine. The District Court held that PASPA was
constitutional and enjoined implementation of the 2012 Law.
1
The sports leagues were the National Collegiate Athletic
Association (“NCAA”), National Football League (“NFL”),
National Basketball Association, National Hockey League,
and the Office of the Commissioner of Baseball, doing
business as Major League Baseball (collectively, the
“Leagues”).
2
The Leagues named as defendants Christopher J. Christie,
the Governor of the State of New Jersey; David L. Rebuck,
the Director of the New Jersey Division of Gaming
Enforcement (“DGE”) and Assistant Attorney General of the
State of New Jersey; and Frank Zanzuccki, Executive
Director of the New Jersey Racing Commission (“NJRC”).
The New Jersey Thoroughbred Horsemen’s Association, Inc.
(“NJTHA”) intervened as a defendant, as did Stephen M.
Sweeney, President of the New Jersey Senate, and Sheila Y.
Oliver, Speaker of the New Jersey General Assembly (“State
Legislators”). We collectively refer to these parties as the
“New Jersey Parties.” In the present case, the New Jersey
Parties are the same, with some exceptions. NJTHA was
named as a defendant (i.e., it did not intervene), as was the
New Jersey Sports and Exposition Authority; the latter is not
participating in this appeal. Additionally, Vincent Prieto, not
Sheila Y. Oliver, is now the Speaker of the General
Assembly.
9
The New Jersey Parties appealed, and we affirmed in
National Collegiate Athletic Ass’n v. Governor of New
Jersey, 730 F.3d 208 (3d Cir. 2013) (Christie I).
Christie I rejected the New Jersey Parties’ argument
that PASPA was unconstitutional. In explaining that PASPA
does not commandeer the states’ legislative processes, we
stated: “[n]othing in [PASPA’s] words requires that the states
keep any law in place. All that is prohibited is the issuance of
gambling ‘license[s]’ or the affirmative ‘authoriz[ation] by
law’ of gambling schemes.” Id. at 232 (alterations in
original). The New Jersey Parties had urged that PASPA
commandeered the state because it prohibited the repeal of
New Jersey’s prohibitions on sports gambling; they reasoned
that repealing a statute barring an activity would be
equivalent to authorizing the activity, and “authorizing” was
not allowed by PASPA. We rejected that argument,
observing that “PASPA speaks only of ‘authorizing by law’ a
sports gambling scheme,” and “[w]e [did] not see how having
no law in place governing sports wagering is the same as
authorizing it by law.” Id. We further emphasized that “the
lack of an affirmative prohibition of an activity does not mean
it is affirmatively authorized by law. The right to do that
which is not prohibited derives not from the authority of the
state but from the inherent rights of the people.” Id. In short,
we concluded that the New Jersey Parties’ argument rested on
a “false equivalence between repeal and authorization.” Id. at
233.
The New Jersey Parties appealed to the United States
Supreme Court, which denied certiorari. Christie I is now the
law of the Circuit: PASPA is constitutional and does not
violate the anti-commandeering doctrine.
10
Undeterred, in 2014, the Legislature passed the 2014
Law, SB 2460, which provided in part:
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, are
repealed to the extent they apply or may
be construed to apply at a casino or
gambling house operating in this State in
Atlantic City or a running or harness
horse racetrack in this State, to the
placement and acceptance of wagers on
professional, collegiate, or amateur sport
contests or athletic events . . . .
N.J. Stat. Ann. § 5:12A-7. The 2014 Law specifically
prohibited wagering on New Jersey college teams’
competitions and on any collegiate competition occurring in
New Jersey, and it limited sports wagering to “persons 21
years of age or older situated at such location[s],” namely
casinos and racetracks. Id.
II. Procedural History and Parties’ Arguments
The Leagues filed suit to enjoin the New Jersey Parties
from giving effect to the 2014 Law. The District Court held
that the 2014 Law violates PASPA, granted summary
11
judgment in favor of the Leagues and issued a permanent
injunction against the Governor of New Jersey, the Director
of the New Jersey Division of Gaming Enforcement, and the
Executive Director of the New Jersey Racing Commission
(collectively, the “New Jersey Enjoined Parties”).3 The
3
In the District Court, the New Jersey Enjoined Parties urged
that the Eleventh Amendment gave them immunity such that
they could not be sued in an action challenging the 2014 Law.
