State v. Epic Tech, LLC

• Decision Date: 25 September 2020
• Docket Number: 1180675, 1180794
• Citation: 323 So.3d 572
• Parties: STATE of Alabama v. EPIC TECH, LLC, et al. State of Alabama v. Epic Tech, LLC, et al.
• Court: Alabama Supreme Court

323 So.3d 572

STATE of Alabama

v.EPIC TECH, LLC, et al.

State of Alabama

v.Epic Tech, LLC, et al.

1180675, 1180794

Supreme Court of Alabama.

September 25, 2020

Steve Marshall, atty. gen., and Edmund G. LaCour, Jr., solicitor gen., A. Barrett Bowdre, deputy solicitor gen., and John L. Kachelman III, asst. atty. gen., for appellant.

Joel E. Dillard of Dillard, McKnight, James & McElroy, Birmingham; Guy A. Lewis and Jeffrey M. Forman of The Law Office of Guy A. Lewis, PLLC, Pinecrest, Florida; and William J. Baxley of Baxley & Jackson, Vestavia Hills, for appellee Epic Tech, LLC.

Faya Rose Toure and Henry Sanders of Chestnut, Sanders, Sanders, LLC, Selma, for appellees White Hall Entertainment and White Hall Town Council.

C. Richard Hill, Jr., and Blake E. Brookshire of Capell & Howard, P.C., Montgomery, for appellee Macon County Sheriff Andre Brunson.

Joe Espy III, J. Flynn Mozingo, and William M. Espy of Melton, Espy & Williams, PC, Montgomery, for appellee K.C. Economic Development, LLC, d/b/a VictoryLand.

WISE, Justice.

These appeals have been consolidated for the purpose of writing one opinion. In case no. 1180675 (hereinafter referred to as "the Lowndes County case"), the State of Alabama, the plaintiff below, appeals from the Lowndes Circuit Court's order granting the motions to dismiss filed by Epic Tech, LLC; White Hall Enrichment Advancement Team d/b/a Southern Star Entertainment; White Hall Entertainment; and the White Hall Town Council (hereinafter collectively referred to as "the Lowndes County defendants"). In case no. 1180794 (hereinafter referred to as "the Macon County case"), the State appeals from the Macon Circuit Court's order granting the motions to dismiss filed by Epic Tech, LLC, and K.C. Economic Development, LLC, d/b/a VictoryLand ("KCED") (hereinafter collectively referred to as "the Macon County defendants"). We reverse and remand.

Facts and Procedural History

The Lowndes County Case

On October 26, 2017, the State sued the Lowndes County defendants in the Lowndes Circuit Court, asserting a public-nuisance claim. On that same day, the State also filed a motion for a preliminary injunction pursuant to Rule 65(a), Ala. R. Civ. P. The State subsequently filed two amendments to its complaint. In its second amended complaint, the State asserted that it was "seeking declaratory and injunctive relief to abate a public nuisance of unlawful gambling, pursuant to § 6-5-120[, Ala. Code 1975]." It also alleged that the Lowndes County defendants' "continued operation of illegal slot machines and unlawful gambling devices" constituted a public nuisance. The State requested that the Lowndes Circuit Court enter an order declaring the gambling activities conducted by or through the Lowndes County defendants to be a public nuisance and "permanently enjoining the [Lowndes County defendants] from providing such unlawful gambling activities."

The Lowndes County defendants filed motions to dismiss the State's complaint in which they alleged that the Lowndes Circuit Court did not have subject-matter jurisdiction over the State's request for a declaratory judgment and injunctive relief; that the complaint failed to state a claim upon which relief could be granted; and that the State had failed to join the operators of Wind Creek Casino Montgomery and Wind Creek Casino Wetumpka (hereinafter collectively referred to as "the Wind Creek casinos") as indispensable parties pursuant to Rule 19, Ala. R. Civ. P.

The Lowndes Circuit Court subsequently conducted a hearing. During the hearing, the court decided that it would hear arguments and rule on the motions to dismiss before it proceeded further on the State's motion for a preliminary injunction. On April 26, 2019, the Lowndes Circuit Court entered a judgment granting the motions to dismiss. In its judgment, the court found that it did not have subject-matter jurisdiction "to adjudicate the legal issues for injunctive and declaratory relief." It also found that, even if it did have subject-matter jurisdiction, "the Complaint, as amended, would be dismissed for failure to state a claim upon which relief could be granted and for failure to include indispensable parties."

