Slate's Hang Up and Listen devoted its first segment to the (problem?) of a Hack-a-[Blank], thr strategy of intentionally fouling a poor free throw shooter away from the ball throughout the game. They discuss whether it works, whether it spoils the game, and what, if anything, can or should be done about it. The best solution is probably to give the offense the option of getting the ball out of bounds instead of taking the free throws (there used to be a similar rule in international basketball).
So if this (or some other rule change) came about, should we understand it as a limiting rule grounded in cost-benefit disparity, a la the Infield Fly? Again, I don't think so. Instead, this would be a purely aesthetic rule, designed to make the game look better and be more enjoyable to watch. To be sure, there is an aesthetic component to the logic of the Infield Fly Rule; that rule disincentivizes teams from intentionally failing to catch easily playable balls, which is unappealing to watch. But the chief concern is the cost-benefit imbalance, of the defense getting two outs instead of one and the runner being unable to stop it. That is missing with Hack-a-[Blank], because the offense can overcome the strategy by making the free throws or rebounding the miss. Nevertheless, the game becomes unappealing when it involves nothing more than intentional fouls on DeAndre Jordan 25 feet from the basketball and a parade of missed free throws. So the rule change may seek to limit strategy solely in the name of aesthetics.
Tuesday, 28 April 2015
MLBPA & Reducing Player Contracts
Alas, MLBPA refused to sign off on his reduction in salary, blocking the trade in claiming that the Red Sox were not providing any "added benefits" to ARod to compensate for the loss in salary. The Red Sox offered to allow ARod to opt out of his contract two years early, but the union scoffed at that offer claiming he was the highest paid player in the league, unlikely to get the same money in free agency.
Ultimately, as we all know, the deal was blocked by the MLBPA leading Larry Lucchino, President & CEO of the Red Sox, to state "it's a sad day when the players' association thwarts the wills of its members...." Ultimately, as we all know, Alex Rodriguez found his way to the New York Yankees and the Boston Red Sox went on to win the 2004 World Series without him.
Fast forward to the present as the Los Angeles Angels of Anaheim agree to "trade" Josh Hamilton to the Texas Rangers after their owner's displeasure in his off-season drug relapse. As of now, the Rangers are offering the nebulous "player to be named later" as compensation to the Angels. With over $80 million remaining on his contract, Hamilton has reportedly agreed to forfeit $12 million to ensure his return to Texas. And, this time, the MLBPA has decided to allow this trade to go through. What's does the MLBPA see as differences between ARod's willingness to forgo salary and Hamilton's?
- Since there is no state income tax in Texas, the take home pay for Hamilton is close to negligible, thereby not actually "devaluing" Hamilton's compensation. In fact, Robert Raiola (@SportsTaxMan), told SI.com "By moving out of California sooner, Hamilton would escape the state's high income tax--the highest in the nation at 13.3%--and thereby recoup some of the money he'd lose if he takes less....";
- According to multiple reports, Hamilton will reportedly be given an opt-out clause in two years which qualifies as an "extra benefit" to the player; (not sure why this is valuable in 2015 but wasn't in 2003)
- And, finally, if one were to be optimistic, perhaps the union really is interested in what's best for a player, acknowledging Texas may be a better environment for Josh Hamilton off the field regardless of his salary.
Legal issues in Josh Hamilton's departure from the Angels
Hope you have chance to read my Sports Illustrated story on the Hamilton saga.
Sports Lawyers Association Conference Update
Sunday, 26 April 2015
Wednesday, 22 April 2015
The First Amendment and the Redskins’ Trademark, Part II: A Shot Across the Bow from the Federal Circuit
The following post is by Christine Haight Farley and Robert L. Tsai (both of American); it is their second guest post on the Washington Professional Football Team trademark case. It is cross-posted at PrawfsBlawg.
On Tuesday, the Federal Circuit issued a unanimous decision (In re Tam) holding that the mark THE SLANTS was properly refused registration because it is disparaging to people of Asian descent. Since 2010, Simon Shiao Tam, the front man for the Asian-American rock band “The Slants,” has been trying to obtain trademark recognition for the name of his band. The record shows that the band picked the name by thinking of “things that people associate with Asians. Obviously, one of the first things people say is that we have slanted eyes.” The record of the case confirmed that “slants,” used in the way proposed, would likely be received as a racial slur.
The fact that the registrant wished to re-appropriate an ethnic slur and try to create a positive connotation did not alter the outcome. Nor was the Court troubled that the user’s own race formed part of the background for assessing the objective meaning of the mark in commerce. Both of these jurisprudential choices are consistent with the Federal Circuit’s approach to statutory interpretation, which strives for an objective meaning of trademarks in actual use. In our view, the private cooptation of illiberal ideas can generate terrific art and might very well help to change social meaning in the long run. But you don’t need trademark protection to engage in such projects of appropriation; indeed, granting one user legal protection might even stifle others who would like to experiment further with taboo ideas.
In re Tam now makes it two cases on trademark disparagement that the Federal Circuit has ever decided—both have been in the past year and both affirmed the TTAB’s finding of disparagement. The court obviously felt bound by precedent. Nevertheless, Judge Moore, the author of the 11-page majority opinion, offered 24 pages of what was styled “additional views," but which read more like a petition for rehearing en banc on the constitutionality of § 2(a) of the Lanham Act.
Though not binding, this last bit by Judge Moore may prove most interesting of all. The judge offered many reasons for wanting to revisit the Federal Circuit’s position on the constitutionality of § 2(a): its 1981 decision In re McGinley did not cite any authority, its analysis consists of only a few sentences, the decision has been criticized in the intervening years, jurisprudence on the unconstitutional conditions doctrine and the protection accorded commercial speech has since evolved, and the source of the PTO’s funding has shifted from tax payers to user fees.
The judge contends that In re Tam presents an unusually strong case for considering trademarks as protected speech since the applicant intended to use the mark to reclaim Asian stereotypes and to participate in a political and cultural discourse about race as a musical artist. At oral argument, the judge tried to distinguish this feature of the case from the Redskins case.
