Crime in the Suites: An Analyis of Current Issues in White Collar Defense
Archive for the ‘State Criminal’ Category
Aug 12
2013

Federal Judge Rejects NYPD’s ‘Stop and Frisk’ Policies

In a decision issued today that could potentially change the way police operate in the Big Apple, U.S. District Judge Shira A. Scheindlin (S.D.N.Y.) ruled that, for years, New York City police officers have been systematically stopping innocent people in the street without any objective reason to suspect that they were engaged in any kind of wrongdoing. The 195-page decision, issued after a lengthy trial, accuses the NYPD of a widespread disregard for the Fourth Amendment – particularly as the “stop-and-frisk” episodes soared in number over the last decade. To address the issue, Judge Scheindlin said she planned to designate an independent private attorney as a monitor for the police department’s compliance with the Constitution.

Judge Scheindlin’s ruling is a brave rebuke to the department’s increasingly aggressive policing policies.During the two-month trial, the court heard testimony regarding some 4.3 million stops between 2004 and mid-2012. The U.S. Supreme Court has long sanctioned stopping and frisking an individual based upon reasonable suspicion that he or she is engaged in wrongdoing. But experts testified in the trial that in about 88 percent of the stops, police found no contraband or other evidence of illegal behavior – an incidence so high that it suggests that there was no credible basis on which to stop many of those individuals in the first place.

Given that the individuals in question were usually young minority men, a policing policy that essentially permitted police to treat as suspicious behavior that was perfectly innocent had the effect of watering down the Constitution’s protection against illegal searches and seizures. In her ruling, Judge Scheindlin rejected the testimony of numerous police officers and commanders who typically defended the legality of stops and said that they were made only when officers reasonably suspected criminal behavior.

Judge Scheindlin’s ruling in the case comes on the heels of what some have characterized as an effort by the administration of NYC Mayor Michael Bloomberg to influence the judge or to create some kind of extrajudicial bias against her ruling in the Second Circuit Court of Appeals (which will doubtless be hearing an appeal of this decision). In June, the mayor’s office offered to a number a press outlets a “study” it had conducted that purported to show that Judge Scheindlin grants motions to suppress evidence for constitutional violations in a much higher percentage of criminal cases than do her colleagues in the Southern District of New York. Today’s decision certainly makes clear that Judge Scheindlin was not influenced by those communications in favor of the city, and it is left to be seen whether press reports on that study will have the unlikely consequence of influencing the appellate court.

Judge Scheindlin’s decision is important because it seeks to address constitutional violations on an institutional level and also because it addresses those violations that befall individuals who are not charged with any crime. In a case in which a person faces criminal charges, he or she usually can challenge the admission of physical evidence or his or her own statements based on a claimed violation of constitutional rights, and a favorable ruling will result in the exclusion of that evidence from any trial on those charges. But for a person whose civil rights are violated by an illegal search that results in no criminal charges, the recourse is less obvious.

While there are circumstances in which an individual could sue individual police officers based on an illegal search, the burdens of litigation and the proof required usually are high enough that few if any people pursue such cases. Indeed, a police department policy that encouraged officers to engage in searches of questionable legality appears to rely on those disincentives to protect the officers and the department from liability and scrutiny. By finding an institution-wide set of violations, and by imposing a requirement that an independent monitor ensure compliance, Judge Scheindlin’s ruling (if upheld on appeal) has the potential to provide a more reliable guarantee of constitutional rights to New Yorkers.

If some will decry the decision as threatening the ability of police to control crime, they have forgotten the historical lessons about the importance of safeguarding the rights of minorities in our country, and the important role that the Constitution plays in protecting the rights of the innocent.

posted in:
State Criminal
Aug 08
2013

Did Florida Accidentally Outlaw All Smartphones?

A lawsuit recently filed by Incredible Investments, LLC, owned by entrepreneur Consuelo Zapata, alleges that the language in a recently enacted Florida law that was intended to shut down Internet cafes and slot machines has actually outlawed all mobile devices that are capable of accessing the Internet. The complaint, which seeks to have the new law declared unconstitutional, alleges that in the process of hastily passing the bill, the legislators crafted language that could include any smartphone or computer in Florida. The complaint, a copy of which is available here, asks the court to throw out the law, which was purportedly passed “in a frenzy fueled by distorted judgment in the wake of a scandal that included the lieutenant governor’s resignation.”

