Five US sports leagues who lost the PASPA sports-betting legal battle have also had their request to split a damages claim from the case turned down.
Five prominent United States-based organizations have failed in their collective attempt to have a multimillion-dollar claim for damages bifurcated (split away from) other ongoing post-ruling matters in the wake of last month’s US Supreme Court PASPA (Professional and Amateur Sports Protection Act) ruling.
That ruling, which nullified PASPA and opened the US for sports betting on a state-by-state basis, went in favor of the State of New Jersey and the New Jersey Thoroughbred Horsemen’s Association (NJTHA), parent company of New Jersey’s Monmouth Park Racetrack. The NJTHA filed a claim for damages in early June against the five sports associations – the National Football League (NFL), the National Basketball Association (NBA), Major League Baseball (MLB), the National Hockey League (NHL), and the National Collegiate Athletic Association (NCAA).
The NJTHA’s claim could exceed $150m (£113m) if granted, well in excess of a $3.4m (£2.6m) bond the leagues posted years ago when they filed a suit in an attempt to block New Jersey’s sports-legalization plans.
Court conference determined result
Following the NJTHA’s damages filing and a response motion from the leagues’ counsel seeking to split that claim away from other post-ruling matters, the two sides met on June 7 to discuss and formalize their opposing stances on the issue. The leagues’ counsel declared in a letter to the court that the NJTHA’s stance was “meritless, if not frivolous”, while a follow-up letter to the court from the NJTHA’s legal team declared the bifurcation attempt to be both a delaying tactic and an attempt for a retrial of certain aspects of the PASPA-overturning case.
As the NJTHA’s counsel wrote: “They want two (and perhaps more) bites at the apple.”
Both sides offered position statements within a document prepared prior to a June 20 hearing with US Magistrate Judge for the US District of New Jersey Lois Goodman, who also heard oral arguments before ruling on the bifurcation request.
Motion denial evident from post-conference filing
A formal denial of the leagues’ motion to split the damages claim apart from other case matters has yet to be published by Judge Goodman’s court, though the leagues’ loss is evident from the submission of a “Stipulation and [Proposed] Order by the leagues’ counsel.
That proposed order included the following key text, based on an agreement reached by both sides at the June 20 conference:
WHEREAS, at a June 20, 2018, conference with the Honorable Lois H. Goodman, Plaintiffs and NJTHA agreed to the following;
IT IS this ____ day of ______, 2018, ORDERED THAT:
A. The Court’s consideration of the merits of the Motion shall, at this time, be limited to the following issues:
(1) Whether, as a matter of law, NJTHA was “wrongfully enjoined” by the temporary restraining order entered by the Court on October 24, 2014 (the “TRO”);
(2) If the Court concludes that NJTHA was “wrongfully enjoined,” then whether, as a matter of law, NJTHA is entitled to recover the full amount of the $3.4 million bond that was issued as security for the TRO (plus interest sought by NJTHA); and
(3) Whether NJTHA’s asserted right to damages in excess of the $3.4 million bond amount (plus interest sought by NJTHA) due to alleged “bad faith” on the part of Plaintiffs, including NJTHA’s claims for restitution and unjust enrichment, can and/or should be decided in favor of either party as a matter of law.
B. Plaintiffs shall file an opposition to the Motion addressing the foregoing issues by
no later than July 16, 2018.
C. NJTHA shall file its reply submission by no later than August 13, 2018. …
Additional points in the proposed order deal with ongoing discovery matters, but the second (B) and third (C) points define the leagues’ loss in the bifurcation attempt. That the “plaintiffs” (the leagues) should file an “opposition” to the motion for damages while the other side (NJTHA) receives an opportunity to reply frames the unpublished result that the leagues’ bifurcation attempt has failed. The first point (A) defines that Judge Goodman will limit legal arguments in the damages dispute to some of the most salient legal points, but that the question over the damage claim’s validity will not be split away from the rest of the PASPA case.
Another discovery battle looms
If the NJTHA continues to prevail and Judge Goodman finds that any part of the claims for damages is valid, then another lengthy discovery battle lies ahead. The leagues have already signaled their reticence to turn over documents related to the earlier “Christie I” case, New Jersey’s first failed attempt to overturn PASPA.
The leagues’ counsel has also made return discovery demands regarding Monmouth Park’s damage estimates, and have submitted their own hoped-for discovery schedule that would push any decision in the matter well into 2019.
From the joint letter prepared before the June 20 court conference, the leagues’ counsel offered this if the bifurcation request was denied:
- Fact discovery to be completed six months following the bifurcation order;
- Expert discovery to be completed two months after fact discovery ends;
- Plaintiffs’ opposition to NJTHA’s bond motion to be submitted 30 days after the close of all discovery; and
- NJTHA’s reply papers to be submitted fourteen days later.
The NJTHA, in return, has agreed to the general timeframe but pleads the court to rule on the disputed issues and set the discovery clock in motion as soon as possible.
