State v. Epic Tech, LLC
| Decision Date | 30 September 2022 |
| Docket Number | 1200798,1210122,1210064 |
| Parties | State of Alabama v. Epic Tech, LLC; K.C. Economic Development, LLC, d/b/a VictoryLand; and Sheriff Andre Brunson State of Alabama v. White Hall Enrichment Advancement Team d/b/a Southern Star Entertainment; White Hall Town Council; and White Hall Entertainment White Hall Entertainment and White Hall Town Council v. State of Alabama |
| Court | Alabama Supreme Court |
State of Alabama
v.
Epic Tech, LLC; K.C. Economic Development, LLC, d/b/a VictoryLand; and Sheriff Andre Brunson
State of Alabama
v.
White Hall Enrichment Advancement Team d/b/a Southern Star Entertainment; White Hall Town Council; and White Hall Entertainment
White Hall Entertainment and White Hall Town Council
v.
State of Alabama
Nos. 1200798, 1210122, 1210064
Supreme Court of Alabama
September 30, 2022
Appeal from Macon Circuit Court (CV-17-900150)
Appeal from Lowndes Circuit Court (CV-17-900069.80)
SHAW, JUSTICE.
In case nos. 1200798 and 1210064, the State of Alabama appeals from separate orders entered by the Macon Circuit Court and Lowndes Circuit Court, respectively, denying the State's requests for injunctive relief seeking to abate, as a public nuisance,[1] illegal gambling operations
in Macon County and Lowndes County. In case no. 1210122, defendants/counterclaim plaintiffs White Hall Entertainment and the White Hall Town Council (referred to collectively as "White Hall"), cross-appeal from the Lowndes Circuit Court's order dismissing their counterclaims against the State. This Court consolidated these appeals. In case no. 1200798, we reverse the order of the Macon Circuit Court denying, in effect, the State's request for preliminary injunctive relief and remand the matter for that court to enter, within 30 days, a preliminary injunction enjoining the defendants' gambling operations in Macon County; in case no. 1210064, we reverse the order of the Lowndes Circuit Court denying the State's request for permanent injunctive relief and remand the matter for that court to enter, within 30 days, a permanent injunction enjoining the defendants' gambling operations in Lowndes County; and in case no. 1210122, we affirm the Lowndes Circuit Court's order dismissing White Hall's counterclaims.
Facts and Procedural History
A full factual background of these matters is found in State v. Epic Tech, LLC, 323 So.3d 572 (Ala. 2020) ("Epic Tech I"), and State v. Epic Tech, LLC,
342 So.3d 200 (Ala. 2021) ("Epic Tech II").[2] Essentially, in 2017, the State sued in the Macon Circuit Court, among others, Epic Tech, LLC ("Epic Tech"); K.C. Economic Development, LLC, d/b/a VictoryLand ("KCED"); and Sheriff Andre Brunson,[3] in his official capacity as sheriff of Macon County (referred to collectively as "the Macon County defendants"). At around that same time, the State sued, in the Lowndes Circuit Court, among others, White Hall Enrichment Advancement Team d/b/a Southern Star Entertainment ("Southern Star") and White Hall[4] (referred to collectively as "the Lowndes County
defendants").[5] In each action, the State sought an order declaring the illegal gambling operations conducted by the defendants to be a public nuisance and related injunctive relief. See Epic Tech I, 323 So.3d at 574. The State's complaint in each action was also accompanied by a motion seeking the entry of an order preliminarily enjoining the defendants from engaging in illegal gambling operations.[6] The State alleged, as support
for its requests for the issuance of the preliminary injunctions, that it had a reasonable chance of success on the merits; that it would be irreparably harmed in the absence of injunctive relief; that it lacked an adequate legal remedy; and that the "balance of equities" favored the issuance of the injunctions. See Ormco Corp. v. Johns, 869 So.2d 1109, 1113 (Ala. 2003) ("A plaintiff seeking a preliminary injunction has the burden of demonstrating '(1) that without the injunction the plaintiff would suffer immediate and irreparable injury; (2) that the plaintiff has no adequate remedy at law; (3) that the plaintiff has at least a reasonable chance of success on the ultimate merits of his case; and (4) that the hardship imposed on the defendant by the injunction would not unreasonably outweigh the benefit accruing to the plaintiff.'" (quoting Perley v. Tapscan, Inc., 646 So.2d 585, 587 (Ala. 1994))). The State supported its motions with, among other evidentiary exhibits, video recordings of the gambling activities in each county and accompanying affidavit testimony attesting that special agents with the attorney general's office had,
during surveillance of the subject facilities, observed nothing to suggest that the activities witnessed amounted to playing the legally permissible game of bingo. See generally Barber v. Cornerstone Cmty. Outreach, Inc., 42 So.3d 65, 86 (Ala. 2009) ("Cornerstone") (outlining the six characteristics necessary for the legally permissible game commonly referred to as "bingo").
