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Lawyers representing the Commonwealth of Kentucky filed a notice to appeal in the matter of iMEGA v. Judge Thomas D. Wingate. The Kentucky Court of Appeals issued a 2-to-1 majority decision to prohibit a lower court from seizing 141 Internet domain names, all related to Internet gambling, which had been part of an effort by Gov. Steve Beshear (D) to protect in-state gambling companies while blocking international gaming sites.
"We're not surprised that Gov. Beshear and Secretary (J. Michael) Brown filed their appeal," said Joe Brennan Jr., iMEGA's chairman. "They both invested a lot of political capital in this suit. They likely feel they can't back down."
"Their attorneys took this on a contingency fee-basis, and have reportedly sunk over a million dollars of their own money in this suit, and other suits like this that they reportedly prepared for other states," Brennan said. "Without a win in Kentucky, it will be hard to get those other suits off the ground, and they'll have taken huge losses on their own gamble."
"We feel very good with where we're at right now," said Jon L. Fleischaker, lead attorney for iMEGA and managing partner at Dinsmore & Shohl in Louisville, KY. "The Court of Appeals was very clear in its ruling that you cannot use Kentucky's "gambling devices" law to seize Internet domain names, because they do not meet the statutory definition."
"The lower court and the Commonwealth also erred when they attempted to get a civil forfeiture remedy - seizing control of the domain names - by applying it to a criminal statute that provided no such remedy," Fleischaker added. "There has been no criminal prosecution, no conviction, and thus no right to seize the owners' property. You just can't mash together a civil statute and a criminal statute to justify your actions."
There is no word yet on when the Kentucky State Supreme Court may take up the matter, but it is expected that it may be sometime this spring.
Links:
iMEGA v. Judge Thomas D. Wingate - KY Court of Appeals decision (PDF format)
iMEGA v. Judge Thomas D. Wingate - KY notice of appeal (PDF format)
