COMMONWEALTH OF KENTUCKY, EX REL. J. MICHAEL BROWN, SECRETARY, JUSTICE AND PUBLIC
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2009-SC-000043-MR
COMMONWEALTH OF KENTUCKY,
EX REL. J. MICHAEL BROWN,
SECRETARY, JUSTICE AND PUBLIC
SAFETY CABINET
C
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APPELLANT
APPEAL FROM COURT OF APPEALS
CASE NOS. 2008-CA-002000-OA, 2008-CA-002019-OA
AND 2008-CA-002036-OA
FRANKLIN CIRCUIT COURT NO . 08-CI-1409
INTERACTIVE MEDIA
ENTERTAINMENT AND GAMING
ASSOCIATION, INC. ; INTERACTIVE
GAMING COUNCIL; VICSBINGO .COM;
PLAYERSONLY .COM;
SPORTSBOOK.COM ;
SPORTSINTERACTION . COM;
MYSPORTSBOOK .CO M;
LINESMAKER.COM; AND HON .
THOMAS D. WINGATE, JUDGE,
FRANKLIN CIRCUIT COURT
APPELLEES
OPINION OF THE COURT BY JUSTICE NOBLE
REVERSING
This case arises from an order by the Franklin Circuit Court that 141
internet domain names be seized from their owners and operators and
transferred to the dominion and control of the Commonwealth . Attorneys
acting on behalf of the domain names sought a writ of prohibition against the
seizure, which the Kentucky Court of Appeals granted. Because the parties
seeking the writ have failed to demonstrate that they have standing to do so,
this Court reverses, though this does not foreclose the possibility of future
relief.
I. Background
Initiating a fight against internet gambling in Kentucky, the
Commonwealth filed an in rem action in Franklin Circuit Court over multiple
pieces of intangible property-141 internet domain names. The
Commonwealth had funded an extensive research project, whereby several
civilians were employed to search the internet for gambling domains . The 141
domains discovered in the search were, in the Commonwealth's view, hosting
illegal gambling activities . Armed with KRS 528 .010 and acting through the
Secretary of the Justice and Public Safety Cabinet, J. Michael Brown, the
Commonwealth sued in Franklin Circuit Court to have those domain names
seized.
In a hearing where only the Commonwealth participated, the trial court
heard testimony regarding the discovery and nature of the domain names .
Using a probable-cause standard, the court concluded that the websites were
indeed violating Kentucky's gambling laws . Pursuant to what it found to be a
civil forfeiture remedy in KRS 528 .010, the court ordered seizure of the domain
names and instructed their registrars to transfer them to the Commonwealth of
Kentucky .
When those supposedly affected learned of the order, counsel appeared
in Franklin Circuit Court on their behalf to challenge the seizure. The parties
purporting to be affected by the seizure were atypical in rem claimants,
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however. Instead of owners, operators, or registrants of the website domain
names, the lawyers opposing the Commonwealth claimed to represent two
types of entities : (1) the domain names themselves and (2) gaming trade
associations who profess to include as members registrants of the seized
domains, though they have yet to reveal any of their identities . The various
groups of domain names and gaming associations sought to intervene in the
case and dismiss the seizure. The circuit court ultimately denied all motions to
intervene or dismiss and scheduled a forfeiture hearing where the actual
registrants and owners of the seized domains could prove their innocence
The court specifically noted in its order that only the domain name owners,
operators, and registrants had a legal interest in the domain names and only
they or their representatives could defend against forfeiture .
Upon the denial of their motions, the groups and associations sought a
writ of prohibition from the Court of Appeals to enjoin the impending forfeiture .
The Court of Appeals issued the writ, reasoning that the trial court acted
beyond the jurisdiction of KRS 528. 100 . The Commonwealth, appealing as a
matter of right, asks this Court to vacate the writ of prohibition.
