No IN THE SUPREME COURT OF THE UNITED STATES. GOVERNOR OF TULANIA and the CITY OF BON TEMPS,

Transcription

1 No IN THE SUPREME COURT OF THE UNITED STATES GOVERNOR OF TULANIA and the CITY OF BON TEMPS, v. Petitioner, NATIONAL FOOTBALL LEAGUE, MAJOR LEAGUE BASEBALL, NATIONAL HOCKEY LEAGUE, NATIONAL COLLEGIATE ASSOCIATION, and the OFFICE OF THE COMMISSIONER OF BASEBALL, Respondents. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTEENTH CIRCUIT BRIEF FOR RESPONDENTS Team 26 Counsel for Respondents

2 TABLE OF CONTENTS TABLE OF AUTHORITIES... iii ISSUES PRESENTED... vi STATEMENT OF THE CASE...1 Statement of Facts...1 Procedural Posture...1 STANDARD OF REVIEW...2 SUMMARY OF THE ARGUMENT...2 ARGUMENT...2 I. THE PROFESSIONAL AND AMATEUR SPORTS PROTECTION ACT IS CONSTITUTIONAL....2 A. PASPA is an appropriate act pursuant to Congress Commerce Clause powers Sports gambling is an economic activity affecting interstate commerce Intrastate sports gambling has a substantial effect on interstate commerce....6 B. PASPA complies with the Anti-Commandeering Doctrine PASPA provides a choice to the States and therefore, is not coercive PASPA directly regulates sports gambling, which is a regulation of state action Even if PASPA is coercive, any conflicting state law is preempted via the Supremacy Clause C. PASPA is consistent with the Equal Sovereignty Doctrine PASPA is justified by the current need to stop the spread of sports gambling and keep the integrity of professional and amateur sports i

3 2. PASPA s geographic coverage is sufficiently related to the spread of sports gambling The grandfathering clauses are necessary to protect the State s reliance interest on already enacted legal sports gambling laws II. THE FOURTEENTH CIRCUIT CORRECTLY HELD MLB FRANCHISE RELOCATION EXEMPT UNDER ANTITRUST LAW A. The business of baseball enjoys an exemption from the Sherman Antitrust Laws B. The MLB constitution requires three-fourths vote for franchise relocation CONCLUSION...25 ii

4 TABLE OF AUTHORITIES UNITED STATES SUPREME COURT CASES Champion v. Ames, 188 U.S. 321 (1903)...4, 5 City of New Orleans v. Dukes, 427 U.S. 297 (1976)...17, 18 Currin v. Wallace, 306 U.S. 1 (1939)...16 Fed. Baseball Club of Balt. v. Nat l League of Prof l Baseball Clubs, 259 U.S. 200 (1922)...20, 21, 22 Flood v. Kuhn, 407 U.S. 258 (1972)...19, 20, 21 Gonzales v. Raich, 545 U.S. 1 (2005)...6, 7 Gregory v. Ashcroft, 501 U.S. 451 (1991)...8 Hodel v. Va. Surface Mining & Reclamation Ass n, Inc., 452 U.S. 264 (1981)...8, 9 Mich. Canners & Freezers Ass n v. Agric. Mktg. & Bargaining Bd., 467 U.S. 461 (1984)...12, 13 Morgan v. Virginia, 328 U.S. 373 (1946)...15, 16 N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937)...3 New York v. United States, 505 U.S. 144 (1992)...8, 9, 10 iii

5 Nw. Austin Mun. Util. Dist. No. One v. Holder, 557 U.S. 193 (2009)...14, 15 Nordlinger v. Hahn, 505 U.S. 1 (1992)...17 Norfolk & W. Ry. Co. v. Am. Train Dispatchers Ass n, 499 U.S. 117 (1991)...23 Radovich v. Nat l Football League, 352 U.S. 445 (1957)...20, 21 Reno v. Condon, 528 U.S. 141 (2000)...11, 12 Shelby Cnty. v. Holder, 133 S. Ct (2013)...14, 15, 16 South Carolina v. Baker, 485 U.S. 505 (1988)...11, 12 Toolson v. N. Y. Yankees, Inc., 346 U.S. 356 (1953)...19, 20, 21, 22 United States v. Darby, 312 U.S. 100 (1941)...6, 8 United States v. Int l Boxing Club of N.Y., 348 U.S. 236 (1955)...21 United States v. Lopez, 514 U.S. 549 (1995)...4, 18 United States v. Morrison, 529 U.S. 598 (2000)...4 United States v. Shubert, 348 U.S. 222 (1955)...21 iv

6 UNITED STATES COURT OF APPEAL CASES United States v. Riehl, 460 F.2d 454 (3d Cir. 1972)...4, 5, 6 UNITED STATES DISTRICT COURT CASES Brown v. Sombrotto, 523 F. Supp. 127 (S.D.N.Y 1981)...23, 24 Morsani v. Major League Baseball, 79 F. Supp. 2d 1331 (M.D. Fla. 1999)...22 STATE COURT CASES Ermert v. Hartford Ins. Co., 559 So. 2d 467 (La. 1990)...23, 24 CONSTITUTIONAL PROVISIONS U.S. Const. art. I, 8, cl U.S.C , U.S.C U.S.C U.S.C U.S.C passim OTHER SOURCES S. Rep. No , at 5 (1992)...6, 7 Sherman Act: Congressional Hearing, 51 Cong. 647 (1890)...18 MLB Const. art. V , 23 v

7 ISSUES PRESENTED 1. Whether the Court of Appeals properly upheld the constitutionality of the Professional and Amateur Sports Protection Act of 1992 and enjoined Tulania s sports wagering law. 2. Whether the Court of Appeals correctly held that the relocation of the N.O. s, a Major League Baseball club, exempt under antitrust law. vi