The District Court rejected this argument, as do we, and we
note that, while the issue was briefed, the New Jersey
Enjoined Parties did not press—or even mention—this issue
at oral argument. They contend that, because the 2014 Law is
a self-executing repeal that requires no action from them or
any other state official, they are immune from suit. This
argument fails. The New Jersey Enjoined Parties are subject
to suit under the Ex parte Young exception to Eleventh
Amendment immunity, which “permit[s] the federal courts to
vindicate federal rights and hold state officials responsible to
‘the supreme authority of the United States.’” Pennhurst
State Sch. & Hosp. v. Halderman, 465 U.S. 89, 105 (1984)
(quoting Ex parte Young, 209 U.S. 123, 160 (1908)). The
New Jersey Enjoined Parties are not arguing that other state
officials should have been named instead of them; they are
arguing that no state official can be sued regarding the 2014
Law. We disagree. The Leagues named the state officials
who are most closely connected to the 2014 Law, i.e., the
Governor, the Director of the DGE, and the Executive
Director of the NJRC. The Leagues did not name officials
who bear no connection whatsoever to the 2014 Law. See
Young, 209 U.S. at 156 (explaining that plaintiffs cannot
name just any state official, such as a “state superintendent of
schools” simply “to test the constitutionality” of a law). See
12
District Court interpreted Christie I as holding that PASPA
offers two choices to states: maintaining prohibitions on
sports gambling or completely repealing them. It reasoned
that PASPA preempts the 2014 Law because the 2014 Law is
a partial repeal that necessarily results in sports wagering with
the State’s imprimatur. The New Jersey Parties appealed.
On appeal, the New Jersey Parties argue that the 2014
Law complies with PASPA and is consistent with Christie I
because the New Jersey Legislature effected a repealer as
Christie I specifically permitted. The NJTHA argues that the
District Court erred in granting injunctive relief to the
Leagues because the Leagues have unclean hands from
supporting sports gambling in other contexts, and that any
injunctive relief should be limited to the Leagues’ games and
should not include games of entities who are not parties to
this action.
The Leagues urge that the 2014 Law violates PASPA
because it “authorizes” and “licenses” sports gambling. The
United States submitted an amicus brief in support of the
Leagues arguing that the 2014 Law impermissibly “licenses”
sports wagering by confining the repeal of gambling
prohibitions to licensed gambling facilities and thus, in effect,
enlarging the terms of existing gaming licenses.
also Rode v. Dellarciprete, 845 F.2d 1195, 1208 (3d Cir.
1988) (noting that a suit against the governor would be
appropriate when challenging a “self-enforcing statute”
because “[t]he plaintiff would have been barred from
challenging the statute by the eleventh amendment unless it
could name the Governor as a defendant”).
13
We conclude that the District Court did not err in
striking down the 2014 Law.
III. Analysis4
A. The 2014 Law Violates PASPA
As a preliminary matter, we acknowledge New
Jersey’s salutary purpose in attempting to legalize sports
gambling to revive its troubled casino and racetrack
industries. The New Jersey Assembly Gaming and Tourism
Committee chairman stated, in regards to the 2014 Law, that
“[w]e want to give the racetracks a shot in the arm. We want
to help Atlantic City. We want to do something for the
gaming business in the state of New Jersey, which has been
under tremendous duress . . . .” (App. 91.) New Jersey State
Senator Ray Lesniak, a sponsor of the law, has likewise stated
that “[s]ports betting will be a lifeline to the casinos, putting
people to work and generating economic activity in a growth
industry.” (App. 94.) And New Jersey State Senator Joseph
Kyrillos stated that “New Jersey’s continued prohibition on
sports betting at our casinos and racetracks is contrary to our
interest of supporting employers that provide tens of
thousands of jobs and add billions to our state’s economy”
and that “[s]ports betting will help set New Jersey’s wagering
facilities apart from the competition and strengthen
4
“We review a district court’s grant of summary judgment de
novo . . . .” Viera v. Life Ins. Co. of N. Am., 642 F.3d 407,
413 (3d Cir. 2011). “We review a district court’s grant of a
permanent injunction for abuse of discretion.” Meyer v.
