- Sports Betting
- US Betting
- Daily Fantasy Sports
Author’s Note: The original version of this article posted last week stated that the Third Circuit order granting rehearing en banc did not specify whether three active judges were recused or merely had declined to vote on the motion for rehearing. Appellate attorney Matthew Stiegler, who writes the excellent CA3Blog, posted a compelling explanation of how the order granting rehearing reflects that the three judges at issue are in fact recused, and that the order identifies the full panel expected to hear the appeal. The article below has been corrected accordingly.
In writing the original article, I found the court’s order unclear, so I did consult with an appellate attorney from Pennsylvania (part of the Third Circuit) who read the order differently than Mr. Stiegler. However, that conversation was informal, and I did not ask the attorney to do any research. The error, though unintentional, was wholly mine. Thank you to journalist John Brennan (who covers the New Jersey sports and gaming scene at the Meadowlands Matters blog) for bringing the error and the CA3Blog analysis to my attention.
Recently, the Third Circuit Court of Appeals granted the state of New Jersey’s petition for rehearing en banc in Christie II, the continuing court battle over whether New Jersey can circumvent the Professional and Amateur Sports Protection Act of 1992 (PASPA) and offer traditional sports betting through a repeal of state regulations for sports betting at the state’s casinos and racetracks.
The court’s ruling rekindled New Jersey’s waning hopes for implementing sports betting without a Congressional amendment or repeal of PASPA, but the legal issue remains up in the air. Based on the Third Circuit’s internal operating rules, my experience in appellate litigation, and my conversations with experienced federal appellate attorneys, here is what we can know and what we can surmise from reading the appellate tea leaves.
The court’s decision to grant rehearing voids the Third Circuit panel opinion entered by the three judges who previously heard the appeal. However, the original district court decision in Christie II which found that New Jersey’s repeal statute violated PASPA remains in effect. So, New Jersey will not be able to offer sports betting unless and until the full Third Circuit reverses the district court ruling.
Even if the case moves quickly by appellate legal standards, New Jersey will likely need to wait six to twelve months for a final decision.
The Third Circuit generally will not order additional written briefing by the parties in an en banc hearing, but most likely will order oral argument before the en banc panel (per court rule, the matter will be set for oral argument upon the request of any judge sitting on the en banc panel).
Argument will not be set for several months, probably sometime in early 2016 depending on the court’s ability to coordinate the schedules of the en banc panel with an opening in the court’s limited oral argument calendar (attorney Matthew Stiegler identifies the court’s February 17 sitting as a likely candidate).
A decision generally will be entered three to six months after argument, with longer waits expected for cases where there are dissenting opinions. Christie II is almost certain to generate dissents.
An “en banc” hearing by a court simply means a hearing by all judges on the court, rather than a smaller panel of judges.
In order to promote efficiency, federal law and federal court rules dictate that most appeals are to be decided by three judge panels, which occurred in both Christie I (where a different panel of Third Circuit judges found that PASPA was constitutional) and the current Christie II appeal.
The court sits en banc only rarely, and only to decide cases of great importance or to resolve conflicts between different panels of judges. Because the court sitting en banc sets binding judicial precedent for the entire Circuit, federal law and court rules generally limit the en banc panel to those Circuit judges who are in active status.
The Third Circuit currently has 23 total judges, of which 12 are active and 11 have taken senior status (a sort of semi-retirement for judges which allows them to be appointed to hear cases on a limited basis to assist with the court’s workload). So, the en banc panel would usually consist of the 12 active judges. The panel composition may change, however, based on four considerations — appointments, retirements, recusals, and special appointments of senior judges.
There are currently two vacant judicial openings on the court. One of the vacancies is set to be filled by current Pennsylvania Federal District Judge Luis Felipe Restrepo, whose nomination has been approved by the Senate Judiciary Committee, but whose final approval by the full Senate has been delayed for several months due to political maneuvering over Presidential appointments.
It is possible Judge Restrepo’s nomination will be approved late this year, in time for him to join the court prior to its en banc sitting.
One or more of the current active judges may retire prior to the en banc hearing. By rule, an active judge taking senior status prior to the en banc hearing could still choose to sit on the en banc panel.
One or more of the current active judges may recuse themselves prior to the en banc hearing because of an ethical conflict (e.g., having represented one of the parties previously, having a direct financial interest in the case, being related to an attorney of record). In this case, Chief Judge McKee, Judge Chagares, and and Judge Shwartz have recused themselves. There is no court filing or public statement indicating the reasons for each recusal.
Although only active judges can vote whether to grant rehearing en banc, by statute and court rule, senior judges who were on the panel that originally heard the appeal may choose to sit on the en banc panel. In this case, Senior Judges Rendell and Barry have elected to sit on the en banc panel.
Bottom line, assuming no further recusals, we can expect the en banc panel to have 11 or 12 judges — the nine active judges who did not recuse themselves, plus Senior Judges Rendell and Barry, and possibly Judge Restrepo if he is confirmed prior to argument. Thus, New Jersey will need to find six votes in order to prevail.
Should Judge Restrepo be confirmed and sit on the panel, New Jersey would need seven votes to prevail; a tie vote would leave the district court decision in force as the final decision, but a tie is highly unlikely—in case of a tie, one judge would likely switch sides and join a narrow decision in order to provide finality to the issue.
