Yesterday, the NCAA and the big four professional sports leagues filed a lawsuit against New Jersey Governor Chris Christie, alleging that the state law that was approved by NJ voters last November is a "clear and flagrant violation of federal law." The five sports organizations (plaintiffs) are asking the U.S. District Court for the District of New Jersey for preliminary and permanent injunctions against NJ officials, to enjoin (prevent) them from carrying out the law that authorizes sports betting in New Jersey. Here's why the State of New Jersey will prevail:

First of all, there's a legitimate argument that the federal statute at issue—the Professional & Amateur Sports Protection Act (PASPA), 28 U.S.C. § 3702—is unconstitutional. Second, even if the statute is constitutional on its face, because the NJ voters overwhelmingly approved the referendum, the state can argue that the statute is unconstitutional as applied because it violates the Tenth Amendment (state sovereignty).

And perhaps the most compelling reason that New Jersey will prevail is that courts don't hand out injunctions like Roger Goodell hands out fines and suspensions. There's a strict, three-part test that the plaintiffs must prove: 1) a likelihood of success on the merits of the lawsuit; 2) irreparable harm is likely if the court doesn't grant the injunction; and 3) that the injunction is necessary to "balance the equities" in the controversy.

Success on the merits essentially means that the plaintiffs have a clear right to relief, or, that there's very little doubt that they will ultimately win the case. In this case, even if the plaintiffs could ultimately win, it's not so clear or obvious as to sufficiently prove a likelihood of success. To try to show their likelihood of success, the plaintiffs simply cited the federal statute at issue—which purportedly bans sports betting in all states except Nevada, Delaware, Montana, and Oregon. But there is a countervailing argument—that the federal law could be unconstitutional. Even though the plaintiffs have the burden of proof, all Gov. Christie (who was a fairly astute lawyer and federal prosecutor in his day) has to do is show the court that there's doubt.

With regard to irreparable harm, the plaintiffs said this in their complaint: 

[A]uthorization of sports gambling in New Jersey would irreparably harm amateur and professional sports by fostering suspicion that individual plays and final scores of games may have been influenced by factors other than honest athletic competition. Plaintiffs cannot be compensated in money damages for the harm that sports gambling poses to the character and integrity of their respective sporting events. Once their reputations and goodwill have been compromised, and the bonds of loyalty and devotion between fans and teams have been broken, Plaintiffs will have been irreparably injured in a manner that cannot be measured in dollars.

Once you consider the undeniable fact that, even without being lawful, sports betting is a multi-billion-dollar industry, the irreparable harm argument is almost laughable. Further, the NJ law specifically carves out local collegiate sports betting from being permissible, which chips away even more of the NCAA's assertion that they will be irreparably harmed by the law.

But there are a couple more reasons that New Jersey will prevail. Say what you want about Chris Christie; you may not like him, his mouth, or his politics, but he has a proven track record of winning. Finally, the pink elephant in the room is Atlantic City, NJ, which for all intents and purposes is the Gambling Capital of the East Coast. With all due respect to Mike Florio, I don't believe that the Third Circuit's ruling on sports betting in Delaware will be controlling in this case. As I said back in November, the state of New Jersey spent a great deal of money getting this law passed. They knew about PASPA, and they got sports betting in NJ on the ballot anyway. It wasn't easy, and it wasn't cheap, and they wouldn't have done it if they didn't believe that the benefits outweighed the risks.

READ:

 Complaint for Declaratory & Injunctive Relief, No. 3:12-cv-04947 (D.N.J. filed Aug. 7, 2012) (PDF)

SEE ALSO:

NJ Says 'Yes' to Sports Betting, But Why?

Tim Dahlberg, Time to do away with sports betting stigma

PHOTO CREDIT: DonkeyHotey

Last week, the League fired longtime grievance arbitrator Shyam Das (the guy who cast the deciding vote that overturned National League MVP Ryan Braun's 50-game suspension for testing positive for performance-enhancing drugs last month) after allowing a second player to use the so-called chain-of-custody defense. The League was certainly within its right to remove Das, who "served at the pleasure of" both MLB and the Players' Association—either side was free to remove Das, at any time, with or without cause, upon written notice. But is the League's action a sign of something more significant?

