Michigan Gaming Institute, Inc. v. State Bd. of Educ.
| Decision Date | 16 June 1995 |
| Docket Number | Docket No. 168141 |
| Parties | , 102 Ed. Law Rep. 803 MICHIGAN GAMING INSTITUTE, INC., Petitioner-Appellee, v. STATE BOARD OF EDUCATION and Superintendent of Public Instruction, Respondents-Appellants. |
| Court | Court of Appeal of Michigan — District of US |
Sean P. Kavanagh, Livonia, for petitioner.
Frank J. Kelley, Atty. Gen., Thomas L. Casey, Sol. Gen., and Jane O. Wilensky and Paul J. Zimmer, Asst. Attys. Gen., for respondents.
Before JANSEN, P.J., and CONNOR and CORRIGAN, JJ.
Respondents appeal as of right from an August 31, 1993, ruling of the Wayne Circuit Court reversing an administrative decision to deny petitioner's application to operate a proprietary school designed to teach prospective casino employees. We affirm the ruling of the circuit court.
On December 29, 1992, petitioner applied to the proprietary school unit of the Department of Education for a license to operate a private trade school. The proposed programs included courses in the casino games of craps, blackjack, roulette, baccarat, and poker. On January 14, 1993, the superintendent's committee on proprietary schools (hereafter referred to as the Committee) met and discussed petitioner's application. The Committee voted to instruct the supervisor of the proprietary school unit to return the application to petitioner because gaming is illegal in Michigan and the proprietary school unit would not approve applications for schools teaching casino gambling unless gaming were legalized. On January 25, 1993, the application was returned to petitioner.
The application was then resubmitted to the proprietary school unit so that petitioner could pursue its administrative remedies if the application was denied by the State Board of Education. On February 19, 1993, the Committee voted to recommend that the superintendent deny the issuance of a license to petitioner. On March 10, 1993, the State Board of Education voted to deny petitioner's application because gaming is considered to be criminal behavior in Michigan. The board implicitly relied on an opinion of the Attorney General for the denial. OAG, 1977-1978, No. 5368, p 605 (September 7, 1978).
On April 15, 1993, petitioner filed a claim of appeal in the Wayne Circuit Court seeking reversal of the State Board of Education's decision. The circuit court reversed the decision of the State Board of Education, ruling that gambling is not against public policy per se because it has been legalized in other areas and that a trade school would not promote illegal gambling. The circuit court's order has been stayed pending this appeal.
We first turn to the proper standard of review to be applied. The Administrative Procedures Act (APA), M.C.L. § 24.201 et seq.; M.S.A. § 3.560(101) et seq., provides for direct review by the courts of final decisions or orders in a contested case. M.C.L. § 24.301; M.S.A. § 3.560(201). A contested case is a procedure that requires notice and a hearing. M.C.L. § 24.203(3); M.S.A. § 3.560(103)(3). Unless the issuance of a license requires notice and a hearing, the APA's contested case rules are inapplicable. Bukhtia v. Bureau of State Lottery, 190 Mich.App. 323, 326, 475 N.W.2d 475 (1991). Here, the proprietary schools act, M.C.L. § 395.101 et seq.; M.S.A. § 15.627(1) et seq., does not require a hearing for the issuance of a license. Thus, the APA contested case rules are inapplicable in the present case.
We, therefore, apply the standard of review set forth in the Michigan Constitution. That is, all final decisions, findings, rulings, and orders of the administrative agency (here, the State Board of Education) are reviewed to determine whether the final decision, finding, ruling, or order is authorized by law. Const.1963, art. 6, § 28. Because no hearing was required in this case, we need not consider whether the final decision, finding, ruling, or order was supported by competent, material, and substantial evidence on the whole record.
We find that the State Board of Education's decision was not authorized by law because gambling is permitted in some forms in Michigan, casino gambling is allowed on a limited level, and the public policy of this state does not completely prohibit casino gambling. Thus, the State Board of Education's decision not to issue the license to teach casino games to prospective casino employees was inconsistent with this state's qualified acceptance of casino gambling.
Although not dispositive of the issue, gambling is not prohibited per se in this state. The state runs a lottery system, M.C.L. § 432.1 et seq.; M.S.A. § 18.969(1) et seq. Bingo is legal and millionaire parties are legal, M.C.L. § 432.101 et seq.; M.S.A. § 18.969(101). Horse race betting is legal, M.C.L. § 431.61 et seq.; M.S.A. § 18.966(31) et seq. The provision allowing millionaire parties specifically recognizes that the games to be played are those "customarily associated with a gambling casino." M.C.L. § 432.102(9); M.S.A. § 18.969(102)(9).
The above-named gambling activities are, of course, strictly regulated, but are, nevertheless, not prohibited outright. Moreover, casino gambling does exist in this state on Indian reservations, although these casinos are permitted pursuant to federal law. 25 U.S.C. 2701 et seq. While this state did not vote to place casino gambling on Indian reservations, the Legislature could have foreclosed the possibility of casinos being permitted on Indian reservations in Michigan by refusing to legalize other similar forms of gambling. A state that prohibits an entire class of gambling can block Indian tribes from operating the same class. United States v. Sisseton-Wahpeton Sioux Tribe, 897 F.2d 358, 367-368 (C.A.8, 1990). By permitting some forms of gambling, including millionaire parties, lotteries, bingo, and horse betting, the Legislature has shown that the public policy of this state does not absolutely prohibit gambling and has advertised that public policy would permit casino gambling on Indian reservations.
Because some forms of gambling, including casino gambling in the form of millionaire parties and casinos on Indian reservations, are lawful, we cannot accept respondents' blanket contention that gaming is illegal in Michigan. As has been noted by this Court, "Michigan does not prohibit 'legal' gambling here or 'legal' gambling in other states." Int'l Recovery Systems, Inc. v. Gabler, 208 Mich.App. 49, 53, 527 N.W.2d 20 (1994). On rehearing, in reversing its prior decision, this Court held that it was compelled to enforce a foreign (Nevada) judgment based on an underlying gambling debt pursuant to the Full Faith and Credit Clause of the federal constitution, U.S. Const., art. IV, § 1. Int'l Recovery Systems, Inc. v. Gabler (On Rehearing), 210 Mich.App. 422, 527 N.W.2d 20 (1995). Further, it is clear that Michigan has legalized some forms of gambling.
Because the public policy of this state does not prohibit outright casino gambling, and given the lawful avenues of casino-style gambling in this state, petitioner's stated purpose of teaching lawful methods for lawful employment is credible. Casino gambling is not completely prohibited by public policy in this state, as is evidenced by the Legislature's decision to legalize millionaire parties and to allow casino gambling on Indian reservations. Therefore, a school to teach limited lawful purposes of casino gambling is not contrary to public policy.
By permitting schools to train potential casino employees, we are not preempting the legislative process as our dissenting colleague asserts. Rather, we are merely recognizing the reality in this state that gambling is permitted in some avenues and that the Legislature has already clearly expressed that public policy embraces gambling in many lawful forms. Michigan residents are not proscribed from taking their money to casinos. In the absence of a clear legislative enactment prohibiting the practice of gambling at casinos in this state, it would be unreasonable to prevent schools from providing training to Michigan residents so that they may be employed in casinos.
Respondents' unqualified rejection of casino employee training is inconsistent with this state's qualified acceptance of casino-style gambling. Permitting a school merely to teach a skill does not necessarily condone gambling. Accordingly, the decision of the State Board of Education was...
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