Domain Names

Some Say the World Will End in MAFIAAFire: Why Domain Seizures Don't Work

Andrew Moshirnia — Mon, 09 May 2011 17:28:34 +0000

And boom goes the dynamite. Last month I wrote about the looming disaster that is COICA – the Combating Online Infringement and Counterfeits Act. Thanks to a brewing fight between a United States government agency and web advocate and Firefox distributor Mozilla, we're getting a preview of the conflicts that COICA would cause if enacted.

As a quick refresher: COICA would allow the government to block sites at the domain name level. Immigration and Customs Enforcement (ICE), an arm of the Department of Homeland Security (DHS), had already made a dry run of sorts, pulling down several sites earlier in the year, angering our allies who had declared the sites non-infringing. So just think of COICA as an invitation for the US to declare war on the infringing internet, casualties be damned.

I argued this would be a terrible idea for all sorts of due process reasons and wouldn’t work due to easy technological adjustments. Now we see what will be the likely US response to those technological adjustments: arbitrary demands! Let’s see how this brilliant strategy plays out.

Some folks who didn’t much like the ICE domain seizures decided to author a simple Firefox plug-in, MAFIAAFire, that rerouted users to the alternate domains of seized sites. This basically undid all of ICE’s sloppy pull-down work, allowing users to easily access the blacklisted sites.

In response, DHS demanded that Mozilla remove the add-on, on the grounds that the add-on “circumvented a [previous] seizure order” against the blacklisted sites. Mozilla’s response was to ask some basic law-and-order (dun-dun) type questions:

To help us evaluate the Department of Homeland Security's request to take-down/remove the MAFIAAfire.com add-on from Mozilla's websites, can you please provide the following additional information:   

1. Have any courts determined that MAFIAAfire.com is unlawful or illegal in any way? If so, on what basis? (Please provide any relevant rulings)

2. Have any courts determined that the seized domains related to MAFIAAfire.com are unlawful, illegal or liable for infringement in any way? (please provide relevant rulings)

3. Is Mozilla legally obligated to disable the add-on or is this request based on other reasons? If other reasons, can you please specify.

4. Has DHS, or any copyright owners involved in this matter, taken any legal action against MAFIAAfire.com or the seized domains, including DMCA requests?

5. What protections are in place for MAFIAAfire.com or the seized domain owners if eventually a court decides they were not unlawful?

6. Can you please provide copies of any briefs that accompanied the affidavit considered by the court that issued the relevant seizure orders?

7. Can you please provide a copy of the relevant seizure order upon which your request to Mozilla to take down MAFIAAfire.com is based?

8. Please identify exactly what the infringements by the owners of the domains consisted of, with reference to the substantive standards of Section 106 and to any case law establishing that the actions of the seized domain owners constituted civil or criminal copyright infringement.

9. Did any copyright owners furnish affidavits in connection with the domain seizures? Had any copyright owners served DMCA takedown notices on the seized domains or MAFIAAfire.com? (if so please provide us with a copy)

10. Has the Government furnished the domain owners with formal notice of the seizures, triggering the time period for a response by the owners? If so, when, and have there been any responses yet by owners?

11. Has the Government communicated its concerns directly with MAFIAAfire.com? If so, what response, if any, did MAFIAAfire.com make?

Mozilla’s reluctance to start arbitrarily pulling things down should make us stop and reflect. We should not pass COICA. We should not authorize more domain name seizures without judicial process. We should not risk betraying principles of concordance and comity by pulling down sites declared legit by foreign courts. Let’s stop this nonsense before someone loses an eye.

Andrew Moshirnia is a third year student at Harvard Law School.

