Casino Ventures v. Stewart

• Decision Date: 16 October 1998
• Docket Number: No. 2:98-1923-18.,2:98-1923-18.
• Citation: 23 F.Supp.2d 647
• Court: U.S. District Court — District of South Carolina
• Parties: CASINO VENTURES, Plaintiff, v. Robert M. STEWART, Sr. in his Official Capacity as Chief of the State Law Enforcement Division, and Charles M. Condon, in his Official Capacity as Attorney General for the State of South Carolina, Defendants.

23 F.Supp.2d 647

CASINO VENTURES, Plaintiff, v. Robert M. STEWART, Sr. in his Official Capacity as Chief of the State Law Enforcement Division, and Charles M. Condon, in his Official Capacity as Attorney General for the State of South Carolina, Defendants.

No. 2:98-1923-18.

United States District Court, D. South Carolina, Charleston Division.

October 16, 1998.

Edward A. Frazier, Columbia, SC, for Plaintiff.

Nathan Kaminski, Jr., Columbia, SC, for Defendant.

ORDER

NORTON, District Judge.

Oh, we got trouble—

Right here in Georgetown County.

We've surely got trouble —

Right here in Georgetown County.

Oh yes we got trouble here,

We got big, big trouble.

With a capital "T" —

And that rhymes with "G"

And that stands for gambling.¹

This case arises out of Plaintiff's intention to operate a "day cruise" or "cruise to nowhere" business in Georgetown County, South Carolina. After denying Plaintiff's motion for a preliminary injunction, this court held a bench trial on September 14, 1998. At the conclusion of the trial and in accordance with Fed.R.Civ.P. 52(a), this court now makes the following findings of fact and conclusions of law.

I. BACKGROUND

Plaintiff filed a declaratory judgment action and a motion for a preliminary injunction and supporting memorandum on July 1, 1998. Defendants filed a motion to dismiss and a motion in opposition to Plaintiff's request for a preliminary injunction on July 10, 1998. Both parties argued their positions at a hearing on July 13, 1998. By order dated July 21, 1998, this court denied Plaintiff's motion.

Plaintiff operates a day cruise business in Mayport, Florida. Day cruises or "cruises to nowhere" are voyages that start and finish in the same port without any stops. The main purpose of these cruises is to offer casino style gambling to passengers once the vessel sails beyond a state's three mile territorial waters.

Plaintiff desires to begin an operation similar to its Florida business in Georgetown County, South Carolina. Plaintiff seeks an order from this court declaring its right to legally operate a day cruise business in South Carolina. Plaintiff further requests that this court enjoin Defendants from arresting any of its officers, agents, or employees or from confiscating any of Plaintiff's equipment when the Plaintiff commences business in South Carolina.

II. FINDINGS OF FACT

Pursuant to the joint stipulation of the parties, this court makes the following findings of fact.

1. Plaintiff intends to operate day cruises that would begin and end within South Carolina territory, which includes its three mile territorial waters, as shown on NOAA Map # 11535.

2. A day cruise is a cruise that begins and ends at the same port and does not make any intervening stops to disembark passengers.

3. Once the day cruise is beyond South Carolina territory, Plaintiff would offer gambling as one of the amenities for its passengers. To offer this amenity, Plaintiff would be possessing and transporting within South Carolina territory gambling equipment of the following type: (a) Black Jack Tables; (b) Craps Tables; (c) Roulette Wheel; (d) Poker Tables; and (e) Slot Machines.

4. Plaintiff is authorized to do business in South Carolina.

5. Dewayne Williams, the sole shareholder of Plaintiff, has paid for an option to lease dock and shore facilities, including parking, in South Carolina. In the event that Plaintiff is permitted to begin its day cruise operation in South Carolina, Dewayne Williams or Plaintiff may exercise the option to lease the dock and shore facilities. Plaintiff has renovated its ship and otherwise prepared for operations.

6. Plaintiff has registered for Calendar Year 1998 with the Department of Justice under the Johnson Act.

7. South Carolina has not enacted a statute that references the Johnson Act.

8. Defendants intend to prohibit Plaintiff from operating its business by threatening to enforce one or more of the following South Carolina statutes: S.C.Code Ann § 12-21-2710; S.C.Code Ann. § 12-21-2712; S.C.Code Ann. § 16-19-10; S.C.Code Ann. § 16-19-20; S.C.Code Ann. § 16-19-30; S.C.Code Ann. § 16-19-40; S.C.Code Ann. § 16-19-50; S.C.Code Ann. § 16-19-120; and S.C.Code Ann. § 16-19-130.

III. CONCLUSIONS OF LAW

Oh, we got trouble —

Right here in Georgetown County.

We've surely got trouble —

Right here in Georgetown County.

Oh yes we got trouble here,

We got big, big trouble.

With a capital "T" —

And that rhymes with "C"

And that stands for Congress.

