State ex rel. Spire v. Strawberries, Inc.

• Decision Date: 30 August 1991
• Docket Number: No. 89-017,89-017
• Citation: 239 Neb. 1,473 N.W.2d 428
• Parties: STATE of Nebraska ex rel. Robert M. SPIRE, Attorney General, and Ronald L. Staskiewicz, County Attorney of Douglas County, Nebraska, Appellees, v. STRAWBERRIES, INC., a Nebraska Corporation, et al., Appellants.
• Court: Nebraska Supreme Court

Page 428

473 N.W.2d 428

239 Neb. 1

STATE of Nebraska ex rel. Robert M. SPIRE, Attorney General, and Ronald L. Staskiewicz, County Attorney of Douglas County, Nebraska, Appellees, v. STRAWBERRIES, INC., a Nebraska Corporation, et al., Appellants.

No. 89-017.

Supreme Court of Nebraska.

Aug. 30, 1991.

Syllabus by the Court

1. Injunction: Equity. An action for injunction sounds in equity.

2. Declaratory Judgments: Judicial Construction: Statutes. A declaratory judgment action is an appropriate method to obtain a judicial construction of a statute or determination of a statute's validity, including resolution of a challenge to the constitutionality of the statute.

3. Equity: Appeal and Error. In an appeal of an equity action, this court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court; provided, where the credible evidence is in conflict on a material issue of fact, we consider and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another.

4. Constitutional Law: Statutes: Proof. One claiming that a statute is unconstitutional has the burden to show that the questioned statute is unconstitutional.

5. Constitutional Law: Statutes: Presumptions. A statute is presumed to be constitutional, and all reasonable doubts 6. Gaming. A person commits the offense of possession of a gambling device if he or she manufactures, sells, transports, places, possesses, or conducts or negotiates any transaction affecting or designed to affect ownership, custody, or use of any gambling device, knowing that it shall be used in the advancement of unlawful gambling activity.

will be resolved in favor of its constitutionality.

7. Gaming: Words and Phrases. A game of chance is one in which the result as to success or failure depends less on the skill and experience of the player than on purely fortuitous or accidental circumstances incidental to the game or the manner of playing it or on the device or apparatus with which it is played.

8. Constitutional Law: Gaming: Words and Phrases. A game of chance is one in which the winner is determined by mere luck and not by skill; the predominant nature of the game, i.e., skill or chance, determines its classification. Free replays are things of value and when obtained on a gambling device constitute property within the meaning of Neb. Const. art. III, § 24.

9. Constitutional Law: Legislature. The Legislature cannot avoid constitutional provisions by statutorily redefining constitutionally unacceptable activity. The Legislature's power of definition may not be employed to nullify or circumvent the provisions of the Nebraska Constitution.

10. Constitutional Law: Statutes: Legislature: Intent. The test to be applied in determining whether an unconstitutional clause may be severed from the remainder of a statute is (1) whether, absent the invalid portions, a workable plan remains; (2) whether the valid portions of an act can be enforced independently, and where the invalid portions do not constitute such an inducement to the valid parts that the valid parts would not have passed without the invalid parts; (3) whether the severance will do violence to the intent of the Legislature; and (4) whether a declaration of separability is included in the act, indicating that the Legislature would have enacted the bill absent the invalid portion.

11. Constitutional Law: Statutes. A severability clause in a statute is not a condition precedent to a determination of the question of severability.

12. Gaming: Nuisances. Establishments performing gambling-related offenses can constitute public nuisances.

13. Gaming. The free replay credits awarded by video gambling machines are a credit or promise involving extension of a service or entertainment and are something of value.

14. Intent: Circumstantial Evidence: Proof. The existence of a required intent, knowledge, or other state of mind may be established through circumstantial evidence.

15. Injunction. An injunction will not lie unless the right is clear, the damage is irreparable, and the remedy at law is inadequate.

16. Injunction: Statutes. Injunction is a proper remedy to be used by the State in the protection of public rights, property, or welfare, whether or not the acts complained of violate a criminal statute or constitute a nuisance.

17. Injunction: Damages. Where evidence establishes that an injury will be either continuous or repetitive, granting of an injunction is an appropriate remedy.

18. Equity: Injunction. A court of equity may properly afford injunctive relief where there has been a continuing and flagrant course of violations of the law, even though these acts may be subject to criminal prosecution.

