Supreme Court Denies Leagues’ Bid For Hearing In Horsemen’s $150M Lawsuit — What’s Next?

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The NFL and four other major sports organizations struck out on Monday in their bid to have the U.S. Supreme Court take up their objection to a $150 million lawsuit by the New Jersey Thoroughbred Horsemen’s Association.

The horsemen have claimed that by being improperly enjoined from offering sports betting from November 2014, when a federal district court judge invalidated a new state law, until mid-2018 — when the nation’s top court opened the door for such wagering — that the $150 million is the amount of damages owed them by the leagues.

After much bickering this year at the U.S. District Court level, the parties agreed last month to stand down until they found out if the Supreme Court would agree to take the case.

Such a filing is said by longtime attorneys to be something like a 100/1 chance — yet that long shot came in for the prequel to this case, the six-year battle by New Jersey officials and the horsemen to get the Professional and Amateur Sports Protection Act of 1992 overturned.

But on Monday, the Supreme Court accepted only one case while denying more than 100 — with most, including the one by the leagues listed as 19-1114, not even receiving a word of explanation.

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Ball now in the horsemen’s court

What does Monday’s denial mean? It’s back to business at the U.S. District Court level, with possible “discovery” depositions and other time-consuming research.

“We’re obviously happy to see that the [Supreme] Court acted as we expected, and now we take the next steps,” Monmouth Park operator Dennis Drazin told NJ Online Gambling.

There are two tiers to damages being sought by the horsemen. The first is fairly straightforward: a $3.4 million bond for the four weeks in 2014 between a temporary restraining order issued by Judge Michael Shipp and his later permanent injunction against Monmouth Park being able to offer sports betting.

Drazin said that because the leagues have never challenged the amount of the bond determined by the judge, he hopes for a quick ruling on that front.

But the rest of the money stems from the subsequent years before the Supreme Court made its ruling. Should the leagues be punished for a judge following the guidance of a Third Circuit Court of Appeals panel and barring the wagering?

It’s a complex question. The horsemen clearly were improperly prevented from offering what turned out to be a legal product — sports betting — for almost four years.

But the leagues will have a case to make that they shouldn’t be held liable for the legal errors of multiple judges.

Florida State gaming law attorney Ryan Rodenberg points out that in the Third Circuit’s overall favorable ruling for the horsemen last year, in a footnote the panel declared that the horsemen “will have the burden of showing provable damages” from the delay “and the alleged damages cannot be speculative.”

How much damage did the horsemen suffer?

The exact amount of losses seems impossible to quantify, but the horsemen in 2014 offered the findings of an industry expert, Chris Grove, who explained his methodology.

The leagues have consistently ignored that issue, however, so questions remain as to whether the court will accept the analysis.

The Third Circuit’s majority opinion last fall was written by Justice Marjorie Rendell, one of the two judges whose opinion in the PASPA saga was overturned by the Supreme Court in 2018. (The other was Maryanne Trump, older sister of President Trump.)

Rendell wrote in the horsemen’s ruling: “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.

“Did it turn out that NJTHA had the right all along to do what they were enjoined from doing? There is no way that the answer to that question could be ‘no.’”

Judge Shipp never addressed the issue of damages beyond the $3.4 million bond claim, so Rendell declined to address that issue in her ruling.

Discovery in this case could include the horsemen obtaining unredacted depositions made by various league commissioners in the original incarnation of the sports betting case in 2012.

The leagues have strenuously objected to such revelations, claiming it would uncover important proprietary research about American consumer attitudes toward sports betting.

But if the unredacted material shows that the leagues would not suffer the “irreparable harm” they claimed would occur with the spread of legal sports betting beyond Nevada — a claim debunked completely in the last two years of legal wagering in other states — then the horsemen’s assertion that the leagues acted in bad faith in making such a claim would be bolstered.

Photo by Dan Thornburg / 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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