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Murphy v. National Collegiate Athletic Association

United States Supreme Court

May 14, 2018

PHILIP D. MURPHY, GOVERNOR OF NEW JERSEY, ET AL., PETITIONERS
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, ET AL. NEW JERSEY THOROUGHBRED HORSEMEN'S ASSOCIATION, INC., PETITIONER
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, ET AL.

          Argued December 4, 2017 [*]

          CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

         The Professional and Amateur Sports Protection Act (PASPA) makes it unlawful for a State or its subdivisions "to sponsor, operate, advertise, promote, license, or authorize by law or compact ... a lottery, sweepstakes, or other betting, gambling, or wagering scheme based . . . on" competitive sporting events, 28 U.S.C. §3702(1), and for "a person to sponsor, operate, advertise, or promote" those same gambling schemes if done "pursuant to the law or compact of a governmental entity, " §3702(2). But PASPA does not make sports gambling itself a federal crime. Instead, it allows the Attorney General, as well as professional and amateur sports organizations, to bring civil actions to enjoin violations. §3703. "Grandfather" provisions allow existing forms of sports gambling to continue in four States, §3704(a)(1)-(2), and another provision would have permitted New Jersey to set up a sports gambling scheme in Atlantic City within a year of PASPAs enactment, §3704(a)(3).

         New Jersey did not take advantage of that option but has since had a change of heart. After voters approved an amendment to the State Constitution giving the legislature the authority to legalize sports gambling schemes in Atlantic City and at horseracing tracks, the legislature enacted a 2012 law doing just that. The NCAA and three major professional sports leagues brought an action in federal court against New Jersey's Governor and other state officials (hereinafter New Jersey), seeking to enjoin the law on the ground that it violates PASPA. New Jersey countered that PASPA violates the Constitution's "anticommandeering" principle by preventing the State from modifying or repealing its laws prohibiting sports gambling. The District Court found no anticommandeering violation, the Third Circuit affirmed, and this Court denied review.

         In 2014, the New Jersey Legislature enacted the law at issue in these cases. Instead of affirmatively authorizing sports gambling schemes, this law repeals state-law provisions that prohibited such schemes, insofar as they concerned wagering on sporting events by persons 21 years of age or older; at a horseracing track or a casino or gambling house in Atlantic City; and only as to wagers on sporting events not involving a New Jersey college team or a collegiate event taking place in the State. Plaintiffs in the earlier suit, respondents here, filed a new action in federal court. They won in the District Court, and the Third Circuit affirmed, holding that the 2014 law, no less than the 2012 one, violates PASPA. The court further held that the prohibition does not "commandeer" the States in violation of the Constitution.

         Held:

