NJ Horsemen Get New Judge — And New Life? — In $150M Lawsuit Against Sports Leagues

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The one-page notice is quite terse — but could it mean volumes for the New Jersey Thoroughbred Horsemen’s Association?

On Friday, a federal court website noted of the horsemen’s $150 million lawsuit against the NFL and four other sports organizations: “Case reassigned to Chief Judge Freda L. Wolfson for all further proceedings. Judge Michael A. Shipp no longer assigned to case. So ordered by Judge Freda L. Wolfson on 6/12/20.”

And who is Michael A. Shipp? He is the judge who ruled against the state in the leagues’ lawsuit in 2012, and again in an amended New Jersey sports betting lawsuit in 2014.

Then after the U.S. Supreme Court in 2018 nullified the Professional and Amateur Sports Protection Act of 1992, the horsemen filed their lawsuit claiming that the leagues had improperly prevented Monmouth Park from offering Las Vegas-style sports betting.

Shipp not only denied their bid for years of damages, in 2018 he even denied the horsemen the rights to a $3.4 million bond for a four-week period in 2014 while Shipp was weighing the merits of his temporary restraining order.

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That sent the horsemen to the U.S. Third Circuit Court of Appeals for a third time. And after a pair of 2-1 verdicts that had upheld the leagues’ efforts, this time the 2-1 verdict went in favor of the horsemen.

That decision remanded the case back to Shipp — who now has been replaced.

Shipp sided with leagues

In 2012, Shipp first denied the state’s claim that the leagues lacked standing to try to prevent the state from offering sports betting. A statewide referendum in 2011 that permitted sports betting at all state racetracks and Atlantic City casinos passed by a 2-to-1 margin.

The leagues’ successful argument at the time was that — in spite of a half-century of legal sports betting in Nevada — adding sports betting in New Jersey would represent “irreparable harm” to their reputations.

“Every dropped pass, every missed free throw becomes an object of suspicion,” Jeffrey Mishkin, attorney for the leagues, claimed at the time. That assertion did not age well, as the leagues by all accounts thrived in the period from numerous states adopting sports betting regulations from mid-2018 until the worldwide COVID-19 pandemic shut major sports down three months ago.

In early 2013, Shipp agreed with the leagues’ claim that PASPA prevented the state from taking bets at Monmouth Park.

The initial ruling by the Third Circuit clarified that there was a way for New Jersey to legally permit sports betting — just not in the manner that the original law offered.

That led to an amended law being passed in 2014, which Shipp again rejected. But in an extraordinary result, Judge Julio Fuentes, who wrote the majority opinion in the first case, was the lone dissenter in the second case.

That led to a 12-judge “en banc” panel of the Third Circuit to again rule in favor of the leagues in 2015 by a 9-3 margin.

But the trio of split decisions, and Fuentes’ pivot, may have been keys in the Supreme Court agreeing in 2017 to take the case.

The horsemen take on the leagues

Once the Supreme Court ruled for the horsemen, in just a few weeks the NJTHA decided to take on the leagues for damages.

After Shipp once again ruled against them, the Third Circuit concluded that he had erred in his decision.

It’s worth noting that Marjorie Rendell, the judge who wrote the majority opinion in 2019, is the same judge who wrote the opinion — along with Maryanne Trump Barry, sister of President Trump — that was overturned by the Supreme Court.

That sent the case back to Shipp, but after months of legal wrangling, the two sides agreed to wait to see if the Supreme Court would take up this sports betting sequel. That bid failed last month as the court declined to take the case.

Shipp, as it happens, grew up in Paterson, only a dozen or so miles from Giants Stadium and its replacement, MetLife Stadium. Each stadium has been the only one to house a pair of NFL franchises, the New York Giants and New York Jets.

The connection goes deeper: Shipp’s brother, Marcel, played in the NFL as a running back for the Arizona Cardinals. But that coincidence did not produce any objection for attorneys for the state or the horsemen over the years.

An expert’s observation

In response to Friday’s news, sports law attorney Daniel Wallach, who has followed this saga since its inception, said the change in judges is “six years too late.”

Wallach told NJ Online Gambling Monday that while Shipp wasn’t necessarily biased in favor of the NFL’s side based on his brother, there was enough of an “appearance of conflict” for Shipp to have recused himself. And with a different judge, Wallach mused, legal sports betting beyond Nevada might well have been in place for several years before 2018.

A replacement of a federal judge this far down the road was not unprecedented, Wallach said, but still “highly unusual.”

“We’ll never know the exact reason, but we know that Judge Shipp was reversed [by higher courts]many times in this case,” Wallach said.

While Shipp was appointed by President Barack Obama, Wolfson, 66, was appointed by President George W. Bush in 2002. In 2019, Wolfson became the chief judge for the U.S. District Court of New Jersey — thus serving as Shipp’s boss.

Photo by Andrey Popov / Shutterstock.com

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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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