HomePublicationsNewsletter ArchiveVolume 26Issue 1DOJ FILES BRIEF IN FIRST CIRCUIT IN WIRE ACT CHALLENGE

On December 20, the Department of Justice (DOJ) filed its opening brief in the First Circuit, appealing the order by the United States District Court for the District of New Hampshire. The New Hampshire Lottery Commission (NHLC) and its service provider, NeoPollard Interactive LLC, filed suit against Attorney General William Barr in February 2019, seeking to overturn the DOJ’s interpretive memo on the Wire Act released in January 2019.  The memo had reversed prior DOJ precedent in re-interpreting the Wire Act to apply to all forms of gambling and not merely sports wagering. The District Court set aside the memorandum earlier this year in its order, leading to the DOJ’s appeal to the First Circuit. 

In its appeal brief, the DOJ argued that the District Court erred in setting aside the OLC’s advice for three reasons:

1. The case presents no live case or controversy due to the forbearance of any prosecution by the DOJ (see previous story in Volume 25, Issue 35 of The Michigan Gaming Newsletter), and that the NHLC and NeoPollard failed to show a “credible threat of prosecution”;

2. The District Court mistakenly concluded that all four offenses outlined in the Wire Act 18 (USCA § 1084(a)) apply only to sports gambling, while the sports gambling language truly applies only to the second prohibition; and

3. The District Court erred in ruling on the OLC opinion because it was not a final action appealable under the Administrative Procedures Act.

First, the DOJ argued that the OLC did not issue an opinion about whether the Wire Act would apply to lotteries owned and operated by the States in its 2018 memo. Regardless, the NHLC and NeoPollard brought suit to prevent enforcement of the statute against them. For these reasons, the DOJ argued that NHLC and NeoPollard lack standard and their suit is unripe.

Second, the DOJ argued that Section 1084(a) has long been interpreted as prohibiting the transmission and communication of “bets or wagers,” regardless of their subject matter. Likewise, the DOJ claims the phrase “on any sporting event or contest” modifies only the second prohibition. In 2011, the OLC issued an opinion that Section 1084(a) “prohibits only the transmission of communications related to bets or wagers on sporting events or contests.” The DOJ stated in its brief that, prior to the 2011 OLC opinion, it undertook “numerous prosecutions against persons who used interstate wire communications to engage in various gambling schemes, whether sports-related or not.”

Third, the DOJ argued that the District Court erred in setting aside the 2018 OLC opinion because OLC opinions are not “final agency action reviewable under the APA because they are predecisional legal advice.”

The DOJ’s brief contained many of the same arguments it raised in the District Court case, but the First Circuit brief focused more on the process of the legal challenge than the legal arguments in the DOJ’s interpretation of the Wire Act.

A few days after the DOJ’s December 20 brief was filed, Sheldon Adelson’s Coalition to Stop Internet Gambling (CSIG) and the National Association of Convenience Stores (NACS) filed an amicus brief. The amicus brief incorporates much of the same language verbatim that was used in its May 2019 amicus brief in the District Court case.

NHLC and NeoPollard are scheduled to submit their appeal briefs by January 21, with the DOJ then having an opportunity to file a response brief no later than February 10.  With oral arguments likely, it appears that the First Circuit will not issue a decision until Summer 2020.

 

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