February 20, 2014

Garnishing a Turd (Part II):
The DOJ Yawns at DiCristina

As most in the poker world know, the DiCristina petition for writ of certiorari ("cert") will be considered by the United State Supreme Court (SCOTUS) in its regular conference tomorrow. As a reminder, the conference is only a vote on whether to accept the appeal. If SCOTUS does grant cert, then additional briefing will occur, and the case would likely be set for oral argument early in the Court's 2014-2015 Term (each Term runs from early October through late June). A decision would likely not be entered until late 2014 or early 2015.

But before we get too far ahead of ourselves, there is still the formidable hurdle of the conference vote tomorrow. Previously, I took a look at DiCristina's Petition and several supporting amicus curiae briefs. Since then, the Department of Justice (DOJ) has filed a Brief in Opposition ("Resistance"), and DiCristina has filed a Reply Brief. Neither document really breaks any significant new ground, and both documents mostly rehash well-worn points and counterpoints. But to SCOTUS, these documents will be the primary exposition of the DOJ's position and DiCristina's rebuttal. For the sake of completeness then, let's take a quick look at both documents.

I.  The DOJ Does Not Seem to View the Case as Particularly Significant

There is a noticeable contrast between the tone of the DOJ's Resistance and the Petition and amicus briefs to which it responds. The Petition and amicus briefs were notably passionate, filled with rhetorical flourishes suggesting the case is about more than a poker game. The DOJ's Resistance, however, is notably dull and workmanlike. Although the DOJ's Resistance hits all the main expected points in its legal analysis, the style and tone of the Resistance give the impression it is just another brief coming off the DOJ's mass production line.

Look, the DOJ has a team of sharp appellate attorneys. But the DOJ has to file hundreds of SCOTUS briefs each Term, not to mention handling thousands of appeals in the lower courts. The DOJ generally has a pretty good idea which appeals are more likely to catch SCOTUS' attention, and any filings in those cases simply get a greater degree of rhetorical polish. Here, it seems the DOJ views DiCristina as a run-of-the-mill cert petition unlikely to be on SCOTUS' radar. Thus, DiCristina is unworthy of the DOJ's A-game.

II.  The DOJ's Arguments & DiCristina's Rebuttals

A.  Statement of the Case

As expected, the DOJ chose to highlight some rather inconvenient facts which take a bit of the shine off DiCristina's argument:
Petitioner [DiCristina] employed paid security, including an armed guard, and used a video surveillance system to decide who would be admitted to the warehouse. Games often lasted all night, and "[p]layers were plied with free food and drinks by a waitress to induce them to stay and play longer."

Total wagers at the poker club amounted to tens of thousands of dollars per night. Dealers collected a five percent "rake" from each pot, keeping 25% as payment. "The remaining funds from the rake were used for expenses relating to the operation of the business and for profits."
(Resistance, p. 2 (record citations omitted))
The DOJ's recitation of these facts serves two purposes. First, it places the focus of the legal analysis on the gambling business requirement of the Illegal Gambling Business Act (IGBA), a nod to the Second Circuit's analytical distinction between whether poker is gambling and whether running a for-profit poker room is an illegal gambling business (see Decision, p. 11, n. 6). Second, it undercuts the notion suggested by DiCristina and his supporting amici that poker itself is under attack by the government. Here, the DOJ gets a two-fer, distinguishing the DiCristina game from a casual home game, while simultaneously suggesting there was some sort of nefarious conduct involved. After all, armed guards! Surveillance! It's far short of a Casino-style crime syndicate, but the DOJ certainly wants the idea of organized crime floating out there in SCOTUS' chambers.

B.  Interlocutory Posture of the Case

The DOJ begins with an argument that the Petition is premature ("not ripe for review") because the current ruling is interlocutory in nature (Resistance, p. 9). Essentially, the DOJ argues that the lower courts have not yet completed all action on the case because the Second Circuit ruling requires a remand to the District Court for entry of a judgment of guilt and official sentencing before there is a final ruling for SCOTUS to review. This argument rests on the standard legal principle that appeals are generally not permitted prior to entry of final judgment by the trial court.