 What's happened here is that MLB removed a judge from the bench because of a philosophical disagreement—i.e. the League believes that their "independent arbitrator" should take a more relaxed view of pillars of the American justice system like the Rules of Evidence.

Alfonzo's grievance challenging his suspension raised issues that were nearly identical to those resolved in the arbitration involving Ryan Braun. It is not anticipated that any other future cases will be impacted by the circumstances raised in the grievances of these two players.

That was MLB's statement, after announcing Das's termination, and the fact that they'd reached "an agreement" with the Players' Association regarding Eliezer Alfonzo's alleged second positive drug test. Whether or not Alfonzo is suspended makes little, if any difference—he was designated for assignment by the Colorado Rockies (effectively cut from their roster) and sent to Triple-A. What's troubling, however, is the League's declaration, that the evidence issues in Braun's and Alfonzo's arbitration hearings will never be at issue again.

This type of situation is precisely why the founders of our country—in the U.S. Constitution—gave federal judges life tenure. The underlying theory of life tenure is that judges will be true to their own consciences and moral convictions, without fear of reprisal for rendering an unpopular decision. Baseball's collective bargaining agreement also had a provision with the same intent (described by attorney Craig Calcaterra in his NBC Sports blog Hardball Talk), but it seems that it failed in this case.

Although the effect of Das's removal is limited to baseball, it represents a microcosm of judicial politics in the United States, which has been a hot-button issue in states such as Mississippi, New York, New Jersey, and Ohio, and subject of the realistic fiction in books by John Grisham. N.B. read Grisham's The Appeal for a creepy tale about a tort reform group's influence on judicial elections, which results in…sorry, you'll have to read the book to find out how it ends (or just read the Wiki-spoiler review).

Earlier:

Braun Decision Affirms Fact that Appeals are Crucial to our System of Justice

Ryan Braun just became the first major league baseball player to successfully overturn a positive drug test result on appeal, and based on the immediate reactions in the press and Major League Baseball itself, you'd think the Berlin Wall had just crumbled. But before everyone jumps to the conclusion that baseball's drug policy is flawed, or that this outcome will somehow open up the proverbial floodgates to players wanting to challenge their positive drug test results, let's put it in perspective.

Prior to Braun's appeal of his October 2011 test result, twelve other positive drug test results were upheld on appeal. In terms of batting average, that's .077. By comparison, in our civil justice system, somewhere between ten and twenty percent of cases are reversed on appeal (in batting average that's .100 to .200). And according to this NY Times report, two-thirds of all death sentences are overturned on appeal (.666). So if you're José Canseco planning a comeback, don't get your size small jockstrap out of retirement yet.

If you want to be upset about something here, it should be the comments by Rob Manfred, MLB's Executive Vice-President for Labor Relations & Human Resources, who is an attorney (Hahh-vaad educated) and was one of the three attorneys that presided as arbitrators of the appeal:

Major League Baseball considers the obligations of the Joint Drug Prevention and Treatment Program essential to the integrity of our game, our Clubs[,] and all of the players who take the field. It has always been Major League Baseball’s position that no matter who tests positive, we will exhaust all avenues in pursuit of the appropriate discipline. We have been true to that position in every instance, because baseball fans deserve nothing less.

As a part of our drug testing program, the Commissioner’s Office and the Players Association agreed to a neutral third party review for instances that are under dispute. While we have always respected that process, Major League Baseball vehemently disagrees with the decision rendered today by arbitrator Shyam Das.

The reason that Braun's positive test result was thrown out was that after the tester collected the urine sample, he kept it in his refrigerator over the weekend, and it wasn't actually examined until days later when it was received by the lab in Montreal. Some call that a technicality, but in reality, once a urine sample is 24-hours old its clinical significance is worthless by medical standards.

As attorneys, we are sworn to advocate for truth, justice, and the Federal Rules of Evidence, but based on Manfred's comments, his only concern is imposing punishment, rather than making sure that punishment is first warranted or justified. Moreover, the fact that Manfred called out his colleague, for essentially voting in a manner consistent with well-established legal doctrine, casts serious doubt on his integrity. 

