You want to start a business, so you call Dozier Internet Law to find out if it is "legal". And you find out that if you are doing business online you typically will have to comply with the laws of all states in the US. And it would cost a small fortune to really go through every state's laws and get a legal opinion on the legality of your online business. The reality sets in that you will have to assume some degree of risk, and you need help balancing risk and reward. That is where Dozier Internet Law comes in. We specialize in risk assessment and assist clients in making smart decisions.
You won't often find a balanced perspective from online legal commentary because much of it is biased due to the nature of the web and its origins. Free speechers think everything is fair, even when laws are broken, but lawyers for businesses don't often participate in the dialogue because their law firm either prohibits it, they don't see a business justification for the exposure, or they are worried about the positions they take in the context of the many cases their law firm is handling. Not to mention, of course, that public positions outside of litigation could lead to disgruntled clients. So, online you are overwhelmed with public interest and law school professor commentators: the bastions of liberal, free speech, "information yearns to be free" followers.
What do you do, then? It's not an easy question. If you are looking for approval and validation of a business undertaking, you cannot and should not rely upon anything you see online. You really need to stay away from the idea that since others are doing it, then it must be legal. The State of Kentucky lawsuit against gambling domain names is a good example of the challenges online businesses assume.
On the one hand, Kentucky is trying to seize domain names allegedly used by gambling websites. The Court's recent ruling to allow the forfeiture process to proceed included a number of interesting, and I believe correct, decisions. First, I criticized the original seizure order, and my focus was on claims made by domain name owners not running online casinos or gambling enterprises. Judge Wingate got this issue right and rescinded the Seizure Order for domain names that identify websites which are providing information only. I agree with that conclusion on jurisidictional grounds, although the issue of commercial free speech and the liability for advertising an alleged illegal site remains a ripe issue that will be revisited at some point in the courts.
The Judge found that domain names were property subject to seizure and not simply contract rights. While a few other courts have found otherwise in years past, it seems clear to me that this conclusion is correct.
The Court's decision also addressed the oft-cited defense that any judicial interference of the Internet will create havoc. This is a poorly conceived, yet common, claim asserted by a broad range of free speech expansionsists. "This doomsday argument does not ruffle the Court. The Internet, with all its benefits and advantages to modern day commerce and life, is still not above the law...[t]he challenge here is to reign in illegal activity and abuse of the Internet within the framework of our nation's and Commonwealth's existing common law norms and principles..."
Interestingly, attorneys appeared on behalf of specific domain name owners and refused to disclose the identity of the owner. The Court ordered the lawyers to disclose the names and identities of those who hired them, and the nature of their clients' interests in the domain name. Ouch. Remember the state indictments that resulted in the gambling arrests of executives of public traded UK companies? Want to guess where this is headed? The criminal prosecutors will be listening intently, I suspect.
So, this case is a good example of the challenges all businesses face when operating online. Any state can jump into your business. We know, because we deal with state enforcement officers regularly and have to fight the battle of convincing them that our client is not subject to their laws. On the other hand, we assert claims implicating state laws against scofflaws who attack our clients. We are on both sides of this issue often, and that is why I think we can give some pretty good, balanced guidance to our clients. Making smart business decisions as to risk and reward requires a seasoned, quality, unbiased, and objective perspective from your lawyer.
Should these domain name owners have anticipated problems? Yes. Was it worth the risk to run an online gambling site? I guess we'll have to wait and see...but the risk has gone way up.
At Dozier Internet Law we don't represent gambling website business clients outside of the litigation context for a number of serious reasons which I will not go into here. It is clear, though, that the liabilities and risks associated with such an enterprise are virtually impossible to accurately assess. And that is becoming clearer by the day.
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