IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
United States,
Plaintiff,
v.
Barney Stinson,
Defendant.
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Case No. 3122010
Judge Karin Mika
DEFENDANT’S 12 (b) (3) MOTION TO
DISMISS CHARGE THAT DOMAIN
NAME “METUBE” IS “PROPERTY”
FOR PURPOSES OF PROSECUTION
OF MAIL FRAUD UNDER 18 U.S.C.
§1341
Now comes defendant Barney Stinson, by and through undersigned counsel, and requests
this Honorable Court to grant defendant’s Motion to Dismiss, under the Federal Rules of
Criminal Procedure 12 (b) (3) the charge that the domain name “MeTube” is “property” for the
purposes of prosecution under the Mail Fraud Statute, 18 U.S.C. §1341.The request is based on
reasons set forth in the attached argument and incorporated herein.
Respectfully Submitted,
____________________________
#9478
Attorney for Defendant Barney Stinson
1801 Euclid Ave.
Cleveland, OH 44115
(216) 123-4567
Attorney Reg. No. 9478
STATEMENT OF THE FACTS
The facts of this case involve the defendant Barney Stinson who is being charged with
mail fraud in violation of 18 U.S.C. §1341, despite the fact that all the elements of the statute
have not been met.
Mr. Stinson acquired a domain name, “MeTube,” from the registrar Reg-Dot-Co. The
company claimed to be using the name regardless of the undisputed fact that they had absolutely
no documentation, official or unofficial, to support this alleged ownership. Reg-Dot-Co merely
“squatted” on what they believed might be popular domain names someday, and sold these
names to consumers who wanted the names registered for their own productive use.
Furthermore, the company did not pay any money whatsoever for the domain names, nor was
there any factual indication that they were the only company or entity “using” the names at any
given time.
This argument is submitted to the court in support of defendant Stinson’s motion
requesting the charge in violation of 18 U.S.C. §1341 be dismissed on the basis that the domain
name “MeTube” is not “property” for purposes of prosecution under the Mail Fraud Statute.
ARGUMENT
THE DOMAIN NAME “METUBE” IS NOT PROPERTY FOR PURPOSES
OF PROSECUTION OF MAIL FRAUD UNDER 18 U.S.C. §1341 WHEN THE
COMPANY USING THE DOMAIN NAME BEFORE THE DEFENDANT
CANNOT CLAIM ANY VALUE IN THE NAME NOR ASSERT EXCLUSIVE
TRANSFERABLE USE OVER IT.
18 U.S.C. §1341, the Mail Fraud Statute, states, “whoever, having devised…any
scheme or artifice to defraud… for [the purpose of] obtaining…property by means of
false or fraudulent pretenses…places in any post office…anything whatever to be sent or
delivered by the Postal Service…shall be fined under this title or imprisoned…”
[Emphasis added.] At issue here is the definition of the term “property.” “Property” may
include “every [tangible and] intangible benefit” subject to possession. Kremen v. Cohen,
337 F.3d 1024, 1029 (9th Cir. 2003). “Intangible benefits” are construed as those without
a physical existence. G.S. Rasmussen v. Kalitta, 958 F.2d 896, 903 (9th Cir. 1992). But
see McNally v. United States, 484 U.S. 350, 356 (1987) (limiting the scope of 18 U.S.C.
§1341 by not considering an “intangible right to honest government” as property).
However, these broad definitions of property at the common law are narrowed for
the purposes of prosecution under the Mail Fraud Statute. Here, in determining what
constitutes “property,” the court looks at only three specific elements. These are value,
exclusivity, and transferability. 337 F.3d at 1029. A defendant will not be convicted of
Mail Fraud unless these three elements are met.
In Stinson’s case, “MeTube” is not property under the Mail Fraud Statute,
because Reg-Dot-Co’s use of the name prior to Stinson’s letter fails to satisfy the three
elements of property laid out by the law. Firstly, Reg-Dot-Co can claim no value in
“MeTube” prior to a sale because of the fact that they are simply “squatting” on it.
