National Collegiate Athletic Association, et al. v. New Jersey Thoroughbred Horsemen's Association, Inc.

In 2014, the district court entered a temporary restraining order (TRO) enjoining respondent from offering sports gambling pursuant to a new state law that purported to repeal longstanding prohibitions on such betting. That law was plainly invalid under Third Circuit precedent, yet respondent refused to put off its plans to introduce sports gambling by even a few weeks to allow the court to rule. Accordingly, the court granted the TRO and then entered a permanent injunction. Consistent with Federal Rule of Civil Procedure 65(c), the court required petitioners to post a bond to secure the TRO, but not the permanent injunction. That difference reflects the text and limited office of Rule 65(c). Nearly four years later, this Court reversed the Third Circuit precedent that bound the district court. Not content to declare victory, respondent demanded millions of dollars in damages on the theory that it was “wrongfully restrained” for 28 days by the 2014 TRO. The district court rejected that extraordinary request, both because the TRO was correct when issued, as underscored by the entry of a permanent injunction, and because damages would be inappropriate given that petitioners were merely vindicating their rights under then-extant law. The Third Circuit reversed on both grounds. The questions presented are: 1. Whether a party was “wrongfully enjoined” under Federal Rule of Civil Procedure 65(c) when the district court confirmed via the grant of a permanent injunction that its entry of a temporary restraining order was correct under then-applicable law.