US Sports League

US Sports League to Lose Bifurcation Attempt in PASPA Damages Claim

Recent court documents filed in the post-Supreme Court ruling phse of the “PASPA” case pitting New Jersey and the state’s Monmouth Park Racetrack show that the five US sports associations on the losing side of last month’s PASPA ruling are also soon to be on the losing side of a bifurcation (“splitting”) motion in the New Jersey US District Court where the PASPA case originated.

The bifurcation motion was a legal attempt by counsel for the sports leagues to split apart from other post-ruling matters the claim for up to $150 million in damages by Monmouth Park’s parent entity, the New Jersey Thoroughbred Horsemens Association (NJTHA), which believes it was for several years unlawfully restrained from offering sports-betting services at its facility.

Though the official ruling on the bifurcation motion has yet to be issued by presiding US Magistrate Judge Lois Goodman, a joint document filed by counsel for both the leagues and the NJTHA indicates that Judge Goodman will deny the leagues’ motion, which the NJTHA had labeled a both an attempt at delay and a second chance for a court to rule on relevant claims. As the NJTHA’s counsel wrote: “They want two (and perhaps more) bites at the apple.”

Several developments have occurred in the past three weeks as the NJTHA’s claims for damages has been formalized, according to this timeline:

June 7: Counsel for the leagues and the NJTHA meet to hammer out a framework in advance of a June 20 court conference scheduled before Judge Goodman on the bifurcation request;

June 15: The two sides file a joint letter providing a framework, position statements and possible judicial steps in response to a request from Judge Goodman. In addition to the position statements, the document also includes the leagues’ requested plans in the event the bifurcation motion is either granted or denied;

June 20: The two sides meet with Judge Goodman, who hears their arguments. Judge Goodman appears to come down primarily on the side of the NJTHA, with some defining of the issues (regarding the claimed damages) that will be examined first;

June 26: The two sides file another joint document, a “Stipulation and [Proposed] Order”, for Judge Goodman to review, edit, and sign. That the June 20th decision went against the leagues is evident from Points B and C of the proposed order, which also confirms the leagues’ plan to file an immediate opposition to the motion’s result, as it also detailed in the June 15 letter.

This excerpt from the proposed order outlines the leagues’ loss in this technical skirmish:

WHEREAS, at a June 20, 2018, conference with the Honorable Lois H. Goodman, Plaintiffs and NJTHA agreed to the following;

IT IS this ____ day of ______, 2018, ORDERED THAT:

A. The Court’s consideration of the merits of the Motion shall, at this time, be limited to the following issues:

(1) Whether, as a matter of law, NJTHA was “wrongfully enjoined” by the temporary restraining order entered by the Court on October 24, 2014 (the “TRO”);

(2) If the Court concludes that NJTHA was “wrongfully enjoined,” then whether, as a matter of law, NJTHA is entitled to recover the full amount of the $3.4 million bond that was issued as security for the TRO (plus interest sought by NJTHA); and

(3) Whether NJTHA’s asserted right to damages in excess of the $3.4 million  ond amount (plus interest sought by NJTHA) due to alleged “bad faith” on the part of Plaintiffs, including NJTHA’s claims for restitution and unjust enrichment, can and/or should be decided in favor of either party as a matter of law.

B. Plaintiffs shall file an opposition to the Motion addressing the foregoing issues by no later than July 16, 2018.

C. NJTHA shall file its reply submission by no later than August 13, 2018. …

Further elements of the stipulation order delineate discovery-related matters, which both sides also agreed to. According to a schedule created by counsel for the leagues in the June 15 letter, the discovery process will take at least ten months in total and stretch well into 2019. Meanwhile, Monmouth Park has already opened up its sports-betting services, though years later than originally planned, as have several other New Jersey venues.

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