CUNA Mut. Ins. Soc’y, 648 F.3d 154, 162 (3d Cir. 2011).
14
Monmouth Park and our struggling casino industry.” (App.
138.) PASPA has clearly stymied New Jersey’s attempts to
revive its casinos and racetracks and provide jobs for its
workforce.
Moreover, PASPA is not without its critics, even aside
from its economic impact. It has been criticized for
prohibiting an activity, i.e., sports gambling, that its critics
view as neither immoral nor dangerous. It has also been
criticized for encouraging the spread of illegal sports
gambling and for making it easier to fix games, since it
precludes the transparency that accompanies legal activities.5
Simply put, “[w]e are cognizant that certain questions related
to this case—whether gambling on sporting events is harmful
to the games’ integrity and whether states should be permitted
to license and profit from the activity—engender strong
views.” Christie I, 730 F.3d at 215. While PASPA’s
provisions and its reach are controversial and, some might
say, unwise, “we are not asked to judge the wisdom of
PASPA” and “[i]t is not our place to usurp Congress’ role
simply because PASPA may have become an unpopular law.”
Id. at 215, 241. We echo Christie I in noting that “New
Jersey and any other state that may wish to legalize gambling
5
It has also been criticized as unconstitutional, but we held
otherwise in Christie I and we cannot and will not revisit that
determination here. See Christie I, 730 F.3d at 240
(“[N]othing in PASPA violates the U.S. Constitution. The
law neither exceeds Congress’ enumerated powers nor
violates any principle of federalism implicit in the Tenth
Amendment or anywhere else in our Constitutional
structure.”).
15
on sports . . . are not left without redress. Just as PASPA once
gave New Jersey preferential treatment in the context of
gambling on sports, Congress may again choose to do so
or . . . may choose to undo PASPA altogether.” Id. at 240-41.
Unless or until that happens, however, we are duty-bound to
interpret the text of the law as Congress wrote it.
We now turn to the primary question before us:
whether the 2014 Law violates PASPA. We hold that it does.
Under PASPA, it shall be unlawful for “a governmental entity
to sponsor, operate, advertise, promote, license, or authorize
by law or compact” sports gambling. 28 U.S.C. § 3702(1).
We conclude that the 2014 Law violates PASPA because it
authorizes by law sports gambling.
First, the 2014 Law authorizes casinos and racetracks
to operate sports gambling while other laws prohibit sports
gambling by all other entities. Without the 2014 Law, the
sports gambling prohibitions would apply to casinos and
racetracks. Appellants urge that the 2014 Law does not
provide authority for sports gambling because we previously
held that “[t]he right to do that which is not prohibited derives
not from the authority of the state but from the inherent rights
of the people” and that “[w]e do not see how having no law in
place governing sports wagering is the same as authorizing it
by law.” Christie I, 730 F.3d at 232. But this is not a
situation where there are no laws governing sports gambling
in New Jersey. Absent the 2014 Law, New Jersey’s myriad
laws prohibiting sports gambling would apply to the casinos
and racetracks. Thus, the 2014 Law provides the
authorization for conduct that is otherwise clearly and
completely legally prohibited.
16
Second, the 2014 Law authorizes sports gambling by
selectively dictating where sports gambling may occur, who
may place bets in such gambling, and which athletic contests
are permissible subjects for such gambling. Under the 2014
Law, New Jersey’s sports gambling prohibitions are
specifically removed from casinos, gambling houses, and
horse racetracks as long as the bettors are people age 21 or
over, and as long as there are no bets on either New Jersey
college teams or collegiate competitions occurring in New
Jersey. The word “authorize” means, inter alia, “[t]o
empower; to give a right or authority to act,” or “[t]o permit a
thing to be done in the future.” Black’s Law Dictionary 133
(6th ed. 1990).6 The 2014 Law allows casinos and racetracks
and their patrons to engage, under enumerated circumstances,
in conduct that other businesses and their patrons cannot do.
