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Tuesday, September 16, 2014
The Fallacy Behind New Jersey's Sports Betting Strategy
If ever there were a sports law case that had the proverbial "nine lives," it would have to be New Jersey's ongoing quest to legalize sports betting. Following Governor Christie's veto of two bills that would have partially repealed the state-law prohibition against sports betting, which itself was a response to the Supreme Court's refusal to hear New Jersey's constitutional challenge to the Professional and Amateur Sports Protection Act ("PASPA"), Governor Christie last week embarked on a new legal strategy designed to finally bring sports betting to the Garden State.
First, the New Jersey Attorney General issued Formal Opinion 1-2014 which concluded that casinos and racetracks would not be committing a criminal offense under New Jersey law if they were to accept wagers on professional and college sporting events (excluding those collegiate games involving New Jersey colleges or taking place in New Jersey). Second, the Attorney General (joined by Governor Christie) filed a motion with U.S. District Judge Michael A. Shipp, the federal judge who permanently enjoined New Jersey from implementing its sports wagering law in February 2013 (that decision was later upheld on appeal by the Third Circuit). The new motion seeks a "clarification" of the injunction to explicitly recognize that New Jersey is not obligated to maintain the criminal prohibitions against sports wagering on its books and, further, that the "surviving portions" of the earlier legislation (which Judge Shipp held was preempted by PASPA) already "effect[ed] a repeal of New Jersey's prohibition of sports wagering in casinos and racetracks" without the need for further action. Alternatively, the motion seeks to "modify" the injunction to reflect the Third Circuit's explicit recognition that a State "may repeal its sports wagering ban" or "keep a complete ban on sports gambling" and "decide what the exact contours of the prohibition will be."
[W]e do not read PASPA to prohibit New Jersey from repealing its ban on sports wagering. . . . [U]nder PASPA, on the one hand, a state may repeal its sports betting ban, a move that will result in the expenditure of no resources or effort by any official. On the other hand, a state may choose to keep a complete ban on sports gambling, but it is left up to each state to decide how much of a law enforcement priority it wants to make of sports gambling, or what the exact contours of the prohibition will be. We agree that these are not easy choices. And it is perhaps true (although there is no textual or other support for the idea) that Congress may have suspected that most states would choose to keep an actual prohibition on sports gambling on the books, rather than permit that activity to go on unregulated. But the fact that Congress gave states a hard or tempting choice does not mean that they were given no choice at all, or that the choices or otherwise unconstitutional.National Collegiate Athletic Ass'n v. Christie, 730 F.3d 208, 232-33 (3d Cir. 2013)
Seizing upon this language, the New Jersey Senate and State Assembly introduced legislation in June that would have repealed the state-law prohibition against sports wagering, but only for the benefit of casinos and racetracks. Governor Christie vetoed these bills on August 8, 2014, believing them to be a blatant "end-run" around PASPA that would not have survived judicial scrutiny. Governor Christie's motion tries a more creative approach: it argues that the state-law prohibitions against sports wagering have already been repealed by virtue of the 2012 legislation that was found to be preempted by PASPA. You might ask: "How can New Jersey still be relying on a state law that was struck down by the federal courts?" Simple. By arguing that the portion of the law authorizing the state to "license" sports betting (the part found to be in express conflict with PASPA) is "severable" from the portion of the law that provides that a casino or racetrack "may operate a sports pool." Pointing to the statute's "severability clause," Governor Christie's motion posits that "the surviving portions of the Sports Wagering Act effect a repeal of New Jersey's prohibition of sports wagering in casinos and racetracks. . . ." (Governor Christie's Motion, at p. 5)
1. New Jersey's Novel "Repeal" Theory is Unlikely to Succeed
Despite the optimism expressed on many fronts, New Jersey's gambit is unlikely to succeed. To begin with, New Jersey's sports wagering law (N.J.S.A. 5:12A-1 et seq.) did not expressly repeal the criminal prohibition against sports wagering in that state. The 2012 legislation does not even refer to the state-law prohibitions that would cover illegal sports betting -- N.J.S.A. 2C:37-2 ["Promoting Gambling"] and N.J,S.A. 2A:40-1 ["Gaming Transactions Unlawful"]. Further, neither of those criminal statutes contains a "carve-out" for sports betting at casinos and racetracks or even refers to the 2012 legislation. Nor does the 2012 legislation contain the common introductory phrase -- "notwithstanding any law, rule or regulation to the contrary" -- in the allegedly "surviving" portion of the statute that provides that a casino or racetrack "may operate a sports pool." This is further evidence that the legislature did not intend to repeal either of the state-law prohibitions when it enacted the sports wagering law.
While statutes can be repealed "by implication," the New Jersey Supreme Court has cautioned that "there is a strong presumption in the law against [an] implied repealer and every reasonable construction should be applied to avoid such a finding." New Jersey Ass'n of School Adm'rs v. Schundler, 211 N.J. 535, 555-56, 49 A.3d 860, 872 (2012) (citing In re Comm'r of Ins.'rs Issuance of Orders A-92-189 & A-92-212, 137 N.J. 93, 99, 644 A.2d 576, 579 (1994)). To overcome that strong presumption, a high threshold must be vaulted: "'a repeal by implication requires clear and compelling evidence of legislative intent, and such intent must be free from reasonable doubt.'" Id.
New Jersey will not be able to overcome this presumption. Recent actions taken by New Jersey legislative officials are completely antithetical to any notion that an "implied repeal" has occurred. For example, in the Supreme Court petition filed by New Jersey Senate President Stephen Sweeney and New Jersey General Assembly Speaker Vincent Prieto in February 2014, those legislative officials conceded that "the citizens of New Jersey have not expressed support for allowing unregulated sports wagering." This is an acknowledgement by New Jersey's two highest-ranking legislative officers that, as of February 2014, the criminal prohibition against sports wagering had not been repealed. This directly contradicts the present position advanced by Governor Christie and Attorney General Hoffman in their motion. To be sure, at no point in the nearly two years of federal court litigation did New Jersey take the position that the criminal prohibition against sports wagering had been "repealed" by virtue of the 2012 legislation. There are no such statements in any of New Jersey's federal court filings--until now, that is.
Ironically, New Jersey points to statements made by its adversaries in the federal case to support its novel "implied repeal" argument. In Formal Opinion 1-2014, Attorney General Hoffman maintains that the Third Circuit "accepted" the positions of the plaintiffs in the case, which he characterizes as having acknowledged that New Jersey repealed its prohibitions against sports wagering. (AG Opinion, at p. 2 [blending the DOJ's and leagues' briefs to read that "'nothing in [PASPA] requires New Jersey to maintain or enforce its sports wagering prohibitions, and, indeed, that New Jersey's 'repeal of its state-law prohibition on the authorization of sports wagering' itself was 'in compliance with PASPA.'"). But a close reading of the appellate briefs paints a far different picture. In his brief, United States Attorney Paul Fishman actually stated that "nothing in [PASPA] requires to New Jersey to maintain or enforce its sports wagering prohibitions," noting that "the Sports Leagues have not brought suit to enjoin New Jersey from repealing those pre-existing sports-gambling prohibitions," which he describes as a "hypothetical scenario."