But the main thrust of Judge Moore's constitutional challenge to § 2(a) is based on the unconstitutional conditions doctrine, which holds that the government cannot deny access to a government benefit on the basis of the recipients exercise of constitutionally protected speech.
In claiming that the benefits of registration are not just procedural, but are also substantive, Judge Moore states that a disparaging mark “cannot be protected by its owner by virtue of a § 43(a) unfair competition claim” because “§ 43(a) protection is only available for unregistered trademarks that could have qualified for federal registration.” (emphasis in original). This is a bold claim not exactly supported by the cases she cites. The Supreme Court’s Taco Cabana decision simply says that “the general principles” under § 2 are “for the most part applicable” in determining whether an unregistered mark is protectable. That’s right because for the most part, these general principles are common law doctrine codified in the Lanham Act. No case yet holds that the owner of a disparaging mark would not be able to assert common law rights against an infringer, but in a 2013 decision the Federal Circuit did suggest that an unregistrable common law mark may receive protection under § 43. As we argued in a previous post, variations in the availability of legal remedies are better understood as procedural changes rather than subsidies of private speech.
By focusing on the benefits of registration, Judge Moore loses sight of the significance of registration. Although in civil law countries trademark registration generally confers rights, in the US trademark rights are created by using a mark in commerce and developing good will. Registration is “essentially a recognition of a right already acquired by use.” At the same time registration is encouraged because it provides notice of rights—hence the benefits that flow from registration. These benefits, however, are distinguishable from benefits conferred by the government in other unconstitutional conditions cases, which typically involve direct subsidies of speech. In the case of trademark registration, the government is literally approving of certain trademarks; the symbol of trademark registration—the “R” in a circle—is a statement by the trademark owner that the government has approved, not its business or its goods, but the mark itself. Such approved trademarks are included in the government’s registry, or list of marks certified by the government. No other unconstitutional conditions case involves such symbolic acts of endorsement by the government, but instead involve unseen deeds such as exemptions from taxes or import duties.
The limited nature of the denial of registration seems to be lost on Judge Moore. The PTO’s refusal to register disparaging trademarks does not force the owner of a disparaging mark to relinquish a constitutional right. The owner can continue to use the mark. In cases where the Supreme Court has found an unconstitutional condition, the speaker has few realistic options other than to cease engaging in a particular form of speech in order to avail itself of a valuable government benefit. No such forced choice results from § 2(a). Because the registration system parallels common law trademark protection, some of which is enshrined in the Lanham Act, the owner of a disparaging mark can continue to engage in its chosen speech and endeavor to have it protected as a common law trademark.
Perhaps worst of all, Judge Moore's application of the presumption against content-based regulations to § 2(a) has no limit. If all trademarks are constitutionally protected speech and the act of registration is the conferral of a substantive benefit, then when may the PTO make a content-based determination that affects registration without violating the First Amendment? The Lanham Act also requires the PTO to refuse registration to marks that consists of simulations of state insignia and marks that include the name of a president. There’s no doubt that these determinations involve trademark owners as speakers and the denial of benefits. They also require the PTO to evaluate the content of the mark. Should the constitutionality of these provisions also be revisited? And what about the denial of registration to merely descriptive marks, deceptive marks, and marks that falsely suggest connections? Under Judge Moore’s logic, these determinations are as unconstitutional as direct content-based regulations of speech. Moreover, it is worth noting that none of these kinds of marks would fall within traditionally unprotected categories of speech (e.g., libel, incitement, obscenity). So applying the First Amendment full bore as Judge Moore proposes would also disable the PTO from barring the registration of these marks as well.
The broader point is that all trademark registration determinations under § 2 are content-based because they all involve an evaluation of the meaning of the mark in the context of its use and analysis of whether it is disparaging, descriptive, deceptive, etc. Thus, if strict scrutiny is applied to the ban on disparaging or scandalous marks, it is also required in evaluating the constitutionality of all the other trademark restrictions contained in § 2. If a court were truly serious about apply this presumption, there would be little left of trademark law.
Finally, Judge Moore asserts that trademarks are private speech, not government speech. Judge Moore asserts that when “the government publishes registered trademarks in the Trademark Principal Register, it does so not to communicate a particular message or select a particular viewpoint.” But it is hard to get around the fact that the Register is a list of marks that the government has approved and that when a trademark owner uses the registered “R” symbol along with its mark, it is using that symbol precisely as a certification that the government has approved its mark. It is only when the PTO rejects the registration of a mark that its use is purely private. There are a host of reasons why the government should have the power to distance itself from odious speech and illiberal business practices. As we argued in a recent Slate article, all of these are compelling features of the federal government’s power to regulate interstate commerce.
On Tuesday, the Federal Circuit issued a unanimous decision (In re Tam) holding that the mark THE SLANTS was properly refused registration because it is disparaging to people of Asian descent. Since 2010, Simon Shiao Tam, the front man for the Asian-American rock band “The Slants,” has been trying to obtain trademark recognition for the name of his band. The record shows that the band picked the name by thinking of “things that people associate with Asians. Obviously, one of the first things people say is that we have slanted eyes.” The record of the case confirmed that “slants,” used in the way proposed, would likely be received as a racial slur.
The fact that the registrant wished to re-appropriate an ethnic slur and try to create a positive connotation did not alter the outcome. Nor was the Court troubled that the user’s own race formed part of the background for assessing the objective meaning of the mark in commerce. Both of these jurisprudential choices are consistent with the Federal Circuit’s approach to statutory interpretation, which strives for an objective meaning of trademarks in actual use. In our view, the private cooptation of illiberal ideas can generate terrific art and might very well help to change social meaning in the long run. But you don’t need trademark protection to engage in such projects of appropriation; indeed, granting one user legal protection might even stifle others who would like to experiment further with taboo ideas.