19. Equity: Jurisdiction: Damages. A court of equity has jurisdiction to enjoin a threatened injury whenever its nature is such that it could not be adequately compensated in damages and its continuance would occasion a constantly recurring grievance.

20. Constitutional Law: Public Health and Welfare. The U.S. Constitution does not recognize an absolute and uncontrollable liberty, and society is free to enact laws against the evils which menace 21. Constitutional Law: Gaming. Prohibiting gambling is a legitimate governmental purpose under the police power.

the health, safety, morals, and welfare of people.

22. Appeal and Error. This court will not consider assignments of error which are not discussed in the proponent's brief.

Michael J. Lehan of Kelley, Kelley & Lehan, P.C., Omaha, for appellants.

Robert M. Spire, Atty. Gen., William L. Howland, Lincoln, Ronald L. Staskiewicz, Douglas County Atty., and Michael W. Amdor, Omaha, for appellees.

HASTINGS, C.J., and BOSLAUGH, WHITE, CAPORALE, SHANAHAN, GRANT, and FAHRNBRUCH, JJ.

PER CURIAM.

Strawberries, Inc., and 18 other Douglas County taverns or individuals doing business as taverns appeal a district court judgment (1) permanently enjoining them from possessing or allowing the playing of video gambling devices on their premises and (2) finding Neb.Rev.Stat. § 28-1107(2) (Reissue 1989) unconstitutional.

We hold that § 28-1107(2) violates Neb. Const. art. III, § 24, which prohibits the Legislature from authorizing games of chance, and that the defendants' actions constitute possession of gambling devices under § 28-1107(1). The trial court judgment is affirmed.

STANDARD OF REVIEW

An action for injunction sounds in equity. Stuthman v. Adelaide D. Hull Trust, 233 Neb. 586, 447 N.W.2d 23 (1989). A declaratory judgment action is an appropriate method to obtain a judicial construction of a statute or determination of a statute's validity, including resolution of a challenge to the constitutionality of the statute. State ex rel. Spire v. Northwestern Bell Tel. Co., 233 Neb. 262, 445 N.W.2d 284 1989). In appellate review of an action for declaratory judgment in an equity action, the standard of review for an equity case applies. Id. In an appeal of an equity action, this court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court; provided, where the credible evidence is in conflict on a material issue of fact, we consider and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another. Stuthman, supra. One claiming that a statute is unconstitutional has the burden to show that the questioned statute is unconstitutional. In re Application A-16642, 236 Neb. 671, 463 N.W.2d 591 (1990). A statute is presumed to be constitutional, and all reasonable doubts will be resolved in favor of its constitutionality. Id.

FACTUAL BACKGROUND

The record reveals that in late 1987, officers of the Nebraska State Patrol, the Omaha Police Division, and the Federal Bureau of Investigation (FBI) visited a group of taverns in Douglas County, looking for video gambling devices as part of an investigation launched by the State Attorney General. In each establishment where officers found video gambling devices, they proceeded to play the machines. The testimony of the officers established that most of the games operated in a similar manner. For each 25 cents deposited in a machine, the player would receive credit for one game and could play up to 10 credits at a time. Most of the games displayed a five-card poker hand dealt by a computer mechanism and displayed on a video screen. The player, if dissatisfied with the hand initially dealt, could discard those cards and draw and play additional cards. The player had no control over the cards initially dealt or received after discard. If the poker hand finally held by the player was the equivalent of or better than certain poker hands shown on the face of the game, the player would win one or more credits. The player would receive one additional play for each credit. Other games available on the machines included dice and blackjack. According Based upon the investigation, the State filed a petition against 25 business establishments and individuals with liquor licenses in Douglas County, alleging they possessed video gambling devices. The petition claimed that the defendants' actions violated Neb. Const. art. III, § 24, and § 28-1107, and sought as relief a permanent injunction against such actions and a declaration that § 28-1107(2) was unconstitutional. On March 14 and 15, 1988, proceedings were had in the district court for Douglas County, wherein the State sought and received a temporary injunction.

to testimony of the officers and of an FBI agent, some of the machines in question contained [239 Neb. 5] "knock-off" switches. The FBI agent stated that machines with such switches also contain accounting functions which allow the proprietors to pay off customers who have accumulated credits on the machines, knock off the credits from the machines, and then...