Indeed, the Third Circuit opinion itself makes clear that any repeal of New Jersey's state-law prohibition against sports wagering would be prospective in nature. In rejecting New Jersey's argument that PASPA improperly commandeers the States to maintain their criminal prohibitions against sports wagering, the Third Circuit majority stated that "we do not read PASPA to prohibit New Jersey from repealing its ban on sports wagering." National Collegiate Athletic Ass'n v. Christie, 730 F.3d 208, 232 (3d Cir.2013). Note the use of the "future tense" rather than the "past tense". This runs counter to any argument by New Jersey that the repeal had already occurred. Although the New Jersey Attorney General quotes from the federal government's answer brief before the Third Circuit, he overlooks a later Supreme Court filing made by the U.S. Solicitor General which states that PASPA "does not even obligate New Jersey to leave in place the state-law prohibitions against sports gambling that it had chosen to adopt prior to PASPA's enactment. To the contrary, New Jersey is free to repeal those prohibitions in whole or in part."
Likewise, at the June 26, 2013 oral argument before the Third Circuit, Paul Fishman (the United States Attorney for the District of New Jersey) conceded that New Jersey "could" repeal its prohibition against sports betting without violating PASPA, but stated that the reason "it hasn't been done" yet is because "it's a really, really bad idea":
MR. FISHMAN: Mr. Olson [counsel for Governor Christie] said they can't change the law, they have to enforce the law on the books, they have to keep it illegal. None of that is true. . . . It is up to the State of New Jersey to determine for itself the extent to which it will or will not enforce that law. . . .
THE COURT: So New Jersey could repeal its ban on wagering on sporting events?
MR. FISHMAN: As a matter of law it could. It would be incredibly irresponsible.
THE COURT: It would not violate PASPA?
MR. FISHMAN: No. But the reason it hasn't been done for 20 years or a hundred years is not because of PASPA. It hasn't been done because it's a really, really, really bad idea. It's irresponsible, it would be bad policy to just allow gambling to go unfettered. . . .(Transcript, at pp. 66-68)
Moreover, the Attorney General's opinion on this issue cannot be reconciled with the recent New Jersey legislative efforts to partially "repeal" the ban on sports wagering. On June 23, 2014, the New Jersey Senate and State Assembly introduced identical bills (S2250/ A3476) that sought to "decriminalize" sports wagering at casinos and racetracks. Each bill contained a "Statement of Intent" acknowledging that the intent of the proposed legislation was to conform current law to statements made by the U.S. Solicitor General in a filing with the Supreme Court that "PASPA does not even obligate New Jersey to leave in place the state-law prohibitions against sports gambling that it had chosen to adopt prior to PASPA's enactment. To the contrary, New Jersey is free to repeal those prohibitions in whole or in part." And this week brought the announcement by New Jersey State Senator Ray Lesniak (D-Union) that he will soon introduce a bill that would "repeal" all prohibitions concerning sports wagering "at casinos or gambling houses in Atlantic City and at current running and harness horse racetracks in this State." This begs the question: if the prohibition against sports wagering had already been repealed by the 2012 legislation, then why even bother with the new legislation? These recent actions completely belie New Jersey's present position.
2. Is the New Jersey Sports Wagering Law "Severable"?
I also question whether any portion of the 2012 legislation "survived" the federal court determination that the New Jersey sports wagering law was preempted by PASPA. This is a key hurdle for New Jersey to clear because it cannot claim that an "implied repeal" occurred without first demonstrating that the portion of the 2012 legislation purporting to repeal the prohibition against sports wagering can be "severed" from the portions of the law that were invalidated. The issue of "severability" was not addressed by either the district court or Third Circuit. But nothing in the two judicial opinions suggests that only "portions" of the 2012 legislation were invalidated. To the contrary, both opinions suggest that the entire statutory scheme was invalidated. See National Collegiate Athletic Ass'n v. Christie, 926 F. Supp. 2d 551, 577 (D.N.J. 2013) (determining that "New Jersey's Sports Wagering Law is preempted" and stating that "the enactment of the Sports Wagering Law is in violation of the Supremacy Clause."); National Collegiate Athletic Ass'n v. Christie, 730 F.3d 208, 215 (3d Cir. 2013) ("New Jersey's sports wagering law conflicts with PASPA, and, under our Constitution, must yield. We will affirm the district court's judgment.").
For such an important threshold question, New Jersey's motion gives short shrift to the "severability" analysis, relegating it to a footnote. Therefore, I will attempt to explain the legal analysis that Judge Shipp will likely undertake in ascertaining whether the portions of New Jersey sports wagering law providing that a casino or racetrack "may operate a sports pool" (the so-called "implied repeal") can be severed from the "licensing" regime of that law.
When a federal court is called upon to invalidate a state statute, the severability of the constitutional portions of the statute is governed by state law. New Jersey courts employ a "commonsense approach" to severability, holding that an invalid provision is severable if that is in keeping with the legislative intent; legislative intent is ascertained by looking to the broad purpose of the statute, the degree to which the valid and invalid provisions are intertwined with one another, and the extent to which the statute remains comprehensive and logical after the invalid provisions are excised. See New Jersey State Chamber of Commerce v. Hughey, 774 F.2d 587, 597-98 (3d Cir. 1985)
At first glance, each of these factors points decidedly away from severability. The "broad purpose" of the New Jersey sports wagering law was to enact a "licensing regime" that would shift illegal economic activity into legal channels where it could be monitored, regulated, and appropriately taxed. During the public hearings, legislators also expressed a desire "to stanch the sports-related black market flourishing within New Jersey's borders." Christie, 730 F.3d at 217. The provision allowing casinos and racetracks to "operate a sports pool" (the so-called "implied repeal") is inextricably intertwined with the requirement that such activities be licensed and regulated. Indeed, the sentence which states that casinos and racetracks "may operate a sports pool" (contained in N.J.S.A 5:12A-2(a)) also expressly conditions such entitlement "upon the approval" of the New Jersey Division of Gaming Enforcement (for casinos) and the New Jersey Racing Commission (for racetracks) and further requires such activities to be undertaken "in accordance with the provisions of this act and applicable regulations promulgated pursuant to this act." Virtually the entirety of the act addresses issues relating to "licensing" and regulation." The licensing and regulatory aspects of the law are so dominant that once they are excised (since they were held to be in conflict with PASPA), the remainder of the statute would be largely an empty shell devoid of any logical structure.
3. Assessment and Conclusion
Given these highly inconvenient facts, New Jersey faces an uphill battle to convince Judge Shipp to clarify the existing injunction to align with the Attorney General's view that the state-law prohibition against sports wagering was repealed by the 2012 legislation and that the "surviving" portions of the 2012 legislation exempt casinos and racetracks from civil or criminal liability. The best that New Jersey can realistically hope for is that the injunction will be "modified" to incorporate the Third Circuit's explicit recognition that a State "may repeal its sports wagering ban" or "keep a complete ban on sports gambling" and "decide what the exact contours of the prohibition will be."