(Image taken from http://barbtarr.blogspot.com/2010/03/pink-explosion.html, used with permission of artist Babs Tarr)

Jurisdiction:

United States

Subject Area:

COICA, the Sequel: Back in Blacklist

Andrew Moshirnia — Mon, 11 Apr 2011 20:18:19 +0000

Any customer can have a car painted any colour that he wants so long as it is black. - Henry Ford

So the Congress appears to be considering the Combating Online Infringement and Counterfeits Act ("COICA") again. The act would essentially allow the government “to block sites at the domain name (DNS) level” (per Ars Technica) and would impose intermediate liability on credit card companies that did not stop transacting with blacklisted sites. This (much like a jump to conclusions mat) is a terrible, terrible idea.

Let’s imagine for a second that there actually exists such a dire piracy problem posed by rogue sites that we need to risk tinkering with the basic structure of the internet. The government has not done a great job with arbitrary domain seizures, COICA might undermine the safe harbor offered by Section 230 of the Communications Decency Act ("CDA 230"), and DNS intervention will at best be ineffective and at worst threaten the stability of the internet.

I don’t want to rehash the complete debacle that was the US's domain name seizure operation, but it seems to me the government has already shown it shouldn’t be a larger player in the web pull-down game. A quick summary: the Department of Justice and Immigrations and Customs Enforcement (ICE) seized several domains on the basis of copyright infringement. Problem was . . . foreign courts had ruled that at least some of those sites weren’t infringing. In the rush to pull down these sites, ICE forgot about that whole “due process” thing. And let’s not ignore the fact that arbitrarily pulling down sites naturally raises First Amendment concerns.

COICA looks like it might be an attempt to undo the safe harbor provisions of CDA 230. The basic gist of CDA 230 is that the government, not private ISPs, will be the johnny law of web activity. That is, if there is a website doing bad things, we punish the website, and not the hosting/directing ISP. If COICA increases ISP liability, as some jurists hope, this will naturally change the fundamental relationship of ISPs to their customers. Mandating greater ISP oversight will encourage deep packet inspection and a host of other less-than-comforting behaviors. Domestic government spying has been problematic; I doubt we want to usher in an era of privatized evesdropping.

But it shouldn't take long for the government to realize that DNS redirects won’t work as a means to cut access to blacklisted sites. Once their sites are blacklisted, the pirates' response would simply be to move to alternate root DNS systems. I would hope that this obvious countermeasure would force Washington not to rely on COICA. And beyond a fracturing of DNS, the COICA domain-pulling regime might also encourage foreign governments to reciprocate and seize domains of American sites. Indeed, this is an ongoing fear in the face of ICE shenanigans.

I don’t care for much of anything about COICA. Beyond antagonizing our allies, undermining the ISP safe harbor, and threatening the internet itself, the act isn't just half bad - it's all bad. Hell, I don’t even like the name. I would have hoped that an industry hack could have helpfully suggested the Protecting American Trade and Reducing Infringement of Online Tubes. I mean, what harm could come from a second PATRIOT act?

Andrew Moshirnia is a third year student at Harvard Law School. Now that he thinks about it, he can see the appeal of a jump to conclusions mat.

(Image taken from http://www.babsbabsbabs.com/post/534712358, used with permission of artist Babs Tarr)

Jurisdiction:

United States

Subject Area:

Showing Cyberbullying No Mercy in the Show Me State

Arthur Bright — Fri, 16 Oct 2009 20:01:15 +0000

On the broad grade-school spectrum of the bullies and the bullied, I tended to fall closer to the bullied side of things. Fortunately, I quickly proved taller than average — thus harder to intimidate — and smarter than average — thus more useful as a source for homework help than as a target for abuse — so the bullies moved on to other targets. Still, although not subjected to it much myself, I got to see a fair amount of bullying in my youth.

That's why I'm surprised that I can't think of a similar, non-Internet parallel for this Wired story about a new case of cyberbullying in Missouri. Apparently a ninth-grade girl at the Troy Buchanan Ninth Grade Center put together a "disparaging" website attacking a fellow student, posting photos of her and calling her a "slut," among other "very troublesome" things. The site creator even went so far as to register a domain name, which Wired writes, "included the target’s name and 'cunt.com.'" (I suspect that an "isa" appeared between the two.)