That selectiveness constitutes specific permission and
empowerment.
Appellants place much stock in our statement in
Christie I that their argument there rested on a “false
equivalence between repeal and authorization.” 730 F.3d at
233. They claim that the 2014 Law does not authorize sports
gambling because it is only a “repeal” and, in Christie I, we
stated that “the lack of an affirmative prohibition of an
activity does not mean it is affirmatively authorized by law.”
Id. at 232. In other words, they argue that, because the 2014
Law is only a repeal removing prohibitions against sports
gambling, it is not an “affirmative authorization” under
Christie I. We agree that, had the 2014 Law repealed all
6
We cite the version of Black’s Law Dictionary that was in
effect in 1992, the year PASPA was passed.
17
prohibitions on sports gambling, we would be hard-pressed,
given Christie I, to find an “authorizing by law” in violation
of PASPA. But that is not what occurred here. The presence
of the word “repeal” does not prevent us from examining
what the provision actually does, and the Legislature’s use of
the term does not change the fact that the 2014 Law
selectively grants permission to certain entities to engage in
sports gambling. New Jersey’s sports gambling prohibitions
remain and no one may engage in such conduct save those
listed by the 2014 Law. While artfully couched in terms of a
repealer, the 2014 Law essentially provides that,
notwithstanding any other prohibition by law, casinos and
racetracks shall hereafter be permitted to have sports
gambling. This is not a repeal; it is an authorization.
Third, the exception in PASPA for New Jersey, which
New Jersey did not take advantage of before the one-year
time limit expired, is remarkably similar to the 2014 Law.
The exception states that PASPA does not apply to “a betting,
gambling, or wagering scheme . . . conducted exclusively in
casinos . . . , but only to the extent that . . . any commercial
casino gaming scheme was in operation . . . throughout the
10-year period” before PASPA was enacted. 28 U.S.C.
§ 3704(a)(3)(B). The exception would have permitted sports
gambling at New Jersey’s casinos, which is just what the
2014 Law does. We can easily infer that, by explicitly
excepting a scheme of sports gambling in New Jersey’s
casinos from PASPA’s prohibitions, Congress intended that
such a scheme would violate PASPA. If Congress had not
perceived that sports gambling in New Jersey’s casinos would
violate PASPA, then it would not have needed to insert the
New Jersey exception. In other words, if sports gambling in
New Jersey’s casinos does not violate PASPA, then PASPA’s
18
one-year exception for New Jersey would have been
superfluous. We will not read statutory provisions to be
surplusage. See Marx v. Gen. Revenue Corp., 133 S. Ct.
1166, 1178 (2013) (“[T]he canon against surplusage is
strongest when an interpretation would render superfluous
another part of the same statutory scheme.”). In order to
avoid rendering the New Jersey exception surplusage, we
must read the 2014 Law as authorizing a scheme that clearly
violates PASPA.7
As support for their argument that the 2014 Law does
not violate PASPA, Appellants cite the 2014 Law’s
construction provision, which provides that “[t]he provisions
of this act . . . are not intended and shall not be construed as
causing the State to sponsor, operate, advertise, promote,
license, or authorize by law or compact” sports wagering.
N.J. Stat. Ann. § 5:12A-8. This conveniently mirrors
PASPA’s language providing that states may not “sponsor,
operate, advertise, promote, license, or authorize by law or
compact” sports wagering. 28 U.S.C. § 3702(1).
The construction provision does not save the 2014
Law. States may not use clever drafting or mandatory
construction provisions to escape the supremacy of federal
law. Cf. Haywood v. Drown, 556 U.S. 729, 742 (2009)
(“[T]he Supremacy Clause cannot be evaded by formalism.”);
7
Granted, the 2014 Law applies to horse racetracks as well as
casinos, while the PASPA exception for New Jersey refers
only to casinos, but that does not change the significance of
the New Jersey exception because it refers to gambling in
places that already allow gambling, and the racetracks fall
within that rubric.