But that might be a pyrrhic victory at best. Let's assume that the injunction is modified to incorporate the "wiggle room" afforded by the Third Circuit majority opinion. What would a future "repeal" actually look like? If it's anything like the June legislative measure (which released only casinos and racetracks from the law's clutches), it might not be worth the effort. The selective exclusion of casinos and racetracks might still run afoul of PASPA, which provides in Section 3702(1) that a governmental entity may not authorize or promote a sports-based wagering scheme even "indirectly." The recent proposed legislation -- removing only racetracks and casinos from the criminal prohibition -- certainly appears to be an "indirect" authorization of sports betting, and will likely be challenged by the leagues and the DOJ if and when it is signed into law. The problem with such a partial repeal is that it does not seek to repeal the prohibition against sports betting in toto; rather it releases only New Jersey's casinos and racetracks from the law's clutches (and subjects everyone else to the prohibition). Such a repeal too closely mimics the prior law.
Previewing last week's court filing, the closing paragraph of the Governor's letter reassures state legislators that he "remain[s] open to legally sound ways to let the State's casinos and racetracks offer sports wagering." It is debatable whether the Governor's latest gambit is "legally sound." Just as the June legislative measure was likely headed for defeat in the federal courts (if it had been signed into law), so too is the Governor's novel but risky legal strategy. Both avenues seek to exempt only casinos and racetracks from the criminal prohibition, a carve-out that may be viewed as an "indirect" authorization of sports betting. Is such a gambit really worth the time, knowing the likely result? Perhaps a more legally sustainable repeal strategy would be to exclude only certain geographic areas (e.g., Atlantic County) from the prohibition. The optics of such a maneuver would certainly be superior to an exemption that specifically and exclusively benefits only two classes -- casinos and racetracks. Perhaps that is elevating form over substance. But without a more reasoned approach to the "repeal" issue (and one that remains faithful to the Third Circuit opinion), we may be a long way from placing that Super Bowl bet in New Jersey.
Sunday, September 14, 2014
Dark Days in the NFL
The Adrian Peterson situation, aside from coming at the worst possible moment for the NFL, raises two difficult ethical questions.
In the Sports Law context, the question is what is the right thing for the NFL and the team to do when one of its players commits a despicable act off the field. As the NFL belatedly learned in the Ray Rice affair, a wrong answer will be a public relations nightmare. Rice is certainly not the first professional athlete to be guilty of spousal abuse, though no one else ever left such a visual record. And if anything is considered an equal or greater wrong than beating your wife, it is child abuse. The facts are still out on whether Peterson is guilty of the charges leveled against him. Obviously, there is no tape. Still, it is worth the inquiry.
The answer to the ethical question, however, should not depend on the existence of a videotape or even a media or public outcry. The answer should be a function of whether the team and the league believe the player’s offense reflects such a failure of character as to be inconsistent with how each organization sees itself and its mission. It is worth discussing whether the fact that the perpetrator is a professional athlete as opposed to an associate attorney or corporate CEO should make a difference. Certainly, when an employee is the public face of an organization, termination is an appropriate response to an immoral or heinous act. The NFL’s current problems stem from its flipping from too weak a response to feigned outrage over information it had all along. Doing the right thing misses the point when it is done the wrong way.
Must the offending act also be illegal? Suppose the player cheats on his dying spouse, squanders the nest egg of his elderly parents, or refuses to donate perfectly matching bone marrow to his brother. Should the team cut its ties with such a lowlife? Any employer should have the right not to be associated with individuals it deems morally bankrupt, so long as such decisions do not depend largely on how good the player is on the field.
Adrian Peterson, of course, is not just any football player. He is one of the real superstars of the game. And he is the face of the Minnesota Vikings.
His case also raises an ethical quandary outside the sports context. When does society have the right to interfere in the parent child relationship? Parents across cultural and geographical divides have had different concepts of what kind of discipline is appropriate. We have all heard tales of kids in days gone by getting “whoopings” by a switch behind the barn. We live in a different time, if there ever really was a time when such beatings were appropriate. When such discipline results in broken bones, or cuts and bruises, or deep emotional scars, parents may have crossed the line of what is acceptable. A Texas jury will decide. So must the NFL and the Vikings.
Saturday, September 13, 2014
Spot the differences, if you possibly can
Atlanta Hawks GM Danny Ferry used racist stereotypes in evaluating and describing player Luol Deng. The comments were unquestionably tasteless and offensive; they might form the basis for an employment-discrimination action, although Deng did not suffer any harm (he signed with another team and there is no indication he was dying to sign with the Hawks) and courts are often quick to dismiss remarks like these as "stray comments" that cannot form the basis for liability (as my colleague Kerri Stone has written) The remarks were audio-recorded and written in a report. Ferry has been placed on indefinite leave of absence, basically meaning he's on his way to being fired (likely as part of an ownership change). The league is holding off on punishment, probably because the team took the matter off its hands.
Isiah Thomas engaged in a pattern of sex- and gender-based harassment of a Knicks executive named Anucha Browne Sanders, for which he was found personally liable by a jury (the case settled, following a jury verdict awarding more than $ 10 million in punitive damages). He never lost his job and suffered no team- or league-imposed penalties. The league explained that it does not get involved with "civil matters," not even civil matters directly affecting the team or reflecting wrongdoing in running the team.
A former executive with the New York Mets has sued the team and the COO (the principal owner's son) for harassing and then firing her over becoming pregnant and having a child without being married and complaining about the harassment. So far, silence from MLB and the Mets, other than bland insistence that they have policies against harassment and discrimination.
So can we find anything remotely resembling consistent and appropriate responses to possibly improper or unlawful employment practices? Or are there distinctions that actually matter?
One answer is accusations are insufficient, a position I could endorse; but then the non-action by the Knicks and action by the Hawks (especially for the latter, since it is not clear the Hawks could be liable for the comments) both were inappropriate. Worse, the Hawks incident may be the least likely of the three to result in liability under federal anti-discrimination law. A more cynical answer is teams/leagues will jump to act when it comes to players and race, but do not care about sex-based discrimination against non-players. An intermediate explanation is Ferry was captured on audio and the Mets COO wasn't, which just brings us back to the issue that audio and video are overtaking our ability to judge evidence and proof. That, in turn, says some troubling things about our ability or willingness to rely on litigation to resolves disputes and determine legal rights and wrongs.
Friday, September 12, 2014
Donald Sterling Draws Ironic Judicial Assignment in Federal Lawsuit Against NBA
Long before Donald Sterling became known for making vitriolic racist comments and odd relationship choices, he had, to put it mildly, a less-than-sterling (couldn't resist that!) reputation as a landlord. As has been reported elsewhere, Sterling and his rental companies (including the Sterling Family Trust -- yes, that one!) were accused in a 2006 federal lawsuit of engaging in housing discrimination by refusing to rent properties to African-Americans, Hispanics, and families with children. Sterling and his companies settled that case in 2009 by agreeing to pay nearly $2.75 million. He also was accused in an earlier lawsuit of making discriminatory and disparaging statements about minority tenants and engaging in discriminatory housing practices, such as by refusing to accept rent from African-American tenants and then later attempting to use the tenants' supposed failure to pay rent as a basis for eviction. Court records show that Sterling settled that suit by agreeing to pay nearly $5 million in attorneys' fees to the plaintiffs.