Naturally, this is the sort of thing that schools crack down on. Unfortunately for the spiteful girl in question here, it's now also the sort of thing that Missouri district attorneys crack down on — she was arrested by the local sheriff's department. According to Wired, her case has been turned over to juvenile court prosecutors who will determine whether she will be charged with a crime.

Missouri was, of course, the scene of the events in the infamous Lori Drew case, in which Drew posed as a teenage boy on MySpace in order to humiliate Megan Meier, a thirteen-year-old classmate of Drew's daughter. When the faux-boy told Meier that the world would be "better off without her," Meier committed suicide. As a result, federal authorities indicted Drew and prosecuted her in federal court in California (where the MySpace servers are located) for violating the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030. Although the jury found Drew guilty of misdemeanor CFAA charges last November, the judge recently tossed Drew's conviction and dismissed all charges.

Troubled by the state's inability to deal with Drew's conduct under its own laws, the Missouri legislature amended its harassment laws last summer to incorporate new protections against cyberbullying. It is presumably for violation of this law that the ninth grader was arrested. According to the relevant portion of the Missouri Revised Statutes § 565.090 (1):

A person commits the crime of harassment if he or she . . . [k]nowingly frightens, intimidates, or causes emotional distress to another person by anonymously making a telephone call or any electronic communication; or . . . [k]nowingly communicates with another person who is, or who purports to be, seventeen years of age or younger and in so doing and without good cause recklessly frightens, intimidates, or causes emotional distress to such other person;

Mo. Rev. Stat. § 565.090 (2) makes harassment a class A misdemeanor, except in certain cases which don't seem to apply here. Wired notes that Missouri has been quite proactive in enforcing the new law, racking up seven indictments in the first three months after the law was put on the books.

The Troy Buchanan situation is troubling on several levels. Certainly, this girl should be punished for putting together the hurtful website. Like I said before, I'm having real trouble thinking of any sort of analogous situation from my youth. I suppose the closest thing would be if someone had put flyers up all over the school accusing a student of being a "cunt" or "slut." No one at my school ever went to that much trouble to bully someone, but if they did, I'm sure they'd be guaranteed at least a lengthy suspension. Not to mention whatever punishment the offender's parents might mete out.

But bringing criminal law into the equation seems extraordinarily heavy-handed. Certainly, the girl's conduct appears to fall neatly inside the statute's parameters, but is it really an act in the same spirit as that of the Lori Drew situation? I'd think that a great deal of schoolyard bullying would be caught up by the "recklessly frightens, intimidates, or causes emotional distress" language — heck, bullying's purpose is to intentionally intimidate or cause emotional distress. But bullying, while antisocial and uncivilized, shouldn't necessarily be criminal.

On the other hand, one wants to protect the victim in situations like this, where the reputational and emotional damage can be far-reaching. Though it's not clear from the Wired story, I suspect that the offender's parents did not approve of her actions. But what if they didn't care, and the Missouri law weren't on the books? If that were the case, it could prove quite difficult and costly to deal with the disparaging website. The targeted girl would have to bring civil claims of defamation or intentional infliction of emotional distress against the offender and her parents. That seems like a hammer almost as heavy as Missouri's criminal law.

Probably the best thing to do is to look at the way the world actually works. And in non-legal world of schoolyard bullies, the bullies generally are kept in line through the oversight of the schools and the parents. And they probably should be in this situation as well. The online portion of the bullying certainly is a modern wrinkle, but with sufficiently tech-savvy parents or educators, criminal laws aren't necessary to prevent this kind of thing from happening. Hopefully the authorities in Missouri will come to the same conclusion. And perhaps the Missouri legislature should add a juvenile exception to Mo. Rev. Stat. § 565.090 to prevent this kind of issue from coming up again.

