Supreme Court Update: Murphy v. NCAA (16-476)

May 17, 2018 Supreme Court Update

Greetings, Court Fans!

It's not every day that a Supreme Court decision gets covered not only in the pages of The New York Times, but also ESPN.com and Sports Illustrated. But Murphy v. NCAA (No. 16-476), which struck down the federal Professional and Amateur Sports Protection Act (PASPA) and opened the door (for now) to legalized sports betting across the country, is no ordinary decision. Beyond green-lighting a potential billion-dollar industry, the Court's decision breathes new life into the anti-commandeering principle (once a favorite of states-rights conservatives and now suddenly popular on the Left) and highlights a divide among the justices with respect to the severability of unconstitutional statutory provisions. (We're pretty sure it's that last part that the sportswriters were interested in.) Because it's a biggie, we'll devote this entire missive to summarizing the Murphy decision, but we'll be back tomorrow with summaries of the other decisions handed down this week.

Enacted in 1992, PASPA was borne out of a growing concern from legislators—most notably star basketballer and New Jersey Senator Bill Bradley—that if the trend of increased gambling extended to sports, it could have detrimental effects on young people and the integrity of the games. The Act made it unlawful for a State "to sponsor, operate, promote, license, or authorize by law or compact" a gambling or wagering scheme based on competitive sporting events. Just in case a State disobeyed, the law also made it unlawful for "a person to sponsor, operate, or promote" any sports-betting scheme pursuant to state law. However, PASPA did not make sports betting itself a crime, and was enforceable only by civil actions, which could be brought by the Attorney General, as well as sports leagues. It also contained a "grandfather" provision, permitting sports betting to continue in four states where it already existed, and it gave New Jersey—which was, at the time, considering proposals to legalize sports books—one year in which to legalize sports betting and benefit from the grandfather clause. But New Jersey dropped the ball on the one-year window. Nevertheless, two decades later the State decided to swing for the fences by enacting a law legalizing sports gambling, notwithstanding PASPA's prohibition. After the major professional sports leagues and the NCAA successfully enjoined that legislative authorization, New Jersey called an audible and crafted a new law that did not technically authorize sports gambling, but instead repealed the existing state law prohibiting it. The NCAA and leagues sued again and the lower courts called New Jersey's bluff, concluding that the repeal law violated PASPA in the same way a direct authorization of sports betting would. The State threw down its red challenge flag and the Supreme Court accepted the case for further review.

At the Supreme Court, one of our oldest and most storied legal rivalries was reignited: state vs. federal law. In the leagues' corner, the well settled doctrine of federal preemption, long a staple of the playbook for arguing that federal law supersedes conflicting state law. On the opposite side, New Jersey placed its chips on the lesser known "anticommandeering" doctrine, which was once used to prevent the Feds from requiring States to enforce federal gun-control legislation and has been more recently touted by "sanctuary city" advocates who argue that States and municipalities are under no obligation to enforce federal immigration laws. Against the odds, the Supreme Court sided rather definitively with New Jersey, with seven justices agreeing that PASPA violated the anticommandeering doctrine, and no justice expressly disagreeing. (The dissenters were more miffed about severability than the Tenth Amendment.)

Writing for a majority including the Chief, Kennedy, Thomas, Kagan, Gorsuch (and mostly Breyer), Justice Alito acknowledged that "the anticommandeering doctrine may sound arcane," but insisted that "it is simply the expression of a fundamental structural decision incorporated into the Constitution, i.e., the decision to withhold from Congress the power to issue orders directly to the States." PASPA violates this principle, he concluded, because it "unequivocally dictates what a state legislature may and may not do." Though the leagues and the United States argued that prohibiting States from enacting legislation is different from compelling them to enact legislation, Justice Alito rejected this argument with a Dikembe Mutumbo finger-wag, noting that the "distinction is empty." Nor could the preemption doctrine save PASPA. Every form of preemption (express, conflict, field) is based on a federal law that regulates the conduct of private actors, not the States. The PASPA provision prohibiting state authorization of sports betting, on the contrary, "is not a preemption provision because there is no way in which [it] can be understood as a regulation of private actors." It is, instead, a "direct command to the States," which "is exactly what the anticommandeering rule does not allow."

That left the second provision of PASPA, which prohibited "a person" from sponsoring a sports-betting operation, even if authorized by state law. This certainly would qualify as a preemption provision, in that it regulated private conduct, but Alito (now with a slimmer majority) concluded that the rest of the statute could not be severed from the unconstitutional authorization bar, because the provisions were meant to work hand-in-glove. "If Congress had known that the latter provisions would fall, we do not think it would have wanted the former to stand alone."

It was the severability issue that sparked a volley of separate opinions. Justice Thomas first weighed in with a concurring opinion questioning the constitutional basis for the Court's severability doctrine, which he considered to be in sharp tension with traditional limits on judicial authority. Because no party had raised the issue, Justice Thomas joined the majority opinion in full, but he called for a review of the severability doctrine was called for in some future case.

The dissenters also focused on severability—so much so that it's not really clear they dissented from the majority's anticommandeering holding. Though styled a "dissent," Justice Ginsburg's opinion (joined by Sotomayor) did not address the anticommandeering argument at all. Instead, she maintained that, even assuming that PASPA's anti-authorization prohibition was unconstitutional, there was no reason "to deploy a wrecking ball destroying" the entire statutory scheme. Rather than strike down the entire statute, the dissenters would have severed the offending provision and permitted the rest of the law to effectuate Congress's intent of "stopping sports-gambling regimes while making it clear that the stoppage is attributable to federal, not state, action." Justice Breyer joined the opinion "in part," but wrote separately to clarify that he concurred with the majority's anticommandeering holding. Although he joined the majority opinion striking down the authorization bar, Breyer (like Ginsburg and Sotomayor) would have allowed the ban on private sponsoring of sports-betting schemes to remain in effect. As he explained, it is perfectly reasonable to assume that Congress intended that provision as an alternative means of achieving its goal of prohibiting the expansion of sports gambling. Because there was no constitutional impediment to its doing so through the private bar, Breyer would have preferred to hand New Jersey a "pyrrhic" victory.

Instead, the Court handed New Jersey—and other states that are betting on betting to shore up their coffers—a big win. That said, with the exception of Justice Thomas, every justice agreed that Congress could achieve its earlier goal of stopping sports betting through a direct ban, under the Commerce Clause. Given the stakes for the losers in Murphy—the NCAA, major sports leagues, and Nevada, among others—odds are good that there will be some serious lobbying for a direct federal ban. In legislation, as in sports, it ain't over til it's over.

We'll be back tomorrow to round out our summaries of this week's decisions. Until then!