Docket No In the SUPREME COURT OF THE UNITED STATES OF AMERICA. GOVERNOR OF TULANIA and THE CITY OF BON TEMPS.

Transcription

1 Docket No In the SUPREME COURT OF THE UNITED STATES OF AMERICA GOVERNOR OF TULANIA and THE CITY OF BON TEMPS Petitioners, v. NATIONAL FOOTBALL LEAGUE, MAJOR LEAGUE BASEBALL, NATIONAL HOCKEY LEAGUE, NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, and the OFFICE OF THE COMMISSIONER OF BASEBALL Respondents. ON A WRIT OF CERTIORARI FROM THE UNITED STATES COURT OF APPEALS FOR THE FOURTEENTH CIRCUIT BRIEF FOR RESPONDENT Anonymous Number: 22

2 TABLE OF CONTENTS TABLE OF AUTHORITIES... II QUESTIONS PRESENTED... 1 I. WHETHER THE COURT OF APPEALS PROPERLY UPHELD THE CONSTITUTIONALITY OF PASPA SINCE IT REPRESENTS A VALID EXERCISE OF CONGRESSIONAL POWER UNDER THE COMMERCE CLAUSE AND DOES NOT VIOLATE THE PRINCIPLES OF ANTI-COMMANDEERING OR EQUAL SOVEREIGNTY, AND THEREFORE TULANIA S PROPOSED LAW REGULATING SPORTS GAMBLING IS INVALID AND WAS PROPERLY ENJOINED II. WHETHER THE COURT OF APPEAL CORRECTLY HELD THAT THE RELOCATION OF THE N.O. S, A MAJOR LEAGUE BASEBALL CLUB, IS EXEMPT UNDER ANTITRUST LAW BECAUSE CONGRESS INTENDED THE EXEMPTION TO APPLY AS PER SUPREME COURT PRECEDENT TO UPHOLD THE EXEMPTION, AND RELOCATION IS INCLUDED IN THE BUSINESS OF BASEBALL FACTS/BACKGROUND... 1 SUMMARY OF THE ARGUMENT... 2 STANDARD OF REVIEW... 5 ARGUMENT... 5 I. THE COURT OF APPEALS CORRECTLY HELD THAT PASPA IS CONSTITUTIONAL SINCE IT REPRESENTS A VALID EXERCISE OF CONGRESSIONAL POWER UNDER THE COMMERCE CLAUSE AND DOES NOT VIOLATE THE PRINCIPLES OF ANTI-COMMANDEERING OR EQUAL SOVEREIGNTY, AND THEREFORE TULANIA S PROPOSED LAW REGULATING SPORTS GAMBLING WAS PROPERLY ENJOINED A. PASPA DOES NOT VIOLATE THE ANTI-COMMANDEERING PRINCIPLE BECAUSE IT REPRESENTS REGULATION OF A PRE-EMPTIBLE FIELD, CONGRESS IS PERMITTED TO PROHIBIT CERTAIN STATE ACTIONS, AND PASPA IS DISTINGUISHIBLE FROM THE ONLY TWO LAWS EVER SUCCESSFULLY CHALLENGED UNDER THE ANTI-COMMANDEERING PRINCIPLE i. PASPA represents a regulation in a pre-emptible field and is therefore permissible under the Supremacy Clause of the U.S. Constitution ii. PASPA represents permissible prohibition of state action iii. Comparing PASPA to the only two laws ever overturned by the anti-commandeering clause reveals that the law does not rise to the level of commandeering state government to do the work of the federal government B. PASPA DOES NOT VIOLATE THE EQUAL SOVEREIGNTY OF THE STATES SINCE IT IS DISTINGUISHABLE FROM THE LAW IN VRA AND TARGETS SPECIFICALLY THOSE STATES THAT WOULD BE REQUIRED TO STOP THE SPREAD OF SPORTS GAMBLING, WHICH IS THE STATED PURPOSE OF THE LAW II. THE RELOCATION OF THE N.O. S IS EXEMPT UNDER ANTITRUST LAW BECAUSE CONGRESS INTENDED THE EXEMPTION TO APPLY AS PER SUPREME COURT PRECEDENT TO UPHOLD THE EXEMPTION, AND RELOCATION IS INCLUDED IN THE BUSINESS OF BASEBALL A. A HISTORICAL ANALYSIS OF BASEBALL S EXEMPTION FROM FEDERAL ANTITRUST LEGISLATION REFLECTS CONGRESS S INTENT TO UPHOLD BASEBALL S EXEMPTION AS INTERPRETED BY THE SUPREME COURT B. THE FEDERAL ANTITRUST EXEMPTION FOR THE BUSINESS OF BASEBALL IS NOT LIMITED TO THE RESERVE CLAUSE AND EXTENDS TO FRANCHISE RELOCATION CONCLUSION i