8 STANDARD OF REVIEW The Supreme Court will review the case at hand de novo. R. at 1. A. Statement of Facts STATEMENT OF THE CASE Congress enacted the Professional and Amateur Sports Protection Act (PASPA) in PASPA prevents the states from sponsoring sports betting, gambling, or wagering directly or indirectly. 28 U.S.C Additionally, PASPA contains a grandfathering clause that allows some states to continue licensing sports gambling. R. at 5. The State of Tulania proposed a law seeking to license sports gambling in the City of Bon Temps (Bon Temps). R. at 2. The National Football League, Major League Baseball, the National Hockey League, and the National Collegiate Athletic Association (The League) filed suit against Tulania s proposed law in the District Court. The Office of the Commissioner of Baseball doing business as MLB ( MLB ) is an unincorporated association of thirty-one Major League Baseball Clubs, including the Blue Devils and the N.O. s. R. at 3. The N.O. s, have considered relocating to Bon Temps, but the MLB Constitution designates Bon Temps as within the Blue Devil s operating territory and requires a three-quarter-majority vote by all the clubs before the franchise can relocate. R. at 3. Pursuant to the Constitution, the MLB commissioner delayed the N.O. s relocation until the clubs could vote. R. at 3. The City of Bon Temps in support of the relocation brought a third-party claim against MLB alleging the delay violates federal antitrust laws. R at 3. B. Procedural Posture Tulania moved to dismiss the Leagues complaint, alleging PASPA unconstitutional. R. at 2. MLB moved to dismiss all counts in Bon Temps complaint for failure to state a claim. R. at 2. The District Court dismissed the Leagues complaint and denied MLB s motion to dismiss. R. 1

9 at 4. The District Court ruled in favor of the Governor of Tulania and Bon Temps. R. at 4. The League appealed and sought to enjoin Tulania from licensing sports gambling. R. at 2. United States Court of Appeals 14 th Circuit reversed the decision of United States District Court on both judgments and Bon Temps appealed. R.at 2. The Supreme Court granted the writ of certiorari. R. at 2. SUMMARY OF THE ARGUMENT The Fourteenth Circuit properly upheld the constitutionality of the Professional and Amateur Sports Protection Act. PASPA is an appropriate act stemming from Congress Commerce Clause powers; PASPA complies with the Anti-Commandeering Doctrine; and PASPA is consistent with the Equal Sovereignty Doctrine. Therefore, PASPA is constitutional and this Court should affirm the decision of the Fourteenth Circuit. Additionally, The Fourteenth Circuit correctly held the relocation of the N.O. s was exempt under the antitrust law. Congress created antitrust exemption for the business of baseball. Major League Baseball is an unincorporated association governed by the MLB Constitution, which requires a three-fourth vote of all MLB Clubs for franchise relocations. Therefore, MLB s conduct and N.O. s relocation was exempted under the antitrust law and this Court should affirm the decision of the Fourteenth Circuit. ARGUMENT I. THE PROFESSIONAL AND AMATEUR SPORTS PROTECTION ACT IS CONSTITUTIONAL. PASPA prohibits most states from licensing sports gambling. The Fourteenth Circuit s decision to enjoin Tulania s sports wagering law was proper because PASPA is constitutional. Congress has congressional authority to enact PASPA through its Commerce Clause power, which, stems from the regulation of interstate and intrastate economic activities that affect 2

10 interstate commerce. N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 36 (1937). Among Congress enumerated powers in Article I of the U.S. Constitution, is the ability to regulate Commerce among the several States. U.S. Const., Art. I, 8, cl.3. (emphasis added). Congress authority to protect commerce can stem from injurious action springing from other sources. Jones & Laughlin Steel, 301 U.S. at 36. In fact, to regulate interstate commerce, Congress holds the power to enact all appropriate legislation for its protection or advancement, to adopt measures to promote its growth and insure its safety, and to foster, protect, control, and restrain. Id. at In addition that congressional power is plenary and may be exerted to protect interstate commerce no matter what the source of the dangers which threaten it. Id. at 37. PASPA is constitutional because PASPA is within Congress Commerce Clause powers; PASPA complies with the anti-commandeering doctrine; and PASPA is consistent with the equal sovereignty to the states. Therefore, PASPA s application of gambling restrictions to the states is a constitutional exercise of Congress Commerce Clause powers. The ruling of the Fourteenth Circuit should be affirmed. A. PASPA is an appropriate act pursuant to Congress Commerce Clause powers. PASPA stems from Congress Commerce powers to regulate interstate and intrastate activity that substantially affects interstate commerce. Congress cannot be denied the power to exercise control over activities that have a substantial relation to interstate commerce when that control is essential to protect commerce from burdens and obstructions. Jones & Laughlin Steel, 301 U.S. at 37. Accordingly, Congress holds the sole authority to contemplate and decide the point of the danger and to remedy it. Id. Generally, there is no requirement for Congress to make a formal finding as to the substantial burden an activity may have on interstate commerce, the existence of such findings may enable us to evaluate the legislative judgment that the 3

