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

Before we get into Pippen's specific claims, let's briefly review the law of defamation. First of all, defamation is the broader classification of two kinds of intentional torts (a type of civil lawsuit) that arise out of the making of false and disparaging remarks about another. If the disparaging remark or statement is oral, then the claim is for slander, if written, then it's libel. Anytime someone sues for defamation they must prove four elements to win. Although there are a few narrow exceptions, the most difficult of these elements to prove is, invariably, damages—i.e. what financial harm did the person suffer as a result of the disparaging statement?

Additionally, when the person claiming defamation is a "public figure" (e.g. celebrity, public official, etc.), they must also prove that the individual who made the defamatory statement/publication knew that the it was false (or recklessness as to the statement's alleged falsity). This is sometimes called the actual malice doctrine, and it basically means that there isn't liability for negligently or accidentally making a statement that is false about a celebrity.

Scottie Pippen has alleged that the various media outlets defamed him by publishing ten or so articles that either allege or imply that he filed for bankruptcy in or around 2003 (complaint PDF file). Furthermore, Pippen's attorneys claim that these publications constitute defamation per se, which is one of the narrow exceptions I alluded to earlier with regard to proving damages. When a statement is considered defamation per se, then you don't have to prove your damages. But there's a catch. Historically, there are only four types of defamatory statements that are considered defamation per se:

(1) allegations that attack a person's professional competence

(2) accusations of criminal activity (which must usually allude to crimes of moral turpitude)

(3) allegations of unchastity

(4) allegations of a loathsome disease (e.g. leprosy, HIV/AIDS, other STDs)

What's missing from this list? For starters, I didn't see "being poor," which is the only thing that would apply in Scottie Pippen's case. So unless Pippen's attorneys can convince the court that they should add "being poor" to the short list of per se defamatory statements, his claim for defamation per se is dead in the water. 

Pippen has also sued CBS, NBC, and the others for negligence, and for false light. Based on the actual malice doctrine the negligence claim is unfounded. As to false light, this is probably the only claim that Pippen has made that has a chance to withstand a motion to dismiss. So what is false light?

False light is somewhat similar to defamation, but is actually an invasion of privacy. The primary difference between a defamatory statement and one that gives rise to a claim for false light is that the crux of the former is a false statement, whereas the latter doesn't necessarily have to be false—typically a false-light statement is one that is misleading in a way that would be highly offensive or embarrassing to a person of ordinary sensibilities.

Based on all this, I would expect the attorneys for each defendant to file motions to dismiss counts one and three of Pippen's complaint, and I would also expect them to prevail on these motions. Pippen's attorneys could amend count three of the complaint to include ordinary defamation (as opposed to defamation per se), but even if they do, they will then have to prove that Scottie suffered some financial harm as a result of the alleged defamatory statements. Damage to his reputation and so-called good name aren't enough.

One last observation about this case: Assuming that Pippen never filed for bankruptcy, how did so many news outlets get it wrong? It's possible that one just copied the other after the other, which may make sense for some of the smaller defendants, but it surprises me that editors at CBS Sports and CNBC would have been so careless.

I wonder if I'll get sued for writing this...

In June 2010, Scottie Pippen won a $2M verdict against the law firm Pedersen & Houpt, which he sued for malpractice, surrounding his purchase of a Gulfstream jet in 2002. He originally asked the jury for $8M, but they determined that Pippen himself was at least partly to blame, and so they awarded him the lesser amount. Still not a bad payday for Scottie Pippen, though, who had already received a $1.5M settlement from another defendant in the same action. Then last month, Pippen's attorneys filed a lawsuit (PDF) asking for more than $18M from CBS, NBC, and eight other defendants, alleging that they defamed him by reporting that he was bankrupt.

The allegations stem from a CBSSports.com story that ran about six months after Pippen's $3.5M payday, Money a problem for a lot of former players, which reported that he was among several high-profile athletes who'd gone bankrupt, and featured a huge picture of the former Chicago Bull (the article has since been removed from CBSSports.com but is attached to the complaint as Exhibit 2 (PDF)). Not long after, in April 2011, CNBC.com published a similar article titled 15 Athletes Gone Bankrupt (also removed from their website, attached as Exhibit 1 (PDF)).

Also named as defendants in the complaint, are Comcast and GE, the parent corps. of NBC/CNBC, and these others, each of which are linked to a PDF-file of the offending publication: Arizona State University, Yakezie Network d/b/a One Money Design, Mint Software, InvestingAnswers.com, Sportsreport360.com, HoopsVibe.com, and a student newspaper published by the University of Tampa.

I've previously explained the law of defamation, which is commonly misunderstood by laypersons. Actually, after reading the complaint, it appears that Pippen's own attorneys don't have a full grasp of the law of defamation. Aside from that, the complaint rambles on and on with irrelevant puffery relating to Scottie Pippen's public service, and even contains a photograph—I'm not talking about attached exhibits either—page twelve shows a photograph of Pippen at a charity event with other Bulls players, donating laptops to a Chicago elementary school. As if that weren't bad enough, it also appears that the exhibits attached to the complaint are commingled with evidence from an entirely different lawsuit! (I've attached a PDF file of the complaint with all exhibits, exactly as filed with the court.)

The law of defamation differs somewhat in this case because of the fact that Pippen is a "public figure." In my next post, I'll discuss the importance of that distinction, and I'll also break down the allegations in the complaint one by one.

Photo credit: CR Artist