3 TABLE OF AUTHORITIES Cases Am. League Baseball Club of Chi. v. Chase, 86 Misc. 441 (N.Y.S. 1914).... 4, 17 California Dump Truck Owners Ass'n v. Davis, 172 F. Supp. 2d 1298, 1304 (E.D. Cal. 2001).. 11 Charles O. Finley & Co. v. Kuhn, 569 F.2d 527 (7th Cir. 1978) Curt Flood Act, 15 U.S.C. 26b(a) (1998)... 5, 19 Escanaba & Lake Mich. Transp. Co. v. Chicago, 107 U.S. 678, 689 (1883) F.E.R.C. v. Mississippi, 456 U.S. 742 (1982)... 8, 9, 13 Fed. Baseball Club, Inc. v. Nat l League of Prof l Baseball Clubs, 259 U.S. 200 (1922) 4, 17, 18, 19, 21, 22 Flood v. Kuhn, 407 U.S. 258 (1972)... 5, 18, 20, 21, 22 Henderson Broad. Corp. v. Hous. Sports Ass'n, 541 F. Supp. 263 (S.D. Tex. 1982) Hodel v. Va. Surface Mining & Reclamation Ass'n, 452 U.S. 264, 283 (1981)... 8, 9 Kelley v. United States, 69 F.3d 1503, 1510 (10th Cir. 1995) Major League Baseball v. Butterworth, MLB, 181 F. Supp. 2d 1316, 1330 (N.D. Fla. 2001).. 1, 5, 16, 19, 22 Marbury v. Madison, 5 U.S. 137 (1803) Morgan v. Virginia, 328 U.S. 373, 388 (1946) Morsani v. Major League Baseball, 79 F. Supp. 2d 1331, 1336 (M.D. Fla. 1999)... 5, 19 NCAA v. Governor of N.J., 730 F.3d 298, 225 (3d Cir. N.J. 2013)... 3, 7, 8, 9, 11, 13 New York v. United States, 505 U.S. 144 (U.S. 1992)... 4, 11, 12 NFL, et. al., v. Governor of Tulania (14 th Cir. 2014)... 13, 15 Northwest Austin Municipal Utility District Number One v. Holder, 557 U.S. 193 (2009) Piazza v. Major League Baseball, 831 F. Supp. 420 (E.D. Pa. 1993)... 21, 22 Printz v. United States, 521 U.S. 898, 926 (1997)... 9, 11, 12 Prof l Baseball Sch. & Clubs, Inc. v. Kuhn, 693 F.2d 1085 (11th Cir. 1982) Reno v. Condon, 528 U.S. 141 (2000) Shelby County, Alabama v. Holder, 133 S. Ct (2013) South Carolina v. Baker, 485 U.S. 505 (1988) South Carolina v. Katzenbach, 383 U.S. 301, 328 (1966) Toolson v. New York Yankees, Inc., 346 U.S. 356 (1953)... 18, 21, 22 United States v. Lopez, 514 U.S. 549, 559 (1995)... 6 United States v. Morrison, 529 U.S. 598, 608 (2000)... 6 Wickard v. Filburn, 317 U.S. 111 (1942)... 6 Rules Federal Rule of Civil Procedure 12(b)(6)... 2 ii

4 Regulations Professional and Amateur Sports Protection Act of , 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 Voting Rights Act of , 12 Constitutional Provisions U.S. Const., Art. I, 8, cl , 5 iii

5 QUESTIONS PRESENTED I. WHETHER THE COURT OF APPEALS PROPERLY UPHELD THE CONSTITUTIONALITY OF PASPA SINCE IT REPRESENTS A VALID EXERCISE OF CONGRESSIONAL POWER UNDER THE COMMERCE CLAUSE AND DOES NOT VIOLATE THE PRINCIPLES OF ANTI-COMMANDEERING OR EQUAL SOVEREIGNTY, AND THEREFORE TULANIA S PROPOSED LAW REGULATING SPORTS GAMBLING IS INVALID AND WAS PROPERLY ENJOINED. II. WHETHER THE COURT OF APPEAL CORRECTLY HELD THAT THE RELOCATION OF THE N.O. S, A MAJOR LEAGUE BASEBALL CLUB, IS EXEMPT UNDER ANTITRUST LAW BECAUSE CONGRESS INTENDED THE EXEMPTION TO APPLY AS PER SUPREME COURT PRECEDENT TO UPHOLD THE EXEMPTION, AND RELOCATION IS INCLUDED IN THE BUSINESS OF BASEBALL. FACTS/BACKGROUND Tulania, one of the United States located in the southern region of the country, sought to pass legislation to allow for licensing of sports gambling. The National Football League, Major League Baseball, the National Hockey League, and the National Collegiate Athletic Association (hereinafter collectively referred to as The League ) filed suit against the state of Tulania seeking to enjoin the state from enacting the law based upon the Professional and Amateur Sports Protection Act of 1992 ( PASPA ). Tulania countered that PASPA was unconstitutional based on principles of equal sovereignty and anti-commandeering. The Court of Appeals held that PASPA was constitutional, and therefore enjoined Tulania s proposed law. Additionally, the City of Bon Temps, as the successor agency to the Redevelopment 1

6 Agency of the City of Bon Temps ( RDA ), and the Bon Temps Development Authority (collectively, City or Bon Temps ), brought a third-party claim against the Office of the Commissioner of Baseball, doing business as MLB (MLB). The basis of their claim stems from the proposed relocation of the N.O. s, an MLB Club currently located in Cajun, Tulania and seeking to relocate to the city of Bon Temps. Under the MLB Constitution, Bon Temps is within the operating of another team, the Blue Devils. Despite this conflict, which required a three-quarter majority in order to waive the Blue Devils rights to the territory, the City proceeded in purchasing an option to buy land for the construction of a stadium. When the City was unable to receive approval for the N.O. s relocation to Bon Temps, it complained that MLB intentionally delayed the relocation. Furthermore, the City alleged that both the territorial rights restrictions in the MLB Constitution and MLB's failure to act on the territorial dispute restrain competition in the baseball market, perpetuate the Blue Devils monopoly over the geographic market, and create anticompetitive effects that lead to consumer harm in violation of federal and state antitrust laws. The Appellate Court granted MLB s motion to dismiss the City s complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). SUMMARY OF THE ARGUMENT As correctly held by the Court of Appeals, PASPA is constitutional. The enactment of the legislation is a valid exercise of congressional power under the commerce clause and it does not violate the principles of anti-commandeering or equal sovereignty. Therefore, Tulania s proposed law regulating sports gambling was properly enjoined. Furthermore, due to Congress intent to extend the antitrust regulation exemption for baseball beyond the reserve clause and 2

