Author: Joe Kizlauskas
Last Updated: 26th September 2019
On Tuesday The Third Circuit granted a victory to a New Jersey horse racing organisation that had a long-running legal saga over sports gambling. claiming millions in damages from the National Football League and other sports leagues.
The ruling stems from the 2014 lawsuit in which the NFL and sports leagues sued then-Governor Chris Christie and the New Jersey Thoroughbred Horsemen’s Association (NJTHA), challenging state laws allowing state-licensed casinos and horse racing to compete.
The Leagues sought an injunction against the state, claiming that New Jersey violated federal law, specifically the Professional and Amateur Sports Protection Act (PASPA)
In May 2018 the Supreme Court overturned PASPA, which had prohibited betting in most states. By then, the leagues and New Jersey had been locked up in a legal dispute for years.
As the case wound its way through the federal court system and ultimately the nation’s highest court, the NJTHA said in court filings that the leagues ‘move was deceptive as they profited from sports gambling and had secured a temporary restraining order “in bad faith.”
In July the racing group told a panel of three judges that the leagues could be on the hook for as much as $150 million in damages.
It remains to be seen whether the horse racing group will be granted a higher award of damages after the appeals court in Philadelphia on Tuesday vacated and remanded the case.
The 2-1 decision concerned a more humble quantity of $3.4 million–a bond issued by the teams as safety in the event that they lost the case. The horse racing group argued that the use by the League of Laws, which the Supreme Court found unconstitutional, had almost put its Monmouth Park racetrack in Oceanport, New Jersey, out of business.
In Tuesday’s ruling, the majority of the Third Circuit Panel found that, because the racing group had been improperly subjected to a restraining order for 28 days, it had been “wrongly enjoined” under federal rules of procedure. The tribunal therefore held that a federal judge should not have refused bond damages.
“Here, PASPA provided the only basis for enjoining NJTHA from conducting sports gambling, and the Supreme Court ultimately held that that law is unconstitutional. Therefore, NJTHA had a right to conduct sports gambling all along. We conclude that NJTHA was wrongfully enjoined and should be able to call on the bond,” Senior U.S. Circuit Judge Marjorie Rendell wrote.
U.S. Circuit Judge Theodore McKee joined Rendell by a majority. U.S. Circuit Judge David Porter had a difference of opinion, writing that although the Supreme Court had overturned PASPA, the temporary restraining order “was not based on PASPA’s constitutionality.”
“I disagree that the Supreme Court’s decision holding PASPA unconstitutional necessarily means that the NJTHA was wrongfully enjoined under the PASPA-based TRO issued four years earlier. This holding requires indulging the fiction—not available to the District Court that issued the TRO—that PASPA never existed at all,” Porter wrote.