Judge Awaits DOJ Response After Arguments in Wire Act Hearing
The day in the US District Court for the District of New Hampshire didn’t go as planned for the US Department of Justice. It had hoped for a quick resolution to the case regarding the Wire Act, but Judge Paul Barbadoro did not grant the motion for dismissal on April 11, 2019.
Instead, the court demanded an update from the DOJ’s Office of Legal Counsel within two weeks regarding the applicability of the latest Wire Act opinion to state lotteries. The onus is back on the Justice Department to clarify its opinion and present a cleaner argument to the court before the case proceeds.
Upon the response from the DOJ within the coming weeks, the plaintiffs will have one week to issue responses. And with all of that information to consider, Judge Barbadoro will issue a decision.
This will determine the future – and next legal steps – for all states with an interest in online poker, casino games, and lotteries per the most current interpretation of the 1961 Wire Act.
If haven't check out @OPRupdate live blog of today's Wire Act case you definitely should. One highlight worth noting is that the Judge in the case believe this ultimately gets decided by the U.S. Supreme Court.https://t.co/U6TtLarXYm
— Poker Alliance (@ppapoker) April 11, 2019
DOJ: No Need for Litigation
Attorney Steven Myers represented the DOJ at the hearing and tried to make the case that the plaintiffs, headed up by the New Hampshire Lottery Commission and service provider NeoPollard, do not have a credible feat of prosecution. Per the most recent Rosenstein letter, he claimed the Wire Act opinion did not pertain to online lotteries.
Judge Barbadoro responded by saying, “I have a very difficult time seeing how the Rosenstein letter would deprive the plaintiffs of the standing they would otherwise have.” He went on to say that the wording of the new Wire Act opinion could even be interpreted to mean that Powerball could be seen as a multi-state “criminal conspiracy.”
Myers reiterated Rosenstein’s assertion that there is no plan to enforce the Wire Act provisions against lottery programs but then noted that the question is under review at the DOJ. However, the judge wanted to move on to the broader application of the Wire Act.
The plaintiffs’ attorney said that the OLC opinion “cast a pallor of criminality over our entire business model,” and another noted that the Rosenstein letter that prosecution could take place in the future. And the judge ultimately agrees by saying to Myers, “There isn’t any statement from you (without the Rosenstein letter) that you’re not going to prosecute. In fact, quite the contrary.”
After more back-and-forth with the attorneys, Judge Barbadoro asserted that the Rosenstein letter “doesn’t come close to making the kind of voluntary cessation required to make the case moot.”
Shortly thereafter, the judge said, “I have a strong feeling that however I resolve the case, or however the First Circuit resolves the case, it is likely going to be resolved by the US Supreme Court either way.” He indicated that he will be reviewing a previous ruling in the First Circuit regarding the Wire Act and commented that the request to him in the current case is “one of the most challenging statutory constructions I’ve seen in my 26 years on the bench.”
Buckle up in the Wire Act case: Judge Barbadoro offers a prediction. “I have a strong feeling that however I resolve the case, or however the First Circuit resolves the case, it is likely going to be resolved by the US Supreme Court either way.” Live blog: https://t.co/RfTt8vdWF2
— Dustin Gouker (@DustinGouker) April 11, 2019
Judge: Covering All Bases
The judge believes that the core of the issue is whether or not the Wire Act applies to online gambling outside of the sports betting realm. He called it an unambiguous statute, a “mess of a statute.” The judge and attorneys argued about the punctuation in the law and its related interpretations, which is part of what makes it a confusing statute.
NeoPollard asked quickly for a declaratory judgement but was denied, as Judge Barbadoro was not prepared to render the most recent DOJ opinion unenforceable. The New Hampshire Lottery Commission also requested a declaratory ruling that the Wire Act applies only to sports-related gambling, does not apply to states, and that the 2018 opinion is invalid. Again, however the judge insists that the issue is too complex for such a ruling.
— John Holden (@Johnsportslaw) April 11, 2019
Judge Barbadoro asked the DOJ attorney Myers if the Justice Department would comply if he ordered declaratory relief to the plaintiffs in that the Wire Act would apply only to sports betting, and Myers responded that he didn’t want to speculate because it would depend upon how the order was written.
Ultimately, the judge ruled that the Rosenstein memo’s argument for the dismissal of the case was insufficient and does not successfully argue a lack of standing. He asked the DOJ to explain its argument about the Wire Act’s application to states within the next two weeks, which would set the deadline as Thursday, April 25.
Far from Over
While the oral arguments were completed, significant revelations lie ahead.
The Justice Department will need to issue another memo within the next two weeks to further explain its Wire Act interpretation to the court to satisfy the judge. There were numerous questions about the current standing of the law and its interpretations, and Judge Barbadoro was not satisfied with the DOJ arguments thus far.
When the court receives updated information from the DOJ, other parties will have one week to respond. Judge Barbadoro will then take whatever time is necessary to research and issue a ruling.
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