19
Howlett ex rel. Howlett v. Rose, 496 U.S. 356, 382-83 (1990)
(“[t]he force of the Supremacy Clause is not so weak that it
can be evaded by mere mention of” a particular word). In the
same vein, the New Jersey Legislature cannot use a targeted
construction provision to limit the reach of PASPA or to
dictate to a court a construction that would limit that reach.
The 2014 Law violates PASPA, and the construction
provision cannot alter that fact.
Appellants also draw a comparison between the 2014
Law and the 2012 Law, which involved a broad regulatory
scheme, as evidence that the 2014 Law does not violate
PASPA. It is true that the 2014 Law does not set forth a
comprehensive scheme or provide for a state regulatory role,
as the 2012 Law did. However, PASPA does not limit its
reach to active state involvement or regulation of sports
gambling. It prohibits a range of state activity, the least
intrusive of which is “authorization” by law of sports
gambling.
We conclude that the 2014 Law violates PASPA
because it authorizes by law sports gambling.8
8
Because we conclude that the 2014 Law authorizes by law
sports gambling, we need not address the argument made by
Appellees and Amicus that the 2014 Law also licenses sports
gambling by permitting only those entities that already have
gambling licenses or recently had such licenses to conduct
sports gambling operations. We also do not address the
argument of the State Legislators and the NJTHA that, to the
extent that any aspect of the 2014 Law violates PASPA, we
should apply the 2014 Law’s severability clause. The State
Legislators and the NJTHA offer no proposals regarding what
20
B. Injunctive Relief
The NJTHA argues that the injunction should apply
only to the parties who brought this suit and that gambling on
the athletic contests of other entities, who are not parties to
this suit, should be permitted. But PASPA does not limit its
prohibition to sports gambling involving only entities who
actually bring suit. PASPA provides that “[a] civil action to
enjoin a violation of section 3702 . . . may be
commenced . . . 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.
The NJTHA conflates the Leagues’ right to bring suit with
the remedy they may obtain. PASPA provides that the
Leagues may “enjoin a violation of section 3702,” without
any limiting language. The 2014 Law violates PASPA in all
contexts, not simply as applied to the Leagues, and, therefore,
the District Court properly enjoined its application in full.
Finally, we need not dwell on the NJTHA’s argument
that the Leagues should not be entitled to equitable relief
because they have unclean hands. The NJTHA contends that
the Leagues are essentially hypocrites because they encourage
and profit from sports betting, noting that the NFL has been
scheduling games in London where sports gambling is legal,
that the NCAA holds events in Las Vegas where sports
gambling is legal, and that the Leagues sanction and
encourage fantasy sports betting. These allegations fail to
rise to the level required for application of the unclean hands
doctrine. “The equitable doctrine of unclean hands applies
provisions should be severed from the 2014 Law, and we do
not see how we could sever it.
21
when a party seeking relief has committed an unconscionable
act immediately related to the equity the party seeks in
respect to the litigation.” Highmark, Inc. v. UPMC Health
Plan, Inc., 276 F.3d 160, 174 (3d Cir. 2001). It is not
“unconscionable” for the Leagues to support fantasy sports
and hold events in Las Vegas or London, nor is doing so
“immediately related” to the 2014 Law. We cannot conclude
that the Leagues acted unconscionably, i.e., amorally,
abusively, or with extreme unfairness, in relation to the 2014
Law.
IV. Conclusion
The 2014 Law violates PASPA because it authorizes
by law sports gambling. We will affirm.
22
FUENTES, Circuit Judge, dissenting.
In response to Christie I, where we held that New
Jersey’s 2012 Sports Wagering Law (“2012 Law”) violated
PASPA, the New Jersey Legislature passed the 2014 Law. In
addition to repealing the 2012 Law in full, the 2014 Law also
repealed all prohibitions on sports wagering and any rules
authorizing the State to, among other things, license or
authorize a person to engage in sports wagering, with respect
to casinos and gambling houses in Atlantic City and horse
racetracks in New Jersey. The repealer also maintained
prohibitions for persons under 21 and for wagering on New
Jersey collegiate teams or any collegiate competition
occurring in New Jersey. Likewise, the 2014 Law stripped
New Jersey of any involvement in sports wagering, regulatory
or otherwise. In essence, the 2014 Law renders previous
prohibitions on sports gambling non-existent.