7 extensive history evidencing the legality of such exemption, the relocation of the N.O. s is exempt from antitrust law. Congress authority to regulate economic activity that substantially affects interstate commerce arises from Article I, 8 of the Constitution, which gives Congress authority to, regulate Commerce with foreign Nations, and among the several States U.S. Const., Art. I, 8, cl. 3. The United States Court of Appeals for the Third Circuit ( Third Circuit ) found that PASPA was a valid exercise of such authority, explicitly stating that the licensing of a quintessentially economic activity is within Congress power under the Commerce Clause. NCAA v. Governor of N.J., 730 F.3d 298, 225 (3d Cir. N.J. 2013). The decision of the Court of Appeals for the Fourteenth Circuit coincides directly with the decision of the Third Circuit, affirming the constitutionality of and leaving only the question of whether PASPA violates the principles of anti-commandeering or equal sovereignty. The anti-commandeering principle prohibits Congress from enlisting the States to do the work of federal officials. The Constitution establishes a system of dual sovereignty preserved by the Supreme Court, limiting the federal government to the powers specifically conferred by the Constitution and leaving the States with the remainder. Laws that directly compel the States to enforce or enact federal programs will be struck down. PASPA does not violate the anticommandeering principle for several reasons: it is permissible under the Supremacy Clause of the U.S. Constitution since it represents a regulation in a pre-emptible field, it is a permissible prohibition of state action, and because the only two laws overturned by the anti-commandeering clause are clearly distinguishable from the case at bar. Furthermore, PASPA does not violate the equal sovereignty of the States. This principle, upheld by the Supreme Court, requires the power and rights of the States under the Constitution 3

8 to be equal. Petitioners have argued that PASPA violates this principle because it allows Nevada to continue licensing sports gambling, while prohibiting other states from doing the same. Petitioners have used two cases addressing the Voting Rights Act of 1965 ( VRA ) to support their argument for the violation of equal sovereignty; however, both of the cases are distinguishable and the VRA was allowed to survive both challenges. For the above reasons, PASPA is constitutional and Tulania s law was properly enjoined. The relocation of the N.O. s is exempt from antitrust regulation for several reasons: baseball s antitrust exemption applies to the entire business of baseball, and not just to the reserve clause, and Congress intent to exempt baseball from antitrust regulation is evident through its refusal to enact legislation to the contrary as interpreted by a bevy of Supreme Court decisions. Furthermore, baseball has an extensive history of exemption from antitrust regulation. Baseball was originally exempted from antitrust regulation in a 1914 New York Supreme Court case in which the Court decided that although baseball was considered to be a monopoly, since it did not qualify as interstate commerce, it would not fall under the scope of antitrust regulation. Am. League Baseball Club of Chi. v. Chase, 86 Misc. 441 (N.Y.S. 1914). The Supreme Court agreed with this decision in Fed. Baseball Club, Inc. v. Nat l League of Prof l Baseball Clubs, also finding that baseball was not engaged in interstate commerce and was therefore exempt from antitrust regulation. 259 U.S. 200 (1922). Despite later disagreeing with Congress decision to exempt baseball from antitrust regulation, the Supreme Court has continually affirmed decisions that uphold the baseball exemption, stating that if the exemption is to be abolished or changed, such must be done through legislative, not judicial, action. In 1998, Congress took action through the Curt Flood Act which subjects baseball to some antitrust regulation, but preserves the long-standing antitrust exemption for the business 4

9 of baseball, including matters relating to relocation and franchise expansion. 15 U.S.C. 26b(a) (1998); see also Morsani v. Major League Baseball, 79 F. Supp. 2d 1331, 1336 (M.D. Fla. 1999) stating, Congress explicitly preserved the exemption for all matters relating to or affecting franchise expansion, location or relocation. For all of the stated reasons, the relocation of the N.O. s is therefore exempt from antitrust law. STANDARD OF REVIEW The Supreme Court will review the lower court s decision de novo. ARGUMENT I. THE COURT OF APPEALS CORRECTLY HELD THAT PASPA IS CONSTITUTIONAL SINCE IT REPRESENTS A VALID EXERCISE OF CONGRESSIONAL POWER UNDER THE COMMERCE CLAUSE AND DOES NOT VIOLATE THE PRINCIPLES OF ANTI-COMMANDEERING OR EQUAL SOVEREIGNTY, AND THEREFORE TULANIA S PROPOSED LAW REGULATING SPORTS GAMBLING WAS PROPERLY ENJOINED. The matter before the court is, at its most basic level, quite simple: If two laws conflict with each other, the courts must decide on the operation of each." Marbury v. Madison, 5 U.S. 137 (1803). Tulania s proposed law seeks to license gambling on professional and amateur sporting events, which is undeniably a violation of 3702 of the Professional and Amateur Sports Protection Act ( PASPA ). 28 USCS The only question, therefore, is whether PASPA is constitutional. The United States Court of Appeals for the Fourteenth Circuit ( Court of Appeals ) correctly held that PASPA is valid under the Commerce Clause and therefore Tulania s proposed law is preempted and was properly enjoined. With PASPA, Congress exercised its constitutional authority to regulate economic activity that substantially affects interstate commerce. Article I, 8 of the Constitution gives Congress the express authority to regulate Commerce with foreign Nations, and among the 5