(Arthur Bright is a third-year law student at the Boston University School of Law and a former CMLP Legal Intern. Before attending law school, Arthur was the online news editor at The Christian Science Monitor.)

Photo courtesy of Flickr user Kopper (http://www.flickr.com/photos/kopper/), licensed under a CC Attribution 2.0 Generic license (CC BY 2.0).

Jurisdiction:

Missouri

Subject Area:

Will Glenn Beck Sue a Defamatory Website in 2009?

DMLP Staff — Fri, 11 Sep 2009 21:08:42 +0000

Even though Glenn Beck has a prime spot on cable television to offer up his beliefs, it's sometimes quite hard to understand what his beliefs actually are. For example, as Jon Stewart has pointed out, he believes we have the best healthcare in the world, except when he says it's a nightmare. Or as Politico underscored, he believes that President Obama is a racist, but he doesn't believe that Obama doesn't like white people.

But if there's one thing Beck believes, it's that he didn't rape and murder a young girl in 1990. And he's siccing his lawyers on a website that asks him — with tongue firmly placed in its virtual cheek — to deny it.

Of course, no one really believes that Beck raped and murdered a young girl in 1990. It's just an Internet meme that came into being on Fark.com recently, imitating Beck's habit of "making a totally bogus rumor into 'news' by stating it, and wondering why there hasn't been a denial," as Mike Masnick puts it. (If you're wondering, the premise of the rape and murder charge actually comes from a Gilbert Gottfried bit during a roast of Bob Saget. Go figure.) According to Mediaite, the Farkers took the meme and plastered it all over the web, including for good measure a variation of Googlebombing, so that Google would suggest "Glenn Beck murder" and other similar searches as alternatives to searches for "Glenn Beck." (Google appears to have since corrected this, however.)

So far, it's all just typical, completely uncontrollable Internet chatter. But one anonymous fellow took it a step farther, and set up glennbeckrapedandmurderedayounggirlin1990.com . And that's when Glenn Beck's lawyers got involved, claiming that the website is defamatory and demanding that it be shut down and its webmaster's identity be revealed. (Although the website has links that are supposed to show the legal info, as of the time of writing, they didn't work for us. Fortunately, the folks at Gawker have an image of the takedown letter available.)

Now, the website's content makes no direct claim that Glenn Beck raped and murdered anyone. In fact, its author writes in an intentionally Beckian fashion that:

We're not accusing Glenn Beck of raping and murdering a young girl in 1990 - in fact, we think he didn't! But we can't help but wonder, since he has failed to deny these horrible allegations. Why won't he deny that he raped and killed a young girl in 1990?

But Beck has a pretty good claim that the domain name itself is defamatory - so says Paul Levy of Public Citizen, writes Ars Technica:

Certainly, domain names alone "can be defamatory," Levy says, pointing out that the first iteration of the site posed the "rape and murder" claim as a statement—not as a question.

Levy says that such a statement is only actionable if 1) it's false (and we're quite sure it is) and 2) it was stated with actual malice. That last bit could be tricky to prove, especially in a case involving an anonymous speaker, but Levy makes clear that the site might well be on the wrong side of a very fine line.
"I don't think 'Ha ha it's a joke' at the end gets you off," he says; if the parodic information is defamatory, it's risky for the defendant in such cases. That's complicated by the fact that the original domain name made the allegedly defamatory claim against Beck—and of course no one stumbling across the site in a search engine or elsewhere would see any disclaimer. In such cases, the domain name itself is a standalone piece of content; the disclaimer may help regarding the website content, but it won't necessarily transfer a cone of protection to the domain name as well.

Ars Technica also quotes Corynne McSherry of the Electronic Frontier Foundation, who is more dubious that the site's name is defamatory: "I'm not sure of any case where someone has claimed that a domain name was defamatory," she says, adding that "the site is 'pure political criticism and there's nothing wrong with that.'"

