Amusements v. State
| Decision Date | 06 March 2012 |
| Docket Number | No. COA11–301.,COA11–301. |
| Citation | 724 S.E.2d 614 |
| Parties | SANDHILL AMUSEMENTS, et al., Plaintiffs v. STATE of North Carolina; Governor Beverly Perdue, in her official capacity; North Carolina Department of Crime Control and Public Safety, Bryan E. Beatty, in his official capacity; Alcohol Law Enforcement Division; Director of Alcohol Enforcement Division, William Chandler, in his official capacity, Defendants. |
| Court | North Carolina Court of Appeals |
OPINION TEXT STARTS HERE
Recognized as Unconstitutional
Appeal by plaintiffs from order entered 29 November 2010 by Judge Paul C. Ridgeway in Wake County Superior Court. Heard in the Court of Appeals 25 October 2011.
Daughtry, Woodard, Lawrence & Starling, Smithfield, by Kelly K. Daughtry, for plaintiff-appellants.
Attorney General Roy Cooper, by Assistant Solicitor General John F. Maddrey and Special Deputy Attorney General Hal F. Askins, for defendant-appellees.
Sandhill Amusements, Inc., Carolina Industrial Supplies, J & F Amusements, Inc., J & J Vending, Inc., Matthews Vending Co., Patton Brothers, Inc., Trent Brothers Music Co., Inc., S & S Music Co., Inc., Old North State Amusements, Inc., and Uwharrie Fuels LLC (collectively “plaintiffs”) appeal the trial court's order which granted defendants' motion to dismiss plaintiffs' complaint for failure to state a claim upon which relief could be granted and dissolved plaintiffs' preliminary injunction. We reverse.
Plaintiffs sell long distance telephone time in retail establishments throughout North Carolina. Plaintiffs' product is marketed through the use of a promotional sweepstakes system.
When plaintiffs' customers make a qualifying purchase of plaintiffs' products, they receive one or more sweepstakes entries. Alternatively, individuals may enter plaintiffs' sweepstakes without purchasing any of plaintiffs' products by completing an entry form available at each retail location. Free entries are not treated any differently than entries accompanying a purchase.
After distributing the sweepstakes entry, the owner or employee of the retail establishment activates a “sweepstakes terminal” on which the sweepstakes player can play a video game. The video game reveals whether the consumer has won the sweepstakes prize.
On 18 March 2009, plaintiffs initiated a declaratory judgment action against defendants in Wake County Superior Court. Plaintiffs sought a declaration that its promotional sweepstakes did not violate any North Carolina gaming or gambling laws which were in effect at that time. Plaintiffs also sought injunctive relief to prevent defendants from attempting to enforce those laws against plaintiffs' sweepstakes systems. On 2 July 2009, plaintiffs obtained a preliminary injunction prohibiting defendants from taking any enforcement action against plaintiffs for the possession, use, or operation of the sweepstakes system. After the injunction was entered, plaintiffs continued to conduct their promotional sweepstakes.
On 20 July 2010, the North Carolina General Assembly enacted House Bill 80. This legislation amended the North Carolina General Statutes to include a provision which prohibited conducting or promoting any sweepstakes which utilized an “entertaining display.” 2010 N.C. Sess. Laws 103 (). Plaintiffs' sweepstakes systems fell squarely within the ambit of the new N.C. Gen.Stat. § 14–306.4.
In response to the enactment of House Bill 80, plaintiffs amended their original complaint to include an allegation that N.C. Gen.Stat. § 14–306.4 was unconstitutional and, in the alternative, that plaintiffs were being selectively prosecuted. On 19 November 2010, defendants filed a motion to dismiss plaintiffs' complaint for failure to state a claim upon which relief could be granted pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. Defendants argued that N.C. Gen.Stat. § 14–306.4 was “constitutional in all respects” and that plaintiffs' sweepstakes operations were in violation of that law.
On 29 November 2010, the trial court conducted a hearing on defendants' motion. At the conclusion of the hearing, the trial court determined that N.C. Gen.Stat. § 14–306.4 was constitutional, dismissed plaintiffs' complaint in its entirety, and dissolved plaintiffs' preliminary injunction. The trial court entered a written order memorializing its decision that same day. Plaintiffs appeal.
In a decision filed today in Hest Technologies, Inc. v. State, –––N.C.App. ––––, ––– S.E.2d –––– (2012), this Court held that “the portion of N.C. Gen.Stat. § 14–306.4 which criminalizes the dissemination of a sweepstakes result through the use of an entertaining display must be declared void, as it is unconstitutionally overbroad.” Since N.C. Gen.Stat. § 14–306.4 has been declared void as unconstitutionally overbroad, the trial court's order in the instant case must be reversed.