H. Analysis
Numerous, compelling arguments endorsing the grant of the writ of
prohibition have been presented throughout the Court of Appeals' opinion,
Judge Taylor's separate concurrence, the Appellees' briefs, the amici briefs, and
oral argument before this Court. This plethora of arguments includes, among
The court did, however, permit the gaming associations to participate in the litigation
as amici curiae.
others, that (1) Kentucky lava only mandates the seizure of tangible gambling
devices, and not intangible things such as domain names ; (2) the court's civil
forfeiture was unauthorized because KRS 528 .100 only contemplates criminal
sanctions; and (3) Kentucky lacks in rem jurisdiction over the domain names
because they are not located in Kentucky .
Although all such arguments may have merit, none can even be
considered unless presented by a party with standing. No such party has
appeared at the original proceedings in Franklin Circuit Court, the writ petition
at the Court of Appeals, or on the appeal here to this Court. As mentioned
above, two types of Appellees sought the writ, claiming an interest in the
domain names : (1) the purported domain names themselves and (2)
associations of anonymous domain registrants. Neither group meets the basic
requirements of standing.
A. Six Domain Names
Counsel purportedly appeared directly on behalf of six domain names
and participated in the writ action at the Court of Appeals . The advocacy on
behalf of five of these domain names was consolidated into one representation .
These five domain names-playersonly.com, sportsbook.com,
sportsinteraction .com, mysportsbook.com, and linesmakencom-have been
referred to as the "group of five." The sixth, vicsbingo .com, joined in the appeal
through separate counsel, together with the Interactive Gaming Council, one of
the gaming associations . Counsel for these six domain names have
consistently claimed the names are some of the intangible property seized by
the trial court and that the names are appearing to protect their own interests
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in themselves. Put simply, counsel purports to represent property that is
protecting itself.
Although unaddressed in the Court of Appeals opinion below, the
Commonwealth has apparently challenged the standing of these individual
domain names at every stage of the proceedings. It has insisted that the
property seized cannot defend itself, but can only be defended by those having
an interest in the property-namely owners and registrants of domain names .
Since no owners or registrants have ever claimed to be participating in this
case at any level, the Commonwealth requests that this Court vacate the writ
and restore the seizure of the domain names.
The domain names' assertion of standing hinges on the origination of
this controversy as an in rem proceeding . They claim that since the
Commonwealth named the domain names as the in rem defendants, the names
must have an opportunity to represent themselves.
The domain names' argument confuses the nature of in rem litigation . It
has long been recognized in Kentucky, as well as elsewhere, that in in rem
litigation, only those with an interest in the property, such as current owners,
have an interest in the litigation . See Taylor v. City ofLa Grange, 262 Ky. 383,
90 S.W.2d 357 (1936) ; City ofMiddlesborough v. Coal 8, Iron Bank, 33 Ky. L.
Rptr. 469, 110 S.W. 355, 356 (1908) ; United States v. One 1965 Cessna 320C
Twin Engine Airplane, 715 F. Supp. 808, 810 (E . D . Ky. 1989) . The property
does not have an interest in itself and, therefore, does not have any interest in
the litigation. See United States v. One Parcel ofReal Property, 831 F.2d 566,
568 (5th Cir. 1987) ("[0]wners are persons, not pieces of real property; [a] piece
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of real property has no standing to contest its forfeiture.") . An internet domain
name does not have an interest in itself any more than a piece of land is
interested in its own use. Just as with real property, a domain name cannot
own itself; it must be owned by a person or legally recognized entity. Nor does
the property itself care whether it is owned and operated by private business or
seized by state government.
When faced with a similar claim, the Fifth Circuit found the concept of
property having in rem standing to be so far-fetched as to be "not arguable on
its merits" and "frivolous," id., that it issued sanctions against the attorneys
purporting to represent such property. See id. a t 568-69. This Court agrees
that the contention that mere property can represent itself is frivolous.