In re Tam now makes it two cases on trademark disparagement that the Federal Circuit has ever decided—both have been in the past year and both affirmed the TTAB’s finding of disparagement. The court obviously felt bound by precedent. Nevertheless, Judge Moore, the author of the 11-page majority opinion, offered 24 pages of what was styled “additional views," but which read more like a petition for rehearing en banc on the constitutionality of § 2(a) of the Lanham Act.
Though not binding, this last bit by Judge Moore may prove most interesting of all. The judge offered many reasons for wanting to revisit the Federal Circuit’s position on the constitutionality of § 2(a): its 1981 decision In re McGinley did not cite any authority, its analysis consists of only a few sentences, the decision has been criticized in the intervening years, jurisprudence on the unconstitutional conditions doctrine and the protection accorded commercial speech has since evolved, and the source of the PTO’s funding has shifted from tax payers to user fees.
The judge contends that In re Tam presents an unusually strong case for considering trademarks as protected speech since the applicant intended to use the mark to reclaim Asian stereotypes and to participate in a political and cultural discourse about race as a musical artist. At oral argument, the judge tried to distinguish this feature of the case from the Redskins case.
But the main thrust of Judge Moore's constitutional challenge to § 2(a) is based on the unconstitutional conditions doctrine, which holds that the government cannot deny access to a government benefit on the basis of the recipients exercise of constitutionally protected speech.
In claiming that the benefits of registration are not just procedural, but are also substantive, Judge Moore states that a disparaging mark “cannot be protected by its owner by virtue of a § 43(a) unfair competition claim” because “§ 43(a) protection is only available for unregistered trademarks that could have qualified for federal registration.” (emphasis in original). This is a bold claim not exactly supported by the cases she cites. The Supreme Court’s Taco Cabana decision simply says that “the general principles” under § 2 are “for the most part applicable” in determining whether an unregistered mark is protectable. That’s right because for the most part, these general principles are common law doctrine codified in the Lanham Act. No case yet holds that the owner of a disparaging mark would not be able to assert common law rights against an infringer, but in a 2013 decision the Federal Circuit did suggest that an unregistrable common law mark may receive protection under § 43. As we argued in a previous post, variations in the availability of legal remedies are better understood as procedural changes rather than subsidies of private speech.
By focusing on the benefits of registration, Judge Moore loses sight of the significance of registration. Although in civil law countries trademark registration generally confers rights, in the US trademark rights are created by using a mark in commerce and developing good will. Registration is “essentially a recognition of a right already acquired by use.” At the same time registration is encouraged because it provides notice of rights—hence the benefits that flow from registration. These benefits, however, are distinguishable from benefits conferred by the government in other unconstitutional conditions cases, which typically involve direct subsidies of speech. In the case of trademark registration, the government is literally approving of certain trademarks; the symbol of trademark registration—the “R” in a circle—is a statement by the trademark owner that the government has approved, not its business or its goods, but the mark itself. Such approved trademarks are included in the government’s registry, or list of marks certified by the government. No other unconstitutional conditions case involves such symbolic acts of endorsement by the government, but instead involve unseen deeds such as exemptions from taxes or import duties.
The limited nature of the denial of registration seems to be lost on Judge Moore. The PTO’s refusal to register disparaging trademarks does not force the owner of a disparaging mark to relinquish a constitutional right. The owner can continue to use the mark. In cases where the Supreme Court has found an unconstitutional condition, the speaker has few realistic options other than to cease engaging in a particular form of speech in order to avail itself of a valuable government benefit. No such forced choice results from § 2(a). Because the registration system parallels common law trademark protection, some of which is enshrined in the Lanham Act, the owner of a disparaging mark can continue to engage in its chosen speech and endeavor to have it protected as a common law trademark.
Perhaps worst of all, Judge Moore's application of the presumption against content-based regulations to § 2(a) has no limit. If all trademarks are constitutionally protected speech and the act of registration is the conferral of a substantive benefit, then when may the PTO make a content-based determination that affects registration without violating the First Amendment? The Lanham Act also requires the PTO to refuse registration to marks that consists of simulations of state insignia and marks that include the name of a president. There’s no doubt that these determinations involve trademark owners as speakers and the denial of benefits. They also require the PTO to evaluate the content of the mark. Should the constitutionality of these provisions also be revisited? And what about the denial of registration to merely descriptive marks, deceptive marks, and marks that falsely suggest connections? Under Judge Moore’s logic, these determinations are as unconstitutional as direct content-based regulations of speech. Moreover, it is worth noting that none of these kinds of marks would fall within traditionally unprotected categories of speech (e.g., libel, incitement, obscenity). So applying the First Amendment full bore as Judge Moore proposes would also disable the PTO from barring the registration of these marks as well.
The broader point is that all trademark registration determinations under § 2 are content-based because they all involve an evaluation of the meaning of the mark in the context of its use and analysis of whether it is disparaging, descriptive, deceptive, etc. Thus, if strict scrutiny is applied to the ban on disparaging or scandalous marks, it is also required in evaluating the constitutionality of all the other trademark restrictions contained in § 2. If a court were truly serious about apply this presumption, there would be little left of trademark law.
Finally, Judge Moore asserts that trademarks are private speech, not government speech. Judge Moore asserts that when “the government publishes registered trademarks in the Trademark Principal Register, it does so not to communicate a particular message or select a particular viewpoint.” But it is hard to get around the fact that the Register is a list of marks that the government has approved and that when a trademark owner uses the registered “R” symbol along with its mark, it is using that symbol precisely as a certification that the government has approved its mark. It is only when the PTO rejects the registration of a mark that its use is purely private. There are a host of reasons why the government should have the power to distance itself from odious speech and illiberal business practices. As we argued in a recent Slate article, all of these are compelling features of the federal government’s power to regulate interstate commerce.