11 activity in question substantially affects interstate commerce, even though no such substantial effect is visible to the naked eye. United States v. Morrison, 529 U.S. 598, 612 (2000). Additionally, when the interstate and intrastate aspects of commerce are so mingled together, full regulation of interstate commerce requires incidental regulation of intrastate commerce. United States v. Lopez, 514 U.S. 549, 554 (1995). PASPA constitutionally regulates intrastate sports gambling activities, which in turn substantially affects interstate commerce. As such, Congress Commerce Clause power enables Congress to regulate sports gambling through PASPA. Therefore, PASPA is well within the Congress Commerce Clause power. 1. Sports gambling is an economic activity affecting interstate commerce. PASPA targets, state-licensed wagering on sports, which may be regulated consistent with the Commerce Clause. Pursuant to Part A of Title VIII, Congress intended, that illegal gambling involves widespread use, of and has an effect upon, interstate commerce and the facilities thereof. United States v. Riehl, 460 F.2d 454, 458 (3d Cir. 1972). Accordingly, Congress qualifies sports gambling to be in the class of activities that affects interstate commerce. Id. at 458. Moreover, where the class of activities is regulated and that class is within the reach of federal power, the courts may not excise as trivial individual instances of the class. Id. Therefore, PASPA is a lawful exercise of congressional regulation of commerce among the states. This Court affirmed that commerce among the states consists of the transportation and transit of persons and property, as well as the purchase, sale, and exchange of commodities. Champion v. Ames, 188 U.S. 321, 351 (1903). Further, transportation for others, as an 4

12 independent business, is commerce, irrespective of the purpose to sell or retain the goods. Id. at 352. In Ames, this Court held that Congress had the ability to regulate the transport of goods in interstate commerce and prohibit the carriage of lottery tickets from state to state. Id. at 355. The lottery tickets were declared subjects of traffic among those who buy or sell them, and thus, the carriage of such tickets by independent carriers from one state to another was interstate commerce. Id. at 363. Ultimately, such carriage was subject to regulation by Congress under the Commerce Clause. Id. Congress has proscribed interstate transportation as a means for carrying out sports lotteries. 18 U.S.C. 1301, 1307(D). In Riehl, the Third Circuit upheld the Organized Crime Control Act of 1970 (OCCA), which prohibited conspiracies to facilitate illegal gambling business by means of the obstruction of the enforcement of local laws. Riehl, 460 F.2d at 456. The Court looked to congressional intent behind the OCCA, which declared Congress intended to reach the persons who targeted citizens systematically by operations that were so continuous and substantial as to be of national concern, and those corrupt State and local official who make it possible for them to function. Id. at 458. The Court ultimately held that Congress did not violate the Commerce Clause because illegal gambling was an economic activity within interstate commerce. Id. In the present context, sports gambling is an economic activity affecting interstate commerce. The Leagues are associations comprised of thirty-one clubs and that compete for millions of fans and revenue across the country. Like Ames, where this Court held that Congress had the authority to regulate carrying lottery tickets across state lines, here, Congress has the power to regulate the transport of goods on the League s exhibitions in interstate commerce and regulate wagering of sports gambling from state to state. 5

13 PASPA is aimed at sports gambling, which is economic in nature and has a substantial effect on interstate commerce. Further, Congress declared that legal [and illegal] sports wagering is not a local issue, but a national one with effects felt beyond the borders of those States that sanction it. Sen. Rep , at 5. (emphasis added). Because national sports are economic activities involved in interstate commerce, wagering money on those sports substantially affects interstate commerce; rarely do two teams from the same state meet in a game. Similar to Riehl, where the Court held Congress did not violate the Commerce Clause because gambling involved interstate commerce, PASPA is not a violation of the Commerce Clause because it prohibits sports gambling within the United States. Looking to Congress intent, like in Riehl, here, the purpose of PASPA is to stop the spread of sports gambling and to protect the integrity of professional and amateur sports. Therefore, prohibiting state licensing of sports gambling is a rational means of regulating commerce and is within Congress power under the Commerce Clause. 2. Intrastate sports gambling has a substantial effect on interstate commerce. PASPA constitutionally governs intrastate sports gambling activities because intrastate sports gambling substantially affects interstate commerce. Congressional action over local activities is permissible if Congress has a rational basis for concluding that the activity, in the aggregate, has a substantial effect on interstate commerce. Gonzales v. Raich, 545 U.S. 1, 22 (2005). Such action is not an impermissible invasion of state power merely because either its motive or its consequence is to restrict the use of articles of commerce within the states. United States v. Darby, 312 U.S. 100, 114 (1941). In Gonzales, this Court held that the Controlled Substance Act (CSA), which criminalized the manufacturing, distributing, or possession of marijuana to intrastate growers and 6

14 marijuana users for medical purposes did not violate the Commerce Clause. Gonzales, 545 U.S. at 26. The primary purpose behind the CSA was to control the supply and demand of controlled substances in both lawful and unlawful drug markets therefore, this Court reasoned that the prohibition of such conduct was a rational means of regulating commerce. Id. at 19, 26. Further, this Court upheld the CSA declaring it was a statute that directly regulated economic and commercial activity, and therefore, was constitutional. Id. at 26. Here, PASPA s prohibition on sports gambling schemes carried out pursuant to state law is not an impermissible regulation of the states. Similar to Gonzales, Congress is empowered to regulate state s legal and illegal sports gambling. This Court s rationale in Gonzales is controlling because like marijuana, the sports gambling market has a substantial effect on interstate commerce. The nation s sports teams across state lines compete for fans, players, and host sporting events on a regular basis. The legislative record for PASPA revealed that the perception of the games and what they stand for would be negatively impacted by the legalization of sports gambling and that sports gambling threatens the integrity of, and public confidence in, amateur and professional sports. S. Rep. No , at 5-8. If the national sports teams are pulled in unwanted directions over wagering, the integrity of sports would be lost and commerce would be affected in a negative manner, controlled by everyone but the rightful owner of commerce power, Congress. Congress purpose behind PASPA is to prevent this exact downfall from happening. The regulation of licensed sports gambling, legal or illegal, stems from a substantial effect upon interstate commerce arising out of each individual state. Therefore, Congress may regulate sports wagering consistent with the Commerce Clause. 7