While McSherry is right about political criticism in general, we tend to agree with Levy that the case is not straightforward. The domain name's statement is — on its face, at least — factual in nature and pretty obviously false, and there is no guarantee that someone who sees the domain name in search results would follow the link and see the joke. In deciding whether the statement is capable of defamatory meaning, or conversely non-actionable opinion, a court would have to look at it in context, and it's not clear how a court would characterize the appropriate context in this situation. Should the domain name be viewed in conjunction with the entire site, which makes its parodic and political thrust more apparent? Or should it be viewed as the snippet you might see in a Google search?

Moreover, even when you're on the website, it's not 100% clear that defamation law's mythic "reasonable reader" would understand the joke. There are lots of cases finding a parody or satire to be a non-actionable statement of opinion because no reasonable reader would view it as conveying factual information about the plaintiff. See, e.g., New Times v. Isaaks, 146 S.W.3d 144, 157-61 (Tex. 2004) (holding that a newspaper article was non-actionable opinion because "a reasonable reader could only conclude that the article was satirical," noting the article's improbable quotes, intentionally irreverent tone, and other "obvious clues"); San Francisco Bay Guardian, Inc. v. Superior Court, 17 Cal. App. 4th 655, 660-62 (Cal. Ct. App. 1993) (letter to the editor in April Fool's Day edition of newspaper which suggested that a landlord gave his tenants shock therapy was not actionable because "the average reader would recognize [it] as a parody"); Walko v. Kean College, 561 A.2d 680, 683 (N.J. Super. Ct. Law Div. 1988) ("A parody or spoof that no reasonable person would read as a factual statement, or as anything other than a joke — albeit a bad joke — cannot be actionable as defamation"; phony ad suggesting that college administrator was available for "good phone sex" not actionable). But none of these cases seems exactly on point here, and Beck's lawyers have a nontrivial argument that your average reader who isn't familiar with his rhetorical style or who simply doesn't share the parodist's view of his politics might not see the gag.

This may not be a particularly good argument given that "the appropriate inquiry is objective, not subjective," and "the question is not whether some actual readers [are] mislead, as they inevitably will be, but whether the hypothetical reasonable reader could be." New Times, 146 S.W.3d at 157 (also noting that the reasonable reader "is no dullard"). The video clip embedded at the top of the webpage should probably clear things up for all but the thickest skulls, but then again we don't know whether the reasonable reader takes the time to watch videos or not. (The video, under the caption "A Plea for Help" and title "Don't Leave Glenn Beck Alone!!!!!," features a mock-crying woman saying, among other things, "everytime people stop teasing him [Glenn Beck], and ridiculing him, and making fun of him, and laughing and pointing and staring at him, a baby ghost gets turned into a human being. Do you want that to happen?") The website's disclaimer might also clear things up for our fair reader, except that it's regrettably small, placed at the bottom of the page, and itself partakes of the sort of double-speak that characterizes the site overall:

Notice: This site is parody/satire. We assume Glenn Beck did not rape and murder a young girl in 1990, although we haven't yet seen proof that he didn't. But we think Glenn Beck definitely uses tactics like this to spread lies and misinformation.

In the end, the parodist could be in hot water if the case ever got to court and the judge felt a tad bewildered by the inside-jokey Internet meme and fancied himself/herself a good bit more sophisticated than the hypothetical reasonable reader.

(Thanks to section 230 of the Communications Decency Act, the site's webhost and domain registrar are completely protected from potential defamation claims because they had no role in its creation or development.)