Proving the old adage that "everything you do will come back to you" (G-rated version of "Karma can be a *****"), Donald Sterling can be none too pleased over the judicial assignment in his federal lawsuit against the NBA. In a deliciously-ironic twist, the judge assigned to that case is well-steeped in housing discrimination -- from the plaintiff's side. Sterling's federal judge is Fernando Olguin, who was appointed by President Obama in 2012. A significant portion of Judge Olguin's pre-judicial career was spent fighting housing discrimination. For six years, Judge Olguin was a name partner in the Pasadena-based law firm of Traber, Vorhees & Olguin, where he primarily represented plaintiffs in civil rights and labor cases. The law firm's website describes the firm as a "plaintiff-side" law firm that has "successfully litigated groundbreaking employment and housing discrimination cases, as well as other cases involving sexual harassment, unfair or unlawful business practices, claims of wage and overtime law violations, intentional human rights consumer rights, constitutional violations and educational rights." The firm's website adds that "[i]n fighting for and extending the right of people everywhere to be free from discrimination, we have brought cases against individuals, companies and public entities and sought to protect people from discrimination and harassment based on race, ethnicity, national original, sexual orientation, gender, familial status, disability and age." Earlier in his career, Judge Olguin served as a trial attorney in the Civil Rights Division of the United States Department of Justice from 1991 to 1994, enforcing the Fair Housing Act and the Public Accommodations Act.
To some, this may seem like poetic justice. To others, it's just the roll of the judicial dice. Predicting how a judge will rule based on his or her past experience in private practice is futile (but fun!). And, to be clear, there is no indication that Judge Olguin or the Traber & Vorhees law firm ever represented clients in litigation against Donald Sterling and/or any of his companies. That would be clear grounds for recusal. But, nonetheless, I find this particular judicial assignment to be especially ironic --and amusing-- in view of Donald Sterling's past business practices. I'm pretty certain that Donald Sterling's legal team would have preferred litigating his case in front of a judge who did not spend the vast majority of his legal career representing victims of housing discrimination. No word yet on whether Judge Olguin is also a Los Angeles Clippers season ticket holder or a team sponsor! But Judge Olguin did make news recently when Above The Law reported that he was offering a "no-pay" judicial clerkship for recent law school graduates -- one of only a few federal judges across the country who engage in this practice. All things considered, this has not been a very good year for Donald Sterling. And his luck does not appear to be improving.
Thursday, September 11, 2014
NCAA Relies on O'Bannon Ruling to Support its Motion to Dismiss the Jenkins Lawsuit
Last week, 32 lawyers from 11 law firms signed a motion to dismiss the Jenkins class action. In support of their motion, which the defendants would like to have heard before Judge Claudia Wilken, the defendants are using Judge Wilken's ruling in O'Bannon against the class in the Jenkins case. The defendants suggest that a ruling in favor of the Jenkins class would directly conflict with Judge Wilken's decision and injunction in O'Bannon. On page 1 of the motion, the defendants argue:
In [the O'Bannon case], this Court held that appropriate limits on the amount of compensation that student-athletes may receive while in school are lawful under Section 1 because they serve the procompetitive goals of (i) maximizing consumer demand for amateur student-athlete intercollegiate sports and (ii) integrating student-athletes into the academic communities of their schools, which in turn improves the education the schools offer. Accordingly, this Court determined that the NCAA and its members may—consistently with federal antitrust law—agree to limit the compensation that student-athletes in Division I (“D-I”) men’s basketball and Football Bowl Subdivision (“FBS”) football may receive each year for their participation in intercollegiate athletics, provided that those limits are not less than (i) the full cost of attendance, as defined in 20 U.S.C. § 1087ll, and (ii) $5,000 per student-athlete, distributed on a deferred basis.But in a footnote to that second sentence, the defendants say:
Nevertheless, the NCAA and its member conferences and schools respectfully disagree with the Court’s ruling in O’Bannon, including its determination that the challenged rules constituted an unreasonable restraint of trade, as well as with the Court’s determinations of (a) the appropriate cap on student-athlete compensation, (b) who—as between the Court and the NCAA—should be permitted to set that cap, and (c) the legal significance of the Supreme Court’s statements in NCAA v. Board of Regents of the University of Oklahoma, 468 U.S. 85, 101- 02 (1984), that the NCAA’s eligibility and compensation rules are procompetitive because they differentiate collegiate sports from professional sports and thus give consumers a product that might otherwise be unavailable.If your head is spinning right now, you're not alone.
So my first question is, does the NCAA agree with the O'Bannon ruling or not?
If the NCAA disagrees with the ruling, why is it using such ruling to support its motion to dismiss the Jenkins case?
My final question relates to how the motion to dismiss should impact an appeal of the O'Bannon ruling by the NCAA. If the NCAA is using the O'Bannon ruling as the basis for having the Jenkins case dismissed, should the NCAA be estopped from arguing that the O'Bannon ruling is incorrect?
Monday, September 08, 2014
BREAKING: New Jersey Seeks Modification of Sports Betting Injunction; Could Lead to Legal Sports Betting in New Jersey's Casinos and Racetracks
Earlier this morning, New Jersey officials took two actions designed to fast-track "legal" sports betting in New Jersey. First, the New Jersey Attorney General issued a Formal Opinion concluding that "sports [betting] pools operated by casinos or racetracks continue to be exempted from criminal liability under New Jersey so long as no wagering occurs on a college sport or athletic event that takes place in New Jersey or in which any New Jersey college team participates regardless of where the event takes place." As part of that Formal Opinion, the New Jersey Attorney General also issued a directive to all New Jersey Law enforcement personnel, including local prosecutors, police, and sheriffs, that prohibitions against sports wagering in casinos and racetracks would no longer be enforced. While acknowledging that New Jersey was enjoined by a federal court from "implementing" its Sports Wagering Law, the the Attorney General reasoned that by virtue of the "severability" provision contained in that law and the Third Circuit's recognition that PASPA does not prohibit states from repealing their criminal prohibitions against sports betting, "the central provisions of the [Sports Wagering Law] that establish that casinos and racetracks may operate sports pools remain in effect and exempt such activity from criminal and civil liability."
At the same time, New Jersey also filed a motion with U.S. District Judge Michael A. Shipp, the federal judge who entered the injunction against New Jersey in February 2013. The motion seeks a "clarification" of the injunction to explicitly recognize that New Jersey is not obligated to maintain the criminal prohibitions against sports wagering on its books and that the Attorney General's opinion "permissibly recognizes" that the "surviving" portions of New Jersey's Sports Wagering Law "exempt certain sports wagering activities in casinos and racetracks from civil or criminal liability." The motion also seeks to "modify" the injunction by including new language stating that the injunction "does not prohibit, and shall not be construed to prohibit, [New Jersey public officials] from recognizing or giving effect to a provision of state law that repeals prohibitions or restrictions on sports wagering activity."