10 several States U.S. Const., Art. I, 8, cl. 3. For nearly a century, the Supreme Court has interpreted this clause as giving Congress considerabl[e] latitude in regulating conduct and transactions. United States v. Morrison, 529 U.S. 598, 608 (2000). The Court has allowed even greater leniency when Congress is regulating economic activity. See Wickard v. Filburn, 317 U.S. 111 (1942), (establishing the principle that if the regulated activity is arguably commercial, the Court will look to see whether the cumulative effect of the activity substantially affects interstate commerce, even if the activity taken alone would not) and United States v. Lopez, 514 U.S. 549, 559 (1995) (finding that Congress may regulate an activity that substantially affects interstate commerce if it arise[s] out of or [is] connected with a commercial transaction. ) Although the lower court moved on to issues of anti-commandeering and equal sovereignty without much discussion of whether PASPA was otherwise constitutional, its decision implies that the statute is a valid exercise of congressional power, since it regulates an economic activity. If there is any doubt, this Court should look to the court s decision in NCAA v. Governor of N.J., which involved a challenge to the constitutionality of PASPA by the state of New Jersey. 730 F.3d 208, 225 (3d Cir. N.J. 2013). There, the United States Court of Appeals for the Third Circuit ( Third Circuit ) found that PASPA was a valid exercise of Congressional power under the Commerce Clause based on the following: At bottom, it is clear that PASPA is aimed at an activity that is "quintessentially economic" and that has substantial effects on interstate commerce. Prohibiting the state licensing of this activity is thus a "rational... means of regulating commerce" in this area and within Congress' power under the Commerce Clause. Id. (internal citations omitted). Having established that PASPA is valid under the Commerce Clause, the only remaining questions are whether the Appellate Court was proper in holding that the law did not violate constitutional principles of anti-commandeering or equal sovereignty. 6

11 A. PASPA DOES NOT VIOLATE THE ANTI-COMMANDEERING PRINCIPLE BECAUSE IT REPRESENTS REGULATION OF A PRE-EMPTIBLE FIELD, CONGRESS IS PERMITTED TO PROHIBIT CERTAIN STATE ACTIONS, AND PASPA IS DISTINGUISHIBLE FROM THE ONLY TWO LAWS EVER SUCCESSFULLY CHALLENGED UNDER THE ANTI-COMMANDEERING PRINCIPLE. The anti-commandeering principle, as summarized by the Court of Appeals, bars Congress from conscripting the states into doing the work of federal officials. It is true, of course, that the Constitution establishes a system of dual sovereignty that leaves to the States all powers not conferred to the federal government. See, generally U.S. Const., amdt. X. The Supreme Court preserves this limitation and has stated that it will strike down laws that commandeer the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program. Hodel v. Va. Surface Mining & Reclamation Ass'n, 452 U.S. 264, 283 (1981) ( Hodel ). Still, the scope of the anti-commandeering principle is not as broad as Petitioners would have this Court believe, and for that reason the Supreme Court has struck down laws based on the principle only twice, both of which are distinguishable from PASPA. Additionally, in 2013 the Third Circuit held in NCAA v. Governor of N.J. that PASPA does not violate the anti-commandeering principle for the reasons discussed more fully below. i. PASPA represents a regulation in a pre-emptible field and is therefore permissible under the Supremacy Clause of the U.S. Constitution. As with the laws in Hodel and F.E.R.C., PASPA represents a permissible regulation by Congress where it could have pre-empted the States entirely under the Supremacy Clause. See Hodel, 452 U.S. at 264 (1981) and F.E.R.C. v. Mississippi, 456 U.S. 742 (1982) ( F.E.R.C. ). In Hodel, the challenged law imposed minimum federal standards on coal mining operations and required states that wished to regulate mining operations to enact[] laws implementing the environmental protection standards. Hodel, 452 U.S. at 271. If a state did not wish to do so, the 7

12 federal government would step in to regulate the industry. Id. When coal miners challenged the statute the Supreme Court upheld the provisions. Id. at 273. The Court later explained that the law did not violate the anti-commandeering principle because it merely made compliance with the federal standards a precondition to continued state regulation in an otherwise pre-empted field. Printz v. United States, 521 U.S. 898, 926 (1997). Soon after, in F.E.R.C., the Court upheld a similar, although slightly more intrusive provision which required state utility regulators to consider whether to enact certain energy standards while leaving the ultimate choice up to the states themselves. 456 U.S. at 746 (1982). The Court again held that the law was valid, even though it required states to expend resources to consider the federal standards. Id. The Court reasoned, as it did in Hodel, that Congress could have pre-empted the States entirely but chose leave room for the states to maneuver. NCAA v. Governor of N.J., 730 F.3d at 225 (3d Cir. N.J. 2013) (discussing the Hodel decision). PASPA, when considered alongside the challenged laws in Hodel and F.E.R.C., is even less intrusive. It does not require the states to adopt any federal regulation or even expend resources to investigate or enforce federal regulations. Instead, it simply requires that states do not license, or authorize by law [sports] gambling. 28 USCS As the Third Circuit noted, despite the opinion of the Petitioners and the Dissenting Judge in this case, PASPA does not require the State to pass any law or even keep existing laws prohibiting licensed gambling in place. NCAA v. Governor of N.J., 730 F.3d at 232 (3d Cir. N.J. 2013). The law simply prohibits states from issuing licenses to gamble, even though Congress could have, via the Commerce and Supremacy Clauses, pre-empted the entire field of sports gambling regulation. Accordingly, PASPA represents a permissible regulation in a pre-emptible field and does not violate the anticommandeering principle. 8