Predictably, defamation is not Beck's only axe to grind. His lawyers also filed an action with WIPO under the Uniform Domain Name Dispute Resolution Policy (UDRP), claiming that the website is improperly using his trademarked name (apparently his trademark application is pending). Here, we can agree with both Levy and McSherry when they say the trademark claim is "preposterous." While these WIPO proceedings aren't always consistent with U.S. law, any award is reviewable in federal court, and U.S. trademark law generally recognizes that use of a trademark in non-commercial, critical speech of this nature rarely amounts to the "bad faith" required for a successful cybersquatting claim. See, e.g., Lamparello v. Falwell, 420 F.3d 309 (4th Cir. 2005) (gripe site operator did not have a bad faith intent to profit when he used the website in question to criticize the social and religious views of the Reverend Jerry Falwell); TMI Inc. v. Maxwell, 368 F.3d 433 (5th Cir. 2004) (gripe site operator did not act in bad faith when using website to engage in consumer commentary and criticism rather than for commercial gain); Lucas Nursery & Landscaping v. Grosse, 359 F.3d 806 (6th Cir. 2004) (same); see also Taubman v. Webfeats, 319 F.3d 770 (6th Cir. 2003) (ruling "taubmansucks.com" was "purely an exhibition of Free Speech, and [federal trademark law] is not invoked"); Bally Total Fitness Holding Corporation v. Faber, 29 F. Supp. 2d 1161 (C.D. Cal. 1998) (ruling defendant's use of "ballysucks" in a sub-domain for a website engaging in critical commentary did not constitute trademark infringement or dilution).

Of course, as Gawker notes, Beck is only making matters worse for himself by threatening legal action against the website. Before, it was just another idiot meme among the oceans of idiot memes online. Now, it's creeping through the blogosphere toward the mainstream news. It's easy to imagine The Daily Show or The Colbert Report picking up this story when they come back from vacation. And if the meme's promoters start calling in to Glenn Beck's show, demanding proof that he didn't rape and murder anyone . . . well, someone in the big news networks will notice. And Beck will be wishing he never called his lawyers in. Believe it.

Update: glennbeckrapedandmurderedayounggirlin1990.com has added a prominent disclaimer at the top of its page — "Notice: This website is 100% parody" with a link to the disclaimer at the bottom. It has also added the following to the disclaimer:

Read the last sentence again. That's the point. Read it a third time and ignore the name of the site itself, because anyone who believes that we're trying to actually get people to believe Glenn Beck raped and/or murdered is *whoosh* missing the entire point. So don't be dumb like a lot of people are. I greatly expanded this text because so many people *read* it, and *still* didn't understand.

(Arthur Bright and Sam Bayard contributed to this post. Arthur is a third-year law student at the Boston University School of Law and a former CMLP Legal Intern. Before attending law school, Arthur was the online news editor at The Christian Science Monitor.)

Subject Area:

Goldman Sachs Tries To Bully Blogger

Marc J. Randazza — Tue, 14 Apr 2009 19:53:31 +0000

Michael Morgan is a Florida blogger who is a little bit upset with Goldman Sachs and its business practices. To voice his displeasure, he registered the domain name goldmansachs666.com and goldmansachs13.com and forwarded them to his blog on the financial giant.

Naturally, Goldman Sachs doesn’t like to be criticized. Who does? Nevertheless, I fail to see how they could have perceived Morgan as a threat to their financial well being or anything else. The fact is, Mr. Morgan’s blog just isn’t that good. The layout is visually painful. The writing isn’t engaging. After muddling through it for about 15 minutes, I still don’t really get what all the fuss is about. In other words, Morgan’s blog was destined for the blogger derelict heap. Morgan has a full time job, had very few readers, and probably would have either gotten bored with his griping, or his blog would have been ignored to death.

With Morgan’s blog plodding along in obscurity, enter John A. Squires of Chadbourne and Parke, LLP. Now this guy has an impressive background: He was top of his class in law school, on his law school’s moot court team, on law review, and an Order of the Coif inductee. Sounds like a pretty smart guy, no? Smart enough to become co-chair of the intellectual property practice at a major law firm. Smart enough that he “is widely recognized in both the financial services and technology sectors as one of the country’s top experts on the issue of patent-eligible technologies.”