DiCristina replies that he has in fact been sentenced, and will not be taking a separate appeal from that sentence. (Reply, p. 10). DiCristina further notes that there was, in fact, a final judgment entered by the trial court, albeit a judgment of acquittal. Although an unusual procedural situation, SCOTUS has previously permitted cert petitions under such circumstances. Further, declining to consider the pending cert petition on this technicality is a waste of judicial resources, as the parties will inevitably wind back at the same position even if a second appeal to the Second Circuit is required.

Here, DiCristina clearly has the better of the argument. In fact, it seems a bit silly for the DOJ to have even raised this technicality. In any event, even if the procedural posture of the case is unusual, it will not prevent SCOTUS from taking the case if it is inclined to consider the merits of the argument.

C.  Preservation of Error

One of the two main issues raised by DiCristina's Petition is that the Second Circuit failed to consider the Nardello line of cases in which SCOTUS has previously interpreted other federal statutes which have a state law violation element. Predictably, the DOJ argues that DiCristina failed to preserve error on this point by not citing the Nardello line of cases in the Second Circuit, and failing to file a motion for reconsideration to bring this alleged error to the Second Circuit's attention. (Resistance, p. 16). DiCristina replies with a version of his prior complaint that the DOJ waived the issue by conceding in the Second Circuit that the IGBA required a federal definition of gambling, and the Second Circuit improperly decided the issue without giving the parties an opportunity for further briefing of the point. (Reply, pp. 5-7). In any event, DiCristina asserts, SCOTUS can take up the case even if the Second Circuit passed on that issue.

As discussed previously, it appears DiCristina is on the wrong side of the error preservation issue. The Second Circuit found that the DOJ had not waived the federal definition issue (Decision, p. 11, n. 9), and SCOTUS is likely to accept the Second Circuit's view on such a procedural issue. It is also clear DiCristina failed to argue the Nardello line of cases at all in the Second Circuit (nor in the District Court for that matter).

But more to the point, DiCristina faces twin hurdles with his Nardello argument. First, because DiCristina failed to argue the Nardello line of cases in the Second Circuit, the Second Circuit has not ruled on the merits of that argument. Although SCOTUS could nonetheless consider the Nardello argument on its own initiative, it would be highly unusual for the Court to do so. Second, and perhaps most important, SCOTUS looks for cases where the merits issues (here, the proper interpretation of the IGBA with respect to poker) are clear and unencumbered by procedural issues. With a severely constrained docket of only 80 or so cases per Term, the Court does not like to waste a valuable cert grant on a case where they may decide that a procedural issue prevents them from deciding the merits issues. The more the parties bicker about procedural issues like waiver of arguments and preservation of error, the less likely SCOTUS is to grant cert.

D.  Nardello and the Federal Definition of Gambling

The real issue lurking in all of the SCOTUS briefing is whether the IGBA has an independent definition of "gambling" that is a separate element apart from the requirement of a state gambling law offense. Recall that the Second Circuit found there was no federal definition of gambling in the IGBA, and that whether the predicate gambling offense had occurred was determined purely as a matter of state law. Instead of a full-throated defense of the Second Circuit's decision, however, the DOJ's Resistance takes a slippery approach. Essentially, the DOJ—likely concerned by DiCristina's Nardello argument—makes the curious argument that the Second Circuit merely held that the IGBA did not define "gambling" in the manner proposed by DiCristina, while backing away from the Second Circuit's suggestion that state law provided the sole definition of "gambling". (Resistance, p. 14). DiCristina's Reply properly and prominently calls out the DOJ's shifty argument. (Reply, pp. 1-4). However, this likely will not factor much in SCOTUS' consideration of the Petition—the Court rarely takes a case merely because the underlying appellate court was wrong in its result or its reasoning.

The DOJ's Resistance does address the Nardello line of cases on their merits. (Resistance, p. 15). The DOJ begins by arguing that none of the Nardello line of cases addresses the IGBA, which is undeniably true. Of course, DiCristina's Reply points out that the cases arise from a range of similar statutes in which a federal crime has a state law offense as an element.