1. When a State completely or partially repeals old laws banning sports gambling schemes, it "authorize [s]" those schemes under PASPA. Pp. 9-14.
(a) Pointing out that one accepted meaning of "authorize" is "permit, " petitioners contend that any state law that has the effect of permitting sports gambling, including a law totally or partially repealing a prior prohibition, amounts to authorization. Respondents maintain that "authorize" requires affirmative action, and that the 2014 law affirmatively acts by empowering a defined group of entities and endowing them with the authority to conduct sports gambling operations. They do not take the position that PASPA bans all modifications of laws prohibiting sports gambling schemes, but just how far they think a modification could go is not clear. Similarly, the United States, as amicus, claims that the State's 2014 law qualifies as an authorization. PASPA, it contends, neither prohibits a State from enacting a complete repeal nor outlaws all partial repeals. But the United States also does not set out any clear rule for distinguishing between partial repeals that constitute the "authorization" of sports gambling and those that are permissible. Pp. 10-11.
(b) Taking into account the fact that all forms of sports gambling were illegal in the great majority of States at the time of PASPA's enactment, the repeal of a state law banning sports gambling not only "permits" sports gambling but also gives those now free to conduct a sports betting operation the "right or authority to act." The interpretation adopted by the Third Circuit and advocated by respondents and the United States not only ignores the situation that Congress faced when it enacted PASPA but also leads to results that Congress is most unlikely to have wanted. Pp. 11-13.
(c) Respondents and the United States cannot invoke the canon of interpretation that a statute should not be held to be unconstitutional if there is any reasonable interpretation that can save it. Even if the law could be interpreted as respondents and the United States suggest, it would still violate the anticommandeering principle. Pp. 13-14.
2. PASPAs provision prohibiting state authorization of sports gambling schemes violates the anticommandeering rule. Pp. 14-24.
(a) As the Tenth Amendment confirms, all legislative power not conferred on Congress by the Constitution is reserved for the States. Absent from the list of conferred powers is the power to issue direct orders to the governments of the States. The anticommandeering doctrine that emerged in New York v. United States, 505 U.S. 144, and Printz v. United States, 521 U.S. 898, simply represents the recognition of this limitation. Thus, "Congress may not simply 'commandeer the legislative process of the States by directly compelling them to enact and enforce a federal regulatory program.'" New York, supra, at 161. Adherence to the anticommandeering principle is important for several reasons, including, as significant here, that the rule serves as "one of the Constitution's structural safeguards of liberty, " Printz, supra, at 921, that the rule promotes political accountability, and that the rule prevents Congress from shifting the costs of regulation to the States. Pp. 14-18.
(b) PASPAs anti-authorization provision unequivocally dictates what a state legislature may and may not do. The distinction between compelling a State to enact legislation and prohibiting a State from enacting new laws is an empty one. The basic principle-that Congress cannot issue direct orders to state legislatures-applies in either event. Pp. 18-19.
(c) Contrary to the claim of respondents and the United States, this Court's precedents do not show that PASPAs anti-authorization provision is constitutional. South Carolina v. Baker, 485 U.S. 505; Reno v. Condon, 528 U.S. 141; Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., 452 U.S. 264; FERC v. Mississippi, 456 U.S. 742, distinguished. Pp. 19-21.
(d) Nor does the anti-authorization provision constitute a valid preemption provision. To preempt state law, it must satisfy two requirements. It must represent the exercise of a power conferred on Congress by the Constitution. And, since the Constitution "confers upon Congress the power to regulate individuals, not States, " New York, supra, at 177, it must be best read as one that regulates private actors. There is no way that the PASPA anti-authorization provision can be understood as a regulation of private actors. It does not confer any federal rights on private actors interested in conducting sports gambling operations or impose any federal restrictions on private actors. Pp. 21-24.
3. PASPAs provision prohibiting state "licens[ing]" of sports gambling schemes also violates the anticommandeering rule. It issues a direct order to the state legislature and suffers from the same defect as the prohibition of state authorization. Thus, this Court need not decide whether New Jersey's 2014 law violates PASPAs anti-licensing provision. Pp. 24-25.
4. No provision of PASPA is severable from the provisions directly at issue. Pp. 26-30.
(a) Section 3702(1)'s provisions prohibiting States from "operating], " "sponsor[ing], " or "promot[ing]" sports gambling schemes cannot be severed. Striking the state authorization and licensing provisions while leaving the state operation provision standing would result in a scheme sharply different from what Congress contemplated when PASPA was enacted. For example, had Congress known that States would be free to authorize sports gambling in privately owned casinos, it is unlikely that it would have wanted to prevent States from operating sports lotteries. Nor is it likely that Congress would have wanted to prohibit such an ill-defined category of state conduct as sponsorship or promotion. Pp. 26-27.
(b) Congress would not want to sever the PASPA provisions that prohibit a private actor from "sponsor[ing], " "operat[ing], " or "promot[ing]" sports gambling schemes "pursuant to" state law. §3702(2). PASPAs enforcement scheme makes clear that §3702(1) and §3702(2) were meant to operate together. That scheme-suited for challenging state authorization or licensing or a small number of private operations-would break down if a State broadly decriminalized sports gambling. Pp. 27-29.
(c) PASPAs provisions prohibiting the "advertising]" of sports gambling are also not severable. See §§3702(1)-(2). If they were allowed to stand, federal law would forbid the advertising of an activity that is legal under both federal and state law-something that Congress has rarely done. Pp. 29-30.