In 2019, the trial courts dismissed, on motions of the defendants and before hearings on the merits of the State's requests for preliminary-injunctive relief, each action in its entirety based on their conclusions that they lacked subject-matter jurisdiction over the State's claims. See Epic Tech I, 323 So.3d at 606. In Epic Tech I, this Court reversed those dismissal orders and remanded the matters for further proceedings. See id. In doing so, the Court specifically noted the following regarding the State's claims in each case: "[I]t is clear that the State adequately alleged facts that would support a finding that the … defendants' conduct caused harm to the public and that the State lacked another adequate remedy." Id. at 600.
Following remand, the filing of the defendants' answers, and several continuances, the trial court in each case conducted a hearing on the State's pending request for preliminary injunctive relief.
Macon County Proceedings
At a hearing conducted on June 22, 2021, the State, referencing this Court's 2016 decision in State v. $223,405.86, 203 So.3d 816, 844 (Ala. 2016), argued that, despite this Court's "previous ruling,"[7] the Macon
County defendants had, subsequent to that ruling declaring the electronic gaming machines at issue in that case, which the defendants had characterized as "electronic bingo" machines, illegal, reopened the same facility ("the Macon County facility"), using machines that were substantially similar. It further explained that, based on failed attempts at obtaining the assistance of local law enforcement in shutting down the illegal gambling operations or the voluntary discontinuation of those operations, it had commenced the underlying action in an attempt to seek the court's help in abating the nuisance that, it alleged, the Macon County defendants' illegal gambling operations represent.
In support of its request for injunctive relief, the State submitted video recordings of the use of electronic gaming machines in the Macon County facility during visits in September 2016, July 2017, and December 2019, and accompanying testimony from two of the agents responsible for obtaining the video recordings, who explained the
recordings' contents in detail to the trial court. Specifically, the agents confirmed, as the State had originally alleged in its submissions in support of its request for injunctive relief, that, while wearing plain clothes and concealed recording devices, they had entered the Macon County facility and had viewed the available electronic gaming machines on multiple occasions.
As described by the agents, the Macon County facility contained, during the surveillance operations, several hundred machines that both "looked like a standard slot machine" and "played[] like[] a slot machine with a five by five grid and balls that dropped to simulate … what would be a person calling a number." The agents estimated that the grid that recorded the numbers, i.e., the simulated "bingo" card, was approximately the size of a postage stamp while the spinning reels were the predominant display on the machines' screens. The agents further testified that they detected no correlation between the grid and the reels and that they were not required either to record numbers on the grid --or on a corresponding physical bingo card -- or determine that the numbers on the grid matched those in the ball drop. Instead, they indicated that the machines could be played without the need for paying
attention to any of the activity occurring on the screen and estimated that a single game lasted approximately five seconds. The agents further denied that the machines required the use of any actual corresponding paper or printed bingo card, that any skill was required to win, or that the machines informed the player that he or she "was racing against anyone else to be the first to do anything." In sum, the agents opined that the electronic gaming machines were illegal "games of chance." The State's evidence further indicated that, despite urgings from the attorney general and the governor, local law enforcement had -- obviously, since the Macon County facility remained in operation -- taken no steps to shut down illegal gambling in Macon County. Thus, as discussed in more detail below, the State argued that its evidence established both that the electronic gaming machines in Macon County were illegal gambling devices in defiance of "the repeated holdings of the Supreme Court of Alabama," see, e.g., State v. $223,405.86, and "the need for an injunction."
In response to the State's evidentiary showing, the Macon County defendants did not dispute the nature of the electronic gaming machines in operation at the Macon County facility. Instead, they elicited, on cross-
examination, testimony from the agents acknowledging that the defendants operating the facility employed a security force responsible for limiting entry to persons aged 21 or older, that the electronic gaming machines bore appropriate "revenue stamps," that the agents were not frightened at any time during their visits to the facility, that they did not become addicted to gambling as a result of those visits, and that they were not coerced by the Macon County defendants into return visits. The Macon County defendants...
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