A. THE JOHNSON ACT: 15 U.S.C. § 1175.

Congress enacted amendments to 15 U.S.C. § 1175 in 1992. The 1992 amendments created an exception to then existing prohibitions on possession and use of gambling devices on U.S. flag ships. Under the exception, it is lawful to transport or possess, on a voyage, a gambling device that is "within the boundaries of any State or possession of the United States" if the use of the gambling device on a portion of the voyage is not within the boundaries of any State or possession of the United States and the device remains on board while the vessel is within such boundaries. 15 U.S.C. § 1175(b)(1). Congress further provided that the repair, transport, possession, or use of a gambling device on a vessel that is not within the boundaries of any State or possession of the United States is prohibited "if the State or possession of the United States in which the voyage or segment begins and ends has enacted a statute the terms of which prohibit that repair or use on that voyage or segment." 15 U.S.C. § 1175(b)(2)(A). Accordingly, any state that "has enacted" a statute that prohibits the repair or use of gambling equipment on voyages that begin and end in the same state without any intervening stops may prohibit the type of business Plaintiff proposes. See Id.

Under the express language of § 1175, Plaintiff has the right to operate day cruises from ports in South Carolina unless South Carolina has opted out of the statute. Id. The parties agree that South Carolina has not enacted a statute that references the Johnson Act. Additionally, none of the preexisting statutes on which Defendants rely² reference the Johnson Act or contain a prohibition on the use of gambling devices on a voyage or segment of a voyage as set forth in section 1175(b)(2)(A) and (B). Under the plain language of § 1175, Plaintiff may operate his business in South Carolina.

Oh, we got trouble —

Right here in Georgetown County.

We've surely got trouble —

Right here in Georgetown County.

Oh yes we got trouble here,

We got big, big trouble.

With a capital "T"—

And that rhymes with "P"

And that stands for precedent.

B. FOURTH CIRCUIT PRECEDENT

Statutory interpretation begins with the language of the statute. Randall v. Loftsgaarden, 478 U.S. 647, 656, 106 S.Ct. 3143, 92 L.Ed.2d 525 (1986). Faced with interpreting the "has enacted" language of the Johnson Act before its 1992 amendments, the Fourth Circuit concluded that "[s]ince no state could possibly exempt itself from the prohibition of the Johnson Act before its passage, the words `has enacted' cannot reasonably be deemed to have contemplated prior existing state legislation." North Beach Amusement Company v. United States, 240 F.2d 729 (4th Cir.1957). As the Supreme Court recently noted, "identical words used in different parts of the same act are intended to have the same meaning." Gustafson v. Alloyd Co., Inc., 513 U.S. 561, 562, 115 S.Ct. 1061, 131 L.Ed.2d 1 (1995). Because South Carolina has not enacted any legislation referencing the Johnson Act specifically or in substance, South Carolina has not "enacted a statute the terms of which prohibit" day cruises. Defendants' argument that existing South Carolina statutes effectively opt South Carolina out of § 1175 is contrary to the Fourth Circuit's decision in North Beach.

Defendants argue that despite North Beach, Congress only intended its 1992 amendments to the Johnson Act to lift existing federal prohibitions on gambling aboard U.S. flag ships. Defendants point to Hawaii and argue that the continued validity of Hawaii's pre-1992 prohibition of day cruises evidences Congress's intent to allow existing statutes to effectively opt a state out of the 1992 amendments to the Johnson Act.

Defendants' attempt to expand upon Hawaii's unique situation is misplaced. The 1992 amendments to the Johnson Act specifically reference Hawaii. 15 U.S.C. § 1175(b)(2)(C). There is no similar reference to South Carolina. Id. Moreover, South Carolina has no statute even remotely similar to Hawaii's statute. Compare Haw.Rev.Stat. § 712-1222.5 with S.C.Code Ann. § 12-21-2710; S.C.Code Ann. § 12-21-2712; S.C.Code Ann. § 16-19-10; S.C.Code Ann. § 16-19-20; S.C.Code Ann. § 16-19-30; S.C.Code Ann. § 16-19-40; S.C.Code Ann. § 16-19-50; S.C.Code Ann. § 16-19-120; and S.C.Code Ann. § 16-19-130 (noting Hawaii's specific reference to crafts that embark and disembark at the same port within the state's borders and the lack of any similar provision in any of South Carolina's statutes).

Because Congress's 1992 amendments to the Johnson Act do not mention South Carolina, and because none of South Carolina's existing gambling statutes are similar to Hawaii's statute, Hawaii and South Carolina are not analogous. Congress did not intend for South Carolina to get the special treatment that it afforded Hawaii. South Carolina's statutes generally prohibiting gambling do not prohibit the operation of day cruises.

Oh, we got trouble—

Right here in Georgetown County.

We've surely got trouble—

Right here in Georgetown County.

Oh yes we got trouble here,

We got big, big trouble.

With a capital "T"—

And that rhymes with "C"

And that stands for coastal states.

C. COASTAL STATES

1. CALIFORNIA

Immediately after the adoption of the 1992 amendments to the Johnson Act, California enacted legislation to opt out of the amendments. See Cal.Penal Code § 11319. The California legislature specifically enacted section 11319 to meet...