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All Bets Are Off: Future of Sports Gambling in New Jersey in Doubt

By [Thursday, May 8th, 2014]

NJ Sports GamblingBY ANTHONY COHEN, CLASS OF 2015

The Professional and Amateur Sports Protection Act defines the status of sports betting throughout the United States. The federal law allows the states of Nevada, Oregon, Montana and Delaware to have various forms of sports gambling, while keeping sports gambling out of other states. These four above states all had some form of sports gambling at the time PASPA was passed and were allowed to continue the sports betting programs. However, the 3rd U.S. Circuit Court of Appeals in Philadelphia has ruled that New Jersey’s sports betting law conflicts with federal law and will not allow the state of New Jersey to proceed with sports gambling.

In the above case, the court halted New Jersey’s efforts to legalize sports gambling, upholding a ruling that New Jersey’s betting laws conflict with the PASPA and therefore cannot be implemented. The majority in this case held that as a matter of constitutional law, New Jersey’s betting laws must yield to the PASPA.  The Supremacy Clause of the U.S. Constitution states that federal laws shall prevail over state laws and that is the reason for the majority’s holding in this case.  Conversely, the dissent in this case stated that PASPA attempts to implement federal policy by telling the states they may not regulate an unregulated activity and Congress does not have that power.

The NFL, NBA, NHL, MLB, and NCAA all sued the state of New Jersey last year, claiming that the New Jersey betting law harmed the integrity of the game. The difference between New Jersey and the aforementioned states with sports betting laws is that unlike New Jersey, the other states had already implemented state betting laws prior to PASPA being passed.

Does the Federal Government have a specific interest in protecting the integrity of the game? Does the PASPA violate the authority of state legislatures under the 10th Amendment?

The 10th Amendment of the U.S. Constitution protects state sovereignty. State sovereignty is protected by granting states power that was not prohibited by the Constitution. The Supreme Court has declared laws in the modern era unconstitutional that compel states to enforce federal statutes. However, the Federal Government can regulate state activity under The Commerce Clause. The Commerce Clause authorizes Congress to regulate commerce in order to ensure that the flow of interstate commerce is free from local restraints imposed by various states. A state has the right under the 10th Amendment to regulate its domestic commerce. However, that right must be exercised in a manner that does not interfere with, or place a burden on, interstate commerce, or else Congress may regulate that area of domestic commerce in order to protect interstate commerce from the unreasonable burden.

New Jersey has the largest gaming capital on the east coast within its state border known as Atlantic City. Atlantic City is one of the most popular tourist destinations in the United States with over 30 million visitors a year and $1.7 billion dollars in investments in casino resorts. It is likely these casino resorts would produce even greater revenue to the state of New Jersey with the addition of sports betting in the casino resorts.

It would appear that the major sports leagues do not want the state of New Jersey to profit from their respective activities and the leagues claim integrity of the game would be harmed. Sports betting is a legal activity in states like Nevada and Congress has not acted under the Commerce Clause to invalidate Nevada state law. This can be considered as evidence that the Federal Government viewed sports betting as an activity that can be regulated by state legislature. Should the state of New Jersey be treated differently solely because it did not have state laws allowing sports betting prior to the enactment of PASPA?

Gov. Chris Christie has already appealed to the U.S. Supreme Court on behalf of New Jersey. However, the odds are not in Gov. Christie’s favor due to the fact only 100 arguments are agreed to be heard out of 10,000 petitions. Nevertheless, the Court of would have to decide where the line between Federal and State Governments is drawn, which has historically been a keen issue. By resolving this constitutional law issue, the Court can determine if all sports bets are off in the state of New Jersey.

Goodbye, Garnett: How the No-Trade Clause is Evolving in the NBA

By [Wednesday, November 20th, 2013]

Garnett PierceBY CHRISTINA TEOLI, NYLS ’15

June 27, 2013, is a day that Boston Celtics fans would love to forget, but is unfortunately burned into their memories for years to come. When news broke that beloved players Paul Pierce, Kevin Garnett, and Jason Terry would be sent to the Brooklyn Nets, it was easy to blame Celtics’ General Manager Danny Ainge for taking away the Team Captain, Paul Pierce. But as disappointed as fans were to see Kevin Garnett go, they knew it was ultimately his choice to waive his no-trade clause and leave Boston in hopes of winning another championship before his impending retirement. While still a rarity in the NBA, no-trade clauses not only provide the league’s veteran players with unique bargaining power, but also change the way fans view player movement amongst the teams.

Garnett is one of the few, elite NBA players to enjoy decision-making power through a no-trade clause. As attorney Adam Epstein explains in his 2011 article An Exploration of Interesting Clauses in Sports, a no-trade clause “allows a player to rescind a trade under certain conditions.”  In other words, a player with a no-trade clause in his contract may only be traded should he approve the move. If a player wishes to remain with his current team, he may use his veto power to decline the trade.