Ironically, baseball analyst Tim Kurkjian (@Kurkjian_ESPN), who by the way is not an attorney, hit the ball on the screws in this interview:

Just like in a court of law, both sides had a chance to present evidence, and in this case the evidence went in Ryan Braun's favor.

Did the National League's 2011 Most Valuable Player use banned substances during last season's playoffs? We don't know. After learning about the positive test result from the MLB collection, Braun had a second test performed by an independent laboratory, and that test revealed normal levels of testosterone. Braun also tested negative for banned substances on three other occasions during the 2011 season. That doesn't mean that he was clean when he was tested in early October, but given the circumstances of the first drug test, the results are clinically unreliable, and so punishment would be unjust.

Photo credit: Steve Paluch

The Barry Bonds verdicts are in. Sort of. The jury found Bonds guilty—not guilty of lying to a grand jury—guilty of one count of obstruction of justice, for allegedly misleading investigators, giving evasive testimony, etc. The jury hung on the other three charges. In our criminal justice system, no defendant is guilty of a crime unless the jury unanimously finds guilt. If even one juror has reasonable doubt, then there is no conviction. But this is not the same as an acquittal (i.e. not guilty verdict). When the jury doesn't agree unanimously, there is no verdict, and the result is a mistrial, which means that the prosecution, at its own discretion, may bring the charges again at a later date.

So what does all this mean, and what happens next? Lots of things. Barry Bonds may go to prison. He could go for a long time (unlikely), or it could be a Martha Stewart stint. According to ESPN's Roger Cossack, the judge should throw out the lone conviction. Whether or not Bonds does go to prison, the U.S. Attorney could refile the three other charges, could get convictions, and could then send Bonds to prison, or increase his sentence. But at the end of the day, does anybody (other than Barry Bonds) really care?

Indeed, there are some provocative legal questions/issues in the Bonds verdict, but aren't we all sick of hearing about Barry Lamar Bonds? So when I hear people cry out at the incredible disservice that the Bonds jury did to our justice system, it makes me chuckle—especially when it comes from a former colleague, who, once upon a time was a brilliant attorney himself.

This is proof positive that the jury just punted here. They decided to “do justice” rather than follow the evidence. I’m not OK with that. You shouldn’t be either.

So what if the jury punted. Sometimes juries do that. But so do judges, and maybe even U.S. presidents (not to mention quite a few football players). Even if Bonds gets off completely, the supposition that the jury punted isn't going to have any ameliorative effect on Bonds' baseball legacy. After all that he did in terms of home runs and records, historically, when it's all said and done, Barry Bonds will eternally be lower than even Bill Buckner.

If you feel otherwise, please chime in (that's why there's space below for comments).

Later this morning, the prosecution and defense are scheduled to give opening statements. If convicted of the most serious charge(s), Bonds could face up to 10 years in federal prison, though as a first-time offender it's unlikely that he would be sentenced to a term of more than two to two-and-one-half years.

Yesterday, the U.S. Attorney for the Northern District of California filed a third superseding indictment inUnited States v. Barry Lamar Bonds, reducing the number of felony charges to five (click the image to download a pdf copy). These are essentially the same charges comprised in Bonds' original indictment, back in November 2007, however, about six months later, prosecutors bumped it up to 15 counts. The allegations in those additional 10 charges were purportedly based on evidence the FBI obtained from documents and records seized at the home of Bonds's personal trainer, and longtime childhood friend, Greg Anderson. That evidence—regardless of whether it's overwhelmingly persuasive of Bonds's guilt—is inadmissible unless someone with personal knowledge gives court testimony to authenticate it.

Several professional athletes, including former American League MVP Jason Giambi, have testified—and will testify at trial—that Anderson supplied them with steroids. Nevertheless, Anderson's attorney, Mark Geragos told the court that his client will not testify, even if that means going back to prison. Anderson has already spent more than a year in federal lockup after the court held him in contempt for refusing to testify against

Bonds (2 weeks in July 2006; Aug. 28–Oct. 5, 2006; and Nov. 20, 2006–Nov.15, 2007). And this was in addition to the time Anderson served after he pleaded guilty to distributing steroids in 2005. U.S. District Judge Susan Illston ordered Anderson to appear March 1st, and if he still refuses to testify at the March 21st trial, the judge says she'll send him back to prison for the duration of the trial, which is expected to last a month. But given the amount of time that Anderson's already spent in prison on Bonds's behalf, the threat of going back to prison for a month isn't likely to change his mind.

