States' Rights Advocates Look to Double Down on Supreme Court Sports Betting Win

California Attorney General Xavier Becerra filed a new brief asking a court to throw out the Trump administration’s lawsuit against the state's “sanctuary state” law last week, citing the Supreme Court’s recent ruling in favor of New Jersey legalizing sports gambling.

The less-than-obvious connection between legalized gambling and the Trump administration’s case against California’s sanctuary status is just one of many areas where you can expect state and local governments to cite Murphy v. NCAA in the future.

Lisa Soronen, executive director of the State and Local Legal Center, described the ruling as “a real celebration of states' rights.” Amanda Kellar, director of legal advocacy and an associate counsel at the International Municipal Lawyers Association said it as “a very powerful decision for state and local governments to have in their arsenal.”

The question that seems to divide legal analysts, though, is how far the ammunition in Murphy will take states’ rights activists. Here are three areas we might see indicators pretty quickly.

Immigration Fight

The immediate effect of Murphy was throwing out the Professional and Amateur Sports Protection Act, which restricted states from legalizing sports gambling. The decision, though, strongly reaffirms—and possibly broadens—the understanding that it is unconstitutional for the federal government to force states to do its bidding.

“It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals,” Justice Samuel Alito wrote in the majority opinion striking down the federal law that forced states to keep sports betting prohibitions on the books. “A more direct affront to state sovereignty is not easy to imagine.”

While several legal analysts told us they were surprised by the clarity and scope of the language in the decision, Soronen told Route Fifty that advocates for sanctuary jurisdictions are particularly “over the moon” about it. That's because the Trump administration’s legal crackdown largely hinges on a 1996 law with a lot of parallels to the sports gambling prohibition the court struck down.

The 1996 Illegal Immigration Reform and Immigrant Responsibility Act says state and local governments cannot prohibit employees from sharing information on immigration status with the federal government. The administration has argued this makes “sanctuary” jurisdictions that refuse to allow local police or jails to help enforce federal immigration laws illegal under federal law.

Among the legal analysts Route Fifty spoke with, there was agreement that this law was already on shaky ground, and now is even more unlikely to pass muster after the Supreme Court’s Murphy ruling. In defending California, Becerra’s new brief argues that Murphy proves that California’s sanctuary law is constitutional—it is the federal law that is problematic.

According to Kellar, if the 1996 law is overturned, “it’s going to really take the legs out from the administration’s position.”

Tax Implications

Beyond immigration, legal experts are playing a ‘what-if’ game among themselves, identifying other potential areas where Murphy might bolster states’ advantage vis-à-vis the feds. And, in one corner of the internet, legal scholars are waging an epic legal blogosphere battle over whether Murphy possibly throws dozens of tax laws into question.

In a blog post earlier this month called “Justice Alito, State Tax Hero?,” David Hemel, an assistant law professor at University of Chicago, argued the ruling could have implications for “a whole host of federal statutes that limit the tax authority of states and their subdivisions.” Brian Galle, a professor at Georgetown Law, more than backed up Hemel, stating, “Daniel’s predictions are dramatic, and he undersells them.”

By Galle’s count, 110 tax laws are “jeopardized,” with the potential for a “major economic impact.”

Ilya Somin, a professor at George Mason University Law, is not convinced. In an interview with Route Fifty, Somin explained that Alito makes clear in the Supreme Court’s ruling on Murphy, “it’s not commandeering if there’s a federal law that confers some sort of benefit on private parties.”

From Somin’s perspective, “the benefit of being exempt from state tax law or a limitation on state tax law certainly qualifies.”

We may not have to wait long to find out who is correct.

In April, the Supreme Court heard arguments in South Dakota v. Wayfair, Inc.. As Route Fifty’s Bill Lucia explained, the case centers on state governments’ long—and sometimes frustrated—struggle to tax internet sales to consumers in their states.

While the arguments took place before the Murphy ruling, Somin said “it is possible somebody could make a ‘Dan Hemel’ type of argument” in Wayfair, if the Supreme Court allowed a supplemental briefing to make that argument.

“If so, the court may have to address it,” Somin said.

FCC Mandates

In the telecommunications space, state and local governments have been warning of overreach by the Federal Communications Commission. The FCC has been restricting state and local governments’ authority to decide how broadband towers and wiring are deployed in their jurisdictions—including on state and locally-owned lands.

Gerry Lederer, a partner at the firm Best, Best & Krieger, which represents local governments on telecommunications issues, is reaching out to clients following the Murphy v. NCAA decision. He believes there is value in sitting down with the FCC to discuss “the direction of the Court in striking down laws that command states to pass laws consistent with [federal] mandates.”

The language the FCC uses to claim preemption of state and local governments is somewhat vague and has been used in both Democratic and Republican-led commissions. Without a significant court setback, the commission is unlikely to give up its use of preemption.

As Somin indicated, Alito made clear that states can only be preempted if it is necessary to provide rights to (or put restrictions on) private actors—otherwise, though, it’s unconstitutional for the feds to force states to legislate or act on the federal government’s behalf. Depending on what is considered a “right” here, corporations, as private actors, might still win those “rights” at the expense of states and local governments in a world where Murphy exists.

Either way, as the FCC preempts state and local governments' authority to manage their own land, as well as issues like net neutrality, expect litigation—and citations of Murphy—to show up often.

A New Era of States Rights?

According to Soronen, for some time the Supreme Court has had “little interest” in the subject of state preemption, and when it did focused mostly on “very narrow and mostly dull issues.” In her mind, the court was overdue to take a preemption case.

Last week, the Supreme Court said they would consider whether Virginia is allowed to ban uranium mining, or if it is preempted by the federal Atomic Energy Act, which raises the question of whether these cases heralded a change in heart for the country’s highest court.

"Is the court taking the uranium mining case right after deciding Murphy a sign? Only time will tell," Soronen said.