New Jersey Horsemen Versus NFL Legal Saga Getting Metaphysical

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If a 26-year-old federal law is vacated by the U.S. Supreme Court, did it ever exist at all?

That might sound like a research assignment for a law school student — or a philosophical query for liberal arts majors.

But that very question is at the core of  Tuesday’s request by the NFL, NCAA et al. for an “en banc” hearing of the U.S. Third Circuit Court of Appeals in their long-running battle with the New Jersey thoroughbred horsemen.

Such a hearing of the full court — a dozen or so justices, compared to the three-judge panel that recently ruled against the leagues — rarely is granted.

But in the original version of this saga, which starred New Jersey government officials with the horsemen as supporting cast members, an en banc hearing was held — one of many unexpected twists in the case.

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With the horsemen now the lone stars of the sequel — seeking up to $150 mm in damages from the leagues — last month’s 2-1 Circuit Court ruling (the third straight time that happened in the saga) and a constitutional question conceivably could lure the full Circuit Court back into action.

Did PASPA ever exist?

The challenge for the leagues is to take head-on the majority opinion by Third Circuit Judge Marjorie Rendell on the variation of “if a tree falls in the forest and there is no one there to hear it, does it make a sound?”

Rendell wrote: “Whether a party is wrongfully enjoined depends upon whether it turns out that that party had a right all along to conduct the activity it was enjoined from doing. The entire concept of ‘wrongfully enjoined’ envisions a look back from the ultimate conclusion of the case: Should the enjoined party have been permitted to do what it was prevented from doing? Thus, whether a party was wrongfully enjoined depends upon the final judgment on the merits.”

But the leagues focus on the undeniable fact that at the time the temporary restraining order was issued in 2014, U.S. District Court Judge Michael Shipp found that the second version of the state sports betting bill still ran afoul of the Professional and Amateur Sports Protection Act of 1992.

The majority of a second Third Circuit panel agreed, and even the U.S. Supreme Court did as well — the Court ruled in favor of the state by finding that it didn’t matter that the new state law defied PASPA. That’s because, the Court ruled, PASPA was never a constitutional law — including in 2014, when Shipp ruled.

The core argument in this sequel is about a modest $3.4 mm bond put in escrow by the league five years ago to account for estimated damages over a four-week span until Shipp made a final ruling. The leagues dispute that they need to pay even that — and Shipp agreed.

The horsemen, meanwhile, note that they were “wrongfully enjoined,” as it turned out for four years — not four weeks. Thus the $150 mm estimated figure sought.

Shipp shape of ruling gets backing

Shipp, last month’s dissenting Judge Otto Porter, and now the leagues want the focus to be on the fact that Shipp had no choice — based on higher Court rulings — but to rule against the horsemen in 2014. That’s true, but is it relevant?

There is a precedent case that addressed what happens if there is “a change in the law.” At question is if that happened here.

No, says, Rendell, who concluded: “The Supreme Court’s decision is not a change in the law; it is success on the merits.” Therefore, the horsemen had the right to offer sports betting all along — it just took 26 years for the U.S. Supreme Court to clarify that.

In Porter’s dissent, he said he could not accept that cosmic concept that “the Supreme Court’s 2018 decision on the commandeering issue means that PASPA never existed.”

Porter calls this “the writ-of-erasure fallacy — the mistaken assumption that a judicial pronouncement of unconstitutionality has canceled or blotted out a duly enacted statute and rendered it a nullity.” He then cites a previous Third Circuit case that he wrote makes the recent horse racing ruling “inconsistent.”

Another case in this Circuit, from 1993, where a woman who had her marriage annulled was still entitled to retirement benefits accrued during the time she was temporarily married.

“During those months, Appellant was still a married person,” in spite of the annulment, according to that ruling.

We look forward to the horsemen tackling these arguments down the road.

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John Brennan

John Brennan has covered NJ and NY sports business and gaming since 2002 and was a Pulitzer Prize Finalist in 2008, while reporting for The Bergen County Record.

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