Challenge to PASPA Dismissed

Plaintiffs Lack Standing in New Jersey

by , Mar 9, 2011 | 9:05 am

The US District Court in New Jersey has dismissed the constitutional challenge to the Professional and Amateur Sports Protection Act (PASPA) filed by iMEGA, State Senator Ray Lesniak, and others. The dismissal was based on a lack of standing. The court’s memorandum opinion is here.

Congress, as the court points out, enacted PASPA in 1992 to limit the expansion of sports gambling in the United States by making it unlawful for a government to license or a person to operate a betting, gambling, or wagering scheme based on professional or amateur sports. The grandfathering provision provided an out for those states that conducted a sports wagering scheme prior to PASPA’s passage, and certain sporting activities are beyond PASPA’s reach. The plaintiffs in the iMEGA case claimed that PASPA’s limitations violated myriad provisions of the US Constitution, including the Commerce Clause, the Tenth Amendment (limiting the powers of the federal government), and the Equal Protection Clause of the Fourteenth Amendment.

The court started with the standing issue. Standing is (very generally) the ability of a party to bring a case or participate in it before the court; a party with standing has a sufficient connection to the law or action that’s challenged, or experiences harm from the law or action, to support its participation in the case. iMEGA and the plaintiff representatives of the New Jersey horseracing industry argued that PASPA prevents their members from pursuing the business of sports wagering in New Jersey. It also denies them and citizens of the 46 states not grandfathered in under PASPA (all except Nevada, Oregon, Montana, and Delaware) from the ability to take advantage of several forms and platforms for sports betting based solely on geography.

The court held that iMEGA and the horseracing industry plaintiffs had not demonstrated that they suffered injury. There was no actual or imminent harm resulting from or that would result from the plaintiffs advocating (or “promoting”) that sports gambling should be legalized. As to operating sports gambling businesses, the court noted that these plaintiffs did not actually engage in gambling activities themselves; they sought to represent the interests of their respective members in this respect. However, there must be some injury to a plaintiff (not just its members) and that a plaintiff’s members must face some obstacles preventing them from pursuing their own claims, neither of which the court was satisfied were proved here. In an obiter dictum, the court also held that, even if there were an injury, and even if PASPA were declared to be unconstitutional by the court, that declaration in and of itself would not bring relief to these plaintiffs. New Jersey law would still outlaw sports betting. Presumably there must be a change in New Jersey law first before the court can consider granting an order to address the alleged harm. (That may yet happen, starting with Senate Concurrent Resolution No. 132. That resolution would amend the New Jersey constitution to permit the legislature to authorize sports betting at Atlantic City casinos and certain horse tracks, with some limitations. That amendment will be decided by New Jersey voters in a referendum during the next general election.)

As to Senator Lesniak and another individual intervenor, State Senate President Stephen Sweeney, the court also found that they were without standing. The senators had challenged PASPA on the grounds that the prohibition interfered with their discretionary rights as legislators to propose, consider, and enact legislation (including with respect to sports betting) that was in the best interests of the people of New Jersey; this is the concept of “institutional standing.” The court concluded that the institutional injury that was alleged here was too abstract for redress. It was the New Jersey constitution that constrained the senators here, more so than PASPA, as the constitution currently precludes the New Jersey legislature from legalizing sports betting. As the court put it: “The Senators’ argument thus puts the cart before the horse in many respects, because they presume voter passage of the referendum, subsequent legislative authorization, and then federal preemption via a civil enforcement action … Essentially, this lawsuit is an attempt to preempt the federal preemption of PASPA.” The mere threat of federal preemption here was not sufficient institutional injury for state legislators to have standing to challenge PASPA’s constitutionality.

Finally, all plaintiffs lacked standing to challenge PASPA on Tenth Amendment grounds. Such a claim is reserved to the various states and the State of New Jersey was not a litigant in this case.

What’s interesting about this case is what could happen next. A number of options make the landscape quite fluid. The plaintiffs could appeal. Some of the facts on the ground could change, e.g., the referendum could pass, authorizing the amendment to the state constitution, and the New Jersey legislature could then attempt to act on that. New Jersey could launch its own case and some of the members of the horse racing associations could bring suit. While changes to PASPA don’t seem to be on the radar for federal legislators, this week’s judgment out of New Jersey likely won’t be the last word in the discussion.

One Comment to “Challenge to PASPA Dismissed ”

  1. Joe

    we must have sports gambling NOW and take the billions out of the hands  of organized crime