The fundamental standing requirement of an interest in the property
does not dissipate in a writ case . A writ of prohibition, just like any other
judicial remedy, may only be sought by a party with a "judicially recognizable
interest." Schroering v. McKinney, 906 S .W.2d 349, 350 (Ky. 1995) . The writ
granted below serves only the interests of the owners and registrants of the
domain names . It does not benefit the domains themselves; they are the
interest at question in this case and belong to still unnamed owners and
registrants.
The group of five mistakenly suggests unfairness in the Commonwealth
proceeding in rem against property without giving the property a "right to
defend." Property possesses no such right. Kentucky's judicial system exists
to protect the interests of persons-both individuals and groups-not property.
Property does not have constitutional or statutory rights. Nor does it have a
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right of access to the judicial system. Nor does it have a judicially recognizable
interest in this writ.
Counsel for vicsbingo.com, meanwhile, misinterprets the unorthodox
styling of in rem case names to mean that the usual standing requirements do
not apply. It cites Three One-Ball Pinball Machines v. Commonwealth, 249
S .W.2d 144 (Ky . 1952), as an example of property contesting its own seizure
under Kentucky's old gambling laws. To be sure, that case name is styled so
that the pinball machines themselves are listed as a party (in that case, the
appellant), as is routine for civil forfeiture proceedings . This is because in rem
"case captions have historically referenced the property subject to forfeiture
and not the interested parties." Commonwealth v. Maynard, 294 S. W.3d 43, 49
(Ky. App. 2009) . But as Justice Combs pointed out in the second sentence of
Three One-Ball Pinball Machines, "[t]he style of the case is a misnomer .
Although the machines are designated as the appellants in the case, it is their
owners who argue" against the seizure. 249 S.W .2d . at 145 (emphasis added) ;
see also 14 Console Type Slot Machines v. Commonwealth, 273 S .W .2d 582,
582 (Ky. 1954) ("On this appeal by the slot machines (through their ownerj, the
main contention is that. . . . ..) (emphasis added) . Likewise, in the situation at
hand, the style of the case title does not change the fact that only those with an
interest in the property have standing. The writ may be styled as being sought
in the name of the domains, but the parties arguing on their behalf must be
ones with standing, such as owners.
The domain names are not their own owners or registrants, nor do they
claim to be. Thus, they lacked standing to pursue the writ.
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B. Gaming Associations
Two gaming associations have attempted to enroll in this litigation : the
Interactive Media Entertainment & Gaming Association (iMEGA) and the
Interactive Gaming Council (IGC) . iMEGA and IGC both claim to represent
registrants of some of the seized domains . They claim to have standing on
behalf of their members under the doctrine of associational standing.
iMEGA refuses to reveal which registrants it represents, or even how
many. It simply claims to have members who registered some, but not all, of
the seized domains.
IGC, on behalf of its members, stakes claim to 61 seized domain names . 2
IGC is not all that clear, perhaps intentionally, about whether it represents
registrants or the actual domain names. For example, on page 13 of its brief, it
claims to be "[r]epresenting the registrants for 61 of the 141 Domain Names."
(Emphasis added .) Yet the following sentence of the brief reads, "IGC identified
all 61 domain names it represents . . . ." (Emphasis added.) For purposes of
this appeal, we will interpret IGC as purporting to represent registrants . The
problem, however, is that IGC fails to disclose who these registrants are .
Associational standing inherently depends on the membership of the
association. The U .S . Supreme Court has set out three requirements for an
association to have standing in federal court:
(a) its members would otherwise have standing to sue
in their own right; (b) the interests it seeks to protect
are germane to the organization's purpose; and (c)
neither the claim asserted nor the relief requested
2 Which 61 of the 141 is not apparent from our record .
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requires the participation of the individual members in
the lawsuit.
Hunt v. Washington State Apple Adver. Comm'n, 432 U .S . 333, 343 (1977) . In
Hunt, the Court found that the Washington State Apple Advertising
Commission had standing to challenge a North Carolina statute which
prevented its members, Washington apple dealers, from displaying Washington
apple grades . See id. at 337-45 .