Nevertheless, he put his name to one of the dumbest trademark demand letters I have ever read. Go ahead, click it. If you practice trademark law, don’t drink any liquids while reading or you’ll shoot them out your nose as you’re laughing and then you might have to change your shirt.

This letter seems to anecdotally confirm two things I’ve preached for years:

1) Patent guys don’t necessarily know trademark law,

2) A lawyer who doesn’t understand public relations is only half a lawyer.

I’m just guessing here, but I’m reasonably certain that Mr. Squires did know better. This demand letter just screams “reluctantly written to shut a client up.” Patent lawyer or not, the guy had to know that his trademark claims were just plain stupid. If goldmansachs666.com creates confusion in the marketplace, then I guess that I had better stop calling my balls my “nutsack,” because someone might come along and expect them to sweat stock options.

Personally, I would never have affixed my signature to this piece of dung. I’ve learned the art of “client control.” That’s when you tell someone “my credibility is worth more than what you want to pay me to write this unsupportable demand letter.” Sadly, many lawyers never learn this skill. I’m certain that some tool at Goldman Sachs told Squires “I don’t care if we can’t back the claims up, just send the letter to try and scare this little mouse of a blogger.” (Or maybe I’m just inclined to give the lawyer the benefit of the doubt).

Although I would love to say that I would continue to that same big shiny set of brass balls if my client were a gazillion dollar financial powerhouse that shits rubies, I won’t judge Mr. Squires until I walk a mile in his Bruno Maglis — especially since I’m 98% certain that somewhere, he has an email to his client telling them that the claims in the letter are just one molecule away from being pure pharmaceutical-grade fecal goodness.

At least I hope so . . . because the mouse, he bite.

Squires’ letter ends with a threat that if Morgan doesn’t confirm, in writing, that he will stop using the words “Goldman” and “Sachs,” they just might sue him. Well, April 18 is a Saturday, Walter Sobchak doesn’t roll on Shabbos, and Mike Morgan did respond in writing — with a lawsuit of his own.

Morgan probably figured that if Goldman Sachs wasn’t bluffing, they would file suit against him in New York. Morgan lives in Florida, and would likely rather just have it out in Florida than travel to New York. So, given that there was a bona fide legal question — created by Squires’ dumb letter, Morgan had the right to file suit to just get the whole thing over with. Naturally, Goldman Sachs probably isn’t too worried about the financial consequences of this suit. The most that Morgan will win is a piece of paper that says he has the right to use the words “Goldman” and “Sachs” to criticize Goldman Sachs. But what a piece of paper it will be.

More importantly, now that he has filed suit, a lot more people are going to take note of this dispute. I’ve been following it for a little while myself, and until I received a copy of Morgan’s complaint, I didn’t really find it interesting enough to write about. Guy gripes. Company whines. Dumb demand letter. Yawn. Happens every day.

What doesn’t happen every day is that the griper has the coglioni to tell one of the biggest financial institutions in the world “You wanna step outside? Fine, lets go.“

So now what happens?

Hopefully, Mr. Squires tells his client “I told you so,” and keeps a copy of the memo he sent them telling them that this was all a really dumb idea and that they should have just ignored Mr. Morgan’s blog. If he didn’t tell them so, then someone at Goldman Sachs should re-think how they choose their attorneys.

Once that is all settled, Goldman Sachs should just gracefully back away from this — issue a statement that they reconsidered their position, and it all goes away. The first rule of getting out of a hole is to stop digging. However, I predict the opposite will happen: Goldman Sachs will dig in, the Spin Doctors song “Little Miss Can’t Be Wrong” will be played over the PA system at Chadbourne and Parke, and we will see both an answer and a counterclaim that will be just one hair shy of being frivolous enough to warrant sanctions because some nitwit will think that it will scare Morgan into submission… and the case will draw even more attention to this once-obscure blog.

And then we’ll see if Mr. Morgan’s reporting on Goldman Sachs’ misdeeds grows any legs. He already has a conference call scheduled to gather the volunteers who have rallied to his side.