The law in question was signed into law on April 10, 2012, by Florida Governor Rick Scott. Zapata, whose clientele is primarily migrant workers seeking to access the Internet, owns one of the approximately 1,000 internet cafés that was shut down as a result of the law.

The bill was introduced in the aftermath of a state investigation which found that a purported charity earned $290 million from an Internet gambling effort but donated only $5.8 million of those funds to charity. The investigation resulted in 57 arrests on racketeering and money laundering charges. Former Florida Lieutenant Governor Jennifer Carroll, who has ties to the charity but has not been accused of wrongdoing, resigned in the wake of the investigation.

The problem with the law that was noted in the lawsuit is that it amended the definition of a slot machine to include “any machine or device or system or network of devices” that can be used to play games of skill or chance, which can be activated by “money, coin, account number, code, or other object or information.” The lawsuit alleges that with such a broad definition of a slot machine, any smartphone or computer is effectively banned in Florida because it could be used to access the Internet to play an illegal game.

It is unclear what the result of the lawsuit will be. The court may agree with the plaintiff that this law has effectively banned mobile devices and should be struck down. However, courts often attempt to avoid constitutional issues when interpreting laws and could find that another reading of the statute in this case would be more appropriate.

Whichever way the court does decide on the law, this lawsuit shows the dangers of a swift reaction from a legislature after a high profile incident occurs. The unintended consequences of legislation can be quite serious, as is alleged to be the case here, and a thorough examination of the problems and the best way to address them could have avoided the confusion that has resulted from this law.

posted in:
State Criminal
Aug 05
2013

Fla. Prosecutor Gets 2 Years’ Suspension for Improper Contacts With Judge

Florida judges acknowledge that “justice requires the appearance of justice.” And given some of the controversial verdicts coming out of the Sunshine State — Casey Anthony and George Zimmerman come to mind — it seems more important than ever for the Florida judiciary to protect its institutional integrity. That might explain why the Florida Supreme Court doubled the recommended suspension of a state prosecutor who failed to disclose numerous ex parte contacts with a sitting judge.

On June 20, that court upheld a finding that Howard Scheinberg engaged in conduct that was prejudicial to the administration of justice. The disciplinary action against Scheinberg pertained to the prosecution of Omar Loureiro. In 2007, Scheinberg was the lead prosecutor in a capital murder trial against Loureiro. Former Judge Ana Gardiner was the presiding judge. As a result of that trial, Loureiro was found guilty of first-degree murder and sentenced to death.

Months after the trial concluded, evidence surfaced that Scheinberg had been romantically involved with the judge. During the five months between the jury verdict and sentencing hearing, Scheinberg and Gardiner had exchanged more than 900 phone calls and more than 400 text messages. On average, Scheinberg had communicated with the judge almost 10 times a day during that time but had never disclosed the contacts to opposing counsel.

When the Broward State Attorney’s office learned of the misconduct, it promptly agreed to retry Loureiro: only a second trial could dispel public perceptions that Loureiro had been denied due process.

When the Florida State Bar learned of the misconduct, it promptly initiated disciplinary action. After the complaint was filed, a referee was appointed. She conducted a hearing and issued a report with her findings and recommendations. First, the referee found that Scheinberg’s ex parte contacts and his failure to disclose them prejudiced the judicial system in violation of Florida’s ethics rules. Based on her findings of aggravating and mitigating factors, she recommended a one-year suspension from the practice of law.

Scheinberg challenged the referee’s recommendation as to guilt and the one-year suspension, but received no relief. Instead, the Supreme Court agreed that Scheinberg was guilty of misconduct, even though his contacts with the judge were unrelated to Loureiro’s murder trial. The court explained that Scheinberg’s extensive contacts with Judge Gardiner created “an appearance of impropriety.”

When an attorney becomes romantically involved with the judge presiding over his case, “the judge’s authority necessarily suffers,” the court concluded. First, the relationship itself undercuts the judge’s role as a detached neutral party. Moreover, when a judge presides over cases involving her romantic partner, she loses her single most important source of authority — the perception that she is absolutely impartial.