A decision on New Jersey's latest motion is expected sometime in October. The Court has already indicated that the motion is "set for 10/6/14 before Judge Michael A. Shipp" and "will be decided on the papers." New Jersey had requested oral argument in its motion, but its request was denied by the district court. Not a good sign. This should lead to a relatively quick decision. As first reported by Christopher Soriano, a gaming attorney with Duane Morris, the leagues' and DOJ's response to the motion is due on September 22, 2014, with New Jersey's reply brief due on September 29, 2014. Based on this expedited briefing schedule (which is standard for New Jersey federal practice), I would expect to see a ruling by mid-October. Of course, this does not take into account the possibility of an appeal. For example, if Judge Shipp denies New Jersey's motion, look for New Jersey to appeal that decision to the Third Circuit. Likewise, if he modifies the injunction in the manner requested by New Jersey, the NBA and the other pro sports leagues will undoubtedly appeal that order, no matter what Adam Silver may have said on Friday.
My analysis of New Jersey's latest gambit appears in Law360 (subscription required) and Meadowlands Matters, and I will update this post later today or tomorrow to provide a more complete legal analysis, including an assessment of New Jersey's chances for success before the district court (and the Third Circuit).
Friday, September 05, 2014
SLB Contributors Headline ABA Annual Meeting Program on Sports Betting Legalization; Foreshadows NBA Commissioner Adam Silver's Surprising Public Comments
NBA Commissioner Adam Silver sent shock waves throughout the sports and gambling industries when he appeared at the Bloomberg Sports Business Summit yesterday and proclaimed that expanded legal sports betting was "inevitable" and that the league would "ultimately participate in that." This was shocking because the NBA has long been opposed to sports betting (who can forget the Tim Donaghy scandal?) and had recently joined forces with the three other major professional sports leagues and the NCAA in successfully blocking New Jersey's efforts to legalize sports betting. Of course, as some have noted, Commissioner Silver's comments recall his interview earlier this year when he acknowledged that sports betting increases interest in games that might otherwise be blowouts. Nonetheless, it is a quantum leap to go from acknowledging the obvious (but illegal) to embracing the concept of state-regulated sports betting, especially so soon after the recent federal court battle ended at the doorsteps of the Supreme Court. His encouraging comments may open the door to creative legislation (from pro-gaming states such as New Jersey and Delaware) in which single-game sports wagering would become legal and, in exchange, the leagues would be paid a licensing fee and/or share in the revenues derived from sports wagering.
Just three weeks earlier, Sports Law Blog stalwarts Michael McCann and Gabe Feldman spoke on this topic at the ABA Annual Meeting in Boston. They were joined on a panel by former U.S. Solicitor General Theodore B. Olson, Supreme Court litigator Erin Murphy, and West Virginia Solicitor General Elbert Lin (pictured below), the principal players in the NCAA v. Christie litigation. The title of the program was Game-Changer: The States' Big Gamble on Legalized Sports Betting, and, as its name implies, the program examined the controversy (as well as the federal constitutional issues) surrounding the efforts by states to legalize and regulate sports betting. As many of you know, a 1992 federal law (the Professional and Amateur Sports Protection Act a/k/a "PASPA") prohibits state-sponsored sports betting in every state except for those states (such as Nevada) that had conducted a sports wagering scheme at any time between January 1, 1976 and August 31, 1990. New Jersey had challenged the constitutionality of PASPA in the NCAA v. Christie litigation, and persuaded one Third Circuit judge (albeit, in a dissenting opinion) to conclude that PASPA was unconstitutional because it "violated principles of federalism."
Anticipating (wrongly!) that the Supreme Court would grant certiorari, I persuaded the ABA's Tort Trial and Insurance Practice Section (I am the Chair of its Appellate Advocacy Committee) to present a CLE program devoted to this case, touting its "federalism" component that transcended sports law. I then invited the key players in the sports betting legal debate (Mr. Olson, Ms. Murphy and Mr. Lin) and two of the nation's leading sports law experts (Mike and Gabe, of course!) to be panelists. The ABA selected the program to be one of its "Presidential Showcase" events, owing to the nationally-significant subject matter and the quality of our speakers. The program was a resounding success, with some spirited exchanges among the panelists. Ted Olson really seemed to enjoy himself, as did Mike and Gabe. There is no better moderator than Mr. McCann, and Gabe brought some incredible insights to the issue of whether the sports leagues' recent partnering with daily fantasy sports leagues undermines their current opposition to sports betting. Thankfully, the program was videotaped, and we expect to post it soon.
The written program materials are available here.
Wednesday, September 03, 2014
New Law Review Essay on District Court Ruling in O'Bannon v. NCAA
The District Court Decision in O'Bannon v. National Collegiate Athletic Association: A Small Step Forward for College Athlete Rights, and a Gateway for Far Grander Change."
The essay, which will be published this December in Washington & Lee Law Review, explains why the district court decision in O'Bannon v. NCAA was correct to hold that the NCAA unreasonably restrained trade, but incorrect to issue an injunction capping athlete compensation through a deferred trust amount of $5,000 per year.
The essay also looks at the possible next steps in the movement for college athlete rights, including potential appeals, lobbying before Congress, unionization efforts, Title IX concerns, and future litigation in Jenkins v. NCAA.
Reader comments on the essay on strongly appreciated.
Tuesday, September 02, 2014
Why the District Court's Ruling in O'Bannon is Favorable to the NCAA
Rick Johnson has an excellent op ed. piece in this week's edition of Sports Business Journal in which he explains why Judge Claudia Wilken's ruling in O'Bannon is a "win" for the NCAA. A must read! I also want to thank Rick for including a link to my Cardozo Law Review article.
Thursday, August 28, 2014
Does Josh Gordon have a legal case against the NFL?
In a new column for Sports Illustrated, I'm pessimistic that Josh Gordon -- suspended for the 2014 season -- would be able to take on and beat the NFL in court.
Donald Sterling fails to file timely appeal to California Supreme Court
Dan Wallach noticed and investigated that Donald Sterling failed to file an appeal to the California Supreme Court by Monday's deadline. I write about the impact of Sterling's inaction in a new piece for Sports Illustrated.
Saturday, August 23, 2014
What we call our teams
Various broadcasters and sports media outlets supposedly are not going to use the nickname of the Washington NFL team this season, presumably referring to them as "Washington" or "the Washington team."
In the mid-'90s, Baltimore got a CFL team (when the NFL inexplicably passed a great football city over for an expansion team), which tried to call itself the "Baltimore CFL Colts." The Indianapolis Colts sued for trademark infringement and won a preliminary injunction (the case had a significant personal jurisdiction point). While the litigation was pending during the 1994 season, the team simply called itself the "Baltimore Football Club." During pre-game introductions, however, the announcer would say something like "And now, your Baltimore . . ." and the crowd would shout "Colts" over the rest of the announcement.
If the trend of not using the nickname becomes widespread enough, I wonder if some of the more hardcore Washington fans will take it upon themselves to shout the nickname themselves.
Wednesday, August 20, 2014
Peter Carfagna to teach MOOC course on Representing the Professional Athlete
Our good friend, Harvard Law School sports law professor Peter Carfagna, has let us know that Case Western Reserve University School of Law, via the Coursera platform, will be offering Peter's "Representing the Professional Athlete Course" as a Massive Open Online Course. The course will be going live on Sept. 16 and you can see the course's details on Coursera. This is an outstanding opportunity to learn sports law from one of the most successful sports lawyers in U.S. history and an extremely talented teacher as well.