As an aside, who is supposed to be paying Geragos's bill? Anderson's career went south shortly after the BALCO scandal was tied to Major League Baseball, in 2003. But isn't paying Geragos's bill the least Bonds can do for his friend under these circumstances?

So what impact will the new indictment have on Bonds's case? Probably very little. Bonds in still charged with four counts of making False Declarations Before a Grand Jury (a/k/a perjury), and one count Obstruction of Justice. The latter charge carries a maximum prison term of 10 years, though, based on the Federal Sentencing Guidelines it would be unprecedented for Bonds to get a sentence even close to that. Legal experts, including sentencing guidelines guru Doug Berman, are speculating that if convicted Bonds would more likely face 24–30 months in prison. ESPN's Roger Cossack estimated 6 months. With all due respect to Mr. Cossack, I disagree.

The Federal Sentencing Guidelines are ridiculously complex (there are people who make a living studying and teaching their subject matter). The guidelines work by setting a base level sentence for each specific offense, and then provide circumstances for deviating, up or down, from that base level. The range is also adjusted based on the convict's prior criminal history (not a factor here, because Bonds has none). In a nutshell, the base level sentence for Obstruction of Justice is 15–21 months. To complicate matters, however, if the jury finds that the obstruction "resulted in substantial interference with the administration of justice," the base sentence jumps to 24–30 months, as this California newspaper estimated. Unless the U.S. Attorney's Office files a motion to have the sentence reduced, I don't see anything in the guidelines that would do so. In sum, I'm not sure how Mr. Cossack arrived at six months.

Not to sound like a weatherman, but the statutory range of Bonds's sentence is more likely 15–30 months. This assumes, however, that all of his sentences run concurrent, rather than consecutive, which is probable. The longest prison sentence related to the BALCO scandal was six months, to Marion Jones. Anderson served three months, and Victor Conte served four. But all three were sentenced pursuant to plea deals with the U.S. Attorney. Bonds is putting the government through a lengthy and costly trial, and he's not exactly a sympathetic figure. If I had to bet, I'd guess that Bonds's sentence would be the minimum, but within the guidelines. In any case, longer than six months. The key factor will be whether the jury finds that Bonds substantially interfered with the administration of justice, which, at the low end of the guidelines, would nearly double his sentence.

Having said that, a conviction is by no means a certainty. To convict, the government must prove that Bonds intentionally lied about material facts. This is fairly tough to do, which is why perjury trials aren't very common. Convictions do happen, though. For example, in 2009, a jury convicted Olympic track coach Trevor Graham of lying to federal agents about steroid distribution, the judge sentenced him to house arrest. And in 2007, a jury convicted Scooter Libby of charges substantially similar to Bonds's.

And in 2005, fantasy sports league operator CBC Distribution filed suit against Major League Baseball Advanced Media (MLBAM, MLB's Internet division) after CBC was denied a new licensing agreement with the players' association giving it the rights to player profiles and statistics.

MLB argued that the league owned intellectual property rights in the players' right-of-publicity, which made it unlawful for fantasy leagues to profit from the identities or statistics of MLB players. In 49-page order granting summary judgment to the fantasy league, U.S. District Court Judge Mary Ann Medler said that even if the league did have intellectual property rights in the players' stats and likenesses, the First Amendment trumped the league's property interest, because the information that the fantasy leagues disseminate are facts. Facts, Medler, wrote, appear in newspapers everyday. Nobody can own them. (CBC v. MLBAM pdf file)

Paul Weiler's textbook Sports and the Law (see previous post) is nearly 1200 pages long, yet it devotes fewer than 100 pages to sports and IP law. In fact, in that single chapter of the book that addresses IP, Weiler tackles broadcast rights, copyright ownership, player publicity rights, trademarks, and group marketing of IP rights. By contrast, the book has three chapters on antitrust, two on labor relations, and even has a full chapter devoted to Title IX and intercollegiate sports. But because of how every sports franchise, conference, and league is continuously exploring how to increase the revenue earned from their branding and intellectual property, IP law, will nonetheless continue to impact the sports world for many years to come.

