Cyberlaw Cases

Case and Court:

• Commonwealth v. Interactive Media Ent’mt and Gaming Ass’n, Inc., No. 2009-SC-000043-MR (Ky. Mar. 18, 2010).

See our previous coverage of this case.

On March 18, 2010, the Kentucky Supreme Court held that the Interactive Media Entertainment and Gaming Association (iMEGA) and the Interactive Gaming Council (IGC) lacked standing to challenge the seizure of 141 internet domain names as illegal gambling devices.¹ These associations failed to particularly specify their membership and thus the Court believed that it could not conclude that any of the owners of the affected domains were represented by the associations. The Court noted that this does not foreclose the possibility of future relief and that those speaking for the seized domains made numerous compelling arguments that “may have merit.” However, the Court insisted that the domain names, as property, cannot themselves challenge their seizure and thus at least some of the owners of the domain names must come forward. The Court explained that such owners could re-file the writ petition with the Court of Appeals. The domain owners could then either proceed to the merits or file a motion for the Kentucky Supreme Court to accept transfer of the case, as its merits have already been briefed and argued. iMEGA has indicated it intends to file such a motion to satisfy the Court’s concerns about standing.²

It is hard not to see this decision by the Court as a “dodge” of the difficult questions presented by the case. While the Court’s language about the arguments made on behalf of the seized domains that “may have merit” is suggestive, it is not entirely clear whether this was an effort by the Court to tip its hand and thereby to encourage the Commonwealth to drop the matter. The Court’s language is circumspect enough that the Commonwealth may continue to pursue this puzzling and over-reaching effort to apply Kentucky’s gambling device seizure laws to these domain names. This ruling is an unsatisfying result either way. If the case is dropped, we will not have a clear ruling from the state’s highest court that this should not happen again. If the case is not dropped, we have to wait several more months to get a resolution.

See also:

• Dan Cypra, Kentucky Supreme Court Sides with State in Internet Gambling Case, Poker News Daily (Mar. 18, 2010).
• Stephen A. Murphy, Poker Domains in Jeopardy as Kentucky Supreme Court Reverses Earlier Decision, CardPlayer.com (Mar. 18, 2010).

Footnotes:

1. Commonwealth v. Interactive Media Ent’mt and Gaming Ass’n, Inc., No. 2009-SC-000043-MR (Ky. Mar. 18, 2010). [↩]
2. iMEGA, KY Supreme Court Questions Standing, Rules for State iMEGA (Mar. 18, 2010). [↩]

Cases and Courts:

• The King’s English, Inc. v. Shurtleff (D. Utah), now Florence v. Shurtleff.
• Am. Booksellers Found. for Free Expression v. Strickland (6th Cir.), on certified questions to Ohio Supreme Court as Cordray v. Am. Booksellers Found. for Free Expression.
• Interactive Media Ent’mt & Gaming Ass’n v. Wingate (Ky. Ct. App.), on appeal to Kentucky Supreme Court as Commonwealth v. Interactive Media Ent’mt & Gaming Ass’n.

Background

States are struggling to determine whether and how they can regulate the internet in those areas where the federal government has either chosen not to regulate or where its efforts have proven unconstitutional. Congress has had significant difficulty regulating indecent and obscene material online and in keeping it away from minors. In particular, the prohibitions in the Communications Decency Act (”CDA”) against transmitting or displaying indecent or obscene material were held unconstitutional in Reno v. ACLU, 521 U.S. 844 (1997) and the Child Online Protection Act (”COPA”), which sought to criminalize posting material “harmful to minors” was also held unconstitutional in Ashcroft v. ACLU, 542 U.S. 656 (2004).

More recently Congress has sought to regulate internet gambling, enacting the Unlawful Internet Gambling Enforcement Act of 2006 (”UIGEA”), 31 U.S.C. §§ 5361-5367. The UIGEA, however, does not itself criminalize internet gambling, but instead prohibits the use of the internet to transfer funds in circumstances where doing so already violates another state, federal, or tribal law.

The failures of the CDA and COPA, and the narrow scope of the UIGEA have created a situation in which many states seek to address these issues of internet regulation themselves, although the states too run into constitutional difficulties. Continue Reading »