Rousso v. State

• Decision Date: 23 March 2009
• Docket Number: No. 61779-6-I.,61779-6-I.
• Citation: 149 Wn. App. 344,204 P.3d 243
• Court: Washington Court of Appeals
• Parties: Lee H. ROUSSO, an individual, Appellant, v. STATE of Washington, a government entity, Respondent.

204 P.3d 243

149 Wn. App. 344

Lee H. ROUSSO, an individual, Appellant, v. STATE of Washington, a government entity, Respondent.

No. 61779-6-I.

Court of Appeals of Washington, Division 1.

March 23, 2009.

Lee H. Rousso, Green & Rousso PLLC, Renton, WA, for Appellant.

Jerry A. Ackerman, H. Bruce Marvin, Assistant Attorney General, Olympia, WA, for Respondent.

DWYER, A.C.J.

¶ 1 Lee Rousso is an amateur poker enthusiast. He enjoys playing poker in virtual card rooms on the Internet. After the legislature amended the state Gambling Act¹ by inserting the words "the internet" in the act's nonexclusive list of media through which the transmission of "gambling information" is prohibited,² Rousso sought a declaratory judgment that the amendments impermissibly interfere with Congress's authority to regulate interstate and international commerce. The superior court entered summary judgment in the State's favor and Rousso appeals. Because the State's established interest in regulating gambling outweighs the burdens that the Gambling Act imposes on interstate and international commerce, we affirm.

I

¶ 2 Rousso brought this action seeking to have the recent amendments to the Gambling Act declared facially unconstitutional. The State does not dispute his standing to bring this suit. The relevant background, then, is not that related to Rousso's poker playing; instead, the relevant background is the legal history that prompted Rousso to bring this challenge, and the procedural history of this action after he did so. Both are straightforward.

¶ 3 In 2005, former RCW 9.46.240 provided that "[w]hoever knowingly transmits or receives gambling information by telephone, telegraph, radio, semaphore, or similar means, or knowingly installs or maintains equipment for the transmission or receipt of gambling information shall be guilty of a gross misdemeanor."

¶ 4 The legislature amended former RCW 9.46.240 in 2006. Substitute Senate Bill 6613³ inserted the words "the internet" and "a telecommunications transmission system" in the nonexclusive list of media through which the transmission of "gambling information" is prohibited. The amendments also made the transmission of gambling information a class C felony. The amending legislation included an express statement of purpose:

It is the policy of this state to prohibit all forms and means of gambling, except where carefully and specifically authorized and regulated. With the advent of the internet and other technologies and means of communication that were not contemplated when either the gambling act was enacted in 1973, or the lottery commission was created in 1982, it is appropriate for this legislature to reaffirm the policy prohibiting gambling that exploits such new technologies.

LAWS OF 2006, ch. 290, § 1. The amendments took effect on June 7, 2006.

¶ 5 "Gambling information" is defined by the Gambling Act as "any wager made in the course of and any information intended to be used for professional gambling." RCW 9.46.0245. "Professional gambling," in turn, includes any conduct in which a "person pays a fee to participate in a card game." RCW 9.46.0269(1)(b). It also includes conduct in which a person, "[a]cting other than as a player ... materially aids any form of gambling activity." RCW 9.46.0269(1)(a).

¶ 6 There is no dispute that both Rousso and the operators of the Internet card room that Rousso favors, Pokerstars, would be engaged in the transmission and receipt of gambling information under the amended act, were Rousso to play poker for money, after June 7, 2006, on Pokerstars.

¶ 7 Thus, after the 2006 amendments took effect, Rousso brought this action pursuant to the state Uniform Declaratory Judgments Act.⁴ Rousso sought a declaration that the amendments were "unconstitutional and ... therefore void and unenforceable." He asserted various theories in support of his requested relief but only one remains at issue in this appeal: his assertion that the act impermissibly interferes with Congress's authority to regulate interstate and international commerce pursuant to article 1, section 8 clause 3 of the United States Constitution, the Commerce Clause.⁵

¶ 8 The trial court denied Rousso's motion for a declaratory judgment, while granting the State's motion for a summary judgment of dismissal.

¶ 9 Rousso appeals.

II

¶ 10 "Review of a grant of summary judgment is de novo." Bostain v. Food Express, Inc., 159 Wash.2d 700, 708, 153 P.3d 846, cert. denied, ___ U.S. ___, 128 S.Ct. 661, 169 L.Ed.2d 512 (2007). A legislative act is presumptively constitutional, "`and the party challenging it bears the burden of proving it unconstitutional beyond a reasonable doubt.'" State v. Heckel, 143 Wash.2d 824, 832, 24 P.3d 404 (2001) (quoting State v. Brayman, 110 Wash.2d 183, 193, 751 P.2d 294 (1988)).

