Kramer v. Village of North Fond Du Lac

• Citation: 384 F.3d 856
• Decision Date: 27 September 2004
• Docket Number: No. 03-4142.,03-4142.
• Parties: Carl R. KRAMER, Plaintiff-Appellant, v. VILLAGE OF NORTH FOND DU LAC and Larry Wodack, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

384 F.3d 856

Carl R. KRAMER, Plaintiff-Appellant

v VILLAGE OF NORTH FOND DU LAC and Larry Wodack, Defendants-Appellees.

No. 03-4142.

United States Court of Appeals, Seventh Circuit.

Argued May 28, 2004.

Decided September 27, 2004.

Appeal from the United States District Court for the Eastern District of Wisconsin, William C. Griesbach, J.

COPYRIGHT MATERIAL OMITTED

David E. Lasker (argued), Lasker & Edwards, Madison, WI, Plaintiff — Appellant.

Raymond J. Pollen, Remzy D. Bitar (argued), Crivello, Carlson, Mentkowski & Steeves, Milwaukee, WI, Defendant — Appellees.

Before BAUER, RIPPLE, and ROVNER, Circuit Judges.

BAUER, Circuit Judge.

Carl R. Kramer sued the Village of North Fond du Lac and Chief of Police Larry Wodack, seeking damages for various constitutional violations, all under the umbrella of 42 U.S.C. § 1983. The events giving rise to the lawsuit occurred in 1996 after a criminal investigation into illegal gambling at taverns in the Village of North Fond du Lac by means of "payouts" (i.e., exchange of cash for accumulation of points) on "Cherry Master" video slot gambling machines. The lower court granted the defendants summary judgment. The district court's Decision and Order is attached. After careful review, we affirm and adopt the Decision and Order as our own.

DECISION AND ORDER

Carl Kramer, formerly the owner of the Dog House Saloon in the Village of North Fond du Lac, Wisconsin, brought this civil rights action under 42 U.S.C. § 1983 against the village and its police chief, Larry Wodack. He alleges that his civil rights were violated when the defendants, while acting under color of state law, selectively prosecuted him, in violation of the Equal Protection Clause. The defendants also are alleged to have deprived the plaintiff of liberty and property without due process of law and to have caused him to be subject to an unreasonable search. Before me presently is the defendants' motion for summary judgment. For the reasons stated herein, the motion will be granted.

I. Factual Background

Much of the factual background of this case is set forth by the Wisconsin Supreme Court in its decision remanding the plaintiff's criminal conviction for commercial gambling crimes, State v. Kramer, 2001 WI 132, 248 Wis.2d 1009, 637 N.W.2d 35, and in my January 10, 2003 decision and order in this case which dismissed claims against defendant Thomas Storm, the Fond du Lac County District Attorney. Some facts are worth repeating, however, inasmuch as they remain relevant here.

In the mid-nineties, video gambling machines were widely offered in taverns in Fond du Lac County, including the plaintiff's Dog House Saloon. The machines would not actually pay out money themselves, as in a typical casino slot or video poker machine. Instead, a patron would accumulate points, or credits, on the machine and then ask a bartender to exchange those credits for cash.

While the machines were certainly popular with some bar patrons, they were not universally appreciated in the community. In 1995, Chief Wodack received an anonymous call complaining about the gambling machines and asking the police department to get involved. (Wodack Aff. ¶ 6.) In May 1996, the North Fond du Lac Police Department received a letter from three anonymous residents who complained that their husbands were losing a lot of money every week in the taverns. (Wodack Aff. ¶ 6.) Later, in August, Wodack's department received another anonymous letter urging the department to do something about the video gambling machines in North Fond du Lac. That letter accused the police and politicians of ignoring the problem and letting the "tavern owners rip off the taxpayers." (Lamb Aff., Ex. 69.) Presumably, the tavern owners were not reporting their gambling earnings as taxable income.

The Fond du Lac County district attorneys had not regularly prosecuted offenses involving gambling machines because of what they viewed as the "vagueness of the law". (Storm Aff., Ex. 116.) Specifically, there was apparently some confusion about what constituted a "gambling machine" in violation of Wis. Stat. § 945.01. But that confusion was dissipated when the Wisconsin Court of Appeals decided State v. Hahn, 203 Wis.2d 450, 553 N.W.2d 292 (Wis.Ct.App.1996). In that case, the court emphasized that video gaming machines were not "gambling machines," per se, because they could be used purely for amusement purposes. To violate the law, gambling machines must pay out money or something of value, "even if the player's `prize' is not automatically awarded by the machine but is awarded by the owner or lessee of the machine." Id. at 457-58, 553 N.W.2d 292.