Peter's course is a 6 Module MOOC course and will cover the 4 stages of a professional athlete's career as explained in his outstanding West Academic book titled Representing the Professional Athlete (2nd Ed.)
For a great Q/A with Peter, see this Harvard Law Today story.
Daniel Wallach on settlement reached in Steve Moore, Todd Bertuzzi case
It has taken over a decade, but there is a settlement over litigation stemming from the vicious hit by Todd Bertuzi against Steve Moore. The hit ended Moore's career and led to a $68 million lawsuit.
Sports attorney Daniel Wallach of Becker & Poliakoff breaks down the settlement on SportsNet Toronto and what it means for hockey. The interview with Brady and Walker begins at around the 15:00 mark, and is an outstanding listen.
Tuesday, August 19, 2014
Turning Pro in Hockey
basketball and football, the draft entry rules and the NCAA eligibility rules are simple--once someone submits their name to the draft, and they don't pull out prior to the draft, they become ineligible to play in college regardless of whether they are selected or not. Baseball allows a player to be drafted, and so long as they don't sign with the team, they may attend college but the drafting team loses the player's rights.
However, for the sport of hockey, the way in which the NHL draft eligibility rules and the NCAA rules intersect are quite unique. For a variety of reasons, the NHL draft rules permit players to be drafted once they turn 19 (or 18 under certain circumstances). However, the NCAA has determined that so long as the player doesn't sign a professional contract, or sign with an agent, he may retain his collegiate eligibility. The player even may spend time at the team's "development camp" during the summer, competing against pro players. In fact, during the summer of 2014 over 300 players with college eligibility competed in prospect "Development Camps."
These rules produce nuances distinct to hockey:
Why am I writing this now, during the dog days of August? Because two events at Boston College highlighted this "twilight zone" recently. First, Kevin Hayes navigated this process masterfully. A first round draft pick of the Chicago Blackhawks during the 2010 entry draft, Kevin followed his older brother Jimmy and decided to embark on a college career.
While his brother Jimmy, a second round pick by the Toronto Maple Leafs, left college after his junior year (and a national championship), despite interest from the Blackhawks, Kevin passed on signing an NHL deal at the end of each college season. After playing four years at Boston College (and winning a championship himself), he became a free agent on August 15th--free to shop himself to the highest bidder.
Why was this masterful? 1) Kevin earned a college degree; 2) he won two national championships and improved himself by competing at the highest level (finishing third in the Hobey Baker Award this past season); and 3) has the luxury his contemporaries do not--he's an NHL free agent, in demand, at the age of 22.
This other side of the question is the saga of Sonny Milano. Milano, who committed to Boston College, was the 16th selection in the 2014 NHL draft by the Columbus Blue Jackets. The plan was to play at Boston College for a few years, honing his skills while the Blue Jackets still owned his rights. He dominated in international competition all summer, posted a video that went viral on YouTube highlighting his stick skills, and announced last week that he would forgo college and head straight to the Ontario Hockey League to begin his pro career.
Monday, August 18, 2014
To the man who taught me the infield fly rule
My father, Lawrence Wasserman, passed away July 10, at age 85. A friend once told me that losing a parent is when you really become an adult; I kind of believe that. I just ended shloshim, the 30-day period of mourning in the Jewish faith, so it seemed a good time to post this.
My dad was a huge baseball fan. He somehow became a Yankees fan in 1930s/1940s Brooklyn, an interesting choice that probably subjected him to some abuse (although his consolation was that the Yankees always won and the Dodgers always lost). He passed that love of the game down to me (even if I traded the Yankees for the Cubs as an adult--don't ask). I still cry at the end of Field of Dreams ("Dad, you wanna have a catch?"), because, who doesn't? More importantly, though he certainly could not have imagined it at the time, he set me down the path of my two-plus-year (and counting) scholarly obsession with the Infield Fly Rule.
Crazy as it sounds, one of my vivid snapshot memories of childhood is that moment when I first learned about this crazy rule. I was about eight years old and my dad and I were watching a Yankee game on TV. One of the announcers said "Infield Fly Rule is in effect" (standard baseball broadcaster lingo on IFR plays, for reasons I have not yet been able to uncover); I asked what that meant and he explained. And he obviously did it in very clear terms, because I immediately understood both the rule and its logic and his explanation stuck with me going forward. If, as I have argued, to understand the infield fly rule is to understand baseball, then my dad understood baseball. And he made sure I did, as well.
One of the last times I visited him in New Jersey in the spring, I brought along two of my infield fly articles. He flipped through them while we were sitting together talking and he read them after I left. And I am quite certain it is the only thing I have written as a prawf that he read or understood. So that alone made this whole project worthwhile.
Friday, August 15, 2014
O'Bannon, College Reform & Title IX
As the dust begins to settle on Judge Claudia Wilken's ruling in the O'Bannon case, many are beginning the process of interpreting the ruling from a variety of perspectives. One of the chief questions relative to paying college athletes, and the brave new world in which the NCAA has been brought, is the role that Title IX will have on its implementation.
One of Sports Law Blog's favorite antitrust economists, Andy Schwarz a partner with OSKR LLC in California, recently penned an insightful article on Deadspin titled "Don't Let Anyone Tell You The O'Bannon Ruling Conflicts with Title IX." Schwarz argues that the payments being proposed by Wilken should be construed as "part-and-parcel of the financial aid offer made to male athletes." As such, they'd fall under the umbrella of the "substantial proportionality" test as required by Title IX. The article is masterful and should be read by all to fully understand this issue.
Our own Michael McCann analyzed the O'Bannon decision for Sports Illustrated and tackled the issue of Title IX, noting that Title IX plaintiff attorneys may have a different perspective than the one Schwarz argues. Another wonderful piece was recently posted on espnW by columnist Jane McManus titled "NCAA Reforms: Good for Female Athletes?" McManus, who also quotes Schwarz, asks the poignant question "so what is the future of women's sports under this new structure?" Finally, Kristi Dosh wrote a piece which poses more questions than answers, in a column titled "Are O'Bannon Ruling and Title IX at Odds?"
What's clear is that there will be many a law review article penned debating this topic. Title IX recently celebrated its 40th Anniversary and its impact continues to play a major role in higher education.
Wednesday, August 13, 2014
Weighing in on the potential for criminal charges against Tony Stewart. Thanks to Corey Yung of Kansas University School of Law, whom I first spotted through the link to the Concurring Opinion blog, for helping out with this story.
Based on the reaction to my story on Twitter, this case is as polarizing as they come. Stewart has a reputation as a hothead, leading many fans to conclude that he was -- at the very least -- trying to teach Ward a lesson by swerving/accelerating/spinning his wheels in his general direction. Many others feel that because Ward was out in the middle of traffic, Stewart should be in the clear.
It's not known yet what Stewart told investigators. If he didn't see Ward, it's hard to argue for any criminal charges (here's the view from inside a sprint car). The Ontario County sheriff says the investigation will continue, perhaps for weeks. Interested in anyone's thoughts on whether this is a good or bad sign for Stewart.