The court then addressed the recommended sanction. Although it found no error with the referee’s findings on aggravating and mitigating factors, the court held that a one-year suspension was not sufficient. Scheinberg’s conduct created an appearance of impropriety based on substantial communications that were never disclosed to the defense. And it all occurred in the context of a capital murder trial!

The resulting harm was obvious: Scheinberg’s conduct led to an investigation and a retrial, both of which consumed public and private resources. In the court’s view, the seriousness of Scheinberg’s violation and resulting prejudice to the administration of justice required a suspension twice as long. On that basis, the court suspended Scheinberg for two years and ordered him to cover the Florida Bar’s costs.

posted in:
State Criminal
Jun 27
2013

Prosecutor Fired for Lying on Facebook to Witnesses in Murder Case

For all its benefits, social media has posed some significant challenges for our criminal justice system. One of the more common problems – Internet-related juror misconduct – has been the subject of numerous criminal appeals lately. It has also burdened federal and state governments with added costs for misconduct hearings and retrials. It is no wonder, then, that the Cuyahoga County Prosecutor’s office in Ohio took swift and decisive action when confronted with Internet-related misconduct by one of its own.

Cleveland-area prosecutor Aaron Brockler was recently fired for contacting trial witnesses on Facebook to dissuade them from providing testimony on behalf of defendant Damon Dunn. Dunn was on trial for aggravated murder in connection with a May 2012 shooting, and Brockler was lead prosecutor on the case.

Before trial, the defense team notified Brockler that two of Dunn’s former girlfriends were prepared to provide an alibi for the defendant, testifying that he was on the other side of town when the murder victim was shot. Brockler was concerned that Dunn might walk free, so the prosecutor decided to contact the witnesses on Facebook. First, Brockler created a fake Facebook profile and “friended” the alibi witnesses. In a series of chats, Brockler told the witnesses he was the defendant’s ex-girlfriend and the mother of Dunn’s child. According to Brockler, the women went “crazy” at the news. As a result, one witness decided she would not lie for Dunn, and the other admitted she wasn’t with him when the crime occurred.

The witnesses later complained that they were being harassed on Facebook. Investigators in the Prosecutor’s Office traced the online activity to Brockler’s office computer. Ultimately, Brockler admitted to his online chats with the women, but denied any wrongdoing. According to him, “[l]aw enforcement, including prosecutors, have long engaged in the practice of using a ruse to obtain the truth.” Brockler’s former colleagues disagreed. County Prosecutor Timothy McGinty said it best: “By creating false evidence, lying to witnesses as well as to another prosecutor, Aaron Brockler damaged the prosecution’s chances in a murder case where a totally innocent man was killed at his work.”

After Brockler was fired, the entire prosecutor’s office was recused from the case, and the matter was handed over to the office of Ohio’s attorney general. A pretrial hearing is scheduled for July 11.

Many laypersons are unaware (and many lawyers forget) that, as officers of the court, lawyers are prohibited from making false statements of material fact or law. It is true that in limited circumstances, police officers are permitted to lie to suspects about the nature of the evidence in their possession and similar matters, but police officers are not considered officers of the court and are subject to cross-examination as witnesses; this is not true of prosecutors.

In Ohio, as in every other U.S. jurisdiction, attorneys admitted to the practice of law are required to be truthful. In particular, Rule 4.1(a) of the Ohio Rules of Professional Conduct states that, in the course of representing a client, a lawyer “shall not knowingly . . . make a false statement of material fact or law to a third person.” Lawyers are also bound by certain restrictions on communications with a third party depending on whether or not the third party is represented by counsel.

Brockler’s Facebook chats violated Ohio’s requirement for truthfulness in the course of representation because Brockler conducted the chats using a fake profile. Brockler contacted the defense witnesses by posing as Dunn’s fictitious ex-girlfriend and the mother of Dunn’s child; he used the misrepresentations to foment the witnesses’ anger against the defendant so they would change their testimony or refuse to testify on his behalf.

One could argue that Brockler’s deception seemed to aid the search for truth in Dunn’s case, but the deception might just as easily frustrate the search for truth in another case. The rules avoid this problem by prohibiting a lawyer’s knowing deception across the board.