Tuesday, 21 April 2015
Guidance For State Legislators Seeking To Regulate "Fantasy Sports"
Those who follow this blog closely know that I have been writing here about legal issues in fantasy sports since long before the topic became chic. I also am the author of two law review articles on the topic: "A Short Treatise on Fantasy Sports and the Law" and "Navigating the Legal Risks of Daily Fantasy Sports."
Recently on FORBES I posted a short article entitled "Fantasy Games, Real Laws: 10 Factors States Must Consider When Regulating the Fantasy Sports Market."
The article discusses in particular ten areas where state legislators should focus when writing bills to regulate the fantasy sports industry.
The factors that I believe state legislators need to consider include the following:
1. Adequately defining the term "fantasy sports"
2. Assessing whether levels of skill should matter in determining the legality of fantasy sports contests
3. Assessing the pros and cons of requiring state licensing fees
4. The importance of understanding existing laws and policies before drafting new ones
5. Ensuring that the proposed bill benefits more than just lobbyists
6. Addressing the long-term risks of online gambling addiction
7. Addressing the adequate protection of minors based within the state
8. Determining reasonable minimum ages for eligibility to enter play-for-cash fantasy sports contests
9. Obtaining adequate disclosures of names and financial status of each fantasy sports company's shareholders
10. Ensuring that fantasy sports companies are not in a reasonably likely position to default without paying out contest winners.For those interested in reading the full FORBES article, a link can be found here.
Thursday, 16 April 2015
Statutory Interpretation Rules May be Key to NJ Sports Betting Victory
As we await the impending decision in the New Jersey sports betting case, no clear consensus has emerged as to which side will win. Those of us who were in attendance for the Third Circuit oral argument on March 17th are divided. While some seasoned observers, such as noted sports litigator Alan Milstein, believe that New Jersey will prevail (and he may be right), others (such as myself) have a hard time wrapping their arms around the prospect of a federal appeals court actually blessing New Jersey's plan to legalize sports betting through a "partial repeal" that primarily benefits state-licensed casinos and racetracks. But my skepticism is not based on the law, but, rather, my sense that the Third Circuit may be reluctant to open the floodgates for nationwide deregulated legal sports betting (the "inevitable" consequence of any New Jersey victory) at casinos and racetracks. Putting my cynicism aside, I believe that New Jersey may hold the upper hand based on what unfolded at the oral argument. In contrast to the district court, which was concerned with the far-reaching implications of other states following New Jersey's blueprint (and thereby potentially weakening PASPA), the Third Circuit signaled strongly that principles of statutory interpretation would dictate the outcome. And this bodes well for New Jersey.
Natural Meaning of the Word "Authorize"
Natural Meaning of the Word "Authorize"
The question asked repeatedly at oral argument was "what does 'authorize' mean"? It was asked no fewer than six times. Why is this one word so critically important? The answer lies in the plain language of the statute. Pursuant to PASPA, states may not "authorize" sports wagering schemes (and also may not sponsor, operate, advertise, promote, or license such activities). The sports leagues take the position that New Jersey's partial repeal law is tantamount to an "authorization" of sports gambling because it allows such activity to take place only at state-licensed and state-regulated casinos and racetracks (and at former racetrack sites). New Jersey, on the other hand, maintains that the word "authorize" connotes some type of "affirmative" state sanctioning of the activity, i.e., placing the state's "imprimatur" on sports betting. The Third Circuit zeroed in on this difference, with one panelist pointedly asking whether "authorize" means "to permit" or "to allow" (as the leagues maintain) or whether it must rise to the level of a state sanctioning or approval of the activity (as New Jersey argues).
Principles of statutory interpretation would appear to support New Jersey's interpretation. The statutory term "authorize" is not defined by PASPA. When a statute itself does not define a term, courts will often construe the term in accordance with its ordinary or natural meaning. This exercise is highly favorable to New Jersey. According to Black's Law Dictionary, the word "authorize" means "to give legal authority; to empower; or to formally approve; to sanction." Similarly, according to the American Heritage Dictionary, to "authorize" means "to grant authority or power to. To give permission for; sanction." The American Heritage Dictionary supplements the above definition of "authorize" with the following example of its usage: "city agency that authorizes construction projects." Likewise, Webster's Third New International Dictionary defines "authorize" as meaning "to endorse, empower, or permit by or as if by some recognized or proper authority; to endow with effective legal power."
These definitions suggest that the term "authorize" does not merely mean "to permit" or "to allow," as the leagues contend. Rather, according to the natural meaning of the word "authorize," there must be an affirmative granting of approval to engage in the conduct in question. One of the Third Circuit judges, Marjorie Rendell, appeared to embrace this construction when she remarked that "to authorize" means "to give power of official meaning, that the state is involved in the process." And Judge Julio M. Fuentes (who authored the majority opinion in Christie I) pointedly stated during an exchange with Paul Clement (the sports leagues' attorney) that "[a] repealer is a removal of the restrictions and of all criminal laws, but it doesn't mean that the government is saying go ahead and engage in that activity."
But the panel was also concerned about the "selective" nature of the partial repeal, suggesting that by restricting sports gambling to specific locations (e.g., casinos and racetracks) which are licensed and heavily regulated by the state, New Jersey may be "authorizing" that activity. One panelist found it "curious" that sports betting "is now being allowed only in places that have gambling licenses." And another panelist suggested that New Jersey's partial repeal law does more than just simply remove existing prohibitions: it "affirmatively permits" sports gambling at racetracks, casinos and former racetrack sites.
The "Associated Words Canon"
These definitions suggest that the term "authorize" does not merely mean "to permit" or "to allow," as the leagues contend. Rather, according to the natural meaning of the word "authorize," there must be an affirmative granting of approval to engage in the conduct in question. One of the Third Circuit judges, Marjorie Rendell, appeared to embrace this construction when she remarked that "to authorize" means "to give power of official meaning, that the state is involved in the process." And Judge Julio M. Fuentes (who authored the majority opinion in Christie I) pointedly stated during an exchange with Paul Clement (the sports leagues' attorney) that "[a] repealer is a removal of the restrictions and of all criminal laws, but it doesn't mean that the government is saying go ahead and engage in that activity."