832 F.3d 389, reversed.

          ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J., and Kennedy, Thomas, Kagan, and Gorsuch, JJ., joined, and in which BREYER, J., joined as to all but Part VI-B. THOMAS, J., filed a concurring opinion. BREYER, J., filed an opinion concurring in part and dissenting in part. GINSBURG, J., filed a dissenting opinion, in which So-TOMAYOR, J., joined, and in which BREYER, J., joined in part.

          OPINION

          ALITO, JUSTICE

         The State of New Jersey wants to legalize sports gambling at casinos and horseracing tracks, but a federal law, the Professional and Amateur Sports Protection Act, generally makes it unlawful for a State to "authorize" sports gambling schemes. 28 U.S.C. §3702(1). We must decide whether this provision is compatible with the system of "dual sovereignty" embodied in the Constitution.

         I

         A

         Americans have never been of one mind about gambling, and attitudes have swung back and forth. By the end of the 19th century, gambling was largely banned throughout the country, [1] but beginning in the 1920s and 1930s, laws prohibiting gambling were gradually loosened.

         New Jersey's experience is illustrative. In 1897, New Jersey adopted a constitutional amendment that barred all gambling in the State.[2] But during the Depression, the State permitted parimutuel betting on horse races as a way of increasing state revenue, [3] and in 1953, churches and other nonprofit organizations were allowed to host bingo games.[4] In 1970, New Jersey became the third State to run a state lottery, [5] and within five years, 10 other States followed suit.[6]

         By the 1960s, Atlantic City, "once the most fashionable resort of the Atlantic Coast, " had fallen on hard times, [7]and casino gambling came to be seen as a way to revitalize the city.[8] In 1974, a referendum on statewide legalization failed, [9] but two years later, voters approved a narrower measure allowing casino gambling in Atlantic City alone.[10]At that time, Nevada was the only other State with legal casinos, [11] and thus for a while the Atlantic City casinos had an east coast monopoly. "With 60 million people living within a one-tank car trip away, " Atlantic City became "the most popular tourist destination in the United States."[12] But that favorable situation eventually came to an end.

         With the enactment of the Indian Gaming Regulatory Act in 1988, 25 U.S.C. §2701 et seq., casinos opened on Indian land throughout the country. Some were located within driving distance of Atlantic City, [13] and nearby States (and many others) legalized casino gambling.[14] But Nevada remained the only state venue for legal sports gambling in casinos, and sports gambling is immensely popular.[15]

         Sports gambling, however, has long had strong opposition. Opponents argue that it is particularly addictive and especially attractive to young people with a strong interest in sports, [16] and in the past gamblers corrupted and seriously damaged the reputation of professional and amateur sports.[17] Apprehensive about the potential effects of sports gambling, professional sports leagues and the National Collegiate Athletic Association (NCAA) long opposed legalization.[18]

         B

         By the 1990s, there were signs that the trend that had brought about the legalization of many other forms of gambling might extend to sports gambling, [19] and this sparked federal efforts to stem the tide. Opponents of sports gambling turned to the legislation now before us, the Professional and Amateur Sports Protection Act (PASPA). 28 U.S.C. §3701 et seq. PASPAs proponents argued that it would protect young people, and one of the bill's sponsors, Senator Bill Bradley of New Jersey, a former college and professional basketball star, stressed that the law was needed to safeguard the integrity of sports.[20] The Department of Justice opposed the bill, [21] but it was passed and signed into law.