If Brockler’s ruse had not been discovered, it may have helped him win a conviction. But there are crucial societal values that also must be upheld and that are more important than winning a conviction at all costs.

posted in:
State Criminal
Jun 26
2013

Appeals Court Hears Argument on N.J. Sports Betting Law, With Uncertain Outcome

Very lively oral arguments were held today, June 26, in the U.S. Court of Appeals for the Third Circuit on the New Jersey sports betting law, in a case that will have an enormous impact on the future of sports betting in the United States.

At issue in the case is the federal Professional and Amateur Sports Protection Act of 1992 (PASPA), which prohibits any state from offering sports betting unless that state had a sports betting scheme in place between 1976 and 1990. Last year, New Jersey Governor Chris Christie signed into law a bill authorizing single-game sports betting in the state. In August, the four major professional sports leagues and the National Collegiate Athletic Association (NCAA) filed suit arguing that the state’s sports gambling law was in violation of federal law.

In December 2012, Judge Michael Shipp of the U.S. District Court for the District of New Jersey held oral arguments to determine whether the sports leagues had standing to bring the lawsuit and determined that they did have standing. The U.S. Department of Justice (DOJ) later intervened in the case to defend the constitutionality of the statute. Oral arguments were held in February, and Judge Shipp held that the New Jersey law was invalid as conflicting with PASPA, which he found to be a valid exercise of congressional power. In March, New Jersey filed an appeal with the Third Circuit, appealing both the standing and constitutionality rulings.

Today in the Third Circuit, the judges dictated the path that the oral arguments took for both sides. Ted Olson, a former United States Solicitor General arguing on behalf of New Jersey, began the arguments by stating that PASPA is “plainly unconstitutional.” Olson also argued that the sports leagues did not have standing to bring the lawsuit because they did not meet the Article III requirement that they actually suffered harm from the New Jersey wagering law.

On the issue of anti-commandeering, which could be crucial to the court’s decision on the constitutionality of PASPA, the judges peppered Olson with questions regarding precedent on the issue and whether “commandeering” is limited to instances in which the federal government forces a state to take affirmative steps. There seemed to be some skepticism from the judges that PASPA should be considered an instance of commandeering because New Jersey did not have to do anything to comply with the statute. Olson argued that PASPA is a federal initiative and the responsibility for enforcing it is on the states, thus making this an instance of commandeering.

The issue of state sovereignty was not an issue that New Jersey focused on in the district court or in their briefs in the Third Circuit, but today Olson focused more on the issue by citing Supreme Court decisions that were issued yesterday and today, arguing that those cases support the position that PASPA is a violation of state sovereignty. Olson took contention with the argument made by their opponents in the briefs that the issue of state sovereignty only applies to states that are newly admitted to the Union.

Paul Clement, also a former United States Solicitor General, argued for the sports leagues. He pointed to the Third Circuit’s previous decision in Office of the Commissioner of Baseball v. Markell, a case that he conceded did not directly address standing, to support his position that the leagues have standing in the case. Clement also pointed to other cases, such as copyright cases, that show that the leagues are entitled to protect their product, and in sports wagering, it is their product, the games, that is at issue.

Clement was questioned about the recent Supreme Court decisions and was asked why PASPA was not a violation of state sovereignty. Clement attempted to distinguish the cases by arguing that they did not apply to PASPA because it was passed under the Commerce Clause, which affords the federal government broad powers to regulate interstate commerce. The U.S. Attorney for the District of New Jersey, Paul Fishman, argued on behalf of the federal government and agreed with Clement’s stance that PASPA is distinguishable from those cases.

There is no definitive timetable for a decision in the case, but it may take several months before an opinion is issued. Regardless of the decision reached by the Third Circuit, the losing party will have the option of seeking a rehearing en banc in that court or filing for a writ of certiorari to the United States Supreme Court. However, both these steps are subject to court discretion.