While this Court has not held that the precise requirements of federal
associational standing apply in Kentucky courts, at least the first requirement
must apply . An association can have standing only if its members could have
sued in their own right. Otherwise the primary requirement for standing, that
the party has a real interest in the litigation, would be thwarted.
In City ofAshland v. Ashland F.O.P. No. 3, 888 S.W .2d 667 (Ky . 1994),
this Court granted the Fraternal Order of Police standing to challenge a city
ordinance that limited public employment to people living within city limits.
The F .O.P. had standing because its members-the police-had a "real and
substantial interest" in striking the ordinance . Id. at 668. Although the
ordinance only applied to new employees, other police officers depended on the
quality of the new police for their own safety. Id. "Such an interest conferred
standing on the police association because, according to stipulation, it
represented the majority of city police." Id.
Unlike the F.O .P., the gaming associations in this case have failed to
disclose whom they represent. While IGC claims to represent 61 of the seized
domains and iMEGA purports to represent "some" more, this Court cannot
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simply take their words for it . The associations bear the burden to
demonstrate that they satisfy the requirements of standing, and to do so
requires proving that their members would have standing themselves. See
Lujan v. Defenders of Wildlife, 504 U .S . 555, 561 (1992) (party invoking
jurisdiction bears burden of proving standing) ; Am. Chemistry Council v. DOT,
468 F.3d 810, 820 (D .C. Cir. 2006) (association bears burden to prove
members have standing) . Without even revealing any of the registrants they
purport to represent, the associations cannot hope to achieve associational
standing. "At the very least, the identity of the party suffering an injury in fact
must be firmly established." Am. Chemistry Council, 468 F .3d at 820; see also
United States v. AVX Corp., 962 F.2d 108, 117 (1st Cir . 1992) (no associational
standing where injured members were unidentified) ; Sierra Club v. SCM Corp.,
747 F.2d 99, 103, 107-08 (2nd Cir. 1984) (same) ; Revell v. Port Authority ofN. Y.
and N.J., 321 Fed. App'x. 113, 117 n.2 (3rd Cir. 2009) (failure to identify
affected members causes standing to "evaporate quickly") . But see Doe v.
Stincer, 175 F.3d 879, 882 (11 th Cir . 1999) (taking contrary position) .
The cyber-age status of their members does not let iMEGA and IGC
escape traditional standing requirements . In another suit brought on by an
association of internet domain registrants, the Coalition for ICANN
Transparency (CFIT) initially merely "alleged vague categories of members that
might suffer harm." Coalition for ICANN Transparency Inc. v. VeriSign, Inc., 464
F. Supp. 2d 948, 956 (N.D . Cal. 2006), rev'd on other grounds, 567 F . 3d
1084 (9th Cir. 2009) . Thus, "associational standing had not been alleged
because CFIT failed to name even one member ." Id. CFIT was able to solve this
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problem, however, by identifying one of its members, Pool.com, Inc ., which
allegedly suffered injury-in-fact . Id. Here as well, the associations had every
opportunity to cure their standing defects by identifying their seized members;
in fact, they were ordered to do so by the Franklin Circuit Court . Refusing to
follow this straightforward requirement, iMEGA and IGC do not have standing.
Admittedly, in some cases the surrounding particulars may not demand
that an association identify specific members. For example, in Ashland F.O .P.,
this Court did not discuss whether the fraternal order had identified affected
members. Indeed, the Ashland F.O .P . may not have provided a membership
list. But in that case it was stipulated that the F.O .P. represented the majority
of the police force . 888 S.W .2d at 668 . Since all members of the police could
claim injury from the ordinance (albeit indirectly), it necessarily followed that
the F .O .P.'s members would have had standing in their own right . Unlike in
Ashland F.O.P., there is no stipulation as to iMEGA or IGC's memberships . In
fact, nothing is known about their members, other than their attorneys' vague
assertions they represented "some" of the registrants .