New Jersey unquestionably scored a significant procedural victory in getting the court to order rehearing en banc. The Third Circuit rarely grants en banc consideration; only one of 2,402 appeals in 2014 and two of 2,715 appeals in 2013 were considered by the court sitting en banc. So New Jersey has made it past the biggest procedural obstacle in its path.
But New Jersey and sports bettors should not celebrate just yet. New Jersey still needs six judges to vote for its position on the merits. Getting those six votes will be a daunting task.
Although at least five of the nine active judges on the panel voted in favor of granting rehearing en banc, a vote to hear a case en banc is a procedural vote, not a vote on the merits. A judge might think the appeal is sufficiently important that the full court should decide the issue or that the panel decision needs more clarity, yet still vote to affirm the district court decision on the merits.
It is also possible a judge could feel the panel reached the right result but for the wrong reason; for example, the Christie II panel decision did not reach the issue of whether New Jersey’s limited repeal in only casinos and racetracks constituted de facto licensing in violation of PASPA, an issue which might appeal to some judges as a stronger basis for ruling against New Jersey’s position.
And some judges will provide a “courtesy vote” — if several colleagues express interest in hearing a case en banc, judges may add their votes in favor of en banc consideration solely to ensure their colleagues get the opportunity to hear the case. In any event, it would be a mistake to assume that any of the judges (other than Judge Fuentes) voting to grant rehearing en banc necessarily think the panel decision was wrong or are inclined to rule in favor of New Jersey.
By contrast, the converse rationale for judges voting against rehearing en banc is not as strong. It is certainly possible the active judges, if any, who may have voted against rehearing may have felt the panel decision was wrong, but not meriting en banc review (recall how rarely en banc is granted). Yet, this particular case involves high-profile parties and attorneys, and raises a significant question of state sovereignty.
So if any judges did not vote for en banc review, they are likely votes against New Jersey’s position.
Although it is highly speculative at this point, we can do some vote projections for the en banc panel. Remember, assuming an en banc panel of eleven or twelve judges, the winning side needs to get at least six and possibly seven votes.
Based on the Christie II panel decision, we can assume Judge Fuentes will vote for New Jersey, while Senior Judges Rendell and Barry will vote for the sports leagues. Based on the Christie I decision, we can assume that Judge Vanaskie will favor New Jersey, as he dissented and would have found PASPA violated New Jersey’s state sovereignty. Similarly, Judge Fisher voted in favor of the sports leagues in Christie I and would presumably be inclined to vote against New Jersey again this second time around.
Of course, neither Judge Vanaskie nor Judge Fisher are locked into place based on their Christie I votes; Judge Fuentes notably went from writing the pro-sports leagues Christie I majority decision to writing the pro-New Jersey dissent in Christie II. But if we are betting people — and we are — the smart wager is for consistent voting.
New Jersey—2 (Fuentes, Vanaskie)
Leagues—3 (Rendell, Barry, Fisher)
Next, the underlying issue in this appeal—the interplay between Congressional power and state sovereignty—is generally an ideological issue. Conservative judges tend to favor elevating state sovereignty over claims of broad Congressional authority, while liberal judges tend to favor Congressional authority over state sovereignty claims.
Interestingly, in Christie I, the issue broke in the opposite direction, as Judge Vanaskie (an Obama appointee) wrote a dissent favoring state sovereignty while Judge Fisher (a Bush appointee) joined the majority decision upholding PASPA (and it is a fair criticism that the President who appointed a judge is only a rough proxy for likely ideological leanings).
Still, there are three other active judges appointed by Republicans on the court who will sit on the en banc panel — Smith, Jordan, and Hardiman (the remaining Republican appointee, Judge Chagares, was recused from en banc review). Interestingly, those three judges, added to the votes of Judges Fuentes and Vanaskie, would have been sufficient to grant en banc review. Let’s assume — again, as the smart wager — that these three judges are likely votes for New Jersey. Or, more to the point, it is difficult to see a way for New Jersey to win without the votes of those judges.
New Jersey—5 (Fuentes, Vanaskie, Smith, Jordan, Hardiman)
Leagues—3 (Rendell, Barry, Fisher)
This leaves three or four judges whose votes are up for grabs — Judges Ambro, Greenaway, Krause, and possibly Restrepo (if confirmed). Each were appointed by either President Clinton or Obama, so they may lean toward the sports leagues because of deference to Congressional restrictions on sports gambling. Or, they may lean toward New Jersey based on their decision to vote in favor of en banc review (assuming they voted for en banc review).
In any case, the final vote is likely to reflect a closely divided court, which is appropriate considering the legal issue in play is a close call with meritorious arguments on both sides.
If we assume that judges’ actual votes for Christie I and Christie II are the most reliable guide to their votes on the merits of the appeal, the sports leagues have a slight advantage with three fairly solid votes as a base, compared to only two solid votes for New Jersey.
Even adding in three votes based on ideological assumptions fails to get New Jersey to the six or seven votes needed to prevail. New Jersey’s position is not impossible; the state may well have a built-in advantage with many of the remaining judges given there were at least five votes in favor of granting en banc review (presumably Judges Fuentes and Vanaskie, joined by at least three colleagues).
But New Jersey’s path to a victory remains challenging. Irrepressibly exuberant New Jersey state senator Ray Lesniak would be smart to make contingency plans for wagering on the Super Bowl somewhere other than Atlantic City.