The ruling from the Third Circuit in this case will have far-reaching implications. A decision in New Jersey’s favor would remove the primary hurdle preventing states from offering sports betting within their borders. The panel today left no clear impression about which way they are leaning in their decision. and ultimately it may take a Supreme Court ruling before there is a definitive answer on PASPA.

posted in:
State Criminal
Jun 10
2013

Kansas Juror Found in Contempt for Online Comments During Trial

Two years ago, we anticipated a growing problem with jurors who disregard trial judges’ instructions concerning Internet use. In July 2011, we reported on the first known prosecution of a juror in Great Britain for Internet-related misconduct. Since then, a Florida judge sentenced a Sarasota County juror to three days in jail for criminal contempt. In that case, the juror contacted a civil defendant on Facebook during jury selection and then bragged about his subsequent dismissal after having been seated on the jury. One month later, a New Jersey court found a jury foreman guilty of criminal contempt. In that case, the juror was required to pay a $500 fine for conducting online research into possible penalties the defendant would face if convicted on drug charges.

Kansas has now followed suit. On May 20, 2013, a court in Topeka found James Reeder guilty of criminal contempt for posting online comments while serving as a juror in a murder trial. The trial involved Anceo Stovall, one of nine defendants charged with felony murder and robbery in connection with the shooting death of a Kansas attorney and the wounding of her companion. Stovall also faced charges for unrelated crimes, including burglary of a vehicle and aggravated robbery of a co-defendant. Throughout the month-long trial, the trial judge instructed jurors not to “seek out and read any media accounts” about the crime or the trial.

Reeder didn’t heed the instruction. Soon after the jury began deliberating, Reeder visited the Topeka Capital-Journal’s website and read an article about the case. On July 21, Reeder posted a comment to the site using the pseudonym “BePrepared.” In response to another commenter, Reeder wrote, “Trust me that’s all they got in their little world, as you, I have been there. Remember the pukes names they will do it for ever [sic].”

Three days later, the jury announced that it could not reach a verdict on nine counts related to the felony murder. On the unrelated charges, Stovall was found guilty of aggravated robbery and not guilty of burglary. He requested a new trial on the robbery charge. Among other things, Stovall alleged juror misconduct based on evidence that Reeder had reviewed and commented on trial-related news in violation of the judge’s orders. As a result, Stovall’s robbery conviction was overturned and his motion for new trial granted. Months later, Stovall entered a plea deal and was sentenced to almost 11 years in prison.

Reeder appeared in court last month for his contempt hearing, arguing that his online post had not caused any harm. In one sense, his argument had appeal. The jury failed to reach a verdict on nine charges, so the case was going to be retried regardless. Additional costs for retrying the robbery charge would have been marginal. On the other hand, it was at least possible that Reeder’s misconduct had prevented the jury from reaching a unanimous decision on every count.

The trial judge didn’t care either way. In her view, “[t]here is great harm that results when someone in Mr. Reeder’s position of great trust violates in this way.” Having found the juror guilty of indirect criminal contempt, the court ordered him to pay a $1,000 fine or spend three days in jail. No doubt, the trial judge intends to send a message: jurors like “BePrepared” should be prepared to follow her instructions on Internet use or deal with the consequences.

posted in:
State Criminal
May 21
2013

What Happens When Big Data and Scientific Approach Meet Criminal Justice?

A Houston couple is giving an estimated $4 billion in the next few years to try to solve some of the nation’s social problems by the application of careful thought and statistical analysis – and the criminal justice system is one of their targets.

John and Laura Arnold have that much to give away because John, still only 39 years old, made a vast fortune as a hedge-fund trader.

As a current Wall Street Journal article entitled “The New Science of Giving” explains, the Arnolds’ approach is quite different from the plan that most mega-donors select. Rather than pick existing institutions like cancer centers, women’s shelters, or anti-hunger programs to give money to, the Arnolds want to fund new, alternative approaches to solving problems. Chief among those new approaches is the use of data analysis and science.

Among their targets is the nation’s criminal justice system, where the Arnolds want to understand not the broad constitutional principles but their application in the states on a daily basis and to try to figure out how the system can be improved. They have hired Anne Milgram, a former New Jersey attorney general, to spearhead this effort.

One aspect of the system that the Arnolds are interested in right now is how judges make their decisions to keep nonviolent pretrial defendants behind bars. There just isn’t enough science behind those decisions, the Arnolds believe, and they are spending millions of dollars to create a risk-assessment tool that judges can use to choose whether to lock people up pending trial or to return them to their families. The assessment tool benefited from data from 1.5 million cases – the sort of “big data” that has hardly ever been used in the criminal justice system to date.

