Kentucky domains case heading for State Supreme Court

The failed attempt by the state of Kentucky to seize and confiscate 141 international domain names looks set to stay in the headlines. Kentucky Governor Steve Beshear’s staff lodged an appeal this week against the successful iMEGA and IGC appeal which overturned a lower court’s order supporting the Governor’s unprecedented action .
Filed Wednesday, the appeal means that the issues will be heard by the State Supreme Court. It was filed by J. Michael Brown, Secretary, Justice and Public Safety Cabinet, who has been spearheading the case for the governor, working through outsourced lawyers on a contingency basis. Brown’s prominence in the case, instead of the state’s Attorney General as the appropriate state enforcement official has been the subject of legal debate in itself.
Brown’s appeal is against the January 20, 2009 Order Granting Petition for Writ of Prohibition,” which was filed by the Interactive Media Entertainment and Gaming Association (iMEGA) and the Interactive Gaming Council (IGC), with the Court of Appeals in Kentucky, in which the plaintiffs won, stopping the governor’s attempt to seize and ultimately confiscate the domains in its tracks.
iMEGA, PlayersOnly.com, Sportsbook.com, SportsInteraction.com, MySportsbook.com, LinesMaker.com, VicsBingo.com, and the IGC were listed as the petitioners in the successful appeal against the lower court’s decision, which had supported Governor Beshear’s controversial actions.
On Wednesday this week – the day after the successful appeal against his actions – Brown’s staff released a statement to the press, advising that the state of Kentucky intended to appeal against the decision of the Kentucky Court of Appeals.
“The Commonwealth will continue its action to protect Kentucky citizens from illegal internet gambling operations and appeal the recent Court of Appeals ruling to the state Supreme Court,” the statement announced. “The evidence demonstrated that illegal and unregulated activity is occurring in Kentucky and that millions of dollars are being lost as a result of that activity, a fact that wasn’t disputed in Tuesday’s ruling.”
In the meantime, the domains appear to have been released to their rightful owners, reports the publication Government, which carried out whois checks on the domains and commented:  “The lower-court ruling rested on Franklin County Circuit Judge Thomas Wingate’s highly specious finding that internet casino domain names constitute “gambling devices” that are subject to the state’s anti-gambling statutes. Tuesday’s decision disabused Wingate of that notion in no uncertain terms.”
Government goes on to detail the under cover nature of the seizures under Brown’s authority last August, which involved a secret hearing closed to the defendant domain owners and without their knowledge. This led in September to Judge Wingate issuing an order directing registrars of absolutepoker.com, ultimatebet.com, and 139 other domain names to transfer ownership to Kentucky officials.
“Shortly after the order was issued, whois records for many of the domains showed they were the property of Kentucky,” reports Government. “For reasons that still are not clear, the handful of addresses we’ve checked since then appeared to have reverted back to their rightful owner. It’s not clear who made the changes or why they were made.”
Government describes the reversal of Judge Wingate’s seizure order as a victory for civil-liberties advocates, who argued that the laws of an individual state shouldn’t trump the rights of others to access sites that are perfectly legal elsewhere. In friend-of-the-court briefs filed in November, the Electronic Frontier Foundation, the Center for Democracy and Technology, and the American Civil Liberties Union of Kentucky argued the decision would pave the way for Kentucky to take control of any domain name if it pointed to sites that were deemed illegal in that state.
“And it’s not too much of a stretch to envision other states with strong opinions, say Utah, or even countries, perhaps China or North Korea, to similarly commandeer entire sites they deem to violate their laws,” Government editorialised.
“It’s always breath-taking when a court with little understanding of the internet makes a decision that proves to the rest of the world just how out-of-step they are with today’s changing world. A federal judge in San Francisco did something similar last year, when he ordered Wikileaks to be shut down. Fortunately, the errors of these decisions tend to become so obvious over time that they eventually have to be overturned. And that’s a good thing.”
The week was not kind to Bush government litigation, because iMEGA won another challenge Wednesday, this one in the Philadelphia Appeals Court where the government was defeated in its attempt to use broad Internet bans rather than technology to protect the underaged from objectionable content. Although protecting minors is an emotive issue, the danger of the government’s attempt lay in its potential for extension to other areas.
The Philadelphia Appeals Court ruled this week that the Internet Content Law proposed by the federal government would unnecessarily violate the First Amendment, because filtering technologies and other parental control tools are a less restrictive way to protect children from inappropriate Internet content.
The US government had persisted in passing the act despite the fact that the Supreme Court had a year earlier ruled that another law intended to protect children from explicit material online – the Communications Decency Act – was unconstitutional.

Related and similar