N.H. Lottery Comm'n v. Barr

386 F. Supp. 3d 132
CourtDistrict Court, D. New Hampshire
DecidedJune 3, 2019
DocketConsolidated Case No. 19-cv-163-PB
StatusPublished
Cited by4 cases

This text of 386 F. Supp. 3d 132 (N.H. Lottery Comm'n v. Barr) is published on Counsel Stack Legal Research, covering District Court, D. New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
N.H. Lottery Comm'n v. Barr, 386 F. Supp. 3d 132 (D.N.H. 2019).

Opinion

Paul Barbadoro, United States District Judge *136The Wire Act of 1961 criminalizes certain gambling activities that use interstate wires. In 2011, the Justice Department's Office of Legal Counsel ("OLC") issued a formal opinion declaring that the Wire Act only punishes activities associated with sports gambling. Last year, the OLC changed its mind. It now asserts that the Act also covers lotteries and other forms of gambling that do not involve sports.

The New Hampshire Lottery Commission has long offered lottery games such as Powerball that necessarily use interstate wires. Fearing that these games, which produce substantial revenue for the State, will be deemed to be criminal activities under the OLC's current interpretation of the Wire Act, the Commission filed a complaint in this court seeking both a declaratory judgment that the Act is limited to sports gambling and an order under the Administrative Procedure Act setting aside the OLC's new interpretation. One of the Commission's vendors also filed a complaint that has been joined with the current action, seeking declaratory relief.

Before me are the Government's motion to dismiss for lack of standing and the parties' cross-motions for summary judgment. As I explain below, I agree with the plaintiffs that they have standing to sue. Based on the text, context, and structure of the Wire Act, I also conclude that the Act is limited to sports gambling. Accordingly, I deny the Government's motions and grant the plaintiffs' motions for summary judgment.

I. BACKGROUND

A. The Wire Act

The relevant portion of the Wire Act provides:

Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.

18 U.S.C. § 1084(a).

Section 1084(a) consists of two clauses. The first clause makes it a crime for anyone engaged in the business of gambling to use a wire communication facility "for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest." Id. The second clause prohibits "the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers." Id.

The key question this case presents is whether the limiting phrase "on any sporting event or contest" in § 1084(a)'s first clause modifies all references to "bets or wagers" in both clauses or only the single reference it directly follows in the first clause. If, as the OLC concluded in 2011, the sports-gambling modifier limits each reference to "bets or wagers," then both clauses apply only to sports gambling. On the other hand, if the OLC's current interpretation is correct, then § 1084(a)'s first *137clause prohibits the interstate transmission of both sports and non-sports bets or wagers but punishes the interstate transmission of information only if the information assists in the placing of bets or wagers on sports. It also follows from the OLC's current interpretation that § 1084(a)'s second clause is unconstrained by the sports-gambling modifier.

B. The OLC Opinions

The path that leads to both OLC opinions begins in 2009, when New York and Illinois asked the Department of Justice whether in-state sales of lottery tickets via the internet would violate the Wire Act if those sales caused information to be transmitted across state lines. The Department referred the matter to the OLC for a formal opinion. In 2011, the OLC responded by concluding that "interstate transmissions of wire communications that do not relate to 'a sporting event or contest,' 18 U.S.C. § 1084(a), fall outside of the reach of the Wire Act." See Virginia A. Seitz, Whether Proposals by Illinois and New York to Use the Internet and Out-of-State Transaction Processors to Sell Lottery Tickets to In-State Adults Violate the Wire Act, Memorandum Opinion for the Assistant Attorney General, Criminal Division , U.S. Dept. Just. 1 (Sept. 20, 2011) ("2011 OLC Opinion" or "2011 Opinion"), Doc. No. 2-4.

The OLC arrived at this conclusion by first determining that the phrase "on any sporting event or contest" in the first clause of § 1084(a) applies to the transmissions of both "bets or wagers" and "information assisting in the placing of bets or wagers." 2011 OLC Opinion at 5. Noting that the statutory text could be read either way, the OLC explained that it was "difficult to discern" why Congress would forbid the interstate transmission of all types of bets or wagers but only prohibit the transmission of information assisting in the placing of bets or wagers that concern sports. Id. The more reasonable inference, according to the OLC, was that Congress intended that the prohibitions "be parallel in scope." Id.

Next, the OLC concluded that the phrase "on any sporting event or contest" also modifies the references to "bets or wagers" in § 1084(a)'s second clause. Id. at 7. The OLC explained that the references to "bets or wagers" in the second clause are best understood as shorthand references to "bets or wagers on any sporting event or contest" as described in the first clause. Id. The 2011 Opinion also relied heavily on the Act's legislative history to confirm its interpretation of the section's limited scope. See id. at 6-10.

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Bluebook (online)
386 F. Supp. 3d 132, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nh-lottery-commn-v-barr-nhd-2019.