15 B. PASPA complies with the Anti-Commandeering Doctrine. PASPA permissibly commandeers the states by regulating illegal sports gambling throughout the United States. The Anti-Commandeering Doctrine bars any law that commandeers the legislative process of the States by directly compelling them to enact and enforce a federal regulatory program. Hodel v. Va. Surface Mining & Reclamation Ass n, Inc., 452 U.S. 264, 283, 288 (1981). However, when a federal regulatory program holds the burden by a state s choice not to follow it, there can be no suggestion that the Act commandeers the legislative process of the States by directly compelling them to enact and enforce a federal regulatory program. Id. at 288. Congress power over interstate commerce is complete in itself, and may be exercised to its utmost extent. Darby, 312 U.S. at 114. Congress power can neither be enlarged nor diminished by the exercise or non-exercise of state power. Id. The Constitution establishes a system of dual sovereignty between the states and the Federal Government. Gregory v. Ashcroft, 501 U.S. 451, 457 (1991). Under the federal system, the States possess sovereignty concurrent with that of the Federal Government, subject only to limitations imposed by the Supremacy Clause. Id. PASPA complies with the Anti-Commandeering Doctrine because it provides a choice to the states and is not coercive. Furthermore, PASPA regulates sports wagering, which regulates state action. However, even if this Court finds PASPA coercive, PASPA pre-empts any state s conflicting sports wagering laws via the Supremacy Clause. 1. PASPA provides a choice to the states and therefore is not coercive. PASPA does not coerce nor compel the states to implement federal regulation because it provides a choice for the States. Congress does not have the power to force states to implement regulations. New York v. United States, 505 U.S. 144, 149 (1992). The Constitution does not 8

16 authorize Congress to commandeer the state legislative process by compelling states to enact and enforce a federal regulatory program. Id. at 163. However, when States have a choice not to enforce the federal regulations there will be no finding that the Act has commandeered the legislative process of the States. Hodel, 452 U.S. at 287. Furthermore, there is nothing in the Tenth Amendment [that] shields States from pre-emptive federal regulation of private activities affecting interstate commerce. Id. at In Hodel, this Court upheld the Surface Mining Control and Reclamation Act of 1977 (SMCR), which was designed to establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations. Id. at 268. The SMCR imposed federal standards for coal mining on certain surfaces and required any state that wished to assume permanent regulatory authority to submit a proposed permanent program to the Federal Government requiring the state legislature to enact laws implementing the environmental protection standards established by the SMCR. Id. at 268, 271. However, if a particular state did not wish to implement the federal standards, the federal government would step in and do so. Id. at 272. This Court failed to see why the [SMCR] should become constitutionally suspect simply because Congress chose to allow the States a regulatory role. Id. at 291. This Court reasoned that the provisions of the SMCR neither compelled the States to adopt the federal standards, nor coerced them into participating in the federal regulatory program in any manner whatsoever. Id. at 288. Because the Act provided a choice to the States within limits established by the federal minimum standards, this court upheld the SMCR as constitutional. Id. at 289. To the contrary, in New York, Congress enacted the Low-Level Radioactive Waste Policy Amendments Act of 1985 (LLRWP), which required states to either provide for radioactive 9

17 waste disposal or take title to waste made within the state s borders. New York, 505 U.S. at 152. The part of the LLRWP in question was the take title incentive, where a state that did not arrange for disposal of its waste would be required to take ownership of the waste. Id. at 153. The take title provision gave a state two options: either the state could take title to the waste and risk whatever liability followed or regulate the disposal according to the congressional mandate. Id at 175. Either way, the state would be forced to implement the federal regulatory scheme and would be agents of the federal government. Id. A choice between two unconstitutionally coercive regulatory techniques is no choice at all. Id. at 176. Here, PASPA does not violate the Anti-Commandeering Doctrine because like Hodel, PASPA merely made compliance with federal standards a precondition to continue state regulation in an otherwise preempted field. The choices PASPA provides to the states are to either to comply with PASPA s regulations or to regulate its own complete ban on sports wagering. Neither of PASPA s two choices requires the states to enact a law but instead provides room for the states to make their own policies on sports wagering bans. As stated in several of this Court s precedent, when the State s have a choice under federal regulations within the Commerce Clause, the coercion argument will be rendered moot. Because the states have a choice in PASPA s regulatory program, coercion cannot exist and therefore is consistent with the Anti-commandeering Doctrine. Unlike New York, PASPA does not require or coerce the states to act. Under PASPA, the states are not required to take title to anything, expend funds, or resources, or enforce federal law. PASPA has no directives requiring the States to address particular problems and gives no command to State officers to administer or enforce a federal regulatory program. PASPA set 10