Furthermore, nothing in the undisputed facts indicates that Reg-Dot-Co has any basis for
asserting exclusive and transferable ownership over “MeTube.” On the contrary, the
company does not have any documentation or authority upon which to base such a claim.
Consequently, “MeTube” is not property for purposes of prosecution under 18 U.S.C.
§1341. As a result, the indictment should be dismissed.
The interpretation of “property” under the Mail Fraud Statute demonstrates that
Reg-Dot-Co can claim no value in the domain name “MeTube.” As enumerated above, to
be prosecuted under 18 U.S.C. §1341, the scheme at hand must be an attempt to deprive
the victim of a property interest. Part of the definition of “property” as interpreted by the
courts is that it must have value. Id. Accordingly, the Court has construed this ambiguity
to mean the property must “have value in the hands of the victim of fraud.” Cleveland v.
United States, 531 U.S. 12, 20 (2000). This cannot be asserted by the government in the
case against Mr. Stinson.
For example, in Cleveland, the Court dealt with two men who used the postal
service to make fraudulent statements in applying for state permission to operate video
poker machines. Id. at 15. In holding that property must “have value in the hands of the
victim of fraud,” the Court reasoned that poker licenses were not property under the Mail
Fraud Statute because the “victim,” the government issuing the licenses, had only a future
regulatory interest in the licenses rather than a present value interest. Id. at 20; see also
United States v. Murphy, 836 F.2d 248, 254 (6th Cir. 1988) (overturning a mail fraud
conviction on the basis that “an unissued certification” of bingo registration is not
property due to its regulatory nature and “want of monetary loss”).
The cases suggest that the government cannot establish the domain name in
question had value “in the hands of” Reg-Dot-Co. 531 U.S. at 20. An item has no value
“in the hands of the victim” when it has only potential value as contrasted with current
value. Id. Like the government in Cleveland, Reg-Dot-Co only had a potential, future
value interest in the name, rather than a present and actual monetary value. In other
words, the domain name only had value to Reg-Dot-Co once acquired by a third party.
This is exemplified by the undisputed fact that Reg-Dot-Co itself was not “using” the
domain name for its own purpose of operating a website under the name. This is much
like the situation in Cleveland, where the government was not “using” the licenses for its
own profit of operating poker machines prior to issuance. Id. This is also similar to
Murphy, where the court held that at unissued bingo license had no value to the
government because of a lack of a present “monetary loss.” 836 F.2d at 254. These
situations demonstrate that property under the Mail Fraud Statute only has value in a
present monetary sense, and this did not occur with respect to Stinson.
Not only is the government unable to demonstrate that the domain name
“MeTube” had value, but it also cannot demonstrate the elements of exclusivity and
transferability. Property under 18 U.S.C. §1341 must be capable of excluding others from
obtaining the benefits of that interest, and therefore, transferable by conveyance. 337 F.3d
at 1029. The court has held that “exclusivity” is the right to prohibit “others” from
reaching the benefits of that interest, while “transferability” is the capability of the
property interest to be “sold, traded, or assigned” on the open market. United States v.
Alkaabi, 223 F.Supp.2d 583, 590 (D. N.J. 2002).
For example, in Alkaabi, the court held that a foreign language standardized
testing agency had no property interest in preserving “the integrity of the…testing
process.” Id. In coming to this conclusion, the court reasoned that ETS, the testing
agency, “did not have an exclusive right” in this interest because it belonged to the
community as a whole; as such, the interest could not be transferred “on the open market”
and was therefore not a property interest actionable under the Mail Fraud Statute. Id; see
also College Savings Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S.
666, 673 (1999) (remarking that “the hallmark of a protected property interest is the right
to exclude others”).