The majority, however, takes issue with what it terms
the “selective” nature of the partial repeal. First, that the
repeal applies to specific locations. That is, under the 2014
Law, wagering may only take place at casinos, gambling
houses, and horse racetracks. Next, the restriction against
betting by persons under the age of 21 would remain, and
finally, restrictions against betting on New Jersey collegiate
teams or any collegiate competition in New Jersey would
remain. These restrictions, the majority concludes, amount to
“authorizing” a sports-wagering scheme and, therefore, the
2014 Law must also violate PASPA. I disagree. As I see it,
the issue is whether a partial repeal amounts to authorization.
1
Because this logic rests on the same false equivalence1 we
rejected in Christie I, I respectfully dissent.
The majority, however, maintains that the 2014 Law
“authorizes” casinos and racetracks to operate sports
gambling while other laws prohibit sports gambling by all
other entities.2 According to the majority, “this is not a
situation where there are no laws governing sports gambling
in New Jersey” and “[a]bsent the 2014 Law, New Jersey’s
myriad laws prohibiting sports gambling would apply to the
casinos and racetracks.”3 Yet, the majority is mistaken as to
the impact of a partial repeal. Repeal is defined as to
“rescind” or “an abrogation of an existing law by legislative
act.”4 When a statute is repealed, “the repealed statute, in
1
A false equivalence is a logical fallacy which describes a
situation where there is a logical and apparent equivalence,
but when in fact there is none. This fallacy is categorized as a
fallacy of inconsistency. Harry Phillips & Patricia Bostian,
The Purposeful Argument: A Practical Guide, Brief Edition
129 (2014). In Christie I, we held that there was a false
equivalence between repeal and authorization. 730 F.3d at
233.
2
For brevity, I refer to the repeal of prohibitions as applying
to casinos, gambling houses, and horse racetracks, with the
understanding that the repeal applies to casinos and gambling
houses in Atlantic City and horse racetracks in New Jersey
for those over 21 not betting on New Jersey collegiate teams
or any collegiate competition occurring in New Jersey.
3
Maj. Op. 16-17.
4
Black’s Law Dictionary 1325 (8th ed. 2007).
2
regard to its operative effect, is considered as if it had never
existed.”5 A repealed statute is treated as if it never existed; a
partially repealed statute is treated as if only the remaining
part exists.6
The 2014 Law, then, renders the previous prohibitions
on sports gambling non-existent. After the repeal, it is as if
New Jersey never prohibited sports gambling in casinos,
gambling houses, and horse racetracks. Therefore, with
respect to those areas, there are no laws governing sports
wagering and the right to engage in such conduct does not
5
73 Am. Jur. 2d Statutes § 264.
6
See, e.g., Ex Parte McCardle, 74 U.S. 506, 514 (1868)
(“[W]hen an act of the legislature is repealed, it must be
considered . . . as if it never existed.” (internal quotation
marks omitted)); Anderson v. USAir, Inc., 818 F.2d 49, 55
(D.C. Cir. 1987) (“Common sense dictates that repeal means
a deletion. This court would engage in pure speculation were
it to hold otherwise.”); In re Black, 225 B.R. 610, 620 (Bankr.
M.D. La. 1998) (“Can a statute use a repealed statute? Is a
repealed statute something or is it nothing? We think the
answers are ‘no’ and ‘nothing.’”); Kemp by Wright v. State,
687 A.2d 715, 723 (N.J. 1997) (“In this State it is the general
rule that where a statute is repealed and there is no saving[s]
clause or a general statute limiting the effect of the repeal, the
repealed statute . . . is considered as though it had never
existed, except as to matters and transactions passed and
closed.” (quoting Parsippany Hills Assocs. v. Rent Leveling
Bd. of Parsippany-Troy Hills Twp., 476 A.2d 271, 275 (N.J.