But the panel was also concerned about the "selective" nature of the partial repeal, suggesting that by restricting sports gambling to specific locations (e.g., casinos and racetracks) which are licensed and heavily regulated by the state, New Jersey may be "authorizing" that activity. One panelist found it "curious" that sports betting "is now being allowed only in places that have gambling licenses." And another panelist suggested that New Jersey's partial repeal law does more than just simply remove existing prohibitions: it "affirmatively permits" sports gambling at racetracks, casinos and former racetrack sites.
The "Associated Words Canon"
But other interpretative tools may strengthen New Jersey's hand. The most pivotal moment of the oral argument occurred when Judge Marjorie Rendell invoked the "associated words canon" during her questioning of Paul Clement, the leagues' counsel:
THE COURT: . . . here we have the words "sponsor, operate, advertise, promote, license, authorize, you know there is a canon, associated words canon, and all of these words anticipate something more, something, something affirmative.
Should we not read "authorize" to mean something more than merely "permit"? Should we read it to say authorized by, you know, empowering, giving the state imprimatur, if you will. I get back to the issue of how do we read "authorize"? And doesn't the context in PASPA make it seem like the state has to do something by law that is a scheme as compared to just saying okay, you can do it at these places?The "associated words canon" (also known as noscitur a sociis) is a tool of statutory construction which provides that when a string of words are grouped together in a statute, they should bear on one another's meaning. Or, as the Supreme Court has put it, "'[a] word is known by the company it keeps-' a rule that is often wisely applied when a word is capable of many meanings in order to avoid the giving of unintended breadth to the Acts of Congress." Thus, an otherwise ambiguous statutory term may be given a more precise meaning by reference to the neighboring words with which it is associated.
Under this canon, the term "authorize" would be construed in light of the other verbs which accompany it in PASPA--"sponsor," "operate," advertise," "promote" and "license." Each of these associated words connotes some type of official involvement by the state in sports gambling. Judge Rendell hinted at this during the following exchange with Paul Clement, the former U.S Solicitor General and outside counsel for the sports leagues:
MR. CLEMENT: . . . I mean I think that in terms of context you obviously can look at the surrounding words. I think you can also look at the legislative history. I think that's still allowed in this country. . . .
THE COURT: But I don't think we can go beyond the language of the law and really look at that. I mean it's fair to know about it, but unless there's ambiguity in the law, you know there really isn't a need. And again I look at the other words and they require something more than - - - I mean they really require involvement of the state, "promoting, licensing, advertising," you know, putting its seal of approval, if you will. . . .Echoing this point, renowned appellate lawyer Ted Olson (representing Governor Christie) referred to the earlier Third Circuit opinion which equated the PASPA verbiage (sponsor, operate, advertise, promote, license, and authorize) with a state "scheme":
MR. OLSON: Well, I think that -- I read your opinion. And I read your opinion to mean that the words, and one of you referred to the fact that it's a stream of words, it has to do with the state providing the approval, a mechanism. It's almost as if you have a license to put in the window saying this is permitted here. You said --
THE COURT: We talk about a scheme also, a scheme.
MR. OLSON: You talked about a scheme and a regime, you talked about permit issuing, licensing, state issues license, affirmative authorization, authorization by law, state scheme, state sponsored, state sanctioned.A look back at Christie I provides some context and insight into the Court's thinking. In Christie I, the Third Circuit stated that "[a]ll that is prohibited [under PASPA] is the issuance of gambling 'license[s]' or the affirmative 'authoriz[ation] by law' of gambling schemes." Within the same paragraph, the Court reiterated that "PASPA speaks only of 'authorizing by law' a sports gambling scheme." The use of the words "only" and "scheme" is notable here. It suggests that a partial repeal of state-law prohibitions against sports gambling would not violate PASPA so long as there is no state scheme or involvement. The interplay of this key language with the interpretative tools discussed above would appear to leave New Jersey holding a strong hand following oral argument.
But Legislative History May Cut the Other Way
Although Judge Rendell downplayed the importance of PASPA's legislative history--saying it only came into play if there was an "ambiguity" in the statutory language--the Third Circuit will likely consult PASPA's background and motivating policies as part of its analysis. If the Court believes that there is a latent ambiguity in the meaning of the term "authorize" (which seemed to be the case at oral argument), then it will undoubtedly avail itself of all pertinent tools of statutory construction, including reviewing the legislative history of PASPA in addition to employing the "associated words canon" and other interpretive aids.
The legislative history of PASPA cuts both ways. While the express legislative purpose behind PASPA was to "stop the spread of state-sponsored sports betting," Congress was also concerned with maintaining the integrity of, and public confidence, in professional and amateur sporting events, which federal officials believed would be threatened by the widespread legalization of sports gambling. But the leagues' attorney, Paul Clement, wisely refrained from playing that card during oral argument, in all likelihood because one of his clients (the National Basketball Association) has evolved in its thinking and now believes that the legalization of sports betting (through the adoption of a federal framework) would actually serve to promote the integrity of sporting events.
Instead, Mr. Clement pointed to language in Senate Report 102-48 expressing concern about the prospect of sports gambling "spreading" to racetracks and casinos, and specifically mentioning Florida as one of the states that was contemplating approving some form of sports gambling for its racetracks as part of legislation "reauthorizing" Florida's pari-mutuel wagering statute (when it was originally set to expire in the early 1990's):
MR. CLEMENT: [I]f you look at the Senate report, there are three things that it's crystal clear Congress is concerned about. They're concerned about states having state lotteries that involve sports gambling. They are concerned with racetracks that already have venues for state authorized gambling having sports gambling. If you look at the Senate Report it's very specific.