Reversed.
In reversing the trial court's order the majority relies on Hest Technologies, Inc. v. State, ––– N.C.App. ––––, ––––, ––– S.E.2d ––––, ––––, (2012), where this Court held that N.C. Gen.Stat. § 14–306.4 (2011) is void for being unconstitutionally overbroad. In a dissenting opinion in Hest Technologies, I concluded N.C. Gen.Stat. § 14–306.4 regulated conduct rather than speech and the statute was not unconstitutionally overbroad. Id. at ––––, ––– S.E.2d at –––– (Hunter, J., dissenting).
Plaintiffs appeal from the trial court's order granting the State's motion to dismiss plaintiffs' complaint for failure to state a claim upon which relief could be granted and dissolving plaintiffs' preliminary injunction against the enforcement of N.C. Gen.Stat. § 14–306.4. Plaintiffs argue section 14–306.4 is an unconstitutional restriction on their freedom of speech, is unconstitutionally vague, and is a violation of their rights to due process and equal protection under our federal and state constitutions. I disagree.
Consistent with my opinion in Hest Technologies, I must dissent from the majority's holding in the instant case and conclude that N.C. Gen.Stat. § 14–306.4 is not a restriction on speech. I further conclude that plaintiffs cannot challenge section 14–306.4 for vagueness; plaintiffs have failed to establish a violation of their rights to equal protection under the law; and plaintiffs have failed to establish a claim of selective prosecution. Accordingly, I would affirm the trial court's order.
Plaintiffs argue that N.C. Gen.Stat. § 14–306.4 is an impermissible restriction of their freedom of speech as guaranteed by the First and Fourteenth Amendments of the United States Constitution and article I, section 14 of the North Carolina Constitution. Specifically, plaintiffs contend that the statute's prohibition of the use of an “entertaining display” in conducting or promoting a sweepstakes is an impermissible content-based restriction on speech, proscribing the manner in which they communicate to a sweepstakes entrant whether the entrant has won a prize.
In Hest Technologies, ––– N.C.App. at ––––, ––– S.E.2d at –––– (Hunter, J., dissenting), I addressed a similar constitutional challenge to the statute. My reasoning in that case applies to this appeal and leads me to the same conclusion, that N.C. Gen.Stat. § 14–306.4 is a restriction on conduct, not speech. Id.; see also Allied Veterans of the World, Inc.: Affiliate 67 v. Seminole County, Fla., 783 F.Supp.2d 1197 (M.D.Fla.2011) (); Affiliate 67 v. Seminole County, Fla., 2011 WL 3958437 (M.D.Fla. Sept. 8, 2011) . Thus, I would overrule plaintiffs' argument that N.C. Gen.Stat. § 14–306.4 is a content-based restriction on protected expression.
Next, plaintiffs contend N.C. Gen.Stat. § 14–306.4 is unconstitutionally vague. Specifically, plaintiffs take issue with the statute's definition of “entertaining display” and its lack of definitions for “visual information” and “game play.” Plaintiffs also argue it is impossible to ascertain the type of machine the statute prohibits. I disagree.
“It is a basic principle of due process that an enactment is void for vagueness if its prohibitions are not clearly defined.” Grayned v. City of Rockford, 408 U.S. 104, 108, 92 S.Ct. 2294, 2298, 33 L.Ed.2d 222, 228 (1972). However, “[o]ne to whose conduct a statute clearly applies may not successfully challenge it for vagueness.” Parker v. Levy, 417 U.S. 733, 756, 94 S.Ct. 2547, 2562, 41 L.Ed.2d 439, 458 (1974). As evidenced by plaintiffs' argument that section 14–306.4 applies to them—albeit as a restriction of their speech rather than their conduct—they cannot challenge the statute for vagueness. This is so even under the heightened scrutiny applied to laws implicating First Amendment protections of speech. Holder v. Humanitarian Law Project, ––– U.S. ––––, ––––, 130 S.Ct. 2705, 2719, 177 L.Ed.2d 355, 375 (2010). Nor can plaintiffs challenge the statute for vagueness as applied to the conduct of others. Id. Thus, I would hold plaintiffs' void for vagueness challenge is overruled.
Plaintiffs also argue that N.C. Gen.Stat. § 14–306.4 violates their rights to equal protection under our federal and state constitutions. Specifically, plaintiffs contend that the statute arbitrarily distinguishes between classes of business using sweepstakes as a promotional tool. I disagree.
As discussed above, I have concluded ...
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