         PASPAs most important provision, part of which is directly at issue in these cases, makes it "unlawful" for a State or any of its subdivisions[22] "to sponsor, operate, advertise, promote, license, or authorize by law or compact ... a lottery, sweepstakes, or other betting, gambling, or wagering scheme based . . . on" competitive sporting events. §3702(1). In parallel, §3702(2) makes it "unlawful" for "a person to sponsor, operate, advertise, or promote" those same gambling schemes[23]-but only if this is done "pursuant to the law or compact of a governmental entity." PASPA does not make sports gambling a federal crime (and thus was not anticipated to impose a significant law enforcement burden on the Federal Government).[24] Instead, PASPA allows the Attorney General, as well as professional and amateur sports organizations, to bring civil actions to enjoin violations. §3703.

         At the time of PASPAs adoption, a few jurisdictions allowed some form of sports gambling. In Nevada, sports gambling was legal in casinos, [25] and three States hosted sports lotteries or allowed sports pools.[26] PASPA contains "grandfather" provisions allowing these activities to continue. §3704(a)(1)-(2). Another provision gave New Jersey the option of legalizing sports gambling in Atlantic City-provided that it did so within one year of the law's effective date. §3704(a)(3).[27]

         New Jersey did not take advantage of this special option, but by 2011, with Atlantic City facing stiff competition, the State had a change of heart. New Jersey voters approved an amendment to the State Constitution making it lawful for the legislature to authorize sports gambling, Art. IV, §7, ¶2(D), (F), and in 2012 the legislature enacted a law doing just that, 2011 N. J. Laws p. 1723 (2012 Act).

         The 2012 Act quickly came under attack. The major professional sports leagues and the NCAA brought an action in federal court against the New Jersey Governor and other state officials (hereinafter New Jersey), seeking to enjoin the new law on the ground that it violated PASPA. In response, the State argued, among other things, that PASPA unconstitutionally infringed the State's sovereign authority to end its sports gambling ban. See National Collegiate Athletic Assn. v. Christie, 926 F.Supp.2d 551, 561 (NJ 2013).

         In making this argument, the State relied primarily on two cases, New York v. United States, 505 U.S. 144 (1992), and Printz v. United States, 521 U.S. 898 (1997), in which we struck down federal laws based on what has been dubbed the "anticommandeering" principle. In New York, we held that a federal law unconstitutionally ordered the State to regulate in accordance with federal standards, and in Printz, we found that another federal statute unconstitutionally compelled state officers to enforce federal law.

         Relying on these cases, New Jersey argued that PASPA is similarly flawed because it regulates a State's exercise of its lawmaking power by prohibiting it from modifying or repealing its laws prohibiting sports gambling. See National Collegiate Athletic Assn. v. Christie, 926 F.Supp. 2d, at 561-562. The plaintiffs countered that PASPA is critically different from the commandeering cases because it does not command the States to take any affirmative act. Id., at 562. Without an affirmative federal command to do something, the plaintiffs insisted, there can be no claim of commandeering. Ibid.

         The District Court found no anticommandeering violation, id., at 569-573, and a divided panel of the Third Circuit affirmed, National Collegiate Athletic Assn. v. Christie, 730 F.3d 208 (2013) (Christie I). The panel thought it significant that PASPA does not impose any affirmative command. Id., at 231. In the words of the panel, "PASPA does not require or coerce the states to lift a finger." Ibid, (emphasis deleted). The panel recognized that an affirmative command (for example, "Do not repeal") can often be phrased as a prohibition ("Repeal is prohibited"), but the panel did not interpret PASPA as prohibiting the repeal of laws outlawing sports gambling. Id., at 232. A repeal, it thought, would not amount to "authorization]" and thus would fall outside the scope of §3702(1). "[T]he lack of an affirmative prohibition of an activity, " the panel wrote, "does not mean it is affirmatively authorized by law. The right to do that which is not prohibited derives not from the authority of the state but from the inherent rights of the people." Id., at 232 (emphasis deleted).