While other major leagues, such as the NHL, mention in their Collective Bargaining Agreements (“CBA”) that players may negotiate for a no-trade clause, the NBA’s CBA is silent on the matter. This silence helps to explain why only four NBA players can veto a trade in 2013.  Of those four, Garnett is the only athlete to waive his rights thus far, and the three others (Kobe Bryant, Dirk Nowitzki, and Tim Duncan) are unlikely to make a move in the foreseeable future.

This rarity of the no-trade clause in NBA player contracts is explained by the stringent prerequisites for even negotiating for the clause. For starters, a player must have at least eight years experience in the league, and then four years with the team with whom he hopes to contract.  If those two requirements are satisfied, a player and his agent may then introduce the clause into their negotiation strategy.  But with the average NBA career lasting only 4.8 years, most players will be unable to qualify unless the requirements are changed.

For those veteran players who are eligible to negotiate for a no-trade clause, there are many benefits. First and foremost, a no-trade clause guarantees security. While athletes, of course, want as high a salary as possible, there are many non-monetary factors that influence whether or not a player signs with a specific team. As Justice Sonya Sotomayor noted in the historic Silverman II decision, which ended the 1994-1995 baseball strike, “personal reasons such as family considerations, or…promises of more playing time,” can greatly sway a player’s decision about which team to join.

For example, in 2001, MLB first baseman Fred McGriff invoked his no-trade clause to stay with the Tampa Bay Devil Rays after the team attempted a deal with the Chicago Cubs. At the time, the Devil Rays were the worst team in baseball, but McGriff was a Tampa native with two small children. Thus, it is clear that a no-trade clause can help prevent an athlete from uprooting his family, as well as allow him to choose a team for other personal reasons.

Club owners, on the other hand, may view the no-trade clause in a negative light.  In his article A History of Free Agency in the United States and Great Britain: Who’s Leading the Charge?, attorney Peter N. Katz explains that owners prefer a free-trade system over the granting of no-trade clauses because it promotes a competitive balance within the league. In other words, owners prefer to retain control over player movement to ensure the league’s star athletes are evenly dispersed across the teams. Additionally, sports blogger Brian Robb explains that no-trade clauses can injure a club’s “roster flexibility,” making it difficult to trade away players who are no longer a good fit for the team. Thus, it is clear that owners are quite hesitant when it comes to no-trade clauses, as it can place their teams in damaging situations.

As time goes on, it will be interesting to see if more NBA players will be able to negotiate their way to a no-trade clause, or if the clauses will disappear from the league all together. The current trend seems to weigh in favor of the clause’s growth. For instance, no-trade clauses were eliminated in the NBA’s 1980 CBA. Now that it is again available, and even granted to a few players, it may continue to be not only an integral tool in contract negotiation, but more commonly used for those that meet the prerequisites.

At the same time, it seems unlikely that the NBA owners will make it easier for players to qualify, and it may also be that no-trade clauses are not as important to players as we may think.  In 2012, Ray Allen joined the Miami Heat even after the Celtics offered him a no-trade clause, and helped lead the team to a championship in his first year. In Allen’s situation, it was not the security of the no-trade clause that played a key factor in his decision-making. Weighed against his lessened playing time with the Celtics and a desire for a strong relationship with his team, a move to Miami seemed to be a better option than accepting the Celtics’ offer.

Yet due to its rarity, the no-trade clause is an important tool in the bargaining process that both teams and agents should keep in mind. If a player qualifies for the clause, a team can try to get a sought-after player by placing the no-trade clause on the table. Similarly, agents should always advocate for the clause if their clients reach veteran status with a team. The benefit of such a unique clause is that it has great power, and is a vital tool for each party to sparingly use. Free trade certainly has its merits, but building a winning team is the goal. Whether the Nets take home the trophy or finish last this season, Garnett’s no-trade clause waiver changed the way that fans view player trades. In fact, NBA columnist Grant Hughes explained that “no rational Celtics fan should have wanted Garnett to stay” because if he “remained with the Celtics, fans would have had to watch their beloved, aging warrior struggle on a go-nowhere team.” As difficult as it was for Boston to say goodbye to Garnett, the waiver of his no-trade clause helped to soften the blow for the fans. And if, at the end of the season, the Nets do win the championship, the no-trade clause just might earn more respect from club owners and make more appearances in player contracts next season.

Union Dissolution and the Nonstatutory Labor Exemption

By [Monday, June 17th, 2013]

Although it already seems like ancient history to sports fans, the 2011 NFL and NBA lockouts are still generating their share of legal scholarly attention.  Three recent law review articles offer differing perspectives on the players’ efforts to dissolve their unions to be able to invoke the antitrust laws against the leagues, and thereby gain bargaining leverage. 

