Cci Entm't, LLC v. State

• Citation: 81 A.3d 528,215 Md.App. 359
• Decision Date: 18 December 2013
• Docket Number: Sept. Term, 2012.,No. 766,766
• Parties: CCI ENTERTAINMENT, LLC t/a Crooked I Sports Bar & Grill et al. v. STATE of Maryland et al.
• Court: Court of Special Appeals of Maryland

215 Md.App. 359

81 A.3d 528

CCI ENTERTAINMENT, LLC t/a Crooked I Sports Bar & Grill et al.

v.STATE of Maryland et al.

No. 766, Sept. Term, 2012.

Court of Special Appeals of Maryland.

Dec. 18, 2013.

Ronald H. Jarashow (Jonathan P. Kagan, Baldwin, Kagan & Gormley, LLC, on the brief), Annapolis, MD, for Appellant.

Julie D. Bernhardt (Douglas F. Gansler, Atty. Gen., on the brief), Baltimore, MD, for Appellee.

Panel: WOODWARD, KEHOE, JAMES P. SALMON (Retired, Specially Assigned), JJ.

KEHOE, J.

The primary dispute in this case is whether a 2012 amendment to the State's gaming law violates the Maryland constitutional prohibition against “special laws.” ¹ We hold that it does not. The appellants/cross-appellees are CCI Entertainment, L.L.C., trading as the Crooked I Sports Bar & Grill, which operated a gaming establishment in Calvert County, and its principals (collectively “CCI”).² The appellees/cross-appellants are the State, Governor Martin O'Malley, the General Assembly, and the State's Attorney for Calvert County (collectively, “the State”).

At issue is chapter 603 of the Acts of 2012, which, among other things, amended the statutory definition of “slot machine” in ways that rendered unquestionably illegal the gaming machines that CCI asserts had been legal up to that time. CCI contends that § 3 of chapter 603 is a “grandfather” provision that exempted a small number of existing entities—but not it—from the effect of the amendments. CCI argues that it should have been included within this class of grandfathered businesses and that chapter 603 was deliberately and specifically drafted to exclude it.

CCI filed suit in the Circuit Court for Anne Arundel County against the State seeking declaratory and injunctive relief. Pertinent to this appeal, CCI alleged that: 1) § 3 of chapter 603 is a “special law” and violates Article III, § 33 of the Maryland Constitution; 2) the same provision offends equal protection principles by treating CCI differently from similarly-situated businesses without any legitimate, rational basis; and 3) chapter 603, when applied to it, constitutes an unconstitutional taking of CCI's property. The State contested all of these allegations.

In discovery, CCI sought to obtain documents and emails in the possession of the General Assembly related to the drafting and consideration of Senate Bill 864, which, when enacted, became chapter 603. The circuit court ordered the General Assembly to disclose certain documents for in camera review, and denied CCI's remaining discovery requests. The State filed an interlocutory appeal of this order. CCI asserts that the circuit court erred in restricting its ability to obtain the discovery it requested. The State contends that the circuit court's order compelling the General Assembly to disclose documents for in camera review violated “the State's sovereign immunity, the speech and debate clause, and the absolute legislative privilege of the General Assembly and its members.”

After an evidentiary hearing, the court denied CCI's request for a preliminary injunction. The parties then stipulated to an order consolidating the preliminary injunction proceedings with a trial on the merits and the circuit court entered final judgment in favor of the State. CCI appealed and its appeal and the State's appeal were consolidated by this Court, with the State designated as appellee/cross-appellant.

CCI raises the following issues, which we have re-worded:

I. Did the circuit court err in deciding that uncodified § 3 of chapter 603 of the Laws of 2012 was not a special law prohibited by Article III, § 33 of the Maryland Constitution?

II. Did the circuit court err in concluding that the same provision of chapter 603 violated CCI's rights to equal protection of the law?

III. Did the circuit court err in not declaring that chapter 603 constituted a taking of CCI's property without due process?

IV. Did the circuit court err by prohibiting CCI discovery and excluding evidence presented by CCI regarding statements and actions by legislators and/or their personnel who drafted chapter 603?

The State presents the following issue in its cross-appeal:

Was the [circuit] court's order compelling the General Assembly of Maryland to disclose documents for in camera review entered in violation of the State's sovereign immunity, the speech and debate clause, and the absolute privilege of the General Assembly and its members?