Super. 1984)).
3
come from the state. Rather, the right to do that which is not
prohibited stems from the inherent rights of the people.7 The
majority, however, states that “[a]bsent the 2014 Law, New
Jersey’s myriad laws prohibiting sports gambling would
apply to the casinos and racetracks,” and that, as such, “the
2014 Law provides the authorization for conduct that is
otherwise clearly and completely legally prohibited.”8 We
have refuted this position before. In Christie I, we held that
“the lack of an affirmative prohibition of an activity does not
mean it is affirmatively authorized by law.”9 Such an
argument, we said, “rests on a false equivalence between
repeal and authorization and reads the term ‘by law’ out of
the statute.”10 We identified several problems in making this
false equivalence—the most troublesome being that it “reads
the term ‘by law’ out of the statute.”11 The majority’s
position does just that. In holding that a partial repeal of
prohibitions is state authorization, the majority must infer
authorization. PASPA, however, contemplates more. In
Christie I, we pointed to the fact that New Jersey’s 2012
amendment to its constitution, which gave the Legislature
power to “authorize by law” sports wagering was insufficient
to “authorize [it] by law.”12 We explained, “that the
Legislature needed to enact the [2012 Law] itself belies any
7
Christie I, 730 F.3d at 232.
8
Maj. Op. 16-17.
9
Christie I, 730 F.3d at 232.
10
Id. at 233.
11
Id.
12
Id. at 232.
4
contention that the mere repeal of New Jersey’s ban on sports
gambling was sufficient to ‘authorize [it] by law’ . . . . [T]he .
. . Legislature itself saw a meaningful distinction between
repealing the ban on sports wagering and authorizing it by
law, undermining any contention that the amendment alone
was sufficient to affirmatively authorize sports wagering.”13
This is no less true of a partial repeal than it would be of a
total repeal—which the majority concedes would not violate
PASPA. Thus, to reach the conclusion that the 2014 Law, a
partial repeal of prohibitions, authorizes sports wagering, the
majority necessarily relies on this false equivalence. It
concedes as much when stating “the 2014 Law” (the repeal)
provides “the authorization” for sports wagering. Of course,
this is the exact false equivalence we identified, and
dismissed as a logical fallacy, in Christie I.14
The majority does not believe it makes this false
equivalence. To support its position, the majority relies on
the “selective” nature of the 2014 Law contending that “the
Legislature’s use of the term [‘repeal’] does not change the
fact that the 2014 Law selectively grants permission to certain
entities to engage in sports gambling.”15 First, it does not.
There is no explicit grant of permission in the 2014 Law for
any entity to engage in sports wagering. Second, not only
does the majority fail to explain why such a partial repeal is
equivalent to granting permission (by law) for these locations,
but the very logic of such a position fails. If withdrawing
prohibitions on “some” sports wagering is the equivalent to
13
Id.
14
Id. at 233.
15
Maj. Op. 18.
5
authorization by law, then withdrawing prohibitions on all
sports wagering must be considered authorization by law.16
Under this logic, New Jersey is left with no choice at all—it
must uphold all prohibitions on sports wagering in perpetuity
or until PASPA is no more. This is precisely the opposite of
what we held in Christie I—“[n]othing in these words
requires that the states keep any law in place”17—and why we
found PASPA did not violate the anti-commandeering
principle.
The majority, along with the United States, conceded
that a complete repeal does not violate PASPA. Indeed, in its
brief in opposition to New Jersey’s petition for certiorari, the
United States went as far as to concede that New Jersey could
repeal its prohibitions in whole or in part.18 Simply put, there
is nothing special about a partial repeal and it, too, does not
violate PASPA. The 2014 Law is a self-executing
deregulatory measure that repeals existing prohibitions and
regulations for sports wagering and requires the State to
abdicate any control or involvement in sports wagering. I do
16
Put another way, would a state violate PASPA if it enacted
a complete repeal of sports-wagering prohibitions and later
enacted limited prohibitions regarding age requirements and
places where wagering could occur? There is simply no
conceivable reading of PASPA that could preclude a state
from restricting sports wagering.
