Kentucky appeals court puts domain seizure case on hold

The state of Kentucky’s six-year-long attempt to confiscate 132 international internet domain titles belonging to companies allegedly associated with online gambling (see previous reports) has been confronted with a serious obstacle following a decision Friday by the Kentucky Court of Appeals.

The Court ruled that trade association the Interactive Gaming Council had the right to become involved in the case as it sought to protect the privacy of the domain owners from being invaded by Kentucky attempts to expose them for forfeiture proceedings.

The Associated Press news agency reports that Judge Allison Jones, writing for a unanimous three-judge panel, commented that Kentucky has treated the domain names as a group for much of the litigation but now wants to handle them individually to prevent the trade association from becoming involved.

“The Commonwealth cannot now turn the tables and ask the court to require each domain name owner to come forward individually and assert virtually identical legal arguments through separate counsel to resolve threshold, purely legal issues that affect the validity of the entire forfeiture procedure,” Jones wrote, sending the case back to Franklin Circuit Court Judge Thomas D. Wingate for further hearings.

Keith Furlong, CEO of the IGC, said that his association considered the ruling a win, and a catalyst providing guidance to all associations seeking to represent their members in the Commonwealth of Kentucky.

Jennifer Brislin, a spokeswoman for the Kentucky Justice Cabinet, said the opinion is being reviewed, but that in any case the state’s actions in litigating and seizing the domains had resulted in most of the websites involved withdrawing from the state of Kentucky.

In standing up for operators, the IGC has fought a long battle with the state of Kentucky over its seizure of the domain names from registrars in late 2008, claiming the operators were involved in illegal gambling business in the state.

In early skirmishing, the state tried to exclude the IGC, but the association was able to convince lower court judge Thomas Wingate that it had the right to represent one of the domain owners, Pocket Kings Limited.

However, Wingate ruled that the trade body had not adduced sufficient information to establish itself as a representative of all the domain names in question, insisting that the owners of the domains be publicly identified by coming forward individually to argue that their enterprises did not breach Kentucky law, or if they did it was without their knowledge and consent.

The Appeal Court decision Friday appears to have put that strategy on hold for now, and if the IGC ultimately succeed, the domain owners will not be required to identify themselves as the IGC now has legal standing and can fight their corner.

Judge Jones noted that the judging panel felt that the alternative to IGC representing the owners would be impractical, commenting:

“The alternative – forcing 141 domain name owners to pursue their claims individually – would be burdensome and inefficient.”