         New Jersey filed a petition for a writ of certiorari, raising the anticommandeering issue. Opposing certiorari, the United States told this Court that PASPA does not require New Jersey "to leave in place the state-law prohibitions against sports gambling that it had chosen to adopt prior to PASPAs enactment. To the contrary, New Jersey is free to repeal those prohibitions in whole or in part." Brief for United States in Opposition in Christie v. National Collegiate Athletic Assn., O. T. 2013, No. 13-967 etc., p. 11. See also Brief for Respondents in Opposition in No. 13-967 etc., p. 23 ("Nothing in that unambiguous language compels states to prohibit or maintain any existing prohibition on sports gambling"). We denied review. Christie v. National Collegiate Athletic Assn., 573 U.S.__ (2014).

         Picking up on the suggestion that a partial repeal would be allowed, the New Jersey Legislature enacted the law now before us. 2014 N. J. Laws p. 602 (2014 Act). The 2014 Act declares that it is not to be interpreted as causing the State to authorize, license, sponsor, operate, advertise, or promote sports gambling. Ibid. Instead, it is framed as a repealer. Specifically, it repeals the provisions of state law prohibiting sports gambling insofar as they concerned the "placement and acceptance of wagers" on sporting events by persons 21 years of age or older at a horseracing track or a casino or gambling house in Atlantic City. Ibid. The new law also specified that the repeal was effective only as to wagers on sporting events not involving a New Jersey college team or a collegiate event taking place in the State. Ibid.

         Predictably, the same plaintiffs promptly commenced a new action in federal court. They won in the District Court, National Collegiate Athletic Assn. v. Christie, 61 F.Supp.3d 488 (NJ 2014), and the case was eventually heard by the Third Circuit sitting en banc. The en banc court affirmed, finding that the new law, no less than the old one, violated PASPA by "authorizing]" sports gambling. National Collegiate Athletic Assn. v. Governor of N J., 832 F.3d 389 (2016) (case below). The court was unmoved by the New Jersey Legislature's "artful[]" attempt to frame the 2014 Act as a repealer. Id., at 397. Looking at what the law "actually does, " the court concluded that it constitutes an authorization because it "selectively remove[s] a prohibition on sports wagering in a manner that permissively channels wagering activity to particular locations or operators." Id., at 397, 401. The court disavowed some of the reasoning in the Christie I opinion, finding its discussion of "the relationship between a 'repeal' and an 'authorization' to have been too facile." 832 F.3d, at 401. But the court declined to say whether a repeal that was more complete than the 2014 Act would still amount to an authorization. The court observed that a partial repeal that allowed only "de minimis wagers between friends and family would not have nearly the type of authorizing effect" that it found in the 2014 Act, and it added: "We need not. . . articulate a line whereby a partial repeal of a sports wagering ban amounts to an authorization under PASPA, if indeed such a line could be drawn." Id., at 402 (emphasis added).

         Having found that the 2014 Act violates PASPA's prohibition of state authorization of sports gambling schemes, the court went on to hold that this prohibition does not contravene the anticommandeering principle because it "does not command states to take affirmative actions." Id., at 401.

         We granted review to decide the important constitutional question presented by these cases, sub nom. Christie v. National Collegiate Athletic Assn., 582 U.S.__(2017).

         II

         Before considering the constitutionality of the PASPA provision prohibiting States from "authorizing]" sports gambling, we first examine its meaning. The parties advance dueling interpretations, and this dispute has an important bearing on the constitutional issue that we must decide. Neither respondents nor the United States, appearing as an amicus in support of respondents, contends that the provision at issue would be constitutional if petitioners' interpretation is correct. Indeed, the United States expressly concedes that the provision is unconstitutional if it means what petitioners claim. Brief for United States 8, 19.

         A

         Petitioners argue that the anti-authorization provision requires States to maintain their existing laws against sports gambling without alteration. One of the accepted meanings of the term "authorize, " they point out, is "permit." Brief for Petitioners in No. 16-476, p. 42 (citing Black's Law Dictionary 133 (6th ed. 1990); Webster's Third New International Dictionary 146 (1992)). They therefore contend that any state law that has the effect of permitting sports gambling, including a law totally or partially repealing a prior prohibition, amounts to an authorization. Brief for Petitioners in No. 16-476, at 42.

