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Kentucky Appeals Court Overturns Domain Name Seizure 
By Anthony Kammer – Edited by Stephanie Weiner

Vicsbingo.com v. Commonwealth of Kentucky, No 08-CI-01409
Court of Appeals Ruling (Hosted by EFF)
Commonwealth of Kentucky v. 141 Internet Domain Names (original ruling) 

On January 20, 2009, the Kentucky Court of Appeals overturned a lower court’s order to seize 141 Internet domain names that could potentially be used as illegal “gambling devices” within the state. The appeals court granted a stay back in November, but Tuesday’s decision makes it look increasingly unlikely that the state can seize domains in this fashion. According to John Pappas of the Poker Players Alliance, this decision is “a tremendous victory for Internet freedom.” 

On January 21, 2009, a day after this decision was entered, the Commonwealth of Kentucky filed a notice of appeal to the Kentucky Supreme Court.

The three judge panel of the Court of Appeals did not provide a majority opinion, but in a 2-1 decision, Judges Keller and Taylor granted a Writ of Prohibition against the Franklin Circuit Court and successfully blocked the domain name seizure. In his opinion, Judge Keller concluded that domain names did not fall within the statutory definition of “gambling devices” and consequently that the lower court lacked jurisdiction over them. 

The appeals court focused its decision on the language of Kentucky’s gambling statutes, declining to address many of the jurisdictional and constitutional issues posed by the state’s attempt to seize out-of-state interests. Judge Taylor agreed, but in a concurring opinion said that even if the domain names had qualified as “gambling devices,” the statute still did not authorize civil in rem forfeitures and that absent criminal charges, the domain names could not be seized.

Jeremiah Johnston of the Internet Commerce Association told the Associated Press that he approved of the Court of Appeals decision to return the 141 websites but noted that the court had not resolved the important question of whether or not Kentucky has the authority to seize the domain names of overseas companies.

The Court of Appeals emphasized that the Kentucky legislature could redraft the gambling law and provide courts with the authority to seize Internet domain names. However, the Electronic Frontier Foundation points out that even if the Kentucky legislature amended its gambling laws in accordance with the court’s decision, several constitutional problems would still be likely render any attempt at seizure unenforceable. The Amicus Curiae brief filed by the EFF, the Center for Democracy and Technology, and the ACLU of Kentucky, addresses many of these problems.

Ars Technia provides a short summary of several of these constitutional problems, including the fact that allowing Kentucky to seize foreign domain names could affect interests internationally and would likely be in violation of the Commerce Clause. Additionally, permitting these kinds of seizures could potentially threaten other types of speech as well, since a domain name seizure could conceivably be authorized whenever content was in violation of a local law. At the time of the original order, these issues gave rise to widespread criticism. 

John Levine, for example, called the dispute “a phenomenally bogus case,” although he speculated that the decision may provide some interesting case law regarding courts’ jurisdiction over domain names.   Slashdot ran a similarly negative response. Some groups even suggested that it might be advisable for domain owners to move their domains to registrars that are located outside the U.S.  DomainNews.com reported that the ruling even led groups to call for a Kentucky Gambling Boycott.

Kentucky Governor Steve Beshear and the Justice and Public Safety Cabinet initially brought the action as part of an effort to protect Kentucky’s legitimate, taxable gambling interests. Kentuckians spend an estimated $170 million annually on gambling, much of which flows out of the state, an effect Beshear has sought to counteract with new gambling laws.  Jacqui Cheng noted that online gambling poses serious threats to Kentucky’s horse-racing industry as well.   The Kentucky Supreme Court has the option of affirming the appellate court’s decision, but it will be interesting to see if they choose to engage the jurisdictional and constitutional issues when they hear the state’s appeal.

Posted On Jan - 25 - 2009 Comments Off

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