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U.S. Files Cross-Motion to Dismiss in Delayed iMEGA Case

U.S. Files Cross-Motion to Dismiss in Delayed iMEGA Case 0001

As the delayed hearing in the case brought by the Interactive Media Entertainment & Gaming Association [iMEGA] nears its now-changed September 26th date, an additional wrinkle in the matter has emerged: The U.S. has also filed a cross-motion to dismiss the matter in its entirety, asserting, among other claims, that iMEGA lacks standing and that the case as brought is 'unripe'.

The case brought in a New Jersey federal court, Interactive Media Entertainment and Gaming Association LLC v. Alberto Gonzalez, was the first organized legal effort against the Unlawful Internet Gambling Enforcement Act itself. iMEGA's initial complaint sought a temporary restraining order against implementation of the UIGEA on multiple grounds, including the restriction of a form of 'consensual private conduct,' an overbroad criminalization of financial transactions relating to online gambling, and an inconsistent and therefore unconstitutional regulation of states' rights matters. According to that initial complaint, "iMEGA was formed to represent the interests of its members, who are businesses or individuals involved in Internet interactive media, entertainment and gaming, including Internet gambling."

The United States Department of Justice had initially requested a two-week delay in responding to the iMEGA complaint, which itself had an original deadline of August 17th. That request, which has since been granted, backed off the U.S.'s deadline to respond until September 4th itself, and the two parties have now agreed to a delayed hearing which will occur on September 26th.

However, the United States on August 21st also filed notice that it will move for dismissal of the case itself at the September 4th hearing, citing a "lack of jurisdiction" and "failure to state a claim upon which relief can be granted."

Further documents from the U.S. filing offer additional insight into the U.S. position. "Plaintiff purports to sue on behalf of its members who fear prosecution under the UIGEA. None of Plaintiff's members, however, has been prosecuted or threatened with prosecution. Thus, their fears are insufficient to confer standing on them or on an association purporting to represent them." Whether or not this assertion will be found to have merit remains to be determined.

Elsewhere, the U.S. cross-motion to dismiss raises the contention that the iMEGA filing is unripe. 'Ripeness' is a legal doctrine that means that a case cannot be judged based on events that have yet to occur; in this matter, the U.S. is alleging that because the financial regulations authorized by the UIGEA have yet to be released, the UIGEA itself cannot be blocked by a temporary restraining order. iMEGA's response to this is likely to show that its members' affiliate signups were dramatically impacted by the UIGEA's October, 2006 passage itself, an event which also caused several major online rooms to withdraw from the U.S. market.

The resignation this past week of U.S. Attorney Alberto Gonzalez has little real impact on the case, despite the specific naming on Gonzalez himself in the filing of the suit. Gonzalez serves as the figurehead for U.S. interests concerning the Department of Justice. As iMEGA president Edward Leyden noted, "The resignation of Attorney General Gonzalez really should have no bearing on the posture of our lawsuit --except for possibly amending the suit to change its caption (an absolutely technical change).

Leyden also noted this, on the Gonzalez resignation: "There is no reason to believe that the policies of the Justice Department — and of the Administration, as a whole — will change substantially, if at all, regardless of whom the President nominates as the new AG [Attorney General]."

That said, iMEGA's own case continues to undergo reexamination and improvement. "As with any lawsuit," commented Leyden, "ours is an evolving being that may well be amended to take into account unfolding events and legal arguments, including naming additional defendants as necessary and appropriate."

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