The Macon County Case

On October 4, 2017, the State sued the Macon County defendants in the Macon Circuit Court; it subsequently amended its complaint. In its amended complaint, the State asserted that it was "seeking declaratory and injunctive relief to abate a public nuisance of unlawful gambling, pursuant to § 6-5-120[, Ala. Code 1975]." It also alleged that the Macon County defendants' "continued operation of illegal slot machines and unlawful gambling devices" constituted a public nuisance. The State requested that the Macon Circuit Court enter an order declaring the gambling activities conducted by or through the Macon County defendants to be a public nuisance and "permanently enjoining the [Macon County defendants] from providing such unlawful gambling activities."

The Macon County defendants filed motions to dismiss the complaints against them. Like the Lowndes County defendants, the Macon County defendants asserted that the Macon Circuit Court did not have subject-matter jurisdiction over the State's request for a declaratory judgment and injunctive relief; that the complaint failed to state a claim upon which relief could be granted; and that the State failed to join the operators of the Wind Creek casinos as indispensable parties.

The Macon Circuit Court subsequently conducted a hearing. During the hearing, the court decided to hear arguments and rule on the motions to dismiss before it proceeded further on the State's motion for a preliminary injunction. On June 14, 2019, the Macon Circuit Court entered a judgment granting the Macon County defendants’ motions to dismiss on the grounds that it lacked subject-matter jurisdiction; that the State had failed to state a claim upon which relief could be granted; and that the State had failed to join the operators of the Wind Creek casinos as indispensable parties.

These appeals followed.

Discussion

I.

The State argues that the Lowndes Circuit Court and the Macon Circuit Court (hereinafter collectively referred to as "the circuit courts") erroneously determined that they did not have subject-matter jurisdiction over its claims for declaratory and injunctive relief and that it had failed to state claims upon which relief could be granted.

In its complaints in both cases,¹ the State alleged that the Lowndes County defendants and the Macon County defendants (hereinafter collectively referred to as "the defendants") "operate, administer, license and/or provide gambling devices" for casinos located in their respective counties. It further alleged that, at those casinos, the defendants "provide hundreds of slot machines and gambling devices in open, continuous, and notorious use." The complaints also included the following factual allegations:

"Gambling is generally illegal in Alabama, and slot machines are particularly so. The State's general prohibition on gambling is so fundamental that the People enshrined it in the Constitution. See Ala. Const. art. IV, § 65. The Legislature has specifically criminalized possession of slot machines and other gambling devices. Ala. Code [1975,] § 13A-12-27. Nevertheless, because of the immense profits associated with organized gambling, the industry frequently has tried to ‘evade[ ]’ these prohibitions, as the Alabama Supreme Court put it in Barber v. Jefferson Cnty. Racing Ass'n, 960 So. 2d 599 (Ala. 2006), by asserting that ‘loophole[s]’ in Alabama law were much larger than they in fact were. Id. at 614. For example, in 2006, the Alabama Supreme Court rejected the industry's attempt to pass off what were slot machines as machines that were playing a ‘legal sweepstakes.’ Id. at 603-15. The Alabama Supreme Court held that substance is more important than legal technicality; accordingly, gambling devices are illegal if they ‘look like, sound like, and attract the same class of customers as conventional slot machines.’ Id. at 616. See also Ex parte State, 121 So. 3d 337 (Ala. [Mar. 1,] 2013) ; Barber v. Cornerstone Comm. Outreach, 42 So. 3d 65 (Ala. 2009) ; State ex rel Tyson v. Ted's Game Enterprises, 893 So. 2d 376, 380 (Ala. 2004).

"... The Alabama Supreme Court has repeatedly held that the game of bingo cannot be played on electronic machines in the State of Alabama. See HEDA v. State, 168 So. 3d 4 (Ala. 2014) ; State v. $223,405.86 et al., 203 So. 3d 816 (Ala. 2016) ; State v. 825 Electronic Gambling Devices, (Ala. 2016).

"... Defendants’ gambling devices are slot machines completely reliant on games of chance. Someone who wants to play one of Defendants’ gambling devices can insert money directly into the face of the machine and/or load money onto a swipe card that the player inserts into the machine. The player then presses a button to bet a certain amount of money. Once the bet is placed, the player presses a button to start the spinning of slot reels that appear on the gambling devices. On the machines, the slot reels are digital; simulating the mechanical reels found on traditional slot machines. Seconds later, the machine displays the game's result. If the customer wins, then his or her credits go up; if not, the credits go down. The player can then either play again or cash out to receive money for any credits he or she has remaining.

"... All it takes to operate the gambling devices at Defendants’ casinos is a touch of a button. With a touch of a button, the machines initiate a game and/or bring that game to conclusion.

"... Defendants’ devices may display a small ‘bingo card’ to the side, below, or above the slot reels. However, the predominant display on all Defendants’ gambling devices is a large, digital or mechanical representation of ‘reels’ commonly seen on acknowledged slot machines.

"... Defendants’ gambling devices replicate a game of chance in an electronic format. There is no interaction between players. There

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