New York Daily Fantasy Sports Suit: Reargument at the Court of Appeals May Have Revealed a Fourth Vote to Preserve DFS’s Constitutionality

When the case challenging the constitutionality of daily fantasy sports in New York was reargued yesterday, after the New York Court of Appeals likely split 3-3 following the first argument last fall, three things stood out. First was the absence of now retired Court of Appeals Judge Eugene Fahey. At the first argument in October, Judge Fahey was a staunch opponent of the State’s argument that the Legislature had rationally concluded that daily fantasy sports is not gambling banned by the New York Constitution, calling it “sophistry” and “Orwellian.” But with Judge Fahey turning 70 in 2021, he was forced to retire at the end of last year.

Without Judge Fahey’s voice in the reargument, and more importantly his vote, Judges Jenny Rivera and Rowan Wilson were forced to counter on their own the State’s assertions that DFS is different from sports or proposition betting and, in a close case like this one, the Court should defer to the Legislature’s rational findings that DFS is a skill-based simulation contest, and not gambling. And counter them they did. Judge Rivera repeatedly questioned the State’s position that DFS is different from any other skill-based gambling like poker or blackjack, and said she couldn’t understand the State’s distinction. Judge Wilson likened DFS to a series of proposition bets, and asked whether the originalist view of the 1896 constitutional amendment that banned gambling in New York was important to the Court’s analysis of what constitutes gambling. Judges Rivera and Wilson appeared to favor the Plaintiffs’ position in the first argument, and not much changed in this one.

Chief Judge DiFiore, Judge Singas, and Judge Cannataro too seemed unmoved from their prior views supporting the State. Each asked a question about the correct standard of review to apply, and each seemed ready to defer to the Legislature’ factual findings. So, that leaves only two to cast the deciding votes in whether the Interactive Fantasy Sports law passes constitutional muster.

The second noteworthy part of the reargument was that new Court of Appeals Judge Shirley Troutman did not ask a single question. I wasn’t able to catch the first two arguments before this one, so it’s hard to say what her questioning style at argument will be. But for this one, there’s just no way to know where she stands.

That leaves the last noteworthy development. After Judge Michael Garcia recused from the case, and the Court likely split 3-3, it couldn’t risk another tie if Judge Fahey’s successor, now Judge Troutman, sided with Judges Rivera and Wilson. So, the Court exercised its power under the New York Constitution to vouch in the Presiding Justice of the Second Department Hector LaSalle to ensure that wouldn’t happen (see NY Const art. VI, § 2[a] [“In case of the temporary absence or inability to act of any judge of the court of appeals, the court may designate any justice of the supreme court to serve as associate judge of the court during such absence or inability to act.”]).

Vouching in a Justice of the Appellate Division is important not only because he can provide the deciding vote, but because over the last 10 years and 21 vouched in Justices in merits appeals, those judges voted with the majority 17 times and concurred in the judgment in a separate opinion once. That leaves only 3 dissents. Where a vouched in Justice goes, so goes the majority of the Court of Appeals.

Where did Justice Hector LaSalle go at the reargument? After listening to the State’s argument without speaking up, Justice LaSalle was ready when counsel for the Plaintiffs stepped to the podium. He was the first to speak up with a question about whether the Plaintiffs’ proof on summary judgment–they didn’t submit any evidence to contradict the Legislature’s factual findings–satisfied the heavy burden to show that the IFS law is unconstitutional beyond a reasonable doubt. “Or is there a different standard we should apply?” he asked. That question is telling, I think. If Justice LaSalle is starting from that point, he appears to be looking at the case in way that would lead to him to conclude that deference is owed to the Legislature’s factual findings that DFS is a game of skill that does not involve chance to a material degree.

And if that is the case, Justice LaSalle’s vote could be the deciding one to preserve the constitutionality of DFS in New York. We shall see in 30-45 days.