At the time Florida is going through the process of renewing the licenses of its racetracks. And Congress is worried that they're going to get involved in sports gambling as a way -- this is 20 years ago, or 20 plus years ago, but the horse tracks were already in a little bit of financial trouble, and there was concern that they're going to try to add sports gambling as the next solution. And Congress was very concerned about that.
[Congress was also] concerned about . . . what they called in the Senate report "casino style" sports gambling, and they were specifically focused on the New Jersey situation. . . . Now, I think what that shows you is that Congress was particularly concerned with the idea that sports gambling would take place in the venues that states had selected as the being the venues for state authorized gambling.But there are several flaws with Mr. Clement's decision to highlight only select portions of the Senate Report. For one, it makes no mention of the primary legislative intent behind PASPA: to stop the spread of state-sponsored sports betting and to maintain the integrity of sporting events. If the Third Circuit is going to consider PASPA's legislative history, then it must consider the entire Senate Report, and not just select portions thereof. Second, whatever concern that Congress may have had about casinos and racetracks offering sports gambling was solely in the context of state-sponsored gambling "schemes." Along those lines, the Senate Report noted that "[i]n the broader sports gambling area, States are considering a wide variety of State-sponsored gambling schemes," specifically mentioning both the Florida racetrack situation and "casino-style" sports gambling. But New Jersey's partial repeal law (which would entail no state oversight of sports gambling) would not seem to fit the rubric of a state-sponsored "scheme." Thus, the legislative history would not appear to be as one-sided as Mr. Clement suggests.
The "Rule of Lenity"
Although not raised during oral argument or in the parties' written submissions, there is yet another canon of statutory interpretation that could tip the scales in favor of New Jersey--the "rule of lenity." The rule of lenity holds that "where there is ambiguity in a criminal statute, doubts are resolved in favor of the defendant." This is the judicial equivalent of the baseball maxim "the tie goes to the runner." Courts will apply the rule of lenity when, after all the tools of interpretation have been applied, a reasonable doubt as to statutory interpretation persists. The rule of lenity is premised on two ideas. First, a fair warning should be given to the world in language that the common world will understand, of what the law intends to do if a certain line is crossed. A second goal of the rule of lenity is to minimize the risk of selective or arbitrary enforcement, and to maintain the proper balance between Congress, prosecutors, and the courts. Or, as the Supreme Court put it, "legislatures and not courts should define criminal activity."
But the rule of lenity is not automatically applied merely because there is some ambiguity in the statute under review. In order for the rule to apply, there must be a “grievous ambiguity or uncertainty in the language and structure of the statute." Lenity is reserved for those situations in which reasonable doubt persists about a statute's intended scope "even after resort to the language, structure, legislative history, and motivating policies of the statute in question." It will be invoked only if, after seizing everything from which aid can be derived, the court can make no more than a "guess" as to what Congress intended. In other words, the rule of lenity is an interpretive tool of "last resort."
The "rule of lenity" could come into play here as the Third Circuit wrestles with the critical question of just how far a repeal must go in order to not violate PASPA. There are no clear answers. And oral argument only added to the confusion, with the leagues retreating from their earlier position and conceding that something less than a "complete repeal" might be allowed under PASPA. But both the leagues and the DOJ struggled to pinpoint the line of demarcation. When asked by Judge Fuentes how far a repeal must go, Mr. Clement vaguely answered "pretty far," suggesting that "the dividing line is maybe around 50 percent." Determining whether a partial repeal of a criminal law constitutes an "authorization" of the activity and then pinpointing the dividing line is no easy task, even after employing canons of statutory construction and reviewing the legislative history of the statute. The Third Circuit may well conclude that this is an area of "grievous ambiguity or uncertainty," and invoke the rule of lenity in favor of New Jersey. I do not expect this to happen, particularly since it was not raised by the parties or by the Court. But it remains a possibility.
Absence of Word "Regulate" from PASPA May Help New Jersey's Chances
During last month's oral argument, Judge Fuentes (the author of the Third Circuit's majority opinion in Christie I) expressed concern that New Jersey's partial repeal law would have the effect of allowing completely unregulated sports betting to take place at state gambling venues. He suggested that this would be anathema to PASPA's goal of preserving the integrity of sporting events. Judge Fuentes' concerns go to the very heart of why I believe New Jersey may be on the losing side (yet again) despite having what I consider to be the better of the legal arguments under a pure statutory interpretation analysis. The following exchange between Judge Fuentes and Mr. Olson demonstrates this tension:
THE COURT: I'm really impressed in how this whole thing is going to unfold, because I was very impressed, in reading your brief, with the number of regulations that the state is repealing, including oversight by the state and Casino Control Commission, the Division of Gaming Enforcement. They will all, according to the state, have no role whatsoever in sports betting.
MR. OLSON: Correct. And that's --
THE COURT: Well, I'm a little concerned about that, because the function of those [regulatory bodies] is to preserve integrity in the process and now the state is saying they're out of this. So this is essentially a laissez-faire. Sports betting is going to take place in the casino with no oversight whatsoever.
MR. OLSON: That's right. As I said, like a ping-pong table game or a debate tournament.
THE COURT: I guess it's not for us to say that's good or bad. . . If it were, I would have a response to that.But then Judge Rendell (who was not of the Christie I panel) weighed in and suggested that it might still be possible to read PASPA as not prohibiting the states from "regulating" sports betting. She noted that PASPA is "so specific" and that there are six verbs contained within PASPA identifying the activities states may not engage in (e.g., sponsor, operate, advertise, promote, license, or authorize), and noting that "regulate" is not one of them. She then posited that "some modicum" of state regulation could be "appropriate." Consider the following exchange:
THE COURT: Do you read PASPA as saying that, assuming the law were repealed in toto and operations came up all across the state, of sports gambling, do you read PASPA to prohibit the state from regulating, imposing any kind of regulations on the sports gaming?
MR. OLSON: Well, that's what our opponents are essentially saying now.
THE COURT: But I'm asking you, is that how you read it? . . .
