Paul Clement of Bancroft and Jeffrey Mishkin of Skadden, Arps, Slate, Meagher & Flom took a huge step this week toward defeating a bid by New Jersey Governor Chris Christie to legalize sports betting in the cash-strapped state. The victory is a big deal to the duo's clients—the big four professional sports leagues and the National Collegiate Athletic Association—who think sports betting is bad news and want to keep it from spreading.
In a lengthy 2-1 decision issued Tuesday, the U.S. Court of Appeals for the Third Circuit ruled that New Jersey's sports wagering law is invalid because it conflicts with a federal statute known as the Professional & Amateur Sports Protection Act of 1992. Christie and other New Jersey politicians challenged the constitutionality of PAPSA, but the two-judge majority carefully dissected their constitutional arguments and ultimately concluded that they have no merit.
The sports leagues lobbied heavily for PAPSA, which banned sports betting except in Nevada and a handful of other states that had already voted to legalize it. According to the leagues, as sports betting spreads, so does suspicion that players are taking bribes to throw games. Despite these fears, New Jersey held a voter referendum on sports betting in 2011. The referendum passed easily, and Christie signed the bill into law in January 2012.
The big pro sports leagues and the NCAA brought suit in August 2012, with Mishkin leading the effort from the get-go. Mishkin's practice focuses on sports law, and he previously served as chief legal officer of the National Basketball Association, one of the named plaintiffs. Realizing that the case would implicate thorny constitutional issues, Mishkin urged his clients to retain Clement, whom he'd worked with on litigation over the 2011 NBA lockout. (The leagues are also represented by a McCarter & English team led by William O'Shaughnessy.)
Theodore Olson of Gibson, Dunn & Crutcher, who represents Christie and his allies, immediately countered that the leagues hadn't suffered an injury and therefore didn't have standing to sue under Article III of the U.S. Constitution. The U.S. district judge in Newark assigned to the case, Michael Shipp, opted to hold an oral argument on that threshold issue. Siding with Mishkin, who handled the argument, Shipp ruled last December that "for purposes of standing, Plaintiffs demonstrated, at least by an identifiable trifle, that state-sanction gambling would adversely impact how the leagues are perceived by those who can affect their future, specifically their fans."
With standing resolved, Shipp held an oral argument on the merits of the case. Mishkin and Olson squared off once again. Olson likened PAPSA to a handful of other federal statutes that have been shot down on the grounds that they "commandeered" states' authority to regulate their own citizens. Shipp rejected that argument in late February and enjoined New Jersey from enforcing its law.
Clement argued to preserve the win before the Third Circuit in June. It was tough to tell how the court would rule. But Tuesday's ruling makes it clear that the judges agree with Clement and Mishkin's view of the U.S. Supreme Court's "anti-commandeering" jurisprudence. "We see much daylight between the exceedingly intrusive statutes invalidated in the anti-commandeering cases and PAPSA's much more straightforward mechanism of stopping the states from lending their imprimatur to gambling on sports," Judge Julio Fuentas wrote for the circuit court.
Christie has already vowed an appeal to the Supreme Court, which may take a cert petition seriously. But given their track record so far, the smart money is probably on Mishkin and Clement.