18 forth a prohibition, not affirmative action on the states. Thus, PASPA is not compelling nor coercive, in compliance with the Anti-Commandeering Doctrine. 2. PASPA directly regulates sports gambling, which is a regulation of state action. PASPA is an affirmative regulation on sports gambling directly regulating state action. The Tenth Amendment limits [ ] Congress authority to regulate state activities.... South Carolina v. Baker, 485 U.S. 505, 512 (1988). This Court has declared that Congress has the power to require States regulating in a pre-emptible field consider suggested federal standards and follow federally mandated procedures. Id. at 514. A federal statute that regulates state activity does not necessarily seek to control or influence the manner in which States regulate private parties. Id. Such commandeering is however, an inevitable consequence of regulating a state activity. Id. Moreover, any federal regulation will demand compliance and a State wishing to engage in certain activity must take administrative and sometimes legislative action to comply with federal standards, [which is a] commonplace that presents no constitutional defect. Reno v. Condon, 528 U.S. 141, 151 (2000). In Baker, this Court held that because the federal imposition of a bond registration requirement does not violate the Tenth Amendment, the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) is constitutional. Baker, 485 U.S. at 527. TEFRA removes the Federal income tax exemption for interest earned on publicly offered long-term bonds issued by state and local governments unless bonds are issued in registered form. Id. at 507. This Court upheld the validity of laws that directly regulated the states by prohibiting outright the issuance of bearer bonds. Id. at 511. These rules required the states to amend a substantial number of statutes in order to comply. Id. at 514. This Court reasoned the act did not violate the Tenth Amendment 11

19 because it did not seek to control or influence the manner in which States regulate private parties but was simply an inevitable consequence of regulating state activity. Id. In Reno, this Court rejected the state s argument that the Driver s Privacy Protection Act of 1994 (DPPA) violates the principle laid down in New York. Reno, 528 U.S. at 150. The DPPA regulated the disclosure of personal information contained in the records of state motor vehicle information contained in the records of state motor vehicles departments. Id. at 143. This Court reasoned that Reno was governed by the decision in Baker, which upheld a statute that prohibited states from issuing unregistered bonds because the law regulated state activities, rather than seeking to control or influence the manner in which States regulate private parties. Id. at 150. Like the statute at issue in Baker, the DPPA did not require the states in their sovereign capacity to regulate their own citizens. Id. at 151. Here, like in Baker and Reno, PASPA does not run afoul the Tenth Amendment because it does not seek to control or influence the manner in which States regulate private parties. PASPA does not require the States in their Sovereign capacity to regulate their own citizens, it does not require the state legislature to enact any laws, and it does not require state officials to assist in the enforcement of federal statutes regulating private individuals. PASPA directly prohibits state licensing of sports gambling, a regulation of state action. Therefore, PASPA cannot be held to commandeer the states. 3. Even if PASPA is coercive, any conflicting state law is pre-empted via the Supremacy Clause. Tulania s sports wagering law conflicts with PASPA and therefore, is pre-empted via the Supremacy Clause. If Congress has not displaced state regulation entirely, it may nonetheless pre-empt state law to the extent that the state law actually conflicts with federal law. Mich. Canners & Freezers Ass n v. Agri. Mktg. & Bargaining Bd., 467 U.S. 461, 469 (1984). A 12

20 conflict with federal law will arise when compliance with both state and federal law is impossible or when the state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. Id. In Mich. Canners, asparagus growers and an association of asparagus processors in Michigan sued a producers association, which had been accredited under the Michigan Agricultural Marketing and Bargaining Act as the sole sales and bargaining representative for Michigan asparagus producers. Id. at This Court held that the federal Agricultural Fair Practices Act pre-empted the Michigan Agricultural Marketing and Bargaining Act to the extent that it authorized producers associations to engage in conduct proscribed by the federal statute. Id. at 478. The federal act forbade an association of producers to belong to, or participate in a marketing contract with, the association. Id. In short, the Michigan Act engaged in conduct forbidden by the federal act, which stood as an obstacle to the accomplishment and execution of the federal Agricultural Fair Practices Act purposes and objectives and therefore was preempted. Id. Even if PASPA is found to be coercive in any way, similar to Mich. Canners, the sports wagering act of Tulania is preempted by PASPA because it conflicts with PASPA s regulations. PASPA is a regulation of state action under the constitutionally permitted powers of the Commerce Clause. Tulania s sports wagering law conflicts with PASPA because it allows the state to license sports wagering on professional and amateur sports, exactly what PASPA forbids. Not only does Tulania s law conflict with PASPA S regulations, but the sports wagering law s conduct also stands as an obstacle to PASPA s purpose and objective to prohibit the spread state licensed sports gambling. 13

21 Tulania s sports wagering law is attempting to allow gambling on professional and amateur sports, which goes against the purpose of stopping the spread of sports wagering and protecting the integrity of professional and amateur sports. If Tulania is allowed to enact its sports wagering law-allowing sports gambling, it is likely to cause a chain reaction of the same and the purpose of PASPA would be defeated. Because Tulania s sports wagering law directly conflict with PASPA, Tulania s sports wagering law is pre-empted. C. PASPA is consistent with the Equal Sovereignty Doctrine. PASPA abides with the equal sovereignty of the states through its remedy for the local evil of sports gambling. Our nation is a union of States, equal in power and authority. Shelby Cnty. v. Holder., 133 S. Ct. 2612, 2623 (2013). There is a fundamental principle of equal sovereignty among the States. Id. The doctrine of the equality of States does not bar remedies for local evils, which have subsequently appeared. Nw. Austin Mun. Util. Dist. No. One v. Holder, 557 U.S. 193, 203 (2009). However, any course away from the Equal Sovereignty Doctrine requires a geographic location sufficient to the targeted problem. Id. Moreover, PASPA is consistent with the Equal Sovereignty Doctrine, which is justified by current needs to stop the spread of sports gambling and to keep the integrity of professional and amateur sports. Additionally, PASPA s geographic coverage is sufficiently related to illegal sports gambling. Further, PASPA s grandfathering clauses are relevant and necessary to protect the State s reliance interest on already enacted legal sports wagering laws. Therefore, PASPA aligns with the Equal Sovereignty Doctrine. 1. PASPA is justified by current needs to stop the spread of sports gambling and keep the integrity of professional and amateur sports. The prohibition of state licensed gambling enacted by PASPA rationalizes the current need to stop the spread of the ills of sports gambling and to protect the integrity of professional 14

