iMEGA Files Brief in Response to US Motion to Dismiss

Following a motion by US Department of Justice officials to dismiss its lawsuit seeking to set aside last year's Unlawful Internet Gambling Enforcement Act (UIGEA), and in advance of a September 26 hearing where oral arguments will be heard, the Interactive Media Entertainment & Gaming Association has filed its own brief in response.

The motion to dismiss by the US included numerous arguments but stressed two key points in its assertions that (a) iMEGA lacked legal standing to pursue the case, and (b) that because regulations called for by the UIGEA have yet to be issued, that iMEGA's case itself was 'unripe' and therefore unable to be adjudicated.

iMEGA's 50-page response, also now available on the organization's website, rebuts the DOJ's arguments and introduces four key points of its own.

Point one, in response to the alleged lack of standing, brings up three secondary points wherein iMEGA asserts that its actions meet the legally accepted standard of review, that it does have standing based on prior legal precedent, and that the UIGEA "directly causes injury-in-fact to plaintiff's members and the public." In one emphasized point, the UIGEA brief asserts, "it is essential to recall the terms of the UIGEA, in particular its impact on the First Amendment, the commercial livelihood of iMEGA's members, and the UIGEA's criminal penalty provisions."

Point two of the iMEGA brief challenges the US assertion that the "mere chilling of unspecified First Amendment free speech rights is the sole ground for relief." In citing several famous cases dealing with the battle between government control and personal control regarding Internet access, the brief asserts that courts have repeatedly struck down over-reaching regulations on unconstitutional grounds.

In point three, the iMEGA brief addresses the US claim that the case remains 'unripe,' and therefore, that the UIGEA cannot be challenged. Among the arguments raised here is the intriguing claim that the US government itself made the case 'ripe' (ready for adjudication) simply by missing the 270-day deadline called for within the UIGEA for the issuance of regulations. According to the iMEGA brief, "Under the Federal Administrative Procedures Act, 'agency action includes the whole or a party of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act. Simply put, the government missed the deadline to define legal and illegal transactions." (Emphasis iMEGA's.) The brief continues with other reasons why the case should be considered ripe at this time.

The fourth and final point in the iMEGA brief, encompassing global matters, is where iMEGA asserts the logical point that the US, in dropping its World Trade Organization appeal in the case over access to Internet gambling, has made a de facto acknowledgment that such gambling was and is legal from the time the treaty round – referred to as the Uruguay Round -- went into effect over a decade ago up to the present. Despite ongoing attempts by the US Trade Representative to withdraw that market segment from the WTO treaty terms, the US's dropping of its appeal raises legal questions that can be brought up by individual parties in a US-federal action, even if those same parties would have no grounds for action in the WTO matter itself. [As an aside, the same argument is expected to be put forth as a defense in the BetonSports prosecutions involving Gary Kaplan and David Carruthers.]

In summary, the iMEGA action may well have more substance was expected when the case was originally filed. The US government has until September 21 to respond to this latest iMEGA brief.