Turning to the policy reason behind the Nardello line of cases—the idea that a state "label" for a crime should not determine, by itself, whether that crime qualifies as a predicate offense for a federal criminal statute—the DOJ essentially argues that all that matters is whether the state gambling offense is consistent with the general concept of "gambling" as it is understood throughout the United States.
Assuming that the approach of [the Nardello line of] cases applies to [IGBA] Section 1955's reference to "gambling," state law would not necessarily be irrelevant to ascertaining the meaning of that word. For example, in Taylor, this Court explained that, in ascertaining the ordinary meaning of the term "burglary," it would look to "the generic sense in which the term is now used in the criminal codes of most States." Under that analysis, the [Second Circuit] court of appeals would have gone astray only if New York law differed significantly from the law of other States, such that it was not an appropriate exemplar of the States' understanding of "gambling." But New York law is not, in fact, distinct in that regard. Rather, the law of many States defines gambling as wagering on an uncertain result or specifically characterizes poker as a form of gambling. (Resistance, pp. 15-16 (citations omitted)).
Essentially, the DOJ is attempting two maneuvers with this section of argument. First, the DOJ is trying to harmonize the Second Circuit's decision with the Nardello line of cases so as to suggest to SCOTUS that the DiCristina case does not signal some radical departure from established federal criminal law requiring intervention by the Court. Second, the DOJ is also responding to the criticism by DiCristina and his supporting amici that the Second Circuit's decision would permit IGBA prosecutions for a wide range of activities—e.g., bridge or Scrabble—not widely considered to be traditional gambling. The DOJ's resistance suggests that, since poker is and has long been widely considered "gambling" under many state laws, SCOTUS need not take this case to prevent potential federal overreach with respect to other games. In other words, the DOJ is arguing that SCOTUS need not waste its time on this case because regarding poker as gambling is entirely reasonable; let the Scrabble folks petition if and when they are ever actually prosecuted under the IGBA.

E.  Alleged Circuit Split on Including-But-Not-Limited-To Clauses

Perhaps sensing how weak the argument is, the DOJ spends little time responding the DiCristina's contention that cert should be granted to resolve a split among lower appellate courts as to the interpretation of "including but not limited to" clauses in statutes and contracts. (Resistance, pp. 19-25). The DOJ primarily argues that the alleged "split" in authority is overstated, with most courts taking a much more nuanced and case-specific approach to such clauses than asserted by DiCristina's Petition. The DOJ also argues that application of a narrow construction of the "including but not limited to" clause in the IGBA would not change the outcome of the case. (Resistance, pp. 24-25). In construing the IGBA's list of prohibited gambling business activities, the DOJ argues that the natural analysis of the underlying games is based on a common characteristic of "wagering of money on an uncertain outcome" rather than an analysis of whether skill or chance predominates in each game.

Frankly, this entire issue continues to strike me as contrived, a desperate effort to gin up a circuit split to catch SCOTUS' attention. But I just don't see how this issue makes any difference to SCOTUS' cert decision. If SCOTUS wants to decide if poker is covered by the IGBA, that is a viable federal question which the Court could choose to review even in the absence of a circuit split (though review is much less likely in the absence of such a split). And if SCOTUS does not want to address the IGBA-poker issue, the Court certainly won't take the case merely to resolve a perceived circuit split over a rule of statutory construction. The entire issue simply distracts SCOTUS from the entire point of the cert Petition, which is to highlight the need for the Court to provide guidance on the scope of a federal criminal statute.

III.  Conclusion

At this point, the legal arguments are fairly well hashed out. Despite a few questionable tactical decisions, DiCristina's legal team has easily out-classed the DOJ in terms of the quality of their briefs. But the DOJ has three built-in advantages: a) defending a government-favorable Circuit Court of Appeals decision related to a federal criminal statute; b) the absence of a real circuit split as to the interpretation of the IGBA; and c) the inherent advantage of SCOTUS' highly selective and limited docket.

So, what will SCOTUS decide to do? Stay tuned for my (presumably predictable) prediction sometime tomorrow ....

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