22 and amateur sports. There must be legitimate means to a legitimate end. Shelby, 133 S. Ct. at In other words, current burdens must be justified by current needs. Id. Congress has authority to burden commerce if there seems to be a desirable means of accomplishing a permitted end. Morgan v. Virginia, 328 U.S. 373, 380 (1946). However, there must be congruence and proportionality between the injury to be prevented and the means adopted to the end. Nw. Austin, 557 U.S. at 204. In Nw. Austin, this Court held that all political subdivisions are eligible to file a bailout suit. Id. at 211. This Court concluded that exceptional conditions prevailing in certain parts of the country justified extraordinary legislation otherwise unfamiliar to our federal system. Id. at 211. The Voting Rights Act (VRA) provided preclearance obligations under the bailout provision that allowed the release of a political subdivision from the preclearance requirements if certain rigorous conditions were met. Id. at 197. The VRA directly preempted all literacy test of African-American disenfranchisement. Id. This court reasoned that the VRA was constitutional to protect minorities from continued racial discrimination in voting. Id. at 201. Here, PASPA s burden of prohibiting state licensed gambling is current to the need to prohibit the tribulations of gambling on sports. Like Nw. Austin, PASPA differentiates between the States, despite our historic tradition that all the States enjoy equal sovereignty. Gambling on sports and the negative impact it has on the perception and integrity of sport exhibitions is similar to the exceptional conditions that existed in Nw. Austin. However, unlike Nw. Austin, PASPA s purpose to prevent sports gambling ills are still prevalent in society where as in Nw. Austin, the Jim Crow laws and the disparate impact of African-American voting was not a current need to the adopted burden. Therefore, PASPA s prohibition of licensed state sports gambling addresses a current need to prevent the ills of sports gambling. 15

23 2. PASPA s geographic coverage is sufficiently related to the spread of sports gambling. PASPA s geographic coverage targeting only states where the practice of sports gambling did not exist prior to PASPA is more than sufficiently related to the problem of the spread of sports gambling. A departure from the fundamental principle of equal sovereignty requires a showing that a statute s disparate geographic coverage is sufficiently related to the problem that it targets. Shelby, 133 S. Ct. at Congress exercises of Commerce Clause authority are aimed at matters of national concern and finding national solutions will necessarily affect states differently. Morgan, 328 U.S. at 389. Congress is not required to establish uniform rules under the Commerce Clause. Currin v. Wallace, 306 U.S. 1, 14 (1939). In exercise of Commerce Clause power, Congress may choose commodities and places to which its regulations shall apply. Id. In Shelby, section five of the Voting Rights Act (VRA) required States to obtain federal permission before enacting any law related to voting. Shelby, 133 S. Ct. at Section four of the VRA applied that requirement only to some States. Id. Congress determined that the [VRA] was needed to address entrenched racial discrimination in voting, an insidious and pervasive evil, which [was] in certain parts of our country through unremitting and ingenious defiance of the Constitution. Id. The coverage formula the means of linking the exercise of the unprecedented authority with the problem that warranted it made sense. Id. at Congress chose to limit its attention to the geographic areas where immediate action seemed necessary. Id. Congress must confirm that passed legislation remedies a current problem. Id. Here, PASPA is distinguishable from the VRA because PASPA created an exemption for States that had legalized sports gambling laws set in place before the enactment of PASPA. Like Shelby, where the purpose of VRA was to stop black voter discrimination, PASPA s purpose is 16

24 to stop the spread of state sanctioned sports gambling. Regulating states in which sports gambling already existed would have been irrational due to those states economic reliance interest on sports gambling. Targeting only states in which sports wagering did not exist is sufficiently related to preventing the spread of sports gambling and quarantining those ills of sports gambling. (emphasis added.) PASPA s geographic coverage is precisely tailored to address the spread of licensed state sports gambling. 3. The grandfathering clauses are necessary to protect the state s reliance interest on already enacted legal sports wagering laws. PASPA s grandfathering clause comports with the Commerce Clause because it protects the state s expectation and reliance interests in economic activity. Protecting legitimate expectation and reliance interest does not deny equal protection of the laws. Nordlinger v. Hahn, 505 U.S. 1, 13 (1992). Legislatures may implement their program step by step, in such economic areas, adopting regulations that only partially ameliorate a perched evil and deferring complete elimination of the evil to future regulations. City of New Orleans v. Dukes, 427 U.S. 297, 303 (1976). Including a grandfather provision can be used for the sole purpose of an economic regulation aimed at enhancing the economy of a city or state. Id. In Dukes, this court held that the equal protection analysis of the grandfathering clause should no longer stand. Id.at 306. An ordinance that banned vendors from New Orleans historic district, but grandfathered those of a certain vintage was upheld as constitutional. Id. at 300. This Court reasoned it permissible for a legislature to adopt regulations that removed local evils, and implement grandfathering provisions that treated similarly situated entities differently due to a substantial reliance interest. Id. at 303. The City s classification rationally furthered the purpose, which the City had identified as its objective in enacting the provision, as a means to 17