13 ii. PASPA represents permissible prohibition of state action. Further, PASPA is constitutionally valid under a line of cases in which the Supreme Court has upheld affirmative prohibitions on state action, even when the federal law invalidated existing state laws. In South Carolina v. Baker ( Baker ), the Court upheld federal laws that prohibited states and private individuals from issuing bearer bonds. 485 U.S. 505, 511 (1988). As a result, the statutes required states to amend a substantial number of statutes in order to comply with new federal regulations. Id. The Court explained that the regulations were permissible because they simply applied to states the same regulations that applied to private parties. Id. at 514. Similarly, in Reno v. Condon, the Court rejected an anti-commandeering challenge to a federal law that prohibited states from divulging citizens personal information obtained by state departments of motor vehicles. 528 U.S. 141, 143 (2000). South Carolina argued that the act required expending state resources and effectively nullified state laws which allowed for the disclosure of that information. Id. at 150. The Court upheld the constitutional validity of the law on the grounds that it d[id] not require the States in their sovereign capacity to regulate their own citizens[,]... d[id] not require the [State] Legislature[s] to enact any laws or regulations, and it d[id] not require state officials to assist in the enforcement of federal statutes regulating private individuals." Id. at 151. PASPA functions exactly like the laws in Baker and Reno, preventing states from issuing licenses to gamble in the same way the states were prohibited from issuing bearer bonds and divulging personal information. In both cases, the Supreme Court upheld the validity of the laws as within the scope of Congress power under the Commerce Clause. See Reno, 528 U.S. at 152. While the Petitioners would have this court read into PASPA the requirement that Tulania 9

14 regulate and enforce the federal statute, the Third Circuit properly dismissed this argument, saying: When Congress passes a law that operates via the Supremacy Clause to invalidate contrary state laws, it is not telling the states what to do, it is barring them from doing something they want to do. Anti-commandeering challenges to statutes worded like PASPA have thus consistently failed. NCAA v. Governor of N.J., 730 F.3d at 230 (3d Cir. N.J. 2013). See, e.g. Kelley v. United States, 69 F.3d 1503, 1510 (10th Cir. 1995) (upholding constitutionality of intrastate motor carrier statute, noting that it preempted state law and in doing so did not "compel[] the states to voluntarily act by enacting or administering a federal regulatory program"); California Dump Truck Owners Ass'n v. Davis, 172 F. Supp. 2d 1298, 1304 (E.D. Cal. 2001) (upholding constitutionality of FAAAA provision against an anti-commandeering challenge, noting that, unlike the laws in New York and Printz, the FAAAA provision, insofar as it merely preempts state law, "tell[s] states what not to do"). PASPA represents an appropriate exercise of Congress ability to prohibit certain activity by states via the Commerce Clause and requires no further action by Tulania which would "seek to control or influence the manner in which States regulate private parties." Reno, 528 U.S. at 151. (citing Baker at ). iii. Comparing PASPA to the only two laws ever overturned by the anticommandeering clause reveals that the law does not rise to the level of commandeering state government to do the work of the federal government. If there remains any doubt about the constitutionality of PASPA, the Court should contrast PASPA with the laws at issue in Printz v. U.S. ( Printz ) and New York v. U.S. ( New York ) the only two successful challenges ever made under the anti-commandeering principle to see that PASPA is unlike either statute and does not rise to the level of 10

15 commandeering the legislative process. Printz v. United States, 521 U.S. 898 (U.S. 1997) and New York v. United States, 505 U.S. 144 (U.S. 1992). New York involved a federal statute which required states to take-title to radioactive waste and assume responsibility for any waste not disposed of in accordance with the federal standards. New York at The Court struck down the law, finding that it did exactly what the anti-commandeering principle was designed to prevent: compelled the states to either enact a federal regulatory program or expend resources in taking title to and responsibility for the waste. Id. In Printz, the Court struck down parts of the Brady Act that required states to run background checks on citizens seeking to purchase guns. Printz at 935. The Court held that Congress may neither issue directives requiring the States to address particular problems, nor command the States' officers... to administer or enforce a federal regulatory program." 521 U.S. at 935. The Court was also troubled that these provisions required states to "absorb the financial burden of implementing a federal regulatory program" and "tak[e] the blame for its... defects, an issue first raised by the Court in New York. Id. at 930. The challenged provision in PASPA is wholly unlike the laws in New York and Printz. As the Third Circuit held, unlike the problematic take title provision and the background check requirements, PASPA does not require or coerce the states to lift a finger they are not required to pass laws, to take title to anything, to conduct background checks, to expend any funds, or to in any way enforce federal law. NCAA v. Governor of N.J., 730 F.3d at 231 (internal citations omitted). The dissenting opinion in the Court of Appeals decision cites Printz in opposition to PASPA based on the rule that [t]he Federal Government may [not] issue directives requiring the States to address particular problems. NFL, et. al., v. Governor of Tulania (14 th Cir. 2014) (citing Printz at 935). This reflects a fundamental misunderstanding by 11