We are quite interested in how this project works out and whether a data-driven approach turns out to help prosecutors and defendants. If some quantifiable benefit can be shown, it won’t be just nonviolent crime that will be affected. We’d then expect to see some application of these principles in white-collar crime sentencing and even in civil cases. It’s not clear where the dollars will come from, beyond the Arnolds’ massive infusion of cash, but there’s a significant chance that real change in the justice system may occur in the next decade or so.

posted in:
State Criminal
May 01
2013

Let the Games Begin: Legal Online Poker Starts Up in Nevada

April 30 was an historic day for online poker players in the United States. Just a bit more than two years after the indictment and civil cases that were termed “Black Friday” shut down the industry, Ultimate Poker became the first live real-money online poker site in the United States after Black Friday.

Nevada became the first state to legalize online poker in June 2011, and the regulations governing online gaming were issued in December 2011. Nevada gaming authorities granted Ultimate Poker a license in October and last week signed off last week on Ultimate Poker’s technology, which allowed them to launch.

Ultimate Gaming, a majority-owned subsidiary of Station Casinos, LLC, is operating UltimatePoker.com. Station Casinos owns sixteen casinos in Las Vegas. Ultimate Poker is the exclusive online gaming partner of the Ultimate Fighting Championship.

Right now, Ultimate Poker is only available to people who are over the age of 21 and are located in Nevada, though you do not have to be a Nevada resident to participate. Players can register and deposit money into their accounts from anywhere in the world, but can only play when they are physically in Nevada. Players can also make deposits and withdrawals at any of Station Casinos’ locations in Las Vegas.

To verify location, Ultimate Poker will triangulate a customers’ cell phone signal, though some cell phone carriers are not participating in the plan yet. Some players reported difficulty when they tried to play on Ultimate Poker on the first day, including issues with the geo-location services and players being unaware that their cell phone carrier was not participating.

Nevada recently passed a bill that would authorize the state to enter into interstate gaming compacts with other states, a reality that became possible after the U.S. Department of Justice released an opinion in December 2011 stating that the Wire Act applied only to sports betting. Liquidity could become an issue for a state with a relatively small population such as Nevada, so interstate compacts could become vital to the long term success of the state’s online gaming industry.

Online gaming is legal in both New Jersey and Delaware, though those states have yet to go live. Nearly a dozen other states have at least considered some form of online gaming legislation in the past year.

We are very happy to see online poker back online again. Some hurdles remain for companies to assure that their products operate smoothly and efficiently, but it is a good day for the industry and players that real money poker is back online.

Mar 21
2013

N.J. Sets Up Regulations for Fantasy Sports Competitions in Casinos

On March 19, 2013, the New Jersey Office of the Attorney General, Division of Gaming Enforcement (DGE), announced that it has adopted temporary regulations authorizing the state’s casinos to offer fantasy sports tournaments to their patrons. The regulations permit casinos, on their own or in partnership with fantasy sports providers, to offer fantasy sports tournaments or contests.

The temporary regulations will remain in effect for a period of 270 days. During that time, the DGE will propose the regulations for final adoption. The text of the regulations could change from their current form to the form that is eventually adopted. The regulations will become effective on April 22, 2013. The minimum age for participation in fantasy sports tournaments at casinos is 21. Full text of the temporary regulations is available here.

A fantasy sports tournament is a simulated game in which a player manages an imaginary sports team and competes for a monetary prize against teams managed by other players. Since fantasy sports involve considerable skill in the selection of teams and players, they are widely considered not to constitute gambling. Fantasy sports can involve season-long or single-day tournaments.

The New Jersey temporary regulations clearly define that all prizes and awards must be made known to all participants prior to the start of the tournament. The winning outcome of a fantasy sports tournament shall reflect the relative skill of the participants and the outcome cannot be determined solely on the performance of any individual athlete or on the score, point spread, or performance of any single real world team or combination of teams.

