Originally Posted by joe@iMEGA
Appellate court hearings are, to borrow from Thomas Hobbes, "nasty, brutish & short."
Today's hearing with the US 3rd Circuit was the epitome of that. We were second on the docket, after a suit involving a zoning dispute for a yeshiva school in a New Jersey town. At one point, Judge Jordan asked one of the attorneys, "why are you even here?" Judges Slovitar and Ambro were equally rough. And that was over a religious school.
Once we were up, the judges wasted no time preempting our attorneys' prepared presentation, and pushed the Q&A aggressively in the direction they wanted to go.
First, Ambro wanted to know the status of the current Frank bill. Our attorney Stephen Saltzburg told the court that there has been no debate on the bill, and it has not been part of the agenda on the Hill, given the other more pressing issues facing Frank's committee and the Congress.
Next, Jordan and Slovitar pressed on the issue of "where the bet is placed". I was not happy to hear this, since this is hardly settled law, and good arguments can be made for each side. The problem is that usually, the argument that is most expedient for a given situation is the one that is applied, so there is no consistency. We've avoided this in the past in Kentucky.
The judges raised this when asking about the "vagueness" of UIGEA. Jordan asked Saltzburg if he agreed with the government's assertion that a law must be vague in all instances in order to be voided (he answered "no"). Jordan then went on to say, paraphrasing, if the federal statute relies on state law regarding Internet gambling, and the state "where the bet takes place" has laws to make Internet gambling illegal, then it is "clearly" illegal under the statute, and thus the opposite of vague.
At this point, I was glad that so much of our briefing documents had highlighted the "vagueness" claim we've actually made - that Congress refused to define what "unlawful Internet gambling" was; that banks and credit card companies couldn't determine what was legal or illegal; that as a result, banks and credit card companies blocked transactions for "exempt" online gambling, like state lotteries and horse racing, referred to as "over-blocking".
Much of what factors into decisions never makes it to oral arguments, but knowing that doesn't help with the anxiety.
Bernstein began to raise the 1st amendment and privacy claims, but the judges turned him instead toward the question of third-party standing on the behalf of players. Bernstein asserted that we did have that right, and that iMEGA itself had members that were individual players, not operators, but this did not seem to come to any resolution, since precedent with the 3rd circuit would permit this kind of third-party standing for individuals who cannot represent themselves. The debate would be whether or not players could stand without self-incrimination.
When Nicholas Bagley stood to represent the government, Judge Slovitar was rather rude when she said to him, "You look like a law student." Now, granted the guy is on the other side, and yes he was young, but I mention this to give a sense of how brutal the panel was. The guy is an appellate attorney for the DoJ...he may have looked a little too Gen Y, but panel got a good laugh out of him.
Any way, Ambro jumped right in and asked Bagley why the government was wasting the court's time arguing that iMEGA did not preserve a "void for vagueness" argument at the trial level, when in fact it was introduce and was preserved in Judge Cooper's decision (under the caption "Void for Vagueness"). Bagley tried to argue that iMEGA didn't spend sufficient time making the case, but Ambro again pointed out that it was preserved by the trial court and met the standard for the circuit, so why challenge it? When Bagley didn't readily answer, Ambro (parapharsing) said, "you were just taking a shot."
Since the government spent a considerable portion of its briefings on this topic, it was interesting to hear Ambro jump on it so aggressively.
The judges then pressed Bagley on the thrid-party standing question, which he of course said iMEGA did not have, yet when Ambro questioned him on the relevant case law that established the precedent in the 3rd circuit, Bagley indicated he was not familiar with it, and Ambro took time to explain it to him.
Slovitar then asked him, "Do you have anything else?" He said no, and Ambro told him to sit down. I couldn't tell if they were being dismissive or if they thought the government had such an outstanding argument that it needed no additional scrutiny.
Saltzburg spend his two minutes of rebuttal time noting that a player could not represent himself in the court without incriminating himself, and that while UIGEA contained no criminal sanction for individual players, it did have civil penalties. Plus, the individual - by the panel's reasoning - would have to be in a state with laws against Internet gambling, so they would open themselves to self-incrimination vis-a-vis the state laws.
Red light goes on, thank you very much, next case.
Nasty, brutish and short.
That was a tough panel. They bore down on us, and they went in a direction that, given the vagueness challenge we were making, seemed odd ("where does the bet take place?"). Since the statute targets banks and credit card companies, it was unusual that there were NO questions about them.
Saltzburg time and again noted for the court that while the statute prohibited the banks and credit card companies from taking "unlawful Internet gambling" transactions, the statute did not make the underlying behavior - individuals gambling on the Internet - illegal. So, why the questions about "where does the bet take place?" It was odd.
I'll admit: it was hard to sit there and not say anything. It's hard to sit back and watch the judges push things in a direction that was not part of either the government's or our arguments. But that's the process in an appellate hearing: go in with a plan, have the plan go out the window with the first question from the panel, get put through a meat grinder, period.
So, now we wait. At least a few weeks, if not a few months, before we get a decision.