17
730 F.3d at 232.
18
Br. for the United States in Opp’n at 11, Christie v. Nat’l
Collegiate Athletic Ass’n, Nos. 13-967, 13-979, and 13980
(U.S. May 14, 2014).
6
not see, then, how the majority concludes that the 2014 Law
authorizes sports wagering, much less in violation of PASPA.
The majority equally falters when it analogizes the
2014 Law to the exception Congress originally offered to
New Jersey in 1992. The exception stated that PASPA did
not apply to “a betting, gambling, or wagering scheme . . .
conducted exclusively in casinos[,] . . . but only to the extent
that . . . any commercial casino gaming scheme was in
operation . . . throughout the 10-year period” before PASPA
was enacted.19 Setting aside the most obvious distinction
between the 2014 Law and the 1992 exception, that it
contemplated a scheme that the 2014 Law does not
authorize,20 the majority misses the mark with this
comparison when it states: “If Congress had not perceived
that sports gambling in New Jersey’s casinos would violate
PASPA, then it would not have needed to insert the New
19
28 U.S.C. § 3704(a)(3)(B).
20
For example, “[Division of Gaming Enforcement (“DGE”)]
now considers sports wagering to be ‘non-gambling activity’ .
. . that is beyond DGE’s control and outside of DGE’s
regulatory authority.” App. 416. At oral argument,
Appellants conceded they would have no authority or
jurisdiction over sports wagering. See, e.g., Tr. 14:12-15 (“Q:
Sports betting is going to take place in the casino with no
oversight whatsoever; A: That’s right.”); Tr. 21:15-20 (“All
of the state and federal laws that deal with consumer
protection, criminal penalties and the like remain in full force
and effect at the sports betting venue. The only thing that
doesn't get regulated is the sports betting itself.”).
7
Jersey exception.”21 Congress, however, did not perceive, or
intend, for private sports wagering in casinos to violate
PASPA. Instead, Congress prohibited sports wagering
pursuant to state law. That the 2014 Law might bring about
an increase in the amount of private, legal sports wagering in
New Jersey is of no moment and the majority’s reliance on
such a possibility is misplaced. The majority is also wrong in
an even more fundamental way: the exception Congress
offered to New Jersey was exactly that, an exception to the
proscriptions of PASPA. That is to say, with this exception,
New Jersey could have “sponsor[ed], operate[d], advertise[d],
promote[d], license[d], or authorize[d] by law or compact”
sports wagering. Under the 2014 Law, of course, New Jersey
cannot and does not aim to do any of these things.
The majority fails to illustrate how the 2014 Law
results in sports wagering pursuant to state law when there is
no law in place as to several locations, no scheme created,
and no state involvement. A careful comparison to the 2012
Law is instructive. The 2012 Law lifted New Jersey’s ban on
sports wagering and provided for the licensing of sports-
wagering pools at casinos and racetracks in the State. Indeed,
New Jersey set up a comprehensive regime for the licensing
and close supervision and regulation of sports-wagering
pools. For instance, the 2012 Law required any entity that
wished to operate a “sports pool lounge” to acquire a “sports
pool license.” To do so, a prospective operator was required
to pay a $50,000 application fee, secure DGE approval of all
internal controls, and ensure that any of its employees who
were to be directly involved in sports wagering obtained
individual licenses from DGE and the Casino Control
21
Maj. Op. 19.
8
Commission. In addition, the regime required entities to,
among other things, submit extensive documentation to DGE,
to adopt new “house” rules subject to DGE approval, and to
conform to DGE standards. This violated PASPA in the most
basic way: New Jersey developed an intricate scheme to both
authorize (by law) and license sports gambling. The 2014
Law repealed this entire scheme.
Without more, the majority is simply left calling a tail
a leg—which, as the adage goes, does not make it so.
Because I do not see how a partial repeal of prohibitions is
tantamount to “authorizing by law” a sports-wagering scheme
in violation of PASPA, I respectfully dissent.
9