Case 3:14-cv-06450-MAS-LHG Document 81 Filed 05/29/18 Page 1 of 3 PageID: 1829

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May 29, 2018 MUNICH
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The Honorable Michael A. Shipp
United States District Judge
United States District Court for the District of New Jersey
Clarkson S. Fisher Federal Building & U.S. Courthouse
402 East State Street
Trenton, NJ 08608

Re: NCAA, et al. v. Murphy, et al.,

Case No. 14-cv-6450 (MAS-LHG)

Dear Judge Shipp:

We write on behalf of all Plaintiffs in response to the May 24 letter of

Defendant New Jersey Thoroughbred Horsemen’s Association (“NJTHA”) (ECF No.
79) and NJTHA’s proposed Motion for Judgment on $3.4 Million Injunction Bond
Plus Interest and Damages (ECF No. 80) (hereinafter, the “Motion”). For the
reasons discussed below, Plaintiffs seek a conference with the Court (by phone or in-
person, as the Court prefers) to request (i) bifurcation of proceedings concerning the
Motion, or (ii) if the Court does not bifurcate proceedings, entry of a scheduling
order for the substantial discovery that will be required for Plaintiffs to respond
adequately to NJTHA’s requested relief (which we believe will be narrowed, if not
mooted entirely, by bifurcation).

Plaintiffs believe that NJTHA’s requests are meritless, if not frivolous, and
that NJTHA is entitled to no recovery as a matter of law. The contention that
Plaintiffs’ arguments concerning the constitutionality of PASPA were advanced in
“bad faith” is utterly unsupportable; indeed, those arguments were repeatedly held to
be well-founded by this Court and by the Third Circuit. Nor can NJTHA
demonstrate “bad faith” by reviving well-worn arguments concerning at least some
of the Plaintiffs’ purported involvement in fantasy sports and “gambling” activities
that were already the subject of extensive discovery, and that both this Court and the
Case 3:14-cv-06450-MAS-LHG Document 81 Filed 05/29/18 Page 2 of 3 PageID: 1830

The Honorable Michael A. Shipp

May 29, 2018
Page 2

Third Circuit have repeatedly rejected. With respect to payment under the $3.4
million bond itself, NJTHA cannot establish that it was “wrongfully enjoined” in the
first place, because this Court did not make any error in granting the temporary
restraining order; the constitutionality of PASPA was not even challenged by
NJTHA in opposing the order. Moreover, the Supreme Court agreed with Your
Honor in its ruling on the narrow issue presented to this court by the NJTHA: that
the “repeal” contemplated by the New Jersey law at issue actually constituted an
“authorization.”

Accordingly, for purposes of efficiency, Plaintiffs intend to seek bifurcation

of NJTHA’s Motion. The first phase would seek a determination from the Court
whether, as a matter of law, NJTHA can recover any sums either under the bond or
in excess of the bond amount based on a finding of “bad faith.” No discovery would
be necessary for the Court to make such a determination. Only if the Court
concludes that Plaintiffs are potentially liable for any such sums—and we believe
they are not—would the parties then proceed to any necessary discovery and briefing
on the issue of damages within the scope of the Court’s determination of any
potential liability.

The foregoing approach promotes judicial efficiency by ensuring that the

parties and the Court will not engage in lengthy proceedings that ultimately may
prove unnecessary. Indeed, the discovery that NJTHA will seek is very broad. With
respect to liability alone, NJTHA proposes duplicating the extensive discovery in
which the Plaintiffs already engaged in Christie I, including obtaining several years’
worth of documents and depositions of each Plaintiffs’ “Commissioners” and
“30(b)(6) League representatives.” (Motion at 37.) Damages discovery likely would
be even more burdensome: in addition to involving multiple experts, NJTHA has
already telegraphed its intention to discover information concerning, inter alia, its
own alleged direct financial losses, recompense for a host of consequential damages
as nebulous as a “decrease in morale” for racetrack employees, its counsel fees and
costs, and alleged “profits” that Plaintiffs obtained in connection with fantasy sports
and “sports betting” activities over the course of nearly four years.

We note further that the proposed bifurcation could not conceivably unduly
prejudice any party, as there is no reason to rush these proceedings. Even under
NJTHA’s liability theory (with which we disagree entirely), any damages to which it
may be entitled have stopped accruing. Moreover, any documentation potentially
relevant to the litigation is duly being retained by Plaintiffs.

If the Court agrees that bifurcation is appropriate, Plaintiffs seek an extension

of thirty (30) days from the date of the bifurcation order to respond to relevant legal
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