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Thursday, October 30, 2014
Brotherly Conflict of Interest in New Jersey Sports Betting Case?

[Update Jan 28, 2015: Daniel Wallach, the author of the post below, is prescient as the Jets have hired Marcel Shipp as running backs coach. Dan's analysis is even more intriguing now -- Mike McCann].

Last Friday, U.S. District Judge Michael Shipp granted a petition sought by the NFL and other leagues to temporarily restrain New Jersey from giving effect to new legislation partially repealing its ban against sports betting. Had the legislation gone into effect, New Jersey’s privately-owned (but state-licensed and regulated) casinos and racetracks would have been able to offer sports wagering to their patrons beginning on October 26th. While Judge Shipp’s order is only of interim effect, as a practical matter it sets in motion a likely end to New Jersey Governor Chris Christie’s efforts to bring legalized sports betting to the Garden State.

Judge Shipp, a respected jurist and attorney, is the older brother of former NFL running back and current University of Massachusetts assistant football coach Marcel Shipp. Just over a year ago, Marcel Shipp served as a Bill Walsh NFL Minority Coaching Fellow with the Arizona Cardinals. The Walsh Fellowship is a highly selective coaching program administered by two league entities, the NFL Management Council and NFL Player Engagement. The league-run program assigns talented minority coaches to NFL teams during minicamps and training camp. During this time, they gain coaching experience and better position themselves for full-time coaching jobs with NFL teams. Most NFL coaches who are minorities participated in the Walsh Fellowship. Marcel Shipp’s own Twitter page stresses “straight to the NFL,” implying a desire to return to the NFL.

Despite what you may have read elsewhere, the fact that Marcel Shipp once played in the NFL is of no legal consequence to Judge Shipp presiding over a lawsuit involving the NFL. As a player, Marcel Shipp’s relationship to the NFL is over and done. He’s 36-years-old and last played in the NFL in 2008. There is no logical reason to believe that Judge Shipp’s analysis of legal arguments involving the NFL is clouded by his brother’s previous employment with the Arizona Cardinals and Houston Texans. Positing a relationship between Judge Shipp evaluating NFL legal arguments and his brother playing in the NFL during the last decade is analytically disingenuous and also disrespectful to the judge.

But Marcel Shipp’s work in the NFL last year as a coaching fellow, and his apparent ambition to become an NFL coach, presents a more debatable issue. There is a real possibility that Marcel Shipp will be interviewing for NFL coaching jobs in the near future. Could his aspirations to become an NFL coach raise questions about his brother’s objectivity in evaluating the NFL’s legal arguments? Might Judge Shipp fear that it would be more difficult for his brother to get hired as an NFL coach—a coveted position—if he ruled against the NFL?

The short answer to these questions is Judge Shipp is likely under no legal or ethical obligation to step aside, but it may be wise for him to do so. For starters, the legal standard for disqualification of a federal judge is very high. Federal judges are expected to recuse themselves only when their impartiality might reasonably be questioned. The mere existence of an employment relationship between a party to a lawsuit and a member of the judge’s immediate family does not automatically require a judge’s disqualification. But it could under certain circumstances. The test for disqualification is “whether an objectively reasonable person – the so-called ‘average person on the street’ – with knowledge of all the facts would conclude that the judge’s impartiality might reasonably be questioned.” This language focuses on “appearances’—not on whether the judge actually harbors a subjective bias.

According to the federal statute, judges are also expected to step aside if a close family member “has an interest that could be substantially affected by the outcome of the proceeding.” This language could be construed as relating to Marcel Shipp, given his apparent desire to become an NFL coach and recent efforts in furtherance of that goal (highlighted by his selection as a Walsh Fellow). At the very least, this latest connection between Marcel Shipp and the NFL (which I discovered several days ago) creates the “appearance” of a conflict of interest. Think about it. Marcel Shipp wants to be hired by an NFL team. His brother, the federal judge, is presiding over a case involving a party—one of the lead plaintiffs—which already has Marcel on its radar and is in a position to hire him. And the judge, as he’s deciding this case, is fully aware that his brother wants to be hired by an NFL team.

This is not like other reported cases involving the employment of a close relative of a federal judge, especially when you consider the unique barriers to entry in the NFL coaching profession. Unlike an accountant or a lawyer with thousands of potential employers and job openings, there is only one major professional football league in the United States, with just 32 teams, and, at best, only a few hundred of these jobs even exist (with even fewer openings). Moreover, there are many candidates competing for a select few positions. For this reason, Marcel’s aspiration to be an NFL coach arguably creates an even greater conflict (or at least the “appearance” of one, which is ultimately what matters) than would a situation involving a family member already employed by a Fortune 500 company who would only benefit indirectly from his employer's courtroom success. By contrast, Marcel could benefit directly – by being hired in a league where jobs are scarce – a result of what happens in the courtroom.