III

¶ 11 In both the trial court and this court, Rousso's briefing focuses on his assertion that a dormant Commerce Clause analysis dictates the outcome of this dispute. The State disagrees, averring that a dormant Commerce Clause analysis is not even applicable. According to the State, this is so because Congress has specifically authorized state laws regulating Internet gambling, rendering them "invulnerable to constitutional attack under the Commerce Clause."⁶ This being so, according to the State, the only question presented is whether the Gambling Act conflicts with these federal laws, and so is preempted. The State's analysis, however, is severely flawed. Although various federal laws affect Internet gambling in one way or another, Congress has not expressly authorized otherwise unconstitutional state laws regulating Internet gambling.

¶ 12 Several basic principles of the dormant Commerce Clause doctrine must be recited in order to explain why it is that the State seeks to entirely preclude examination of the Gambling Act under that doctrine. "The Commerce Clause of the Constitution grants Congress the power `[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.'" Maine v. Taylor, 477 U.S. 131, 137, 106 S.Ct. 2440, 91 L.Ed.2d 110 (1986) (quoting U.S. CONST. Art. I, § 8, cl. 3). "`Although the Clause thus speaks in terms of powers bestowed upon Congress, the Court long has recognized that it also limits the power of the States to erect barriers against interstate trade.'" Taylor, 477 U.S. at 137, 106 S.Ct. 2440 (quoting Lewis v. BT Inv. Managers, Inc., 447 U.S. 27, 35, 100 S.Ct. 2009, 64 L.Ed.2d 702 (1980)). In other words, under the dormant Commerce Clause doctrine, a validly enacted state law may run afoul of Congress's legislative supremacy even when Congress has not legislated on the subject matter of the state law — i.e., when the clause's grant of legislative power to Congress is "dormant" — if that law intrudes upon Congress's constitutional prerogative to regulate trade between the states and with foreign nations.

¶ 13 The State primarily relies on two federal appellate opinions in support of its assertion that Congress has spoken on the issue of Internet gambling and, as such, the Congress's power is no longer "dormant," precluding application of the dormant Commerce Clause doctrine to this dispute. The first is the United States Supreme Court's decision in Northeast Bancorp, Inc. v. Board of Governors of the Federal Reserve System, 472 U.S. 159, 105 S.Ct. 2545, 86 L.Ed.2d 112 (1985). The second is the Third Circuit's decision in Pic-A-State PA, Inc. v. Pennsylvania, 42 F.3d 175 (3d Cir.1994).

¶ 14 Northeast Bancorp addressed the ability of states to enter into reciprocal state compacts governing out-of-state bank holding companies' ownership of in-state banks. As relied upon by the State, it is relevant for its ruling that, while "[t]here can be little dispute that the dormant Commerce Clause would prohibit a group of States from establishing a system of regional banking by excluding bank holding companies from outside the region if Congress had remained completely silent on the subject," that was not the case in light of a federal statute's allowance that states could "plainly authorize[ ]" out-of-state holding company acquisitions. Ne. Bancorp, 472 U.S. at 174, 105 S.Ct. 2545. The court held that, under such circumstances, "the commerce power of Congress is not dormant, but has been exercised," and precludes any Commerce Clause challenge to the federally authorized state banking law. Ne. Bancorp, 472 U.S. at 174, 105 S.Ct. 2545.

¶ 15 Pic-A-State addressed a different situation. In that case, the state of Pennsylvania had passed a law that imposed criminal penalties on any person who purchased out-of-state lottery tickets, for a fee, on behalf of Pennsylvania residents. Pic-A-State, 42 F.3d at 177. A Pennsylvania business engaged in that business, Pic-A-State, challenged the law as invalid under the Commerce Clause. Pic-A-State, 42 F.3d at 177. After the entry of a trial court decision favorable to Pic-A-State, however, Congress enacted legislation that directly prohibited the cross-border sale of lottery ticket purchasing and redemption — i.e., precisely the conduct criminalized by the challenged Pennsylvania law. Pic-A-State, 42 F.3d at 177-78.

¶ 16 Based on the passage of the federal legislation, the Third Circuit reversed the trial court's decision in Pic-A-State's favor. The court applied the long-standing rule that "in those instances where Commerce Clause challenges to state regulation have been mounted in an area where Congress has made it a crime to conduct such commerce, the courts have conducted only a two-fold inquiry, asking (1) whether federal law precludes all state legislation in that area, and (2) if state regulation is not precluded, whether the state statute conflicts with the federal provision." Pic-A-State, 42 F.3d at 179-80 (citing California v. Zook, 336 U.S. 725, 733, 69 S.Ct. 841, 93 L.Ed. 1005 (1949); Asbell v. Kansas, 209 U.S. 251, 255-56, 28 S.Ct. 485, 52 L.Ed. 778 (1908)).

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