16 the judge, who apparently reads into PASPA a requirement that the states enforce a federal regulatory program. In reality, the states are not even required, like the states were in F.E.R.C., to expend resources considering federal regulatory regimes, let alone to adopt them. NCAA v. Governor of N.J., 730 F.3d at 231. Accordingly, this Court should find, as both the Court of Appeals in this case and the Third Circuit have, that PASPA does not violate the anticommandeering principle since it contains no "directives requiring the States to address particular problems" and no "command[s] to the States' officers... to administer or enforce a federal regulatory program." Id. (internal citations omitted). B. PASPA DOES NOT VIOLATE THE EQUAL SOVEREIGNTY OF THE STATES SINCE IT IS DISTINGUISHABLE FROM THE LAW IN VRA AND TARGETS SPECIFICALLY THOSE STATES THAT WOULD BE REQUIRED TO STOP THE SPREAD OF SPORTS GAMBLING, WHICH IS THE STATED PURPOSE OF THE LAW. Finally, the Court should reject Petitioners attempt to cast PASPA as violative of the equal sovereignty of the states. The principle of equal sovereignty stems from the Supreme Court s holding that [e]quality of constitutional right and power is the condition of all the States of the Union, old and new. Escanaba & Lake Mich. Transp. Co. v. Chicago, 107 U.S. 678, 689 (1883). The principle has since been qualified to allow for, among other things, remedies for local evils which have subsequently appeared. Northwest Austin Municipal Utility District Number One v. Holder, 557 U.S. 193 (2009) ( Northwest Austin ) (quoting South Carolina v. Katzenbach, 383 U.S. 301, 328 (1966)). Petitioners claim that PASPA violates the principle of equal sovereignty because it allows Nevada to continue licensing sports gambling while prohibiting other states from doing so. The Court of Appeals effectively summarized several reasons why Petitioners reliance on Northwest Austin and Shelby is misplaced, and therefore rejected Petitioners equal sovereignty challenge to PASPA. Since PASPA is distinct from 12

17 previously challenged laws, and because it targets only those states necessary to stop the spread of sports gambling, it does not violate the principle of equal sovereignty. Among other things, Petitioners seek to compare PASPA, a relatively minor sports gambling law, to the Voting Rights Act of 1965 ( VRA ), which targeted historically racially discriminatory states in order to ensure racial equality in voting. See 79 Stat In Northwest Austin, the Supreme Court expressed concerns over the VRA due to its differentiation between the states. 557 U.S. at 194. The Court revisited the same provision in Shelby County, Alabama v. Holder ( Shelby ), and once again reiterated the importance of basic principles of equal sovereignty. 133 S. Ct (2013). Remarkably, the Supreme Court allowed the challenged provisions of the VRA to survive in both Northwest Austin and Shelby. Id. As the Court of Appeals noted, invalidating PASPA based on these two cases would be illogical both because the VRA is fundamentally different from PASPA and because even the VRA provision in question was allowed to continue despite its differentiation between states. NFL, et. al., v. Governor of Tulania (14 th Cir. 2014). See, also Shelby at 2624, (explaining that the VRA was a special circumstance given that it represented an uncommon exercise of congressional power in an area the Framers of the Constitution intended the States to keep for themselves the power to regulate elections. ) Unlike the VRA, PASPA was passed via the Commerce Clause, and is therefore not as limited as the regulation of elections pursuant to the Reconstruction Amendments. As the Court of Appeals properly observed, This only makes sense: Congress' exercises of Commerce Clause authority are aimed at matters of national concern and finding national solutions will necessarily affect states differently; accordingly, the Commerce Clause, [u]nlike other powers of [C]ongress[,]... does not require geographic uniformity. Id. at 13 (citing Morgan v. Virginia, 13

18 328 U.S. 373, 388 (1946)). The Court of Appeals properly pointed out that there is no Supreme Court authority to suggest that the principle of equal sovereignty applies equally, or at all, in the context of the Commerce Clause. Id. Still, Petitioners argue that laws treating states differently can only survive if they address local evils. Id. at 13. Even if the equal sovereignty principal applied in the same manner to laws passed under the Commerce Clause, an idea with no supporting precedent, PASPA is precisely tailored to solve the problem contemplated by Congress to stop the spread of statesanctioned sports gambling. Id. at 14. Targeting only those states which did not already have laws licensing sports gambling in place is thus the appropriate measure needed to address Congress concern over the spread of state-sanctioned gambling. For these reasons, PASPA does not violate the equal sovereignty principle and was therefore properly upheld by the Court of Appeals. II. THE RELOCATION OF THE N.O. S IS EXEMPT UNDER ANTITRUST LAW BECAUSE CONGRESS INTENDED THE EXEMPTION TO APPLY AS PER SUPREME COURT PRECEDENT TO UPHOLD THE EXEMPTION, AND RELOCATION IS INCLUDED IN THE BUSINESS OF BASEBALL. The Court of Appeals correctly concluded that the federal antitrust exemption for the business of baseball extends beyond the reserve clause to include franchise relocation. Thus, MLB s alleged interference with the N.O. s relocation to Bon Temps is exempt from antitrust regulation. The Supreme Court should affirm the Court of Appeals decision in favor of the National Football League, Major League Baseball, the National Hockey League, the National Collegiate Athletic Association, and the Office of the Commissioner of Baseball (collectively hereinafter the League ). It is evident from baseball s history of exemption from antitrust laws, Congress s intent to exclude baseball from antitrust legislation, and a slew of past Supreme 14