MR. OLSON: . . . If the state is engaged, to address your exact question, in regulating the activity, that might involve the imprimatur of . . . regulation and control.
THE COURT: But which verb under PASPA would regulation fall under? It's not sponsoring, it's not operating, its not advertising; promoting; licensing; or authorizing. It's regulating. Would that be permissible? . . .
MR. OLSON: Well, I think it is a different question . . .
THE COURT: PASPA is so specific. There are six specific activities that you cannot engage in, but regulating is not part of that.
MR. OLSON: That's right.
THE COURT: So I'm just wondering, maybe thinking out loud, that maybe some modicum of regulation is appropriate if you were right in the first instance.This could be a real "game-changer" for New Jersey. If, as Judge Rendell suggested, states could repeal sports betting prohibitions but still be allowed to "regulate" the activity (so long as they do not sponsor, operate, advertise, promote, license, or authorize it), this might be the type of compromise that avoids the "wild-west" scenario feared by Judge Fuentes. It would allow the Third Circuit to interpret PASPA in a manner that is favorable to New Jersey (and in accordance with the above-described canons of statutory construction) without having to worry about the negative consequences associated with unregulated sports betting. At the very least, this reveals Judge Rendell to be an "outside the box" thinker. As noted earlier, Judge Rendell was also the panelist who invoked the "associated words canon" during oral argument. Her comments from the bench strongly suggest that she might be inclined to rule in favor of New Jersey (or is at least looking for a reason to do so). But she will need at least one more judge to join her (there are three judges on the panel), and her statement concerning the ability of states to "regulate" sports gambling without violating PASPA may be just the vehicle to accomplish that.
The Long-Range Implications of the Third Circuit's Decision
The Third Circuit's decision--regardless of the result--will have far-reaching consequences for the U.S. sports industry (and New Jersey's gaming industry). If New Jersey prevails, sports betting could become a reality at the state's licensed casinos and racetracks in time for the beginning of the 2015 NFL season. But as the decision date stretches into July, that may prove to be a long shot (even with a New Jersey victory) because the leagues and the U.S. Department of Justice would get 45 days to file a petition for hearing en banc. (Rehearing en banc is a mechanism available to the losing side to seek review of the decision by the entire court, rather than just the three-judge panel that decided the appeal). Normally, the deadline for seeking rehearing is 14 days from the date of the decision. But since the federal government is a party, the leagues would have 45 days to file a petition for rehearing. That means we are looking at a late August deadline, assuming that there is a panel decision by mid-July. Thus, for Monmouth Park Racetrack to be able to offer sports betting by Week 1 of the 2015 NFL season (September 10), an appellate decision plus a denial of rehearing would have to occur no later than August 26, 2015 since the injunction entered by the lower court would not be lifted until 15 days has passed from the denial of rehearing. Thus, with each passing "non-decision" day, the prospect of Monmouth Park Racetrack launching sports betting in time for Week 1 of the NFL season is in jeopardy, but I'm sure that the track operators will settle for any date in 2015 (or even 2016).
The impact of a New Jersey victory will be extend far beyond the state's borders. One immediate aftershock of such an upset (I now give New Jersey a 40% of chance of prevailing, increased slightly after oral argument) is that neighboring states (such as Pennsylvania and Delaware, which are part of the Third Circuit territory) would likely follow New Jersey's "court-blessed" blueprint and enact their own version of a partial repeal law in reliance on the Third Circuit's decision. Looking beyond the Third Circuit's jurisdictional territory, we could see as many as 10 other states passing similar partial repeal laws within a matter of months following a New Jersey victory. Several states--most notably, Minnesota, Indiana and South Carolina, to name just a few--are not even waiting. The legislatures of those states have already proposed bills legalizing single-game sports wagering (but not the partial repeal version favored by New Jersey). While these bills are only in a preliminary stage at this juncture, expect them to be fast-tracked if New Jersey wins.
Further, a victory by New Jersey will undoubtedly—and perhaps quickly—lead to new federal legislation that would expand legalized sports betting beyond Nevada. This is because New Jersey’s version of legal sports betting would be “unregulated" (meaning no governmental oversight). While NBA Commissioner Adam Silver has come out in favor of legal sports betting, he maintains that it needs to be “regulated” in order to preserve the integrity of the league’s games. A New Jersey victory would open the door to “unregulated” sports betting, a prospect that the NBA, the other sports leagues, and Congress are desperate to avoid. But the leagues and Congress have offered no definitive timetable for federal legislative reform, or any guarantees. Most observers believe that there is little chance of any Congressional action before 2017 (especially with a Presidential election next year). A New Jersey victory would likely change all that, and accelerate the timetable for federal legalization to 2016 (or perhaps this year). But even if New Jersey were to lose the appeal, the eventual Third Circuit opinion will likely include language that provides New Jersey officials with some guidance for future legislative efforts. New Jersey would then be poised to follow such a “roadmap” and propose new legislation right away. Thus, regardless of the result, the Third Circuit’s decision will likely determine the “timing” of when sports wagering becomes legal in the United States.
Wednesday, 15 April 2015
Aaron Hernandez is guilty of First Degree Murder
Thursday, 9 April 2015
Study Sports Law and Entertainment Law at UNH Law this summer!
The courses include:
Sports Law and Investigative Reporting
This course will be co-taught by Sports Illustrated executive editor B.J. Schecter and me. This 1-credit course will meet from Monday, June 1 to Friday, June 5 from 8:30 a.m. to 11:30 a.m each day. B.J. and I will also have some very distinguished guest speakers who have covered legal matters in sports. If you are a journalist or an aspiring journalist who covers legal issues, this class is made for you. It is also an excellent class for sports lawyers and students interested in sports law. It is a similarly useful class for attorneys whose practices include higher-profile clients and who encounter media management issues.
