The US Supreme Court [official website] heard oral arguments in two cases Monday, including a Tenth Amendment challenge to a federal sports betting prohibition.

The first case, Christie v. NCAA [docket], was brought by the governor of New Jersey, challenging [SCOTUSblog report] the federal Professional and Amateur Sports Protection Act (PASPA) [text], which prohibits betting in sports played at the amateur and professional levels. The New Jersey legislature passed a law in 2014 to repeal the prohibitions on sports betting and gambling, which the NCAA, MLB, NHL, NFL and NBA all challenged. The question [text, PDF] the court will answer is: “[d]oes a federal statute that prohibits modification or repeal of state-law prohibitions on private conduct impermissibly commandeer the regulatory power of States?”

The petitioner, New Jersey, argued [transcript, PDF] that PASPA is a direct command to the states, where it attempts to regulate the market through the state legislatures, rather than using federal money to put into place a “comprehensive regulatory scheme.” The justices agreed that such an interpretation would contradict the court’s precedent concerning federal preemption of state laws. In closing, the petitioner focused on the constitution’s founding principles:

The whole debate with respect to federalism had to do with whether Congress was going to be permitted to regulate .. states or will it be required to regulate commerce first and, as an adjunct to that, constrain what states could do. And that’s exactly what this statute did. … Congress wanted a prohibition under state law because it would have no responsibility, no accountability. … The accountability is very important. The structure is important to the liberty of citizens. And this statute violates that ordained structure.

The respondent, the leagues, argued that PASPA preempts states from regulating sports betting and gambling, and also established a comprehensive regulatory scheme, consistent with court precedent. The attorney representing the leagues supported his argument with federal Title 18, under which private parties engaged in sports gambling was a federal felony. The United States, as an amicus curiae, also argued before the court, stating many of the same arguments.

The second case, Rubin v. Iran [docket], arose from a civil lawsuit [SCOTUSblog report] brought under Foreign State Immunities Act (FSIA) [text], in which victims of terrorism prevailed against Iran and now seek Iranian museum artifacts held in the US as compensation. The FSIA permits terror victims to sue the foreign state terrorism sponsors in US courts and to collect certain assets for the judgments against those states, in an effort to better compensate the victims who historically were unsuccessful in obtaining judgment awards from foreign states. The case presents two questions for the court [text, PDF]: “[w]hether the commercial use exception to execution immunity … applies to a foreign sovereign’s property located in the [US] only when the property is used by the foreign state itself,” or if the exception applies to any foreign state assets, regardless of whether they are commercial. The arguments hinge on the contradictory language interpretations from two federal courts.

The petitioner, Iran, argued [transcript, PDF] consistently with the Seventh Circuit’s interpretation, which is that Section 1610 of the FSIA enables “terrorism judgment creditors to enforce their judgments against the foreign governments’ instrumentalities that have been established as separate juridical entities.” Under this view, the victims could only collect Iranian property held in the US which is subject to commercial activity. Iran’s attorney supported this argument, saying: “[A]lthough it subjects to execution any property in which the state has a. . . beneficial interest, it does not extend to diplomatic property. … Congress is excluding specifically that narrow class of quintessentially sovereign property, diplomatic property.”

The victims argued consistently with the Ninth Circuit, which held: “1610(g) provides a freestanding attachment immunity exception, which in addition to enabling veil piercing, allows terrorism victims to attach and execute upon any assets of foreign state sponsors of terrorism, their agencies, or instrumentalities regardless of whether the assets are connected to commercial activity in the United States.” The respondent’s argument relies on legislative history and the principle that Congress would not radically depart from central principles unless Congress has made its determination very clear, and here what’s really very clear is the opposite, that Congress did not intend to override sovereign immunity in Section 1610(g).” If Congress did intent to do so, it would have specifically used the terms “commercial” and “noncommercial”.

The court also heard amicus curiae argument from the United States, which supported Iran’s interpretation of the statute.