The First Circuit Court of Appeals heard oral arguments in the Department of Justice’s appeal of the New Hampshire Lottery’s lawsuit over enforcement of a new DOJ opinion on the Wire Act Thursday. When both sides concluded their arguments, the Justice Department’s already frail case seemed weaker.
The three-judge panel inspected the DOJ’s three main arguments, and that produced some moments that exposed the flaws in those arguments. The likelihood of more appeals should temper the NH Lottery’s excitement, however.
Recapping Wire Act oral arguments
Both sides of this dispute have been submitting briefs to the court, so Thursday’s telephone conference was mainly an opportunity for the three-person panel to question the parties about their arguments. The questions for Justice were quite pointed.
The panel’s questioning of Justice’s arguments created several, “yeah, but…” moments. The first of those came in the DOJ’s response to a question from Judge Juan Torruella.
Torruella asked counsel for Justice whether the 2018 memo from the Office of Legal Counsel constituted a change in the DOJ’s interpretation of the Wire Act. Justice acknowledged that it did, begrudgingly.
Judge Sandra Lynch picked up what Judge Torruella laid down and ran with it. Lynch pressed the DOJ lawyer on whether or not Justice has a position on the application of the Act in regard to the circumstances in dispute.
The DOJ representative responded with a paradoxical statement. Counsel maintained that while Justice interprets the Wire Act to apply to all online gambling, it wouldn’t go so far as to say whether online lotteries offered by states are legal or illegal.
Judge William Kayatta Jr. approached the DOJ arguments from a different angle. He inquired about Justice’s position on the legality of multistate online poker and enforcement of the Act against companies offering it.
DOJ’s counsel pointed out that Justice has extended forbearance for enforcement against such sites. Kayatta’s point, however, was that if Justice did enforce the Act as the 2018 OLC memo suggested, it would result in a judicial review of such action. It’s not the responsibility of the court to review prosecutorial opinions before actual enforcement, Kayatta stressed.
Takeaways from the First Circuit review
In plainer English, things did not go well for Justice during its time with the panel. The questioning seemed to line up well with the plaintiffs’ arguments.
One of the DOJ’s primary defense arguments was that the 2018 OLC memo hasn’t led to actual enforcement against the NH Lottery. For that reason, the lottery has no standing to bring its case against Justice.
Torruella’s question seemed to substantiate the lottery’s standing. With that settled, then the only question before the Court is whether the DOJ would enforce the Act as the 2018 OLC memo suggests.
Counsel for the DOJ wouldn’t commit to the nonenforcement of the Act against the NH, or any other state, Lottery beyond the current forbearance. That currently runs through the rest of 2020.
The NH Lottery also has another facet of this appeal on its side. That’s the simple fact that the District Court ruled in its favor before. Justice has to convince the panel that District Judge Paul Barbadoro erred in his ruling.
Both sides will now await a ruling from the panel. When that happens, it won’t likely be the final word on this matter.
The path forward to a Wire Act decision
If the panel doesn’t overturn Judge Barbadoro’s ruling, the DOJ has two options. First, it can ask the court for an en banc review. That would be a review of the panel’s opinion by the full court.
Another option is to appeal the ruling to the US Supreme Court. There’s no guarantee that SCOTUS would hear that appeal, however. Justice’s case may not be strong enough.
What normally prompts a SCOTUS review is when different circuit courts issue differing opinions on the same subject. If the panel upholds Judge Barbadoro’s ruling, it would line up with an earlier opinion from the Fifth Circuit Court of Appeals. That concurrence lessens the chance of a SCOTUS review.
Things appeared to go well for the NH Lottery on Thursday. It may not be time for the lottery to truly celebrate a victory for months yet though. Regardless, the lottery probably feels much better than the DOJ does right now.