Tuesday, August 12, 2014
The never-ending Donald Sterling saga ends . . or not
Steve Ballmer is the new owner of the Los Angeles Clippers, according to the NBA. Donald Sterling has a different interpretation, as I write in a new piece for Sports Illustrated.
Monday, August 11, 2014
More on the Legal Fallout of Tony Stewart crash and O'Bannon v. NCAA
I was a guest on ESPN's Outside the Lines tonight to talk about the legal fallout of the Tony Stewart crash. Here's a video:
In addition, I have a new Sports Illustrated column where I predict that Ed O'Bannon will appeal his victory in O'Bannon v. NCAA.
Sunday, August 10, 2014
Potential Criminal, Civil and Contract Law Fallout for Tony Stewart
I have a new column on SI.com on the assorted legal ramifications of the incident last night involving Tony Stewart and the death of Kevin Ward, Jr. This includes criminal charges, a wrongful death lawsuit and termination of endorsement contracts under morals clauses. Hope you can check it out.
Yung on Tony Stewart and criminal culpability
At CoOp, Corey Yung (Kansas) has a good analysis Tony Stewart's possible criminal culpability in the on-track death of Kevin Ward, Jr.
Saturday, August 09, 2014
Loss of Value Insurance: 3 Questions
Following the news that Florida State paid for the premium for Jameis Winston's loss of value insurance policy, and the wonderful law review article titled "Insurance Coverage for Elite Student-Athletes" by Jill Weiber Lens and Josh Lens (Baylor University) a few questions to ponder:
O'Bannon & NCAA Reform
Yesterday, Michael McCann and I, along with Robert Raiola, Alan Milstein and Daniel Wallach, led a roundtable discussion for the Boston Bar Association on the Donald Sterling controversy. The panel was well attended and, by all accounts, quite successful. Afterwards, most of us then headed out to a late lunch in Boston to catch up on life.
As often happens with the conversations of sports lawyers, our attention turned to the O'Bannon case. Always prescient, McCann stated that he expected Judge Wilken to issue her ruling at approximately 6:45 pm est just before the weekend. He hoped it wouldn't happen, lamenting the likely long night of writing and analysis he'd be required to provide Sports Illustrated (alas, the rigors of being THE sports law expert for that media outlet.)
We now know McCann was correct--in a ruling siding, primarily for O'Bannon, Judge Wilken ruled that the NCAA's could no longer use "amateurism" as the single defense to all restrictions placed on college athletes. You can read McCann's insight in a piece titled "What Ed O'Bannon's Victory over the NCAA Means Going Forward" here.
Another article worth your time is from noted columnist Joe Nocera of the New York Times who posted this piece titled "This is Reform? The NCAA's Feeble Reform Impulse." And, to be clear, any writing that discusses Andy Schwarz's concept of Team Reform v Team Market analysis is a good read. For Schwarz's full article titled "How Not to Reform the NCAA" go here.
Friday, August 08, 2014
Article of interest: Lens on insurance for college athletes
Jill Wieber Lens (Baylor Law) and Josh Lens (who works in athletics compliance at Baylor) have posted Insurance Cover for Elite Student-Athletes to SSRN. Here is the abstract:
College athletics is commonly referred to as “big business” for universities. But it’s also big business for elite student-athletes, meaning those who are talented enough to later become professional athletes. What happens if they get injured while still in college? An injury could cost an elite student-athlete millions of dollars, in the form of lost expected future income from playing professional sports. More and more elite student-athletes are looking to insurance to help with this risk.
This Article explores the types of insurance available for elite-student athletes, mainly total disability and loss-of-value insurance. The Article is the first to focus on student-athletes’ biggest hurdle in obtaining the insurance—the cost. It argues that change is needed because current limitations on elite student-athletes provide easier access to total disability insurance than to loss-of-value insurance. The Article also cautions that even though insurance is a solution to this unavoidable problem for elite student-athletes, it is not foolproof. Insurance is only reimburses part of the lost future income. That partial benefit may also possibly be inadequate because it is based on draft projections, which will not always be accurate.
Wednesday, August 06, 2014
Disability Insurance: College Edition
In 2011, on this blog, I posed the question whether a lack of disability insurance was driving college football players to the NFL early--link here. For decades now, the NCAA has permitted students to borrow off future earnings to cover the premiums on policies protecting themselves from permanent disability. It's known as the NCAA's Exceptional Student Disability Insurance (ESDI) program.
Where the NCAA has traditionally restricted the ability of college athletes to procure true protection is via "loss of value" insurance policies. For example, true "loss of value" coverage is offered by insurance carriers whereby a player projected to be a top ten pick suffers a debilitating, but not permanent injury. The player is able to continue playing at a slightly lower level than before the injury but still gets drafted in the fifth round. The player would collect on the sizable gap in compensation between their anticipated early first round and actual fifth round salaries.
Loss of value coverage was deemed permissible by the NCAA in 2010. Unfortunately, the NCAA deemed students who borrowed off future earnings to cover these premiums to be receiving impermissible extra benefits under their rules--thereby forcing students (and their families) to pay these expensive premiums for the policies out-of-pocket.
Good news, while the NCAA didn't come to their senses and change the rules, individual colleges found a loophole. Florida State quarterback Jameis Winston, the 2014 Heisman Trophy winner is predicted to be a top-10 pick in the NFL's 2015 draft. Using money from the school's Student Assistance Fund, Florida State recently paid the approximate $60,000 premium on Winston's loss of value policy to provide $10 million in disability and loss of value protection.
According to the NCAA, the Student Assistance Fund "shall be used to assist student-athletes in meeting financial needs that arise in conjunction with participation in intercollegiate athletics, enrollment in an academic curriculum or that recognize academic achievement." Responsibility for the oversight and administration of these funds occur at the conference level.
Thus, Florida State, with the ACC's blessing, recognizes the responsibility it has to protect the future earnings of its students. Well done Stan Wilcox, athletic director at Florida State!
For media coverage of this policy you can check out ESPN and SB Nation.
Tuesday, August 05, 2014
An Empirical Analysis of the Infield Fly Rule
The published version is in the Journal of Legal Metrics. The paper discusses the results of a four-year study of every infield fly call (and should-have-been call) from 2010-2013. I am going to repeat the study for the 2014 and 2015 seasons and I am hoping to turn the entire infield fly project into a book. Comments and suggestions are always welcome.
Friday, August 01, 2014
Announcement: New online sports law course
Nationally recognized sports lawyer Glenn Wong will launch the new Mark H. McCormack Online Graduate Sport Management Certificate program this coming Fall semester. Professor Wong’s 3-credit “Sport Law” course will be the first in a 15-credit certificate program that enables working professionals to access the highly regarded McCormack Sport Management curriculum and faculty in a convenient, 100% online format.
In addition to authoring one of the leading Sport Law textbooks, Wong has previously served as an MLB Salary Arbitrator and as Interim Athletic Director at UMass. Students can take courses without being in the certificate program if they would like them for professional development. Students interested in the certificate can take up to 2 courses towards the certificate before applying to the full program.