So what about entertainment law? I realize that I just devoted three entire posts to explain sports law, and even though this is the Sports & Entertainment Law Playbook, I haven't so much as mentioned entertainment law. Again, there is no such body of law per se, though there are so-called entertainment lawyers. I happen to be one of them. Like sports and the law, there are many different areas of law that intersect with the entertainment industry, although IP is probably the most prevalent. Artwork, sheet music, and sound recordings all need copyright and in some circumstances, trademark protection. Also, composers routinely license their scores and compositions to filmmakers and advertisers. This process inevitably involves attorneys. And just like professional athletes, artists, actors, and musicians work under contracts as well, and they also need competent legal counsel to represent their interests during negotiation. The record companies, opera houses, and concert promoters are certainly going to come to the table with the best attorneys that money can buy, so it behooves the artist to also come prepared.

Another area of law that is often overlooked in sports is antitrust, which has beleaguered professional athletes for over 100 years. So what is antitrust? The easiest way to describe it is that it functions as the law of competition—within the marketplace, that is. Antitrust laws, such as the Sherman Act prevent restraints on trade, by making it unlawful for companies to collude or conspire to fix prices of goods.  So what does this have to do with sports? Collective bargaining agreements (CBAs).

The players' associations are labor unions; their primary function is to organize and to coordinate the players' efforts in dealing collectively with the owners. CBAs are designed to restrain trade in the labor market—that's their intended purpose! So why is it okay for labor unions to organize, to maximize employee wages, but it's not okay for manufacturers to do that with widgets? The short answer is, Labor Law. More specifically, the the Clayton Act (1914) and the National Labor Relations Act (1935), which the U.S. Supreme Court has interpreted to exempt collective bargaining and labor disputes from antitrust laws. This is referred to as the statutory exemption. So how does this apply in the real world? Remember Maurice Clarett?

As a college sophomore, Clarett sued the NFL, alleging that the league's age/class requirement was anti-competitive, and an unlawful restraint on trade. Alan Milstein, Clarett's attorney at the time, told the NY Times: ''I see Maurice's case as a league trying to make certain players, young players, who are often poor, wait on earning a living, while the NFL and colleges, either directly or indirectly, make millions off of them.'' U.S. District Judge Shira Scheindlin agreed, issuing this 71-page order that granted Clarett the right to enter the 2004 NFL Draft.

The NFL appealed the decision to the 2nd Circuit, which, in an opinion by then-Judge Sonia Sotomayor, reversed, finding that the NFL's eligibility rule fell within the scope of the "nonstatutory exemption" to the antitrust laws, regardless of the fact that the owners and players' association did not collectively bargain over the rule (2d Cir. decision pdf). Clarett's lawyers petitioned the U.S. Supreme Court to stay the the 2nd Circuit's decision, but the Court declined to hear the case (SCOTUS, cert. denied pdf). And we all remember what happened next...

But Maurice Clarett was, by no means, the first athlete to take the NFL—or any other sports league, for that matter—to the U.S. Supreme Court. In 1972, it was St. Louis Cardinals center-fielder Curt Flood, who sued the commissioner of Major League Baseball, challenging the reserve clause in his contract. Twenty years prior, it was NY Yankees' minor-league pitcher George Earl Toolson. And thirty years before that, in 1922, Justice Oliver Wendell Holmes wrote Federal Baseball, holding that professional baseball was not "interstate commerce." With a stroke of the pen, however, Congress effectively erased all of those holdings when it passed the Curt Flood Act of 1997, which removed baseball's antitrust exemption. This law also paved the way for the sharp rise in MLB player salaries over the past 15 years.

Given the history of baseball's antitrust exemption, and the fact that it was eventually repealed, it's probably only a matter of time before we see similar changes to the other professional sports leagues as well, especially in light of all the attention that the NFL is getting this year with regards to the impending expiration of its current CBA.

Next: Part III, IP