How The NJ Sports Betting Lawsuit Should Play Out With The Supreme Court

Posted on May 7, 2020

We learned Friday that in all likelihood, the New Jersey sports betting case would end its third journey to the Supreme Court two years and one day after it struck down the Professional and Amateur Sports Protection Act.

With nearly 20 states featuring legal sports betting, the current case deals with a dispute centered on the bond that the sports leagues were required to post at the commencement of the Christie II case, which gave us the Murphy decision.

Although this case still lingers, it does not pose a threat to the new status quo. It has no impact on the continued expansion of sports betting across the country.

A quick recap of how we got here

Back in March, the sports league quintet that originally sued Gov. Chris Christie and the New Jersey Thoroughbred Horsemen’s Association (NJTHA), petitioned the Supreme Court for review of a Third Circuit decision. The ruling found the leagues on the hook for costs associated with the bond they posted in 2014.

The sports leagues asked the Supreme Court to answer two questions that would alleviate their responsibilities to pay up to the Horsemen’s Association:

  • Whether a party was “wrongfully enjoined” under Federal Rule of Civil Procedure 65(c) when the district court confirmed via the grant of a permanent injunction that its entry of a temporary restraining order was correct under then-applicable law.
  • Whether the district court retains its full equitable discretion to deny recovery on the rule 65(c) injunction bond.

The association’s response

The Horsemen’s Association raised five arguments as to why the Supreme Court should not move forward and grant the petition for the case to proceed to oral arguments. Convincing six of the justices not to take the case on any or some of the arguments would likely be the end for the case set in motion with a non-binding ballot measure nearly a decade ago.

The Horsemen’s brief attempted to highlight as missing several factors that the Supreme Court has historically used to decide whether to take the case.

What do we have this time?

After receiving a short extension to file a reply brief, the sports leagues, through their counsel Jeffrey Mishkin, filed on April 27.

Despite the reply brief’s short word limits, the leagues still attempted to address three different issues.

What we have here is a failure to communicate

The sports leagues’ first argument centered on the belief that the Third Circuit’s conclusion that the Horsemen’s Association were “wrongfully enjoined” conflicts with the text and precedent surrounding Federal Rule of Civil Procedure 65 (c).

The league argues that Rule 65(c) only applies to temporary and preliminary injunctions. Thus, when the injunction turned permanent by the district court in 2015, the leagues should have been let off the hook.

The worst kind of split

The leagues’ second argument advances the proposition that the Third Circuit’s decision creates “inequitable results and deepens a different circuit split.” Circuit splits are historically one of the factors that lead the Supreme Court to be more inclined to review a case (though they are still far from a guarantee.)

The leagues argue that the Third Circuit’s determination is in direct conflict with precedent out of the Fifth Circuit, arguing that if the Third Circuit’s interpretation is to prevail, it would lead to unfairness.

If the Third Circuit was correct that a temporary restraining order was entirely correct when issued can become “wrongful” based on subsequent changes in the law, it would be critical for courts to have the discretion to ameliorate inequitable results.

While there does appear to be a split with the Fifth Circuit, the leagues’ reply brief seems to suggest that the Fifth Circuit is the outlier here. In fact, there are other circuits more in line with what the Third Circuit has done here.

It does appear as though this approach has been repeated; there has been little in the way of justification for it in the eyes of the leagues.

Leagues assemble

The sports leagues argue that this case is an optimal means of resolving the questions before the court and that these questions appear frequently. The leagues note that the questions they are asking the Supreme Court to resolve have been asked in at least five different circuit courts.

The leagues argue that the Supreme Court needs to step in here and resolve this matter before the different approaches lead to even greater inconsistent results across the country.

What does this all mean?

In all likelihood, when the Supreme Court holds their conference on May 15, this will be the last time they discuss this case.

If you are a fan of wagering, you would be advised to put your money on the Horsemen, if for no other reason than the Supreme Court grants very few petitions – normally only between 75-100 a year out of thousands of petitions.

In order for this case to stay at the Supreme Court and proceed to an oral argument (a distant second in terms of the likelihood of possible events not including the possibility the case gets relist which effectively means the Court will deal with it at another conference), four justices would need to vote in favor of granting the petition.

If this occurred, the case would move to the merits stage and the leagues would need to file their opening brief within 45 days of the granting of certiorari.

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John Holden

John Holden J.D. / Ph.D. is an academic. His research focuses on policy issues surrounding sports corruption.

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