25 preserve the appearance and custom valued by the Quarter s residents and to tourists. Id. at 304. Here, PASPA s grandfathering clauses like those in Dukes, protect legitimate expectation and reliance interests, and therefore, do not deny equal protection of the laws. The Legislature in enacting PASPA chose to implement their program of preventing state licensed gambling systematically, in such economic areas that did not have an economic reliance interest. Congress decision to exempt these particular states was made with rational consideration of the state s that already enacted laws contrary to PASPA. Similar to Dukes where the exempted vendors relied on the area they set up business, the exempted states in PASPA were given the same opportunity to keep the gambling laws they relied on before PASPA. Just because these exempted states had active legalized gambling laws, they should not be penalized because all other states failed to do the same. Thus, the grandfathering clause is necessary to protect the reliance interest of those states and is not a violation of the Equal Sovereignty Doctrine. PASPA is a constitutional exercise of Congress power. Therefore, this Court should affirm the decision of the Fourteenth circuit and find the PASPA in its entirety is constitutional. II. THE FOURTEENTH CIRCUIT CORRECTLY HELD MLB FRANCHISE RELOCATION EXEMPT UNDER ANTITRUST LAW. The Federal antitrust law does not apply to the business of baseball in regards to franchise relocation. According to the Commerce Clause, Congress has the power to regulate interstate and intrastate activities that substantially affect commerce if it arises out of or is connected with a commercial transaction. Lopez, 514 U.S. at 561. In 1890, Congress passed the Sherman Act to protect trade and commerce against unlawful restraints and monopolies. Sherman Act: Congressional Hearing, 51 Cong. 647 (1890). The Sherman Act provides that every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade 18

26 or commerce... is declared illegal. 15 U.S.C. 1. However, the Sherman Act does not apply to any actions integral to the business of baseball such as franchise relocation. 15 U.S.C. 26b(3). Congress has clearly expressed its intention to continue excluding the business of baseball from antitrust legislation. Id. The MLB constitution is the appropriate authority over franchise relocation. MLB is an unincorporated association created by a constitution. R at 1. Courts treat constitutions of unincorporated associations as binding contracts on all members of the association. The MLB constitution provides that before a team can be relocated to another team s territory there must be a three-fourths majority approval vote by all club owners. MLB Const. art V 2b(3). The MLB Commissioner delayed the public vote so that the club owners can vote to change the location of the N.O. s to the Blue Devils Territory. R. at 3. Therefore, the commissioner was acting within his power under the constitution. A. The business of baseball enjoys an exemption from the Sherman Antitrust Laws. This Court has consistently held that the business of baseball enjoys an exemption from the Sherman Antitrust laws. According to this Court, the business of providing public baseball games for profit between clubs of professional baseball players is not within the scope of the federal antitrust laws. Toolson v. N.Y. Yankees, Inc., 346 U.S. 356, 357 (1953). Congress has not seen fit to bring to such business under the antitrust laws by legislation having prospective effect. Id. This Court has been very reluctant to overrule the baseball exemption thereby giving those laws retrospective effect. Id. Congress has left the business of baseball for thirty years to develop with the understanding that it was not subject to existing antitrust legislation. Id. Major League Baseball s federal antitrust exemption is deemed fully entitled to the benefit of stare decisis, and one that has survived the Court s expanding concept of interstate commerce. 19

27 Flood v. Kuhn, 407 U.S. 258, 282 (1972). The baseball exemption rests on a recognition and acceptance of baseball s unique characteristics and needs. Id. Congress, by its positive inaction, clearly showed a desire to continue Major League Baseball s federal antitrust exemption. Id. at 284. The best way to change this exemption is by legislation not by court decision. Radovich v. Nat'l Football League, 352 U.S. 445, 452 (1957). In Fed. Baseball Club of Balt. v. Nat l League of Prof l BaseBall Clubs, this Court first recognized the antitrust exemption. 259 U.S. 200, 208 (1922). In Fed. Baseball, the plaintiff alleged that the defendants were buying teams within the Federal League and inducing those teams to become a part of the National League. Id. at 207. The plaintiffs argued that this destroyed the competitive dynamic of baseball in violation of federal antitrust laws. Id. This Court found that baseball was exempt from the antitrust laws, reasoning that the business of baseball was purely a state affair. Id. at 208. This Court noted that although teams crossed state lines in order to compete, such transport is mere incident not the essential thing to the exhibition Id. at 209. Thus, this Court concluded baseball was exempt from the antitrust laws. Id. In 1953, this Court revisited the baseball exemption and affirmed the ruling in Fed. Baseball. Toolson, 346 U.S. at 357. In Toolson, plaintiffs alleged club owners were taking advantage of players in regards to their contracts. Id. at 362. This Court denied plaintiff relief holding that the business of baseball should continue to be exempt from the federal antitrust laws. Id. at 357. This Court reasoned that Congress had no intention of including the business of baseball within the scope of the federal antitrust laws. Id. Congress has had the ruling under consideration but has not seen fit to reject it by amendatory legislation. Id. Four bills have been introduced in the Congress, three in the House, one in the Senate, intending to give baseball 20

28 and all other professional sports a complete and unlimited immunity from the antitrust laws. Id. This Court concluded that if there are evils in this field which now warrant application to it of the antitrust laws it should be by legislation. Id. Again in 1972, this Court decided to uphold the antitrust exemption to Major League Baseball. In Flood, the plaintiff was a baseball player who alleged antitrust violation when he was denied a trade to another team per the baseball reserve system. 407 U.S. at 265. This Court was asked to rule that professional baseball s reserve system was within the reach of the federal antitrust laws. Id. Declining to do so, this Court held that while professional baseball was a business engaged in interstate commerce it still enjoyed exemption from the federal antitrust laws. Id. at 282. This Court has determined that other sports associations do not enjoy this exemption. In United States v. Shubert, this Court found that the theatrical business was not exempt from antitrust laws. 348 U.S. 222, 231 (1955). Justice Holmes held the Fed. Baseball Court was addressing the business of baseball and nothing else. Id. at 228. The Court considered the nature of the game, it history and league organization, the necessity of arranging games between cities in different states, and the resulting travel across state lines. Id. Fed. Baseball did not automatically immunize the theatrical business from the antitrust laws, and this Court has never held that the theatrical business is exempt from the Sherman Act. Id. at see also Radovich v. Nat'l Football League, 352 U.S. 445, 454 (1957) (holding antitrust exemption did not apply to professional football because Federal Baseball held the business of baseball outside the scope of the Sherman Act and no other business claiming the coverage of those cases has such an adjudication); see also United States v. Int'l Boxing Club of N.Y., 348 U.S. 236,

