Tuesday, August 15, 2017

If federal law prohibits the sports gambling, which way does that cut in Christie v. NCAA?

Marty Lederman

Mark Tushnet suggests that there's a very straightforward way of looking at Christie v. NCAA--namely, as what he calls a federal "preemption" case that can be resolved by ignoring New Jersey law and simply recognizing that the sports gambling in question is prohibited by federal law.  Mark's perspective on the case--what he himself describes as an "unbearably simple-minded" view--might well be right.  It's not clear, however, what should follow in the case if he is right.

The suits in question were brought by the NCAA and the major national professional sports leagues--MLB, the NFL, NBA and NHL--against New Jersey.  Note that the federal government is not a party.  The plaintiffs allege that it was unlawful for New Jersey not to have categorically prohibited sports gambling under state law--or, to be more specific, they allege that New Jersey has affirmatively and unlawfully "authorized" sports betting by "channeling" such wagering into established casinos and racetracks.  The "channeling" in question is effected, claim the plaintiffs, by the simple fact that those are the only locations in the State in which New Jersey law does not prohibit such gambling.  In other words, they complain that New Jersey, far from simply declining to prohibit gambling in the interest of its residents' liberty to wager, has in effect done the bidding of the casinos and race tracks by providing them an effective monopoly.  The state has thereby "authorized" sports betting in such locales, claim the plaintiffs, which allegedly violates a federal law (28 U.S.C. 3702(1)) that makes it "unlawful for . . . a governmental entity to . . . authorize" such wagering "by law."

The plaintiffs succeeded on this argument, thereby securing an injunction against New Jersey, prohibiting the State from "giving effect to" its own 2014 law.  As the plaintiffs' lawyer, Paul Clement, describes it, this injunction "thus requires the State to resurrect and maintain prohibitions on private conduct the State itself chose to repeal."

New Jersey's constitutional defense is that to the extent federal law does prohibit what the state has done, Congress is effectively "commandeering" the New Jersey legislature to criminalize certain conduct, in violation of the Court's so-called "Tenth Amendment" doctrine announced in New York v. United States and Printz v. United States.

Mark's understandable reaction to this suit about what New Jersey has or has not done is:  so what?  The plaintiffs don't really have grounds for complaining about whether or not New Jersey has prohibited the gambling in question, he suggests, because federal law independently prohibits that very same conduct.

Mark might be right about the impact of federal law.  Indeed, in its amicus brief at the cert. stage, the federal government took Mark's view:  The SG urged the Court not to grant cert. because "even if this Court granted review and agreed with petitioners that Section 3702(1) violates the Tenth Amendment, the sports-gambling schemes purportedly authorized by the 2014 Act would still be prohibited by Section 3702(2)."  Paul Clement, representing the NCAA and the sports leagues, argued likewise in his brief in opposition (see pages 33-34).  Unlike Section 3702(1), which regulates governmental entities, Section 3702(2) of the federal law makes it unlawful for a private party, such as the casinos and racetracks in question, to operate a sports betting scheme "pursuant to the law or compact of a governmental entity."

It is unclear--or disputed, anyway--whether the SG and Clement are correct about the scope of the federal prohibition.  In a supplemental filing at the cert. stage, Ted Olson, representing New Jersey, argued that section 3702(2) does not have prohibitory force of its own because the casinos and racetracks in question do not operate gambling schemes "pursuant to" New Jersey law.

I haven't studied the question, and so I don't (yet) have a strong view about whose interpretation of section 3702(2) is more compelling.

Let's assume for the sake of argument, however, that the SG, Paul and Mark are correct about section 3702(2) of the federal law--namely, that it directly prohibits the gambling in question, even though (as far as I know) the federal authorities have never taken any steps to directly enforce that federal law.  Why would that mean, as Mark's post appears to suggest, that the injunction concerning New Jersey law is unobjectionable because "New Jersey's repeal of its prior ban on sports betting is basically irrelevant"?

After all, if the federal government could itself, today, shut down those gambling operations because they violate federal law, what's Congress's possible justification for requiring New Jersey to do so, too?  It's certainly relevant, as a very practical matter, whether one's conduct is prohibited by two sovereigns rather than one--which is presumably why both the plaintiffs and the casinos/racetracks believe that so much is at stake in whether the injunction stands.  This is the way Ted Olson puts the point in his supplemental brief:
If the government is correct and Section 3702(2) prohibits New Jersey's casinos and racetracks from engaging in sports wagering regardless of whether New Jersey continues to prohibit that activity, then invalidation of Section 3702(1) finally would task the federal government with administering and enforcing its own proscription against sports wagering. The end of the federal government's conscription of the States' legislative apparatuses to impose that prohibition, and the restoration of an appropriate line of accountability for it to federal officials, would have immense “practical significance” to Petitioners, the people of the State of New Jersey, and to our system of federalism.
Why is that mistaken?*

(And conversely, I might add, if the SG/Clement/Tushnet reading of federal law is wrong, and Congress has not directly prohibited the sports gambling in question, why is it kosher or defensible for Congress to insist that New Jersey do so, whatever one's views of New York and Printz might be?  What would be Congress's justification, in that case, for not bringing federal resources to bear to prohibit the gambling, but instead shifting all of the burdens to the State to do its bidding?)

* Only one possible argument comes immediately to mind:  If federal law prohibits the conduct in question, and the intended and foreseeable impact of the selective state prohibition is to funnel gambling proceeds into the pockets of the casinos and racetracks, I suppose it's arguable that the State is, in effect, "aiding and abetting" the federal law violations by those casinos and racetracks, in a way that, perhaps ironically or counterintuitively, it wouldn't be if New Jersey did not ban sports gambling at all . . . and that Congress could logically, and perhaps constitutionally, choose to prohibit such aiding and abetting.  I'd need to think about this argument further if and when Clement and the SG invoke it.

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