19 Court cases, which repeatedly uphold the exemption, that baseball s antitrust exemption applies to the entire business of baseball and not merely to the reserve clause. A. A HISTORICAL ANALYSIS OF BASEBALL S EXEMPTION FROM FEDERAL ANTITRUST LEGISLATION REFLECTS CONGRESS S INTENT TO UPHOLD BASEBALL S EXEMPTION AS INTERPRETED BY THE SUPREME COURT. During the nineteenth century, federal antitrust legislation came to the forefront of national concern due to the public s hostility toward big business and the fear of stifled individual innovation. Congress responded with the Sherman Antitrust Act, intended to prevent monopolies and promote competition. See 15 U.S.C. 1-7 (1976). Section 1 of this act provides that every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." 15 U.S.C. 1 (1976). The first antitrust suit concerning baseball involved a player who alleged that baseball was a monopoly because his team would not let him switch to another team, violating antitrust legislation. Am. League Baseball Club of Chi. v. Chase, 86 Misc. 441 (N.Y.S. 1914). The New York Supreme Court found baseball to be a monopoly, yet, ultimately concluded that baseball did not qualify as interstate commerce, stating that "baseball is an amusement, a sport, a game that comes clearly within the civil and criminal law of the state, and it is not a commodity or an article of merchandise subject to the regulation of Congress on the theory that it is interstate commerce." Id. at 459. Therefore, baseball was not subject to antitrust provisions. Baseball enjoys certain exceptions to normal antitrust laws. The Supreme Court first addressed baseball s antitrust exemption in Fed. Baseball Club, Inc. v. Nat l League of Prof l Baseball Clubs, 259 U.S. 200 (1922). In the unanimous decision, the Supreme Court concluded 15

20 that professional baseball was exempt from antitrust legislation because it was not engaged in interstate commerce, a requirement for the application of the Sherman Antitrust Act. The Court decided that trade and commerce require the transfer of something, and although players travel from place to place, they are not the game, and patrons of the game are not transferred anything in the process. Id. at 201. Since 1922, the Supreme Court has continued to uphold baseball s federal antitrust exemption. In Toolson v. New York Yankees, Inc., the Supreme Court affirmed baseball s antitrust exemption, stressing the importance of the responsibility that Congress, not the courts, have regarding amendment of the exemption. 346 U.S. 356 (1953). The Supreme upheld the exemption again, in Flood v. Kuhn, conceding that it was an anomaly and an aberration confined to baseball, but maintaining that the power to abolish the exception belonged to Congress. 407 U.S. 258 (1972). Flood overturned Federal Baseball in one respect: it determined that professional baseball is a business that is engaged in interstate commerce; however, this determination did not alter the answer to the larger question of whether baseball is exempt from antitrust regulation. Congress had not acted to amend its original stance on baseball s exemption; therefore, it was clear that it intended baseball to remain outside of the scope of antitrust regulation. Id. at 284. Thus, the Supreme Court, once again, nodded to the legislative branch to take action on baseball s exemption issue. Id. Time and time again, the Supreme Court has looked to Congress to address the issue of baseball s antitrust exemption, asserting that the judicial branch cannot make such a decision. Congress has the power to eliminate baseball s exemption but has chosen not to do so. Whether the exemption is plausible or an aberration is not for the courts to decide but rather is left for Congress to address. Congress has created numerous bills that address baseball s antitrust 16

21 exemption, but none have been enacted. Id. at 281. For example, if either the Professional Sports Antitrust Clarification Act or the Professional Sports Franchise Relocation Act had been enacted, sports leagues, including baseball, among other requirements and prohibitions would have been prevented from violating antitrust laws when considering franchise relocation. Thus, Congress has the power to change the nature of baseball and any inconsistency and illogic of long standing that is to be remedied by the Congress and not by [the] Court. Id. at 284. This separation of powers reasoning and the previous Supreme Court decisions support baseball s exemption from antitrust laws as they apply to franchise relocation. Congress has, in fact, taken action in 1998 by way of the Curt Flood Act, which subjects "the conduct, acts, practices or agreements of persons in the business of organized professional Major League Baseball relating to or affecting employment to play baseball at the Major League Baseball level" to antitrust laws to the same extent such laws apply to other professional sports. 15 U.S.C. 26b(a) (1998). However, Congress intentionally excluded the longstanding antitrust exemption for the business of baseball with respect to franchise relocation. 15 U.S.C. 26b(a)-(b). Therefore, Congress explicitly preserved the exemption for all matters relating to or affecting franchise expansion, location or relocation. Morsani v. Major League Baseball, 79 F. Supp. 2d 1331, 1336 (M.D. Fla. 1999) (quoting 15 U.S.C 26b(b)(3) (1998)); see also Federal Baseball, 407 U.S. at 282 ( Congress as yet has had no intention to subject baseball s reserve system to the reach of the antitrust statutes. This, obviously, has been deemed to be something other than mere congressional silence and passivity ). This limitation, coupled with Congress inaction for nearly 100 years regarding the enactment of legislation eliminating the exemption of the business of baseball from regulation, is convincing evidence of the legislative branches intent to leave the exemption intact. 17