Upon the heels of the Hahn decision, a letter was sent to tavern owners and liquor license owners indicating that, following Hahn, the policy of the Fond du Lac County Sheriff's Department and District Attorney's Office would be to investigate and prosecute complaints of commercial gambling. The September 2, 1996 letter was written on the sheriff's department stationary and was signed by Sheriff Jim Gilmore and District Attorney Tom Storm, both of whom were previously dismissed as defendants earlier in this action. (Storm Aff., Ex. 116.) The letter was sent only to taverns in unincorporated areas of the county, however, because "incorporated areas [including North Fond du Lac] are serviced by their own law enforcement agencies and are not normally policed by the County sheriff." (DPFF ¶ 102; Storm Aff. ¶ 4.) Thus, none of the tavern owners in North Fond du Lac or other incorporated areas of the county received the warning letter.1 Though the plaintiff did not receive the letter, he admitted that the letter's contents became a "hot topic" among tavern owners in North Fond du Lac and that he became aware of the letter within a week after it was sent out. (Bitar Aff., Ex. 121 at 36.) The plaintiff's central complaint in this action surrounds what happened following the letter's transmittal. At his deposition, he alleged that Chief Wodack told other bar owners to keep operating as usual, and that it was all right to operate games like the "Cherry Master" video gambling machine involved here. (Id. at 40.) The plaintiff admitted, however, that he never had a conversation with Chief Wodack about the issue himself. When asked whether Wodack ever told anyone that it would be okay to make payouts for play on the machines (the act which the Hahn court found to be illegal), the plaintiff replied, "I don't know about payouts, but he told us to keep operating as we are." (Id.)

In fact. Chief Wodack's department, with the assistance of the Lake Winnebago Area Metropolitan Enforcement Group ("MEG") Drug Unit, had actually begun an investigation of commercial gambling in the Village of North Fond du Lac in July 1996.2 Beginning that month, MEG unit officers went undercover to the taverns in North Fond du Lac and obtained cash payouts from bartenders, including the bartender at the Dog House Saloon. (DPFOF ¶¶ 40-43.) In early December of 1996, one of the investigators obtained anticipatory search warrants for eight Village of North Fond du Lac taverns. Each warrant was to be executed on December 5 if, and only if, the investigators successfully completed a commercial gambling transaction (i.e., received money in exchange for points) on the afternoon of December 4 at the tavern for which the warrant was issued. (Bitar Aff., Ex. 1.) The warrants authorized the seizure of "divers goods, chattels and property, to-wit: gambling machines, ledgers, notes, envelopes, currency, utility bills, bank statements, tax returns and other items which identify persons in control of the property and other evidence of crimes of commercial gambling." (Bitar Aff., Ex. 2.) At seven of the eight taverns in the village, the officers were able to meet the requirements of the search warrants (the two machines at one tavern were apparently out of order). (DPFOF ¶ 61.) At the Dog House Saloon, the search turned up several ledgers and envelopes evidencing football and other gambling activity, as well as "one Dyna Cherry Master standing floor model video gambling machine containing $186 in U.S. currency". (Bitar Aff., Ex. 3.)

Several months later, Kramer, along with the owners of the other six taverns at which the search warrants were successfully executed, were charged with various counts of commercial gambling, a felony under Wisconsin law. Wis. Stat. § 945.03(5) (1995). Prior to his 1998 trial, Kramer moved to suppress evidence seized from his tavern on the ground that it had been illegally obtained in violation of the Fourth Amendment and to dismiss the information on the ground he was being selectively prosecuted. The judge denied both motions, finding that the search was reasonable and that Kramer had failed to make out a prima facie case of selective prosecution. (Bitar Aff., Ex. 122 at 35-36.) At trial, the plaintiff was found guilty of two counts of commercial gambling, and was sentenced to community service and ordered to make donations to Gamblers Anonymous. (Bitar Aff., Ex. 5.)

Kramer successfully appealed his conviction to the Wisconsin Court of Appeals, which reversed the circuit court's judgment on the ground that he had been selectively prosecuted. State v. Kramer, 2000 WI App. 271, 240 Wis.2d 44, 622 N.W.2d 4. The Court of Appeals concluded that the gambling prosecutions had been arbitrarily limited to one geographic area, the Village of North Fond du Lac. Because the State had failed to demonstrate a valid reason for this limitation, the court held that the conviction could not stand. The Wisconsin Supreme Court granted the State's petition for review, however, and reversed. 2001 WI 132, 248 Wis.2d 1009, 637 N.W.2d 35. Although it agreed with the Court of Appeals that Kramer had established a prima facie claim of selective prosecution, the Supreme Court concluded that the State had not been afforded the opportunity to rebut the prima facie claim by...