From all appearances, Marcel Shipp may have already directly benefited from the NFL’s courtroom success. Let’s look at the timeline in this case (or, rather, the prior case won by the NFL). On February 28, 2013, Judge Shipp issued an order granting final summary judgment in favor of the NFL and the other sports leagues (thereby ending the case on its merits) and permanently enjoined New Jersey from legalizing sports betting. Less than five months after that decision, Marcel Shipp is in training camp with the Arizona Cardinals serving on then first-year head coach Bruce Arian’s coaching staff as a Walsh Fellow (albeit, just for the summer).

The timing of these events raises a number of questions, such as when exactly did Marcel Shipp apply for a Walsh Fellowship? Did he apply when his brother, the federal judge, was still presiding over the New Jersey sports betting case? And exactly when did the NFL accept Marcel Shipp into the Walsh Fellowship Program? Was it before or after his brother’s summary judgment ruling? Was Judge Shipp even aware of his brother’s apparent desire to be an NFL coach? When did he first learn of his brother’s pursuit of a Walsh Fellowship? Was he aware of it while presiding over the case (and before summary judgment was granted)? Or did he learn of it only after his ruling?

But then again, there are numerous factors that would affect Marcel Shipp landing an NFL coaching job. Many of those factors—such as his experience, skill set and how well he interviews with NFL head coaches and coordinators—are likely more meaningful than legal decisions made by his brother, the judge. Plus, an NFL team, not the NFL itself, would hire Marcel Shipp as a coach. From this lens, Judge Shipp was under no obligation to step aside.

Even if Judge Shipp had every right to hear the case, should he have used discretion to recuse himself? This is a more difficult question. Judge Shipp’s choice to hear the arguments opens the door for critics to question his impartiality. Take, for instance, Judge Shipp’s ruling last Friday. New Jersey had argued in court papers that the leagues were barred from claiming that a “repeal” of the state-law ban on sports betting violated federal law because the Department of Justice had asserted in a prior lawsuit that New Jersey was free to repeal its sports betting ban “in whole or in part” without violating federal law—in other words, the very kind of law Governor Christie recently enacted. Under the doctrine of judicial estoppel, which allows judges to prevent parties from switching arguments in different phases of a case, Judge Shipp could have permitted New Jersey to use the DOJ’s statements against the NFL. Instead, Judge Shipp focused on the DOJ’s absence from this particular petition and denied New Jersey a chance to better argue its case.

Or take Judge Shipp's statement that “the United States is not a party to this matter” in dispatching with New Jersey’s estoppel argument. That statement is only partly true. The leagues’ motion for a temporary restraining order was filed in two different cases – the new one (in which the DOJ is not a party) and the earlier case (in which the DOJ remains a party). The official transcript from Friday’s hearing also bears both case numbers, and an attorney from the DOJ appeared telephonically (as did many of the other lawyers). And the written order granting the temporary restraining order lists both case numbers. Nonetheless, Judge Shipp rejected New Jersey’s effort to bind the leagues to the DOJ’s prior statements, pointing to the “absence” of the DOJ from the new case.

And what about the NFL’s own actions in regard to this apparent conflict? Should the NFL League Office (which employs many lawyers and undoubtedly was aware of this recent connection) have told its outside counsel about Marcel’s participation in the Walsh Fellowship Program? And what do you think the NFL’s reaction was to learning that Judge Shipp was assigned to preside over the latest case. Were they doing “high-fives” in the league office? Assuming that the NFL wins this case, and they are well on their way to doing so (in view of the TRO ruling, which presupposes a reasonable probability of success on the merits), how will it be perceived if Marcel Shipp lands an assistant coaching job with an NFL team for the 2015 season? These are difficult and troubling questions.

Viewing it through a different lens, what efforts, if any, should New Jersey’s lawyers have undertaken to discover this information? Were they under a duty to discover this latest link? Are they required to play detective to ferret out any and all potential conflicts? After all, it took me no longer than 15 minutes of Google and Twitter searches to learn of Marcel Shipp’s participation in the Walsh Fellowship Program. But imposing such a duty on the other side seems impractical as well as unfair. If anything, the burden of disclosing such information to New Jersey should be placed on those having unique, first-hand personal knowledge of the facts.

On appeal (assuming they lose at the preliminary injunction stage), expect New Jersey to challenge Judge Shipp on his interpretation of the law favoring the NFL and the other leagues. It will be interesting to watch if New Jersey attempts to link its scrutiny of Judge Shipp’s legal reasoning to his brother’s pursuit of an NFL coaching job.


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