To enroll in Prof. Wong's Sports and the Law course click here.
For more information on the McCormack Sports Management Graduate Certificate program at UMass go here.[Editor's Note: Prof. Wong is a longtime mentor and friend. Anyone interested in the field of "sports law" would benefit tremendously from his insight and experience. Additionally, any potential access to his colleagues including, but not limited to, Department Head & Prof. Lisa P. Masteralexis, should also be a huge draw for potential students.]
Tuesday, July 29, 2014
The Irony of the MLBPA's Recent Grievance Against the Houston Astros
Major League Baseball Players Association (MLBPA) has filed a grievance against the Houston Astros over the team's failure to sign several recent draft picks, including the first overall selection Brady Aiken (pictured). Nick Faleris has provided a great recap of the breakdown in negotiations between Aiken and the Astros over at Baseball Prospectus, but in short Houston had allegedly reached a $6.5 million deal with Aiken, only to pull it off the table due to concerns with Aiken's elbow that were identified during his pre-contract-signing physical exam (Aiken disputes the diagnosis). Instead, the team opted to offer Aiken the minimum amount allowed under the collective bargaining agreement, or about $3.5 million, to sign. Even after Houston eventually raised its offer to $5 million, Aiken refused to sign for less than the original agreed upon amount, and as a result the signing deadline for draftees passed last week without the two sides reaching an agreement.
Due to the intricacies involved in the new MLB draft system, however, by failing to sign Aiken the Astros were also unable to honor the agreement they had reached in principle with fifth round selection Jacob Nix. Basically, MLB's CBA caps the amount that teams can spend on draft picks, and conditions some of that money on the team signing its top picks. It just so happens, however, that Nix's agent, Casey Close, also represented Aiken, raising questions about whether the Astros were attempting to manipulate the situation to force one of Close's clients (Aiken) to sign at a reduced rate so the agent's other client (Nix) could sign as well.
The fact that the MLBPA has opted to pursue a grievance over the Astros' failure to sign Aiken and Nix is somewhat ironic given that the union has never shown much interest in representing minor league baseball players. Indeed, the MLBPA has historically focused its energy exclusively on serving the interests of major league players, sometimes at the expense of minor leaguers (including, for example, the union's agreement discussed above to cap draft pick signing bonuses in the most recent CBA). The resulting lack of union representation for minor leaguers is a significant factor motivating the recent Senne class action lawsuit filed against MLB, which alleges that MLB teams have failed to pay their minor league players in accordance with the Fair Labor Standard Act's minimum wage and maximum hour provisions (for more on the Senne lawsuit, check out Sports Law Blog's prior coverage of the case available here and here).
All of this makes the union's decision to pursue a grievance on behalf of Aiken and Nix somewhat surprising. Under the terms of MLB's most recent CBA, teams are prohibited from signing recent draftees to major league contracts. Consequently, even if they had signed with the Astros, neither Aiken nor Nix would have immediately joined the MLBPA's membership. Instead, they would have had to wait until they were promoted to the major leagues (or assigned to a major league team's 40-man roster) in order to join the union. Admittedly, the draft rules at issue in the Aiken/Nix grievance were agreed to as part of MLB's most recent CBA, giving the union some interest in the matter. But the fact that the two draftees would not have immediately joined the union even if they had signed does raise questions about why the MLBPA has elected to become involved in the matter.
Monday, July 28, 2014
Donald Sterling loses
The NBA is poised to approve the sale of the Clippers to Steve Ballmer following a probate court effectively ruling for Shelly Sterling. My take for Sports Illustrated.
Wednesday, July 23, 2014
New Chapter in Donald Sterling Saga: he sues NBA, Adam Silver and Shelly Sterling
There have been several significant developments in the Donald Sterling legal saga over the last 48 hours, including a new lawsuit and threat from Doc Rivers that he'll quit as Clippers coach if Donald Sterling sicks around. Here is my legal analysis of those issues for Sports Illustrated.
California knows how to tax pro athletes
Robert Raiola and I, in a new piece for SI.com, look at how California tax law plays a key role in raising revenue from athletes for the state.
Saturday, July 19, 2014
Distractions and misdirections on Chris Kluwe
Two thoughts on the Vikings' report about the release of punter Chris Kluwe and anti-gay comments by the team's special teams coach. The coach, Mike Priefer, was suspended for three games (reduced to two if he attends sensitivity training); the report describes him as a good man who made a mistake and said a bad thing. The report insists that Kluwe was released because of performance and contract, not because of his gay-rights/marriage equality activism.
1) The report concludes that the Vikings were not concerned with the content of Kluwe's advocacy, but with the fact of his advocacy and the "distraction" it was creating. While it perhaps gets the team out from liability for retaliation, the notion that players are doing something wrong--something that justifies cutting them--by being politically engaged is a pretty reprehensible stance for the team to take. The NFL (and all professional sports leagues) makes a big deal of how all the charitable work players do--in fact, much of this work is required of the players. The league supposedly wants its players to be engaged. But it is beyond hypocritical and paternalistic to punish a player for having enough of an engaged mind to pick his own causes. And someone needs to excise the word "distraction" from teams' vocabulary. Most people in most walks of life can do their jobs just fine even while taking some time to think, speak, and write on political issues. We need to get past the idea that professional athletes are different.
2) The report mentions Kluwe (and others) making raunchy jokes about Jerry Sandusky; Pro Football Talk's Mike Florio (acting as shill for the Vikings and the NFL) highlighted this in a series of tweets, repeating what he was told by anonymous league sources. Of course, none of this matters if/when Kluwe sues the Vikings, since none of it would be admissible under evidence rules. And that is for the better. While the rules of evidence are often criticized for leaving out important information and giving fact-finders less than the whole story, they also serve to remove stuff that is meant as little more than misdirection. It should be obvious that there is a world of difference between admittedly tasteless jokes targeting the wrongdoer (not at his victims) and at the school that harbored the wrongdoer, and an explicit call to kill all members of a class of people based on hatred of members of that class. But clearly it is not that obvious, as Florio (who does not seem like the smartest guy anyway) has demonstrated. So the rules help us keep our focus.
Monday, July 14, 2014
Busy Stretch on Sterling, O'Bannon, Redskins, Painkillers, Insider Trading, LeBron, Carmelo, A-Rod, Dan Marino, Johnny Manziel, Ken Feinberg . . .
Since the Donald Sterling story broke on April 26, I've written 41 columns for Sports Illustrated, SI.com, MMQB and Golf.com. The last 10 weeks have been a busy stretch! I have a week's worth of columns from last week's Sterling hearing that I didn't get a chance to blog on. In general, I haven't had a chance to blog, but I'm grateful that others on our blog have contributed with excellent posts. I appreciate the great insights in these columns from Robert Raiola, Alan Milstein, Larry Coon, Daniel Wallach, Warren Zola, Mark McKenna and Eugene Egdorf. I also received outstanding feedback by e-mail and on Twitter, and am grateful to all of the readers.
Here are the links to the 41 columns [updated Aug. 13 to commemorate the end of the Donald Sterling legal saga -- there are now 50 columns]: