Dep't of Tex. v. Tex. Lottery Comm'n

Decision Date21 August 2013
Docket NumberNo. 11–50932.,11–50932.
PartiesDEPARTMENT OF TEXAS, VETERANS OF FOREIGN WARS OF the UNITED STATES; Amvets Department of Texas, Incorporated; Amvets Post 52, Incorporated; Amvets Post 52, Auxiliary, Incorporated; the Great Council of Texas, Improved Order of Redmen; Redmen War Eagle Tribe No. 17; Redmen Tribe No. 21 Geronimo; Redmen Ramona Council No. 5; the Institute for Disability Access, Incorporated, doing business as Adapt of Texas; Temple Elks Lodge No. 138, Benevolent and Protective Order of Elks of The United States of America, Incorporated; Bryan Lodge No. 859, Benevolent and Protective Order of Elks of The United States of America, Incorporated; Austin Lodge No. 201, Benevolent and Protective Order of Elks of The United States of America, Incorporated; Anna Fire and Rescue, Incorporated, Plaintiffs–Appellees v. TEXAS LOTTERY COMMISSION; Gary Grief, Executive Director in His Official Capacity; Sandra K. Joseph, Director of Charitable Bingo in Her Official Capacity; Mary Ann Williamson, Commissioner in Her Official Capacity; Commissioner in Official Capacity; J. Winston Krause, Commissioner in His Official Capacity, Defendants–Appellants.
CourtU.S. Court of Appeals — Fifth Circuit

OPINION TEXT STARTS HERE

Anatole Robert Barnstone, Esq., Attorney, Austin, TX, for PlaintiffsAppellees.

Arthur Cleveland D'Andrea (argued), Office of the Attorney General, Office of the Solicitor General, James Carlton Todd, Assistant Attorney General, Office of the Attorney General, General Litigation Division, Austin, TX, for DefendantsAppellants.

Appeal from the United States District Court for the Western District of Texas.

Before STEWART, Chief Judge, DeMOSS and GRAVES, Circuit Judges.

PER CURIAM:

The original opinion in this appeal was issued by a unanimous panel on October 9, 2012. On November 21, 2012, we granted Appellees' petition for panel rehearing without hearing oral argument. We now withdraw our previous opinion and substitute the following.

The question presented in this appeal is whether Texas's charitable bingo program violates the First Amendment by allowing charitable organizations to raise money by holding bingo games on the condition that the money is used only for the organizations' charitable purpose, as defined by the Texas Bingo Enabling Act. The Act specifically prohibits the use of bingo proceeds for certain types of political advocacy, including lobbying and supporting or opposing ballot measures. Plaintiffs-appellees, a group of charitable organizations licensed to conduct bingo games, filed suit challenging those political advocacy restrictions, arguing they violate their speech rights under the First Amendment. The district court granted summary judgment in favor of Appellees and issued a permanent injunction preventing enforcement of the challenged provisions. We reverse for the following reasons.

BACKGROUND

The Texas Constitution has prohibited gambling for most of the State's history. SeeTex. Const. of 1845, art. VII, § 17 (“No lottery shall be authorized by this State; and the buying or selling of lottery tickets within this State is prohibited.”); see alsoTex. Const. art. III, § 47 (amended 1980) (“The legislature shall pass laws prohibiting the establishment of lotteries and gift enterprises in this State, as well as the sale of tickets in lotteries, gift enterprises or other evasions involving the lottery principle, established or existing in other States.”); Hardy v. State, 102 S.W.3d 123, 130 (Tex.2003). In November 1980, Texas voters approved an amendment to the Texas Constitution establishing an exception to the general ban on gambling for charitable bingo. The exception allows the Texas Legislature to “authorize and regulate bingo games conducted by a church, synagogue, religious society, volunteer fire department, nonprofit veterans organization, fraternal organization, or nonprofit organization supporting medical research or treatment programs.” Tex. Const. art. III, § 47(b). The constitution makes clear that the bingo exception was established for the limited purpose of supporting the enumerated charitable organizations, requiring that “all proceeds from the [bingo] games are spent in Texas for charitable purposes of the organizations.” Id.§ 47(b)(1).

To implement the charitable bingo exception, the Texas Legislature passed the Bingo Enabling Act (“Bingo Act) in 1981. Bingo Enabling Act, 67th Leg., 1st C.S., ch. 11, 1981 Tex. Gen. Laws 85 (current version at Tex. Occ.Code § 2001.001 et seq. (2012)). The Bingo Act sets forth the rules that govern the State's charitable bingo program and establishes a licensing scheme under which eligible charitable organizations can obtain a license to hold bingo games. The Act includes the Texas Constitution's requirement that bingo proceeds are used only for an organization's “charitable purposes,” and specifies that bingo proceeds may not be used for lobbying activities or to support or oppose ballot measures (“political advocacy”). SeeTex. Occ.Code §§ 2001.454, .456. This appeal centers on the political advocacy restrictions, which provide as follows:

A licensed authorized organization may not use the net proceeds from bingo directly or indirectly to:

(1) support or oppose a candidate or slate of candidates for public office;

(2) support or oppose a measure submitted to a vote of the people; or

(3) influence or attempt to influence legislation.

Id.§ 2001.456.

Appellees, thirteen nonprofit organizations licensed to hold bingo games (“Charities”), have challenged the second and third of the above provisions, § 2001.456(2)-(3), arguing they violate their First Amendment right to free speech. They do not challenge the prohibition on using bingo funds to support or oppose political candidates or the requirement that bingo proceeds are used only for an organization's charitable purposes. The lead plaintiffs are the Department of Texas Veterans of Foreign Wars (VFW) and the Institute for Disability Access, d/b/a ADAPT of Texas (ADAPT). Both VFW and ADAPT engage in political advocacy in furtherance of their charitable mission. They maintain that bingo generates a substantial portion of their total revenue and that the challenged statutory provisions restrict their ability “to engage in political advocacy to the degree that, in the judgment of [their] governing bod [ies], would best further [their] purposes.”

The Charities filed suit on June 25, 2010 in the Western District of Texas naming as defendants, in their official capacities, the commissioners and two executive officers of the Texas Lottery Commission (collectively the Commission).1 The Charities asserted claims under 42 U.S.C. § 1983 arguing that the challenged provisions are facially invalid under the First Amendment because they restrict political speech and fail to satisfy strict scrutiny. They also alleged that the provisions impermissibly restrict speech on the basis of the speaker's identity because they apply to nonprofit organizations and not for-profit gaming organizations. The Charities sought temporary and permanent injunctions preventing enforcement of the challenged provisions, a declaration that the provisions are unconstitutional, and attorneys' fees.

On October 29, 2010, the district court issued a preliminary injunction preventing enforcement of § 2001.456(2)-(3). The court, drawing heavily from the Supreme Court's opinion in Citizens United v. Federal Election Commission, 558 U.S. 310, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010), concluded that the challenged provisions are facially unconstitutional under the First Amendment because they burden political speech and fail to satisfy strict scrutiny. Shortly after the district court issued its opinion, the Commission filed an interlocutory appeal in this court. The Commission also filed motions to stay the preliminary injunction in the district court and in this court, both of which were denied.

While the interlocutory appeal was pending, the Charities moved for summary judgment. On August 30, 2011, the districtcourt issued an opinion granting the Charities' motion for summary judgment for the reasons stated in the opinion granting the preliminary injunction. That same day the district court entered a final judgment permanently enjoining enforcement of the challenged provisions and declaring them unconstitutional. The interlocutory appeal was dismissed as moot and the Commission timely filed a new appeal challenging the permanent injunction.

STANDARD OF REVIEW

This court reviews the grant of summary judgment de novo, applying the same standard used by the district court. Hill v. Carroll Cnty., Miss., 587 F.3d 230, 233 (5th Cir.2009). Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

DISCUSSION
A. Standing

Before reaching the merits of this appeal, we must first address the Commission's argument that the Charities lack Article III standing because their claims are not redressable.

Constitutional standing is a jurisdictional question which we review de novo. Nat'l Fed'n of the Blind of Tex., Inc. v. Abbott, 647 F.3d 202, 208 (5th Cir.2011). To establish Article III standing, a plaintiff must show “an injury-in-fact caused by a defendant's challenged conduct that is redressable by a court.” K.P. v. LeBlanc, 627 F.3d 115, 122 (5th Cir.2010). For a plaintiff's claim to be redressable, it must be “likely, as opposed to merely speculative, that a favorable decision will redress the plaintiff's injury.” S. Christian Leadership Conference v. Supreme Court of the State of La., 252 F.3d 781, 788 (5th Cir.2001). [A] plaintiff satisfies the redressability requirement when he shows that a favorable decision will relieve a discrete injury to himself. He need not show that a favorable decision will relieve his every injury.” LeBlanc, 627 F.3d at 123 (alteration in original) (quoting Larson v. Valente, 456 U.S. 228, 243...

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