Moreover, notably distinct from Ashland F.O.P., not all internet gaming
registrants are affected by the seizure; only the registrants of the 141 seized
domains. In cases where the harm is specific, the proof of standing must be
equally specific . See Forum for Academic 8s Inst. Rights, Inc. v. Rumsfeld, 291 F.
Supp . 2d 269, 288 (D .N.J. 2003) . For example, in cases where only people in a
certain geographical area may be harmed, a showing that members are located
in that area is "critical" to associational standing. See id. (distinguishing AVX
Corp., 962 F.2d at 117, stating, "Geographic location was critical to
establishing members' injury-in-fact in the environmental context. . . .") .
Similarly, where, as here, the injury is limited to those whose property was
actually seized, associational standing requires some assurance that members
actually have an interest in the property. Thus, the associations must
specifically identify some of the affected registrants they represent.
This is not to say that showing associational standing requires heavy
proof. On the contrary, it must simply be proven to the same extent as any
other "indispensable part of the plaintiff's case ." Lujan, 504 U .S. at 561 .
"[E]ach element must be supported in the same way as any other matter on
which the plaintiff bears the burden of proof, i.e., with the manner and degree
of evidence required at the successive stages of the litigation ." Id. At the
pleading stage, less specificity is required . At that point, an association may
speak generally of the injuries to "some" of its members, for the "presum[ption]
[is] that general allegations embrace those specific facts that are necessary to
support the claim." Id. ; accord Bldg. & Constr. Trades Council of Buffalo v.
Downtown Dev., Inc., 448 F.3d 138, 145 (2nd Cir. 2006) . By the summary
judgment stage, however, more particulars regarding the association's
membership must be introduced or referenced . See Bldg. & Constr. Trades
Council ofBuffalo, 448 F.3d at 144-45 ; Sierra Club v. SCM Corp., 747 F.2d 99,
102 (2nd Cir. 1984) (affirming dismissal where association "indicated that it did
not intend to identify any of its members who might have been harmed") .
Finally, before a favorable judgment can be attained, the association's general
allegations of injury must clarify into "concrete" proof that "one or more of its
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members" has been injured . See Sierra Club, 747 F.2d at 107 . "By refusing]
to come forward with any such showing," any claim to associational standing,
and the potential for success on the merits is forfeited . See id.
While the normal sequence of litigation is muddled in a writ petition,
since only pleadings are filed and no discovery is allowed, the basic requisites
for a judgment remain . This includes proof of standing. When associational
standing is the chosen route, the writ petitioner must prove it represents at
least one member with an injury in order to obtain relief. This may be done by
reference to the facts in the underlying litigation or a verified assertion, such as
in an affidavit, attached to the petition . Through their unwillingness to identify
any of their members, iMEGA and IGC failed to meet this burden . As such,
iMEGA and IGC lack standing and, therefore, their writ petition should have
been denied.
Writs are to be granted only as an extraordinary remedy, and certainly
only when parties who have demonstrated a concrete interest are before the
court. This is not to say, however, that the failure to establish standing in this
writ action completely forecloses relief by way of a writ in the future . If a party
that can properly establish standing comes forward, the writ petition giving rise
to these proceedings could be re-filed with the Court of Appeals . The Court of
Appeals could then properly proceed to the merits of the issues raised, or upon
a proper motion, this Court could accept transfer of the case, as the merits of
the argument have already been briefed and argued before this Court. Until
then, however, consideration of the merits of this matter is improper for lack of
standing.
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III. Conclusion
Due to the incapacity of domain names to contest their own seizure and
the inability of iMEGA and IGC to litigate on behalf of anonymous registrants,
the Court of Appeals is reversed and its writ is vacated . This case is hereby
remanded to the Court of Appeals with instructions to dismiss the Appellee's
writ petition .