Jurisdiction:

Florida

Subject Area:

Kentucky Court of Appeals Rules in Gambling Domains Case

Marc J. Randazza — Wed, 21 Jan 2009 16:28:53 +0000

The Kentucky Court of appeals has ruled that the Commonwealth can not seize 141 domain names due to their alleged affiliation with online gambling. The Commonwealth initially filed an in rem (against the item, not against a person) action against the domain names -- seeking to seize the domains as "gambling devices." However, the statute does not seem to fit around domain names. The statute was designed to permit the seizure of slot machines and the like. The court of appeals wrote:

Suffice it to say that given the exhaustive argument both in brief and oral form as to the nature of an Internet domain name, it stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute "a machine or any mechanical or other device...designed and manufactured primarily for use in connection with gambling." We are thus convinced that the trial court clearly erred in concluding that the domain names can be construed to be gambling devices subject to forfeiture under KRS 528.100. (Op. at 8)

The Court of Appeals seemed to sympathize with the Commonwealth, but exercised judicial restraint and refused to legislate from the bench.

Regardless of our view as the advisability of regulating or crimininalizing Internet gambling sites, the General Assembly has not seen fit to amend KRS 528.010(4) so as to bring domain names within the definition of gambling devices. Neither we, nor the Justice Cabinet, are free to add to the statutory definition. If domain names cannot be considered gambling devices, Chapter 528 simply does not give the circuit court jurisdiction over them. (Op. at 9)

The Court of Appeals also ruled on whether Kentucky law permitted the in rem proceeding against the domains. The court found that the in rem proceedings were not authorized by the statute. Given that KRS 528.100 is a penal statute, in order to seize the domains, it requires charges to be filed -- none were. Without a conviction under KRS Chapter 528, there can be no forfeiture. (Op. at 14)

What is absent from the opinion is just as important as what is in the opinion. The Court did not address the constitutional issues including whether the use of the domain names was Commercial Speech and thus protected by the First Amendment. The Court also avoided discussing whether due process would permit Kentucky to exercise jurisdiction over domain names that had no nexus to that state other than the fact that they could be accessed there. However, this is not a criticism of the decision. Courts are supposed to avoid sweeping constitutional issues if a case can be decided on narrower statutory grounds, and the Court exercised this proper judicial restraint. The decision leaves it open to the Kentucky legislature to amend its statute to include domain names as "gambling devices." However, I don't think this will result in a renewed effort. As the court discussed the fact that domains could not be seized in an in rem proceeding of this kind, it hinted that the entire case had a bit of a foul smell to it. Instead of bringing criminal charges, with their higher burden of proof, the Commonwealth farmed this case out to a private law firm that was working on a contingent fee basis -- apparently banking on a big payday if the domain owners wrote checks rather than standing and fighting. The Kentucky Court of Appeals appeared to find this a bit distasteful.

This deficiency in the Commonwealth's case is further amplified by the conspicuous absence of the Kentucky Attorney General, the Commonwealth's chief law officer, who pursuant to KRS 15.020 clearly has the authority to pursue the prosecution of crimes under KRS Chapter 528. The Secretary of the Justice and Public Safety Cabinet has no such authorty. (Op. at 15)

Accordingly, Kentucky could amend KRS 528.100 to include domain names, but that still wouldn't authorize a civil in rem proceeding to seize domain names owned by foreign companies and operated outside the Commonwealth. If Kentucky wants to seize these domain names, they will have to amend KRS.100, then bring criminal charges against the domain owners, meet the higher burden of proof required in a criminal case, and if they score a conviction (despite the obvious constitutional issues), they can move for an order of forfeiture. However, bringing criminal charges takes the profit motive out of the equation, as the domains (if seized) would have no resale value to the Commonwealth, and a private firm could not take a criminal prosecution on contingency.

Full opinion available here.

Jurisdiction:

Kentucky

Subject Area:

Domain Names