Sports Leagues Fight ‘Unprecedented’ Claim By NJ Horsemen For $150M From Sports Betting Case

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Does a new federal judge to the long-running saga of the NFL and four other sports organizations vs. the New Jersey horsemen really want to boldly go where no judge has gone before?

That’s the challenge the leagues brought forth in a brief filed on Friday asking the court to limit consideration of damages to be awarded to the horsemen to some portion of a $3.4 million bond set aside by the leagues in 2014.

That bond was to cover the lost revenue to the state’s thoroughbred horsemen from not being able to offer sports betting at Monmouth Park for a four-week period, while U.S. District Court Judge Michael Shipp reviewed the league’s request for a temporary restraining order (TRO).

But thanks to a series of court rulings adverse to the horsemen over the years, such wagering at Monmouth Park was delayed until mid-2018.

The horsemen have sought almost $150 million in additional damages for the extra 3½ years that they were denied such revenues. The NFL — along with the NBA, MLB, NHL, and NCAA — has declared that it’s not their fault, nor cost, that the courts kept getting it wrong until the U.S. Supreme Court in 2018 rendered a 26-year-old congressional limitation on sports betting outside of Nevada to be unconstitutional.

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But last fall, U.S. Third Circuit Court of Appeals Judge Marjorie Rendell sided with the horsemen, writing in a 2-1 majority opinion, “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? … There is no way that the answer to that question could be ‘no.’”

There’s a new sheriff in this town

This is now the bailiwick of Judge Freda Wolfson, who replaced Shipp last month. Shipp oversaw the entire New Jersey sports betting saga from 2012-18, which can now be looked at as a “prequel” to this long-running legal affair that began just days after the Supreme Court ruling.

The leagues struck back at the New Jersey Thoroughbred Horsemen’s Association (NJTHA) in the latest filing, writing that their opposition to the sports organizations’ previous cross-motion “is most notable for what it does not address.”

“NJTHA does not dispute that it has failed to identify a single authority supporting its claim for purported ‘excess’ damages allegedly arising after the 28-day TRO period, nor does it dispute that any such award would be unprecedented.

“Such a remedy has never been awarded (or even suggested) by any court, and an award of damages after the expiration of the ‘wrongful’ injunction — let alone for a 42-month period until the Supreme Court overturned [the Professional and Amateur Sports Protection Act of 1992]— would be inconsistent with Third Circuit precedent and the basic purpose of injunction bonds.”

The leagues also needed to — and did — address claims by the horsemen at the core of the damages issue: whether the leagues acted in “bad faith” by offering numerous comments under oath during depositions claiming “irreparable harm” should a Jersey Shore racetrack for even four weeks in 2014 offer the same sort of wagering that Las Vegas casinos have offered for more than 50 years.

The horsemen previously have tried and failed to attack the leagues for “hypocrisy” and “unclean hands” — and the leagues say that in fact this is the same argument that has been rejected in court five times, wearing only slightly different clothing.

Leagues insist there was no “bad faith”

“NJTHA elides the issue by making the brazenly false statement that the Sports Organizations ‘have admitted that NJTHA’s legal theory is cognizable as a matter of law,'” the leagues argue in the brief. “As NJTHA is well aware, the Sports Organizations have done no such thing; the Sports Organizations have acknowledged only that there is limited precedent for awarding excess ‘bad faith’ damages arising during the injunction period — albeit under extremely rare and narrow circumstances inapplicable to this case.

“Stripped of all rhetoric and extraneous allegations, NJTHA’s ‘bad faith’ claim rests entirely on a single false premise: that the Sports Organizations knowingly submitted false statements concerning the threat of irreparable harm while enforcing their rights under PASPA.

“NJTHA does not address the record that this Court explained is ‘replete with evidence’ demonstrating ample support for the Sports Organizations’ stated concerns about irreparable harm from the spread of state-sponsored sports gambling.”

The deposition excerpts from 2012 cited in the horsemen’s most recent filing by NCAA President Mark Emmert, NFL Commissioner Roger Goodell, and then-MLB Commissioner Bud Selig, say league attorneys, reflects “their reasonable and well-supported concern that New Jersey’s scheme ‘would threaten’ or ‘threatens’ irreparable damage to their organizations.”

Reality check on sports leagues claims

To step outside of the filing for a moment, it’s worth noting that unavailable to the leagues is a claim of “I told you so.”

That is, this “irreparable harm” to come from four weeks of sports betting at Monmouth Park in 2014 looks particularly absurd given that since mid-2018, nearly two dozen states have legalized sports betting.

Harm to the leagues appears to be less than zero. It’s more likely that improved ratings and ticket sales can be attributed to the new prevalence of legal, regulated sports betting.

But the sports organization attorneys are fully aware that all that matters in the courts is whether the horsemen can actually prove that these high-ranking sports overlords “knew better” when they made what turned out to be rather ridiculous sky-will-fall claims eight years ago.

That’s a high hurdle for the horsemen, it appears.

Finally, the leagues claim that the horsemen’s current bid for a jury trial — can one find a jury of 12 people in New Jersey who don’t boo Goodell at the annual NFL drafts — was waived by them in 2014 when they didn’t mention that preference.

The horsemen previously countered that they couldn’t ask for such a trial until the Supreme Court voided PASPA in May 2018.

Photo by Yanik Chauvin / 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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