Minton, C.J . ; Abramson, Schroder and Venters, JJ ., concur. Scott, J .,
concurs in result only . Cunningham, J., not sitting.
COUNSEL FOR APPELLANT :
David Eric Lycan
William Harvey May
Aaron Davis Reedy
Hurt, Crosbie 8v May PLLC
The Equs Building
127 West Main
Lexington, Kentucky 40507
William Cecil Hurt, Jr.
Wethington, Hurt 8v Crosbie, PLLC
127 West Main Street
Lexington, Kentucky 40507
,COUNSEL FOR APPELLEE, INTERACTIVE MEDIA ENTERTAINMENT Ss
GAMING ASSOCIATION, INC . :
Jon L. Fleischaker
Robert Kenyon Meyer
James Lee Adams
Dinsmore 8U Shohl, LLP
1400 PNC Plaza
500 W. Jefferson Street
Louisville, Kentucky 40202
COUNSEL FOR APPELLEE, INTERACTIVE GAMING COUNCIL:
Margaret Eileen Mary Keane
Greenebaum, Doll 8, McDonald, PLLC
101 S. 5th Street
3500 National City Tower
Louisville, Kentucky 40202
Phillip D. Scott
Greenebaum, Doll & McDonald, PLLC
300 West Vine Street, Suite 1100
Lexington, Kentucky 40507-1665
COUNSEL FOR APPELLEES, INTERACTIVE GAMING COUNCIL AND
VICSBINGO .COM:
Bruce F. Clark
Stites 8s Harbison, PLLC
421 West Main Street
PO Box 634
Frankfort, Kentucky 40602-0634
Ian Thomas Ramsey
John Lewis Tate
Joel Beres
Stites 8s Harbison, PLLC
400 West Market Street
Suite 1800
Louisville, Kentucky 40202
COUNSEL FOR APPELLEES, PLAYERSONLY.COM, SPORTSBOOK .COM,
SPORTSINTERACTION .COM, MYSPORTSBOOK.COM AND LINESMAKER.COM:
William E. Johnson
Johnson, True 8v Guarnieri, LLP
326 West Main Street
Frankfort, Kentucky 40601-1887
APPELLEE, HON. THOMAS D . WINGATE:
Honorable Thomas D . Wingate
Judge, Franklin Circuit Court
214 St. Clair Street
PO Box 678
Frankfort, Kentucky 40601
COUNSEL FOR AMICUS CURIAE, EBAY, INC. :
Laura Anne D'Angelo
Wyatt, Tarrant 8v Combs, LLP
250 West Main Street
Suite 1600
Lexington, Kentucky 40507-1746
Daniel G. Dougherty
Ebay, Inc .
2065 Hamilton Avenue
San Jose, California 95125
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COUNSEL FOR AMICUS CURIAE, NETWORK SOLUTIONS, LLC . : .
Michael Romano Mazzoli
Cox 8a Mazzoli, PLLC
600 West Main Street
Suite 300
Louisville, Kentucky 40202
Timothy B. Hyland
25 West Middle Lane
Rockville, MD 20850
COUNSEL FOR AMICUS CURIAE, THE ELECTRONIC FRONTIER
FOUNDATION, THE CENTER FOR DEMOCRACY AND TECHNOLOGY, THE
AMERICAN CIVIL LIBERTIES UNION OF KENTUCKY, THE MEDIA ACCESS
PROJECT, THE UNITED STATES INTERNET INDUSTRY ASSOCIATION, THE
INTERNET COMMERCE COALITION, THE INTERNET COMMERCE
ASSOCIATION:
David Alan Friedman
325 West Main Street, Suite 150
Louisville, Kentucky 40202
COUNSEL FOR AMICUS CURIAE, POKER PLAYERS ALLIANCES :
Joshua Taylor Rose
Charles M . Pritchett, Jr.
Bart Loveman Greenwald
Frost, Brown, Todd, LLC
400 West Market Street, 32nd Floor
Louisville, Kentucky 40202-3363
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