New Jersey is asking the U.S. Supreme Court to review and reverse a Third Circuit ruling that struck down the state’s sports-betting law as preempted by federal regulation.
The state filed a petition for a writ of certiorari on Feb. 12 in an effort to rescue the statute, which would legalize sports wagering in casinos and horse-racing tracks in the state.
Theodore Olson of Gibson, Dunn & Crutcher in Washington, D.C., the state’s outside counsel, argues that the appellate court ruling in National Collegiate Athletic Association v. Christie “impermissibly trenches on the States’ authority to regulate their own citizens, and it does so in a manner that discriminates among the States.
“That double-barreled infringement on the sovereign prerogatives of the States calls out for review,” Olson says.
In January 2012, after voters approved a state constitutional amendment to legalize sports wagering, a statute was enacted to permit betting on professional and collegiate events that take place outside New Jersey and do not involve a New Jersey team.
In August 2012, the National Collegiate Athletic Association sued, along with the four major professional sports leagues, seeking a declaration that the law violates the federal Professional and Amateur Sports Protection Act (PASPA), enacted in 1992, which barred authorization of sports betting in places where it wasn’t already legal.
The leagues also claimed that legalized wagering in New Jersey would repel fans and compromise sport integrity.
In December 2012, U.S. District Judge Michael Shipp in Newark found that the leagues had standing to sue and months later ruled on summary judgment motion that the statute was preempted by PASPA.
The state appealed, arguing that PASPA violates the 10th Amendment’s anti-commandeering doctrine, which bars Congress from making states carry out the will of federal officials.
The state also alleged that PASPA’s grandfather clause—allowing sports betting to continue in Nevada, Delaware, Oregon and Montana, where it already had been legal—is unfair because it favors those states while restricting others. Last September, a divided panel of the U.S. Court of Appeals for the Third Circuit affirmed Shipp’s decision, holding PASPA a valid exercise of Congress’ authority. The court agreed that the leagues had standing based on assertions of harm to their reputations.
Circuit Judges Julio Fuentes and Michael Fisher noted that the anti-commandeering doctrine invalidates only federal laws that require states to take affirmative action, whereas PASPA required no action by New Jersey. It has been used to overturn federal law just twice by the Supreme Court, and never by the Third Circuit, they said.
The judges also rejected the state’s equal-sovereignty argument, finding that it didn’t apply to regulation of gambling through the Commerce Clause.
Circuit Judge Thomas Vanaskie dissented in part, contending that PASPA violates federalism principles because it restricts regulation of a practice over which the state historically has had regulatory authority.
In his certiorari petition, Olson, a U.S. solicitor general for three years under President George W. Bush, said the Third Circuit’s interpretation of the anti-commandeering doctrine is at odds with binding precedent stating that Congress may not interfere with states’ regulatory imprimatur or their conveyance of a “label of legitimacy” on private conduct, which he said “lies at the heart of their retained sovereignty,”
The ruling “would allow almost infinite degrees of federal interference with State regulation of private conduct,” he added. “Any activity subject to licensure by the States…could be regulated indirectly by limiting the circumstances under which States may issue a license.”
Paul Clement of Bancroft in Washington, D.C., who represents the leagues, declines comment through National Football League spokesman Brian McCarthy.
U.S. Attorney Paul Fishman’s Office also has argued for upholding the statute. Office spokesman Matthew Reilly declines comment, but Fishman previously said that Congress has “constitutional authority to make uniform national policy and not to leave it to the decisions of individual states.”
Olson could not be reached Tuesday, and Gibson Dunn partner Matthew McGill, who’s also working on the case, declined comment.
The state Attorney General’s Office is also involved in the matter. Spokesman Lee Moore did not comment by press time.