29 (1955) (affirming the decision in Fed. Baseball and Toolson, but holding boxing was not exempt because the business itself engaged in illegal restraints on interstate commerce). Congress has taken legislative action on the longstanding baseball exemption. In 1998, Congress passed the Curt Flood Act that subjected only the reserve clause to antitrust laws. 15 U.S.C. 26b. The Curt Flood Act provides that any conduct in the business of organized professional major league baseball directly relating to the employment of major league baseball players are subject to the antitrust laws to the same extent as any other professional sports business affecting interstate commerce. 15 U.S.C. 26b (a)(1998). However, the Act also states that no court shall rely on the enactment of this section as a basis for changing the application of the antitrust laws to any conduct, acts, practices, or agreements other than dealing with player employment. Id. at 26b(b). In fact, the Act does not create, permit, or even imply a cause of action by which to challenge under the antitrust laws... franchise expansion, location or relocation. Id. at 26(b)(3); see also Morsani v. Major League Baseball, 79 F. Supp. 2d 1331, 1336 (M.D. Fla. 1999) (noting that Congress explicitly preserved the baseball exemption for all matters relating to or affecting franchise expansion, location or relocation). Here, Major League Baseball is enforcing the franchise relocation provision in the MLB constitution. Franchise relocation has been exempted from the antitrust laws since As noted by this Court in Toolson, the nature of the business of baseball has continued to build on the basis of this exemption and the appropriate method of change lies with Congress and not judicial intervention. This court would do more harm in overruling Fed. Baseball and Toolson. The business of baseball vastly developed since these decisions and enormous capital has been invested in reliance on its performance. Retroactive effect of the repudiation of the exemption continues to allow Major League Baseball to enjoy the federal antitrust exemption. 22

30 Congress has specifically expressed its intention not to include the business of baseball within antitrust laws. One hundred years of Congressional positive inaction, not subjecting the business of baseball to the antitrust laws shows its intention not to apply the antitrust laws. Thus, Major League Baseball s franchise relocation still enjoys the exemption from the Sherman Antitrust Act. B. The MLB constitution requires three-fourths vote for franchise relocation. Enjoying the well-established exemption the business of baseball is governed by the MLB constitution. MLB is an unincorporated association of thirty-one Major League Baseball clubs. An unincorporated association is created by a written document evidencing the intent to form a separate legal entity and laying out the duties of the members. Ermert v. Hartford Ins. Co., 559 So. 2d 467, 473 (La. 1990). The charter, constitution, and by-laws of an unincorporated association constitute a contract between the members much like an agreement creating a partnership. Id. Courts have interpreted the constitution of an unincorporated association as a binding contract on its members. Brown v. Sombrotto, 523 F. Supp. 127, 133 (S.D.N.Y. 1981). Furthermore, it is well established by this Court that a contract is an obligation that binds the parties to perform the duties laid out in their agreement. Norfolk & W. Ry. Co. v. Am. Train Dispatchers Ass'n, 499 U.S. 117, 130 (1991). In order to effectuate a valid relocation of a team to another team s territory, there must be a three-quarter-majority approval by all of the clubs. MLB const. art. V section 2b(3). In Ermert, a group of friends gathered materials for the common purpose of hunting. Ermert, 559 So. 2d at 469. On one of the trips a hunter shot one of the friends in the foot, injuring him. Id. The hunter brought suit against the other hunters in the group claiming they were vicariously liable for his injury. Id. at 470. The Supreme Court of Louisiana held that the 23

31 group of hunters did not form an unincorporated association that would make the other members of the hunting group liable for his injuries. Id. at 474. The court reasoned that the hunters never drew up a contract, constitution, by-laws, or any written instrument displaying their intent to create a separate legal entity. Id. The Southern District of New York determined that an unincorporated association was bound to the terms of its constitution and by-laws. Brown, 523 F. Supp. at 129. In Brown, a labor association voted to send six delegates to their national convention pursuant to their constitution. Id. The plaintiff delegates alleged their votes were counted incorrectly in violation of a relevant labor statute. Id. at 128. The court found that the votes were counted according to the relevant section of the association s constitution. Id. at 133. The court held that the constitution and by-laws of the unincorporated association represented a binding contract among the members. Id. As a result, the relevant labor statute was not applicable as the constitution clearly defined the privileges and duties of the delegates and how their votes were to be counted. Id. Here, MLB is an unincorporated association. Unlike the hunters in Ermert, MLB is created by the MLB constitution. The thirty-one clubs in MLB, including N.O. s, combined their efforts, knowledge, or activities through the constitution for the common purpose of providing exhibitions of baseball. Similar to the union in Brown, the MLB s constitution constitutes the contract between the members and the association and is binding on the thirty-one Clubs. The MLB Constitution designates Bon Temps as within the Blue Devils territory. The MLB Constitution requires a three-quarter majority approval by all MLB clubs since the Blue Devils, another MLB Club, operates in the city of Bon Temps and Bon Temps is outside of the N.O. s operating territory. Since the MLB is an unincorporated association, this Court should 24