NCAA Division 1 Legislation and Compliance
This course will be taught by Kathy Sulentic, the associate director of enforcement on the NCAA enforcement staff and chair of the NCAA's academic integrity unit. This 2-credit course will meet from Tuesday, May 26 to Friday June 5 from 12:00 pm to 3:15 pm each day (other than on Saturday and Sunday). This is an excellent class, particularly if you currently work in college sports administration or compliance or if you are a student with an interest in pursuing that field.
It should be a great time in the Granite State. New Hampshire is a beautiful, scenic state and the summers are amazing here. Our law school is in the state's capital, Concord, and we're only about 70 minutes from Fenway Park. You'll also be sure to see presidential candidates walking around the neighborhood or at local pubs (the New Hampshire Presidential Primary is only 10 months away).
I hope to see you this summer at our school. If you would like more information, check out the additional details below and also visit our summer program registration page. Please also don't hesitate to contact me at michael.mccann[at]law.unh.edu.
Here is the complete sports and entertainment law course listing for our summer program:
Sports and entertainment law courses |
Studies in sports and entertainment law for:
- Lawyers
- Law students
- University athletic department compliance officers
- Athletic conference compliance officers
- Journalists who write about legal issues in sports and entertainment
- Broadcasters
- Authors
- Actors
- League and team attorneys
- Players association attorneys
- Sports agents and entertainment agents
- Marketing executives
- Advertising executives
Training is offered in three key areas of sports law: NCAA rules and regulations; dispute resolution and sports law journalism. Training is also offered in four key areas of entertainment law: advertising law; Internet law; film and TV law and publishing law. Courses are small and are taught by leading attorneys and executives associated with the NCAA, Sports Illustrated and other premier entities in the sports and entertainment industries.
Hub Page for Aaron Hernandez Trial Coverage and Legal Analysis
Over the last nine weeks I have reported on the trial of Aaron Hernandez for the murder of Odin Lloyd. I have spent time at the trial in Fall River, Massachusetts and become very familiar with this case. As of this writing, the jury is deliberating a verdict. I've written 38 articles for Sports Illustrated on the Hernandez trial over the last nine weeks, and SI has put together a Hernandez Trial Hub Page for these pieces if you're interested in them.
Wednesday, 8 April 2015
Boston Marathon bomber sentenced: will he receive the death penalty?
This is a story that I covered back in 2013 from Boston for SI and was one of the most difficult stories I've reported on. For many of the victims and their families I know they have waited for this day for a long time.
Calling All Students Interested in Sports Law
The 2015 Oregon Law Summer Sports Institute brings together the best and brightest sports industry professionals and legal scholars to provide you with a full roster of engaging and educational coursework, guest lectures, and out of the classroom experiences for an unparalleled sports law educational opportunity.
This intensive 5-week, 6-credit program runs from July 6th through August 7th and is designed to provide law students with a comprehensive introduction to the legal topics of sports regulation and management. Registration information and more details can be found here: http://sports-law.uoregon.edu
Among many others, our speakers and visitors this year will include:
· Mike Hausfeld and the Ed O’Bannon legal team
· A federal bankruptcy judge who became an expert on stadium finance (along with some stadium finance attorneys)
· The general counsels from as many as six or seven NFL, NBA, and MLB teams
· Key inside lawyers from Nike and adidas
· Some big-name agents from LA and Seattle
· Various NCAA compliance honchos
· Law faculty from Tulane, Wake Forest, Pepperdine, San Francisco, American, and elsewhere
And, of course, we’ll take a rafting trip, catch a Portland Timbers game, tour the headquarters of Nike and adidas, go wine tasting, and much more.
There are limited spots available, and we will give strong preference for applications we receive on or before April 20.
For more information, please contact Rob Illig at rillig@uoregon.edu
Sunday, 5 April 2015
UNH Law Sports and Advertising Law Symposium this Friday, April 10
Directions to the University of New Hampshire School of Law are available at this link.
Advertising Law in the Sports & Entertainment Industries
The Franklin Pierce Center for Intellectual Property and UNH Law's Sports and Entertainment Law Institutepresent:
And Now a Word from Our Sponsors
A symposium on advertising law in the sports and entertainment industries
This symposium will feature leading lawyers and other experts working at the intersections of advertising and sports or entertainment. They will discuss contemporary applications of advertising law, challenges facing advertisers, and issues relevant to consumers and fans.
The conversation will touch on such topics as brand protection, ambush marketing, clean zones, data mining and privacy, celebrity endorsements, product placement, a la carte programming, and more, with plenty of opportunities for audience participation and questions.
This event is open to the public and lunch will be served. RSVP to Mary O’Malley atmary.omalley@law.unh.edu by April 8, 2015.
Agenda | |
12:30-1:30 | Lunch in the IP Center rotunda, featuring the keynote address by Douglas J. Wood |
1:30-2:45 | Panel 1: Advertising Law & Entertainment |
2:45-3:00 | Break |
3:00-4:15 | Panel 2: Advertising Law & Sports |
4:15-5:15 | Networking reception |
Participants include: | |
 | Luke Bonner, Brand & Marketing Executive, GYK Antler |
 | Erica Han, Senior Attorney, Ropes & Gray |
 | Michael Kuh, Counsel at Latham & Watkins LLP |
 | Michael McCann, Professor of Law, Director, Sports and Entertainment Law Institute |
 | Dalia Topelson Ritvo, Assistant Director of Cyberlaw Clinic, Harvard Law School's Berkman Center for Internet & Society |
 | Alexandra J. Roberts, Assistant Professor of Intellectual Property; Executive Director, Franklin Pierce Center for Intellectual Property |
 | Christine Santariga, Senior Privacy Counsel, Warner Bros. Entertainment Inc. |
 | Amanda Schreyer, Of Counsel at Price Lobel Tye LLP |
 | Christopher Sloan, Assistant Vice President & Senior Corporate Counsel at Liberty Mutual Insurance |
 | Douglas J. Wood, JD '76, Partner, Reed Smith, UNH Law Adjunct Professor, Advertising LawIP Summer Institutes (IPSI) |
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