The temporary regulations authorize casinos to utilize the casino cage to accept entry fees and pay out winnings from fantasy sports tournaments in the casino. Under the temporary regulations, fantasy sports are not considered to be gambling under state law. Therefore, revenue generated from these games is not subject to the same taxes as revenue generated from table games and other games offered in casinos.

This announcement on fantasy sports is part of a flurry of activity in New Jersey dealing with the state’s gaming industry. Last month, New Jersey became the third state to legalize online gaming within its borders, and games could be online by the end of the year. Earlier this month, a federal judge in New Jersey struck down the state’s sports betting law and the decision has been appealed by the state to the U.S. Court of Appeals for the Third Circuit.

We are very happy to see New Jersey add fantasy sports offerings in its casinos. This will be a boost for the state as well as for patrons who will soon be able to play these games in casinos.

posted in:
State Criminal
Mar 04
2013

Va. Court Declines to Decide Status of Poker Under State’s Gambling Law

On February 28, 2013, the Virginia Supreme Court issued an opinion in which it declined to address the legality of playing poker in the state but left open the possibility for the issue to be decided in a future case. The full opinion in the case, Daniels v. Mobley, is available here.

Charles Daniels, a former poker hall operator who operated charitable bingo halls in Portsmouth, Virginia, for decades, filed suit in 2010 seeking a declaratory judgment that Texas Hold ‘em poker is legal under Virginia’s gambling statute.

Under Virginia law, “illegal gambling” is defined as:

“the making, placing or receipt of any bet or wager in the Commonwealth of money or other thing of value, made in exchange for a chance to win a prize, stake or other consideration or thing of value, dependent upon the result of any game, contest or any other event the outcome of which is uncertain or a matter of chance, whether such game, contest or event occurs or is to occur inside or outside the limits of the Commonwealth.”

The law also states that:

“Nothing in this article shall be construed to prevent any contest of speed or skill . . . where participants may receive prizes or different percentages of a purse, stake or premium dependent upon whether they win or lose or dependent upon their position or score at the end of such contest.”

Daniels argued that the outcome of Texas Hold ‘em poker is determined by skill and not luck and therefore the game does not violate the Virginia statute. In the circuit court Daniels presented testimony of two math experts and a world champion poker player to support the skill argument.

The lower court ruled that poker was a game of chance, stating that “all the evidence indicates that the outcome of any one hand is uncertain.” Daniels then appealed the case to the Virginia Supreme Court.

The state Supreme Court declined to address the legality of poker, holding that the court could not rule on the case because the request for a declaratory judgment on the status of Texas Hold ‘em poker “failed to present a justiciable controversy over which the circuit court could exercise jurisdiction.” Since there was no justiciable controversy, the Supreme Court held that the circuit court did not have jurisdiction to rule on the claim.

The court did not directly address the argument that poker is a game of skill and not chance, an argument that has been accepted by other courts. It thus left the door open for the argument to be made in the future.

Daniels also argued that the state’s anti-gambling statute is unconstitutionally vague. The Supreme Court affirmed the ruling of the circuit court that the statute is not unconstitutionally vague because it gives fair notice and an individual of ordinary intelligence can discern its meaning.

In our view, poker is a game of skill and not chance and thus should not be considered gambling under the Virginia statute. The Virginia Supreme Court’s decision to rule on other grounds left poker supporters with a lost opportunity, but there will be other opportunities to make the argument in this and other courts.

posted in:
State Criminal
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About Ifrah Law

Crime in the Suites is authored by the Ifrah Law Firm, a Washington DC-based law firm specializing in the defense of government investigations and litigation. Our client base spans many regulated industries, particularly e-business, e-commerce, government contracts, gaming and healthcare.

Ifrah Law focuses on federal criminal defense, government contract defense and procurement, health care, and financial services litigation and fraud defense. Further, the firm's E-Commerce attorneys and internet marketing attorneys are leaders in internet advertising, data privacy, online fraud and abuse law, iGaming law.

The commentary and cases included in this blog are contributed by founding partner Jeff Ifrah, partners Michelle Cohen and George Calhoun, counsels Jeff Hamlin and Drew Barnholtz, and associates Rachel Hirsch, Nicole Kardell, Steven Eichorn, David Yellin, and Jessica Feil. These posts are edited by Jeff Ifrah. We look forward to hearing your thoughts and comments!

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