The Washington Law Review features a student comment that focuses on the distinction between the two methods of dissolving a union — disclaimer of interest and full-fledged decertification — and its significance to the nonstatutory labor exemption as articulated in Brown v. Pro Football Inc..  The nonstatutory labor exemption is a judge-made doctrine that holds that unions and employers should not be exposed to antitrust liability for the duration of the collective bargaining relationship, even after expiration of the CBA and even if the parties’ negotiations are at impasse.  Although the exact contours of the exemption are still fuzzy, the  Brown Court suggested that the nonstatutory labor exemption lasts until the “collapse” of the collective bargaining relationship.  The open question has been whether and what type of dissolution of the union qualifies as “collapse.”  Decertification is a lengthy process requiring the players to round up at least 30% of their members to file a formal petition with the NLRB, followed by a formal election that achieves a majority vote in favor of decertification.  Disclaimer of interest merely requires the union to announce it is terminating its right to represent the players, and can be done simply by sending a letter to the league declaring it is no longer the players’ bargaining agent.  The student comment opines that disclaimer does not satisfy the “collapse” standard because of its informal nature and instantaneous effect.  The comment further argues that courts should extend the nonstatutory labor exemption in the event of a disclaimer for the length of a “business cycle” in the subject industry, to ensure it is not being used merely as a bargaining tactic.

Posing an interesting counterpoint to this argument is an article in the U.C. Davis Law Review, contending that extending the nonstatutory labor exemption to cover post-dissolution agreements would subvert both federal labor and antitrust policy.  To this author the issue is not whether the players dissolved the union simply as a bargaining tactic, but whether employees are entitled — whatever their motives — to unilaterally return at any time to a labor market under free competition principles.  

An article in the Vanderbilt Journal of Entertainment and Technology Law makes the point that dissolution of a players’ union, by either disclaimer of representation or full-fledged decertification, marks a new era in sports industry labor battles, confounding the expectations of commentators and requiring a second look at league lock-out strategies.  

If the leagues pull back from that strategy, the courts may not get the chance to further define the nonstatutory labor exemption any time soon.

Trademarking Linsanity

By Elliot Solop [Wednesday, May 2nd, 2012]

In the span of 15 days, Harvard alum Jeremy Lin went from riding the leather cushioned pine on Mike Antoni’s bench (there’s no “D” in his name!  Get it?  Ha. Ha ha.  Oh whatever.) to being a worldwide phenomenon. Before February 4th no one knew that Jeremy Lin was a basketball player, now he’s arguably the most famous professional athlete in the world!

With his newfound celebrity comes a lack of privacy and potential exploitation from his biggest fans. According to the USPTO’s trademark electronic search system (www.uspto.gov), there have already been three trademark applications filed for the term “Linsanity”. Out of the three filed trademark applications, two are from commercially driven fans who have high hopes of selling merchandise donning the coined phrase. The third trademark applicant is Jeremy Lin himself. The United States Patent and Trademark Office frowns upon bad faith attempts of trademark applicants to capitalize off of a renowned celebrity.  In addition to multiple trademark applications for “Linsanity”, the domain name www.linsanity.com has also been purchased by a cyber squatter. Generally, courts look down upon cyber squatting with Chris Bosh’s victory in California federal court to reclaim his online presence and identity as a clear cut example of the court’s willingness to protect a celebrity’s right of publicity.

For an athlete of Jeremy Lin’s stature, it is crucial to protect the intellectual property rights associated with his persona and brand. Lin’s talents on and off the court help develop the profitability of a term such as “Linsanity”. The Lanham Act provides an individual the exclusive right to their legal identity for commercial use. In addition to the Lanham Act, the right of publicity is also protected by common law. Considering Lin is lawyered up, I see no reason why his full arsenal of intellectual property will not be protected accordingly.

Clippers Ask “Clipper Darrell” to Drop the Clipper From His Name

By John Kelly [Friday, April 20th, 2012]

Darrell Bailey has been a diehard Clipper fan for 15 years and has shown it rather exorbitantly.  He was given the name “Clipper Darrell” because of his Clipper infused wardrobe, his passion during home games, and even his Clipper car.  The Clippers have given Darrell free season tickets for years, and in exchange for dropping the “Clipper” from his name they have offered Darrell an extra season ticket.  From a public relations standpoint this has been a nightmare for the Clippers given that they made this request of Darrell once they became relevant as a team, and their star players Chris Paul and Blake Griffin are showing support for Darrell on Twitter, not to mention that the owner of the Clippers has history of poor race relations (he paid the largest out-of-court housing discrimination settlement ever) which some might assume to be a factor given that Darrell is African American. However, amid the media storm that this has created for the Clippers they have come to an agreement with Darrell to allow him to continue using his “Clipper Darrell” nickname so long as he tells them of his public appearances as Clipper Darrell and is careful of any possible endorsement deals. Because they allowed him to keep his nickname, would there have been any First Amendment implications had an agreement not been made?