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Anne Lindner

Government Responds to Cohen's Petition

24 May 2002

The U.S. Attorney's office gave a message to Jay Cohen last week, and that message was this: Ignorance is no excuse for violation of the law.

On May 15, the U.S. government submitted its response to Cohen's petition to have his case heard by the Supreme Court. Cohen is seeking to overturn the March 2000 ruling in a New York federal court that convicted him on one count of conspiracy and seven counts of violating the 1961 Interstate Wire Act in connection with operating an Internet gambling business, World Sports Exchange, out of Antigua.

"In the petition, we tried to make clear to the court that on a number of aspects of Jay's case, there were disagreements among the lower courts as to exactly what the law was,"
- Ian Gershengorn
Counsel for Jay Cohen

On July 31, 2002, the U.S. Court of Appeals for the Second Circuit upheld the verdict. Cohen was sentenced to 21 months in prison, two years of supervised release, a special assessment of $800 and a fine of $5,000.

On Feb. 22, 2002, Cohen and his legal team filed a writ of certiorari with the Supreme Court, asking the judges for a chance to make their case for a final time, with the hope that Cohen's conviction is overturned.

Cohen's lawyers expect to file a reply to the government's brief within the next few days. The Supreme Court will decide by June 13 whether it will take the case.

More than 7,000 petitions for writ for certiorari are filed each year, according the Supreme Court Historical Society. However, in its 1999-2000 term, the court heard arguments on only 83 cases, and of those decided 74 cases. Another 50 cases were decided summarily--without judgment.

After Cohen's filing, the court requested a response from the government, which signals that at least one justice thinks the case warrants further consideration. If Cohen is to be granted certiorari, four of the nine Supreme Court justices need to vote in favor of it.

After being given two due-date extensions, the government filed its response on May 15. The U.S. Attorney General's office, which authored the response, makes three main arguments for why the Second Circuit Court of Appeals decision should stand.

Cohen's Case: Disagreement in the Courts

Ian Gershengorn, of the Washington D.C. law firm Jenner and Block, is Cohen's lead lawyer. According to Gershengorn, the name of the game in filing for writ of certiorari is convincing the court that there is a split of authority among the lower courts--meaning that similar cases have been decided differently among the circuit courts.

"In the petition, we tried to make clear to the court that on a number of aspects of Jay's case, there were disagreements among the lower courts as to exactly what the law was," Gershengorn said.

A danger in Cohen's case, say legal experts, is that the larger issue of whether an American can be convicted of Wire Act violations for running an Antigua-licensed online gambling site, will be lost among the more technical points made in the government's brief. Many arguments in both Cohen's petition and the government's brief hinge on legal technicalities and semantics.

"In some ways, a certiorari petition is a pretty stylized exercise," Gershengorn said. "We think it's really important that what this case is really about doesn't get lost in that, and that the government is trying to prosecute and convict Jay for what they are basically conceding is going on a daily basis with off-track betting."

"This really is a version of the old maxim that ignorance is no excuse for violation of the law."
-John Crigler
Garvey, Schubert and Barer

The Powell Doctrine

The first argument in the government's response deals with a little-used legal doctrine called the Powell doctrine. The term originates from a New York Court of Appeals case from 1875, People v. Powell.

An argument that Cohen uses in his certiorari petition is that he did not know that what he was doing by operating an Internet gaming site in Antigua was going to be considered unlawful in America. His lawyers, in making that point, rely on the Powell doctrine, which states that a defendant must be aware that what he or she is conspiring to do amounts to a crime, said Paul Hugel, a lawyer with Clayman and Rosenberg, a New York firm.

John Crigler, a lawyer with Garvey, Schubert and Barer, a firm in Washington, D.C., explains that the doctrine means a defendant must have been conspiring for a bad reason to be convicted.

"Cohen is arguing that he had a good-faith belief that what he was doing was legal, since it was licensed in Antigua," Crigler said. "And the government is saying, 'We don't care what you believe, and the statute doesn't care what you believe. All it cares about is what you did.'"

Hugel said the government's brief argues that the Powell doctrine should not be applied to Cohen's case because it's no longer relevant. The last case in which the doctrine was cited was in 1945, he said.

"(The Powell doctrine)may have been the law in 1875, but it's not so clear that it is today," Hugel said. "The cases were cited for 50 or 70 years or so, but as far as I can tell, it's really fallen out of favor, at least within the last 50 years. It's not a doctrine that you want to be in a position of having to rely on to stay out of jail, as far as I'm concerned."

Hugel said that if the Supreme Court hears Cohen's case, it will likely be because it wants to settle the issue of whether the Powell doctrine can still be used. Both Cohen's petition and the government's response address the Powell doctrine heavily.

"I think everyone sort of realizes that if the Supreme Court wants to hear this, that's most likely what they're going to be focusing on," Hugel said.

Safe Harbor?

The second argument made in the government's brief relates to the safe harbor provision of the Wire Act. The safe harbor provision of the Wire Act allows that transmission of information about bets is legal, while transmitting an actual bet is not.

Cohen's petition states that Cohen should be covered by the safe harbor provision because WSEX's transmissions between Antigua and New York were not bets but simply transmissions of information. The government, Crigler said, disagrees.

"The government argues that they were bets," he said. "There wasn't any doubt that people knew they were wagering money and that World Sports Exchange was accepting those and in fact paying out money on those bets, and the fact that it was using an account wagering system doesn't really matter."

Hugel said the case's Internet gambling angle is probably not what will snare the justices' attention because technicalities of the Wire Act are not likely to be of great concern to the court.

"I don't think the Supreme Court is interested in granting cert just to determine whether this phone call is a bet or information to assist in the placing of a bet," he said.

Jury Instructions

The third and final prong of the government's brief, Crigler said, arises from the fact that the original New York decision was made by a jury. Crigler said Cohen's side tries to make the case that the jury that convicted Cohen was not properly instructed on the Powell doctrine--that Cohen had to have knowledge that his activities were against federal law.

The government's response, though, is that the Powell doctrine should not reply.

"This really is a version of the old maxim that ignorance is no excuse for violation of the law," Crigler said.

The jury instructions section of the arguments is not likely to win the court's attention, either, he said.

"The court likes to get its teeth into big issues--policy issues--and try to straighten up things when there's inconsistencies across the country," Crigler said. "It's leery of taking cases that just relate to a single individual, and a particular set of jury instructions if it doesn't have wider implications."

Hugel, however, said that if the court does decide to take the case, it will likely be because it would like to decide once and for all whether a person must know that they are conspiring to commit a crime.

Both Crigler and Hugel lament that the government's response doesn't include much in the way of arguments about Internet gambling itself.

"I think it's disappointing that [the government] doesn't get to some of the big policy issues that everybody wants to find the answers to," Crigler said, "like how you try to reconcile U.S. law with Antiguan law or the laws of other jurisdictions. It really doesn't get to it because its focus remains so intently on those jury instructions, because that's the basis for legal error, if it exists."

Click here to view an electronic copy of the government's reponse.

Government Responds to Cohen's Petition is republished from
Anne Lindner
Anne Lindner