Smith v. McGrath, Civ. No. 5690.

• Decision Date: 10 March 1952
• Docket Number: Civ. No. 5690.
• Parties: SMITH et al. v. McGRATH, Attorney General et al.
• Court: U.S. District Court — District of Maryland

103 F. Supp. 286

SMITH et al. v. McGRATH, Attorney General et al.

Civ. No. 5690.

United States District Court D. Maryland.

March 10, 1952.

R. Palmer Ingram, Ellis Levin and Joseph M. Wyatt, Baltimore, Md., for plaintiffs.

Bernard J. Flynn, U. S. Atty., James B. Murphy, Asst. U. S. Atty., Baltimore, Md., for defendants.

CHESNUT, District Judge.

The plaintiffs in this case are seeking a declaratory judgment and an injunction to prevent the enforcement by the defendants against the plaintiffs of the provisions of the Act of Congress of January 2, 1951, c. 1194, 64 Stat. 1135, 15 U.S.C.A. §§ 1171-1177, sometimes referred to as the Johnson Act. The case has been heard upon complaint, answer, evidence and argument of counsel. There is no procedural objection interposed by the defendants. The principal question in the case is whether the activities of the plaintiffs constitute them "dealers" in coin machines within the meaning of the Act.

The main purpose of the Act is to aid the States in the local enforcement of anti-gambling laws by prohibiting the interstate transportation of such gambling devices.

Section 1171 defines the term "gambling devices". It includes certain so-called slot machines or coin machines, including such machines owned and operated by the plaintiffs in this case.

Section 1172 prohibits the interstate transportation of such gambling devices except where the interstate transportation is to a place in another State which has enacted a law providing for the exemption of such State from the provisions of the Act.

Section 1173 requires manufacturers of and dealers in gambling devices to register with the Attorney General, and to file inventory and sales and delivery records monthly. It also requires the manufacturer or dealer to mark and number each gambling device so that it is individually identifiable. It is made unlawful for manufacturers or dealers to sell, deliver or ship gambling devices not so marked, and it is also made unlawful for them to recondition, repair, sell, deliver or ship such machines without having registered or without filing monthly reports.

And by section 1174 the shipping packages for such gambling devices or repair parts thereof must be plainly marked.

Section 1175 provides that it shall be unlawful to manufacture, recondition, repair, sell, transport, possess or use any gambling devices in the District of Columbia, in any possession of the United States, within Indian country or within the maritime and territorial jurisdiction of the United States (it will be noted that the prohibition does not apply to the use of gambling devices within the State).

Section 1176 provides maximum penalties for violation of any provision of the Act, to be not more than a fine of $5,000 or imprisonment of not more than two years, or both.

Section 1177 provides that gambling devices transported, delivered, shipped, manufactured, reconditioned, repaired, sold, disposed of, received, possessed or used in violation of the provisions of the Act shall be seized and forfeited to the United States.

The facts of the case with respect to the activities of the plaintiffs as stated in the complaint and fully supported by the evidence are not in dispute. Two of the plaintiffs are Maryland corporations engaged in conducting amusement parks or resorts on or near the Chesapeake Bay and within about 25 miles or less of Washington. One such park is in Anne Arundel County in the State of Maryland, and the other in Calvert County. The third plaintiff is a partnership which owns and operates about 100 such gambling machines placed in various locations in Anne Arundel County on a rental or percentage basis of about 50% to the owner and 50% to the proprietor of the location. None of the plaintiffs have at any time in their present business engaged in any way in interstate transportation of such machines. They have bought and from time to time may buy the machines but only from reputable and established dealers in the State of Maryland. They have never ordered any of such machines for delivery to them interstate. They maintain their own service employees for repair of machines. When occasionally a repair part must be ordered from a dealer it is bought from a Maryland dealer and delivered in Maryland. One of the plaintiffs, the Southern Maryland Development Company, Inc., owning and operating a bathing beach known as Triton Beach Club in Anne Arundel County (the whole park consisting of about 200 acres) has not bought any machines anywhere since the passage of the Act. The two corporate plaintiffs in their amusement parks have many other types of machines and devices for the amusement of their patrons. The ownership, use and operation of all gambling devices possessed by the plaintiffs are lawful in the respective Counties of Anne Arundel and Calvert in the State of Maryland where they alone are used, under Acts of the General Assembly of Maryland. All taxes, federal state and county, have been duly paid by the plaintiffs respectively. Shortly after the passage of the Act the plaintiffs in good faith inquired at the office of the Attorney General of the United States whether his office interpreted the Act as applicable to their activities, but were unable to obtain a ruling upon the subject. Subsequently, and before filing the present complaint, their places of business were visited by representatives of the F. B. I. who made particular inquiries about the possession of such machines and in some cases demand was made for their inspection, and attention was called to the...