Internet gamer's case hits deadlock

Las Vegas Internet gambling pioneer Kerry Rogers' bid to avoid prosecution in Minnesota has failed by the narrowest of margins: a deadlocked court.

Rogers, targeted in a 1995 civil lawsuit by Minnesota Attorney General Hubert Humphrey III for running several Internet gambling sites, had argued that prosecutors could not sue him in Minnesota for Web sites he runs out of Las Vegas.

Rogers' argument has been rejected by Minnesota trial and appeals courts. Earlier this week, the argument was rejected by the Minnesota Supreme Court by default when the six-member panel deadlocked, 3-3.

The Supreme Court impasse effectively leaves the lower court opinions intact. It also leaves Rogers little option but to stand trial in Minnesota, or appeal the case to the U.S. Supreme Court. And it leaves Internet law experts surprised.

"I'm pleased and surprised they had trouble with this," said David Post, a professor and Internet law expert at Temple University, and founder of the Cyberspace Law Institute. "It is a very important issue about the nature of the contact that will suffice to subject you to jurisdiction."

The Supreme Court split was made possible when one justice recused himself from the case because of a personal friendship with an attorney in the case, said Rogers attorney Oscar Goodman. The deadlock means Rogers can seek a re-hearing, ask for a justice to take the place of the justice who recused himself, or appeal to the U.S. Supreme Court.

Goodman said no decisions have been made about how to proceed, but made it clear what he wants to do.

"The way I'm leaning now, is going straight to the Supreme Court," Goodman said. "We're going to be making a decision real fast."

But Post, while agreeing that the jurisdictional issues raised in the Rogers case are important, noted that many other Internet jurisdiction cases are working their ways through the courts. The Supreme Court will likely wait until the issue has "bounced around" in lower courts before it agrees to rule on an Internet jurisdiction case, Post said.

"The Supreme Court takes cases primarily because there's a clear split among lower courts about a question of law," Post said. "This issue has not ... crystalized into opposing camps."

At issue in the Rogers case is whether the State of Minnesota has the right to prosecute Rogers in Minnesota for Web sites he maintains in Las Vegas.

Humphrey first sued Rogers in July 1995, alleging false advertising and deceptive trade practices. Through his company Granite Gate Resorts Inc., Rogers operates several Web sites that claim Internet gambling is legal, and that they will soon take bets. Rogers says he has yet to take a single bet over the Internet.

Under Rogers' plan, any bets placed via the sites will be routed through a Belizean company, Global Gaming Services Ltd., which he also owns. Internet gambling is legal in Belize, thanks to Rogers' help in drafting that country's Computer Wagering Licensing Act.

"I know where the line is and I don't believe I've crossed it," Rogers said in a recent interview.

Since its filing, all actions in the case have involved a motion filed by Rogers to dismiss the suit based on his claim that Minnesota lacks jurisdiction over him. The crux of Rogers' argument is that because Minnesotans must take action themselves to access his Web sites, they are "getting" the information from his computers. It is not being unwillingly transmitted to them.

"Granite Gate never made any contact with a Minnesota resident," states a brief filed by Rogers' attorneys. "This case only deals with the issue of whether a Minnesota state court has jurisdiction over a Nevada resident who maintains a Web site which has been accessed by Minnesota residents."

But Humphrey claims that not only are Rogers' Web sites accessible in Minnesota, they are regularly accessed by Minnesotans. Because Rogers is trying to build an online business that can be accessed globally, goes the attorney general's argument, by default Rogers is trying to drum up business in Minnesota.

"Appellants cannot seek to profit from the Minnesota market, yet claim they are beyond the jurisdiction of the Minnesota courts," states Humphrey's brief. "Appellants have advertised in a national market, and it is not unreasonable to ask that they bear the responsibilities that come with that advertising."

Post said Internet law is fairly clear in one respect: to fall within the jurisdiction of a remote government, a person must not only advertise in that government's jurisdiction, they must do business with people in that jurisdiction. The question in the Rogers case, as in most Internet jurisdiction cases, is whether the interactive nature of Rogers' Web sites -- the fact they let Minnesotans send Rogers personal information -- constitutes doing business in Minnesota.

The fact the Minnesota Supreme Court could not reach a decision shows that in the Rogers case, that question was unclear, Post said.

"Obviously, they did not think it was an open and shut case," Post said.

Still, there is a limited body of case law on Internet jurisdiction issues, he said, mostly involving copyright, trademark and defamation issues. Until there is a clear split in opinion by different courts in different areas, the Supreme Court is unlikely to take up a case like Rogers', Post said.

"It doesn't particularly stand out," Post said of the Rogers case. "There are lots of these."

If the case does not go to the Supreme Court, Rogers will move to dismiss it on the grounds the Web sites do not actually take bets, Goodman said.

"Our business ... hasn't opened up," Goodman said.

Rogers is also facing a criminal prosecution by U.S. attorneys in New York for violating provisions of the Federal Wire Act. Rogers also intends to defend himself vigorously in that case.

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