We will affirm the judgment of the circuit court. Turning first to the special law issue, and applying the analysis articulated in Cities Service v. Governor, 290 Md. 553, 431 A.2d 663 (1981), and MDE v. Days Cove, 200 Md.App. 256, 27 A.3d 565 (2011), we hold that chapter 603 is not a special law. We also conclude that chapter 603 does not violate CCI's equal protection and due process rights. The circuit court's discovery rulings did not prejudice CCI because, to the extent that the information it sought was relevant, it presented unchallenged evidence to the same effect. Our disposition of CCI's issues renders the State's cross-appeal moot.

In order to provide context to the parties' assertions, it is necessary for us to set out the complicated legal and factual background to the current dispute, a task that will involve a fair amount of slow drilling through hard wood.

BACKGROUND

The Initial Slot Machine Statute: Article 27, Section 264B

The operation of slot machines has been regulated by statute in Maryland since 1963. The original regulations were enacted by ch. 617 of the Acts of 1963 and codified at Md.Code (1957), Art. 27, § 264B. The act provided that: “It shall be unlawful for any person, firm or corporation to locate, possess, keep, maintain or operate any slot machine within this State ..., except as provided in [other parts of the statute].” Art. 27, § 264B(I). The act defined “slot machine” as follows (emphasis added):

Any machine ... that is adapted for use in such a way that, as a result of the insertion or deposit therein, or placing with another person of any piece of money, coin, token or other object, such machine ... is caused to operate or may be operated, and by reason of any element of chance or of other outcome of such operation unpredictable by him, the user may receive or become entitled to receive any piece of money, coin, token or other object representative of and convertible into money....

Art. 27, § 264B. The act's purpose was: “to define the term ‘slot machines,’ [and] to make it unlawful to possess or operate such machines except for a specified period in the four Southern Maryland Counties [Calvert, St. Mary's, Anne Arundel, and Charles Counties] during which these machines were to be gradually decreased year by year and ‘providing for the gradual and eventual total abolition ... of all slot machines within this State.’ ” Clerk of Circuit Court for Calvert County v. Chesapeake Beach Park, Inc., 251 Md. 657, 661, 248 A.2d 479 (1968) (quoting ch. 617 of the Acts of 1963); see also State v. 149 Slot Machines, 310 Md. 356, 365, 529 A.2d 817 (1987) (“[T]he General Assembly intended a total abolition of slot machines adapted for gambling.”). Although § 264B was amended in 1981 and 1983, the definition of slot machine remained substantively unaltered. See State v. 158 Gaming Devices, 304 Md. 404, 407 n. 1, 499 A.2d 940 (1985) (quoting ch. 540 of the Acts of 1983); ch. 280 of the Acts of 1981.

At the time that Article 27 § 264B was enacted, there was no State-wide licensing system for slot machine operations. Instead, some counties had local law provisions permitting them to grant licenses.

Bingo Enters the Digital Era: Chesapeake Amusements v. Riddle

On February 13, 2001, the Court of Appeals issued its opinion in Chesapeake Amusements v. Riddle, 363 Md. 16, 766 A.2d 1036 (2001). The issue in Chesapeake Amusements was “whether a dispensing machine with a video screen that displays the contents of the [paper] tickets that it dispenses and emits a musical tone that signals when a winning ticket is being dispensed is a ‘slot machine’ ” as defined by § 264B. Chesapeake Amusements, 363 Md. at 18, 766 A.2d 1036. The parties in that case did not dispute that the machine—called the Lucky Tab II—offered a form of “instant bingo.” The parties stipulated that the game of instant bingo involved pre-printed bingo tickets, some of which contained winning combinations of letters and numbers. Id. at 20, 766 A.2d 1036. The Court described the Lucky Tab II as:

an electrically operated machine that dispenses paper pull-tab tickets from a roll of preprinted paper pull-tabs inserted in the machine by [an employee of the operator]. [E]ach ticket dispensed by the Lucky Tab II is part of a particular deal of outwardly identical tickets, in which the total number of tickets, as well as the number of winning tickets, were determined when the deal was constructed and printed.

Id. at 21, 766 A.2d 1036. The parties provided an agreed statement of facts explaining how “instant bingo” was played using the Lucky Tab II machine:

A customer inserts money into the Lucky Tab II and pushes a button located on the front of the machine; a pull-tab ticket is then dispensed into a tray on the front of the machine. When a ticket is purchased from the Lucky Tab II, a bar code reading device in the interior of the machine reads the bar code on the back of the ticket as it is being severed from the roll of tickets and dispensed into the tray. The information from the bar code is used to create a video image of the symbols that appear on the inside of the ticket, and that image is then displayed on the video screen located on the front of the Lucky Tab II. The video image of the symbols on the inside of the ticket is displayed on the screen after a brief delay.... As in a retail store setting, the bar code reader also reads and records accounting information relating to the ticket purchase. The video display of a winning ticket is accompanied by a musical signal....