         Respondents interpret the provision more narrowly. They claim that the primary definition of "authorize" requires affirmative action. Brief for Respondents 39. To authorize, they maintain, means "'[t]o empower; to give a right or authority to act; to endow with authority.'" Ibid. (quoting Black's Law Dictionary, at 133). And this, they say, is precisely what the 2014 Act does: It empowers a defined group of entities, and it endows them with the authority to conduct sports gambling operations.

         Respondents do not take the position that PASPA bans all modifications of old laws against sports gambling, Brief for Respondents 20, but just how far they think a modification could go is not clear. They write that a State "can also repeal or enhance [laws prohibiting sports gambling] without running afoul of PASPA" but that it "cannot 'partially repeal' a general prohibition for only one or two preferred providers, or only as to sports-gambling schemes conducted by the state." Ibid. Later in their brief, they elaborate on this point:

"If, for example, a state had an existing felony prohibition on all lotteries, it could maintain the law, it could repeal the law, it could downgrade the crime to a misdemeanor or increase the penalty .... But if the state modified its law, whether through a new authorization or through an amendment partially repealing the existing prohibition, to authorize the state to conduct a sports lottery, that modified law would be preempted." Id., at SI.

         The United States makes a similar argument. PASPA, it contends, does not prohibit a State from enacting a complete repeal because "one would not ordinarily say that private conduct is 'authorized by law' simply because the government has not prohibited it." Brief for United States 17. But the United States claims that "[t]he 2014 Act's selective and conditional permission to engage in conduct that is generally prohibited certainly qualifies" as an authorization. Ibid. The United States does not argue that PASPA outlaws all partial repeals, but it does not set out any clear rule for distinguishing between partial repeals that constitute the "authorization" of sports gambling and those that are permissible. The most that it is willing to say is that a State could "eliminat[e] prohibitions on sports gambling involving wagers by adults or wagers below a certain dollar threshold." Id., at 29.

         B

         In our view, petitioners' interpretation is correct: When a State completely or partially repeals old laws banning sports gambling, it "authorize [s]" that activity. This is clear when the state-law landscape at the time of PASPA's enactment is taken into account. At that time, all forms of sports gambling were illegal in the great majority of States, and in that context, the competing definitions offered by the parties lead to the same conclusion. The repeal of a state law banning sports gambling not only "permits" sports gambling (petitioners' favored definition); it also gives those now free to conduct a sports betting operation the "right or authority to act"; it "empowers" them (respondents' and the United States's definition).

         The concept of state "authorization" makes sense only against a backdrop of prohibition or regulation. A State is not regarded as authorizing everything that it does not prohibit or regulate. No one would use the term in that way. For example, no one would say that a State "authorizes" its residents to brush their teeth or eat apples or sing in the shower. We commonly speak of state authorization only if the activity in question would otherwise be restricted.[28]

         The United States counters that, even if the term "authorize, " standing alone, is interpreted as petitioners claim, PASPA contains additional language that precludes that reading. The provision at issue refers to "authorization] by law, " §3702(1) (emphasis added), and the parallel provision governing private conduct, §3702(2), applies to conduct done "pursuant to the law ... of a governmental entity." The United States maintains that one "would not naturally describe a person conducting a sports-gambling operation that is merely left unregulated as acting 'pursuant to' state law." Brief for United States 18. But one might well say exactly that if the person previously was prohibited from engaging in the activity. ("Now that the State has legalized the sale of marijuana, Joe is able to sell the drug pursuant to state law.")

         The United States also claims to find support for its interpretation in the fact that the authorization ban applies to all "governmental entities." It is implausible, the United States submits, to think that Congress "commanded every county, district, and municipality in the Nation to prohibit sports betting." Ibid. But in making this argument, the United States again ignores the legal landscape at the time of PASPA's enactment. At that time, sports gambling was generally prohibited by state law, and therefore a State's political subdivisions were powerless to legalize the activity. But what if a State enacted a law enabling, but not requiring, one or more of its subdivisions to ...


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