22 B. THE FEDERAL ANTITRUST EXEMPTION FOR THE BUSINESS OF BASEBALL IS NOT LIMITED TO THE RESERVE CLAUSE AND EXTENDS TO FRANCHISE RELOCATION. Baseball s antitrust exemption encompasses franchise relocation rules because franchise relocation falls under the scope of the business of baseball. This exemption is the direct result of Congressional inaction to change baseball s antitrust exemption status. [I]f any change is to be made, it [must] come by legislative action. Flood, 407 U.S. 258, 283. Thus, even if the Blue Devils have a monopoly over the geographic market, the potential anticompetitive effects are exempt from antitrust laws. Originally, baseball s antitrust exemption was based on the Supreme Court s determination in 1922 that baseball did not qualify as interstate commerce. The Supreme Court has since questioned its original rationale, albeit upheld the holding which determined that the exemption applies to the entire business of baseball, which includes franchise location; it further clarified that it is Congress duty to make any legislative changes to baseball s exemption. The vast majority of lower court cases challenging baseball's exemption have held that the exemption extends beyond baseball's reserve clause. Both the Seventh and Eleventh Circuits have specifically addressed the issue and held that baseball's exemption applies to the entire business of baseball. See, e.g., Charles O. Finley & Co. v. Kuhn, 569 F.2d 527 (7th Cir. 1978); Prof l Baseball Sch. & Clubs, Inc. v. Kuhn, 693 F.2d 1085 (11th Cir. 1982). In Prof l Baseball Sch. & Clubs, Inc. v. Kuhn, the Eleventh Circuit affirmed the lower court s decision, which excluded baseball from antitrust laws, stating that [a]lthough it may be anomalous, the exclusion of the business of baseball from the antitrust laws is well established. 693 F.2d (11th Cir. 1982). It defined the business of baseball to mean integral parts of baseball, such as player assignment and franchise relocation. Id. The Southern District of Texas also defined 18

23 the business of baseball as baseball s integral parts, which include aspects central to the game. See Henderson Broad. Corp. v. Hous. Sports Ass'n, 541 F. Supp. 263 (S.D. Tex. 1982). Various courts have concluded that relocation rules are integral parts of baseball and fall within the scope of the business of baseball. The location of a team's games is an integral part of the business of baseball, covered by the antitrust exemption, because it affects the team s schedule, rivals, and opportunity to make it to the playoffs. Some divisions are weaker than others and thus, a team located in a region of a weak division might have a better chance of making the playoffs then it would if the team was located in a region of a stronger division. In the instant case, the MLB s alleged interference with the N.O. s relocation efforts presents an issue of league structure that is an integral part of the business of baseball. As such, it falls squarely within baseball s antitrust exemption. Although most courts agree that the business of baseball extends beyond the reserve clause, some courts have come to a different conclusion. In Piazza v. Major League Baseball, the court determined that Flood invalidated both Federal Baseball and Toolson reasoning that the facts at issue only applied to the reserve clause. 831 F. Supp. 420 (E.D. Pa. 1993). The Piazza court determined that baseball s exemption did not apply to franchise relocation, but it recognized that "relocation could implicate matters of league structure, and thus be covered by the exemption. Piazza, 831 F. Supp. at 441. However, in Federal Baseball, Justice Oliver Wendell Holmes, Jr. did not address the reserve clause. Rather, the opinion discussed various aspects and operations involved in the business of baseball, inferring an exemption that goes beyond the reserve clause. Furthermore, Toolson directly addressed the reserve clause and also determined baseball to be exempt from antitrust legislation, assigning responsibility to Congress to enact legislation concerning antitrust 19

24 issues if and when further legislation became necessary. 346 U.S. 356 (1953). Then, once more, in Flood, the Supreme Court upheld the exemption and turned to the legislative branch to take action on baseball antitrust exemption. Flood, 407 U.S. 258, 285 (stating that Congress had no intention of including the business of baseball within the scope of the federal antitrust laws." In affirming both Federal Baseball and Toolson, Flood upheld baseball s exemption from antitrust laws and reinforced the extension of the exemption beyond the reserve clause to the entire business of baseball. In rejecting Piazza, a federal district court judge interpreted Federal Baseball, Toolson, and Flood, finding that the holdings that exempted the business of baseball from antitrust laws to have been reached, not based on any original antitrust analysis but instead because of [the Courts ] explicit determination that any change should come from Congress. Major League Baseball v. Butterworth, MLB, 181 F. Supp. 2d 1316, 1330 (N.D. Fla. 2001) (further stating that the Flood decision was, not so much a decision about antitrust law as about the appropriate role of the judiciary within our constitutional system ). Until it enacts legislation to the contrary, it has been determined that Congress does not intend to change the long-standing antitrust exemption for the business of baseball with respect to franchise relocation issues. Thus, the federal antitrust exemption for the business of baseball must remain unchanged and is not limited to the reserve clause. CONCLUSION For the reasons stated in this brief, Respondent respectfully requests that this Court affirm the Appellate Court s decision that PASPA is constitutional and that the baseball exemption applies to franchise relocation. This 12th day of January, Anonymous Number: 22 20