Alkaabi demonstrates that the government in Stinson’s situation cannot show
Reg-Dot-Co had an exclusive and transferable use over “MeTube,” because the company
“did not have an exclusive right” over the name. 223 F. Supp. 2d at 590. Although it is
arguable that domain names in general have some degree of exclusive use in that only
one holder can use a single name at a time, and that domain names in general have some
degree of transferability in that they can be bought and sold “on the open market,” it is
simply not in the facts to indicate that Reg-Dot-Co had any basis for asserting exclusive,
and therefore transferable, control over “MeTube.” This is similar to Alkaabi because the
testing agency had no authority upon which to base their alleged ownership. In Stinson’s
situation, Reg-Dot-Co had absolutely no documentation indicating ownership, and they
did not openly hold themselves out as using the name. Furthermore, Reg-Dot-Co handed
over “MeTube” to Mr. Stinson quickly, showing a general lack of care for the domain
names they allegedly possessed Id.
Even in cases where an item has been found to be excludable, transferable, and
have value, the scenarios support exactly why the domain name “MeTube” is not
property here under 18 U.S.C. §1341. For example, in Carpenter v. United States, 484
U.S. 19, 21 (1987), the Court held that a not-yet-published article containing stock
information classified as intangible property because the newspaper originally possessing
it had exclusive control over the information and the ability to transfer it. Id. at 26. In
finding the reporter in violation of 18 U.S.C. §1341, the Court reasoned that the
newspaper’s property interest in the financial information had monetary value in its
exclusive nature. Id.; see also Int’l New Service v. Associated Press, 248 U.S. 215, 236
(1918) (holding that “news matter…is stock in trade…to be distributed and sold…as any
other [valuable] merchandise”).
However, Stinson’s indictment is inappropriate because what occurred here is
nowhere near analogous to the circumstances in Carpenter. In Carpenter, the Court
found that the newspaper had the right to transfer the contents of the column at issue
because the newspaper had “exclusive control” over the work product that produced the
column. 484 U.S. at 26. Contrarily, in Stinson’s situation, there is no work product, nor
any other indication that Reg-Dot-Co had the exclusive right to the domain name
“MeTube.” Any other entity could have done what Reg-Dot-Co did by merely claiming a
right in the domain name. However, this is not what the courts have intended when
defining the necessary exclusivity for purposes of a Mail Fraud prosecution. Id.
Another example of a circumstance in which the court found an excludable and
transferable property right is that of Kremen v. Cohen. In Kremen, the court concluded
that the domain name “sex.com” satisfied the three-part test determining whether an
intangible property right exists, because it was well defined, exclusive, and “bought and
sold” like “corporate stocks or a plot of land.” 337 F.3d at 1030. However, the factual
situation in Kremen is so vastly different from Stinson’s circumstances, that to draw an
analogy between the two would test the limits of logic. In Kremen, Kremen had obtained
rights to the name “sex.com” directly from the registrar, and had legal authority and
documentation to assert his claim over the name. Id. at 1026. Here, Reg-Dot-Co has no
analogous basis upon which to assert a similar claim; they have merely been “squatting”
on “MeTube” without the legal authority that is clearly present in Kremen. Consequently,
it is improper to find Stinson in violation of 18 U.S.C. §1341 under the interpretation of
“exclusive use” enumerated by the case law in Carpenter and Kremen.
CONCLUSION:
For all these reasons, Defendant Stinson respectfully requests this court to dismiss
Plaintiff United States’ charge in violation of 18 U.S.C. §1341 as the facts of this case
conclude that the domain name “MeTube” is not “property” under the statute as defined
by the relevant case law.
Respectfully Submitted,
9478
#9478
Counsel for Defendant
1801 Euclid Ave.
Cleveland, OH 44115
(216) 123-4567
CERTIFICATE OF SERVICE:
The foregoing Motion to Dismiss and attached argument was served on opposing
counsel by ordinary mail this 12th day of March, 2010.
______________________________
9478
Counsel for Defendant