Sullivan v. Fox

• Decision Date: 30 January 1987
• Citation: 235 Cal.Rptr. 5,189 Cal.App.3d 673
• Court: California Court of Appeals Court of Appeals
• Parties: Iola SULLIVAN, Plaintiff and Respondent, v. James P. FOX, Defendant and Appellant. ARTICHOKE ENTERPRISES, INC. et al., Plaintiffs and Respondents, v. James P. FOX, Defendant and Appellant. A033205, A033761.

Page 5

235 Cal.Rptr. 5

189 Cal.App.3d 673

Iola SULLIVAN, Plaintiff and Respondent, v. James P. FOX, Defendant and Appellant.

ARTICHOKE ENTERPRISES, INC. et al., Plaintiffs and Respondents, v. James P. FOX, Defendant and Appellant.

A033205, A033761.

Court of Appeal, First District, Division 4, California.

Jan. 30, 1987.

As Modified on Denial of Rehearing Feb. 27, 1987.

James P. Fox, Dist. Atty., Mark R. Forcum, Deputy Dist. Atty., Redwood City, for defendant and appellant.

Leslie A. Williams, San Mateo, Wilbur Duberstein, Robert J. Kahn, Walnut Creek, Correy, Orton, Luzaich & Gemello, Millbrae, for plaintiffs and respondents.

POCHE, Associate Justice.

The issue presented on these consolidated appeals is whether law enforcement officials were properly enjoined from preventing the game of pai gow being played at commercial gaming establishments.

Plaintiffs operate licensed gaming clubs in the cities of San Mateo and San Bruno. As of the spring of 1985 ¹, the playing of pai gow had either already commenced or was anticipated to begin shortly. In conjunction with these developments, plaintiffs attempted to obtain assurances from local police departments and the District Attorney of San Mateo County that the playing of pai gow would not expose them to criminal liability. These efforts were effectively terminated by a letter circulated to law enforcement agencies throughout the state in April by the Attorney General. In this letter the Attorney General stated his conclusion that when pai gow was played as either a "banking or percentage game" it was prohibited by Penal Code section 330.

Action No. 299638 was initiated in August when plaintiff Sullivan filed a complaint for declaratory and injunctive relief. In addition to recounting the above events, plaintiff alleged that the playing of pai gow had already been judicially-determined to be compatible with section 330: plaintiff attached copies of recent superior court orders enjoining law enforcement officials in Los Angeles and Alameda counties from interfering with pai gow playing as specified in the orders. ² Plaintiff further alleged that, despite being informed of these orders, police and the district attorney had advised that arrests would be made and plaintiff's establishment would be closed if pai gow was played.

The matter of plaintiff's application for injunctive relief was submitted on the basis of declarations and argument heard by the trial court at a hearing. On September 16th the court filed an order granting plaintiff a preliminary injunction adopted verbatim from the one issued by the Alameda court. (See fn. 2, ante.)

Action No. 302073 commenced two months later with the filing of another complaint for declaratory and injunctive relief, the allegations of which were substantially similar to those in action No. 299638. The only material difference between the two complaints was that plaintiffs in the later action were able to claim the support not only of the Los Angeles and Alameda orders, but also the injunction issued in action No. 299638 and an order for injunction granted by the superior court of San Joaquin County. ³ Plaintiffs' application for a preliminary injunction was submitted for decision on the basis of declarations. Filed on December 2d was an order for a preliminary injunction which is indistinguishable from that issued in action No. 299638.

Timely notices of appeal from both orders were filed by the district attorney, who is the sole appellant.

Section 330 declares guilty of a misdemeanor "[e]very person who deals, plays, or carries on, opens, or causes to be opened, or who conducts, either as owner or employee, whether for hire or not, any game of faro, monte, roulette, lansquenet, rouge et noire, rondo, tan, fan-tan, stud-horse poker, seven-and-a-half, twenty-one, hokey-pokey, or any banking or percentage game played with cards, dice, or any device, for money, checks, credit, or other representative of value, and every person who plays or bets at or against any of said prohibited games." Section 330 is only one of many state statutes dealing with gambling, which nevertheless leave considerable scope for local regulation because the state has not preempted the field. (In re Hubbard (1964) 62 Cal.2d 119, 125-127, 41 Cal.Rptr. 393, 396 P.2d 809; People v. Mason (1968) 261 Cal.App.2d 348, 350, 68 Cal.Rptr. 17.) No county or city ordinance is involved here; the sole enactment is section 330.

Pai gow is not one of the games specifically mentioned in section 330. The question of its legality or illegality thus depends upon whether it qualifies as either a banking or a percentage game. This is an issue of law. (People v. Carroll (1889) 80 Cal. 153, 157, 22 P. 129; People v. Hardy (1969) 271 Cal.App.2d 322, 327, 76 Cal.Rptr. 557; People v. Ambrose (1953) 122 Cal.App.2d Supp. 966, 969, 265 P.2d 191.)

As originally enacted in 1872, section 330 prohibited "any banking game". An 1885 amendment expanded this to "any banking or percentage game." (Stats.1885, ch. 145, § 1, p. 135.) Banking game has come to have a fixed and accepted meaning: the "house" or "bank" is a participant in the game, taking on all comers, paying all winners, and collecting from all losers. (People v. Carroll, supra, 80 Cal. 153 at pp. 157-158, 22 P. 129; In re Lowrie (1919) 43 Cal.App. 564, 566-567, 185 P. 421; People v. Ambrose, supra, 122 Cal.App.2d Supp. 966 at p. 970, 265 P.2d 191; 38 C.J.S., Gaming, § 1, p. 38-39 (1943).) No comparable definition of what constitutes a percentage game has been developed. Our duty in undertaking this task is to proceed on the assumption that the Legislature's use of disjunctive language was purposeful and in keeping with the ordinary sense of terminology importing separate meanings to the differentiated categories. (See People v. Anderson (1972) 6 Cal.3d 628, 636-637, 100 Cal.Rptr. 152, 493 P.2d 880; Tyson v. Burton (1930) 110 Cal.App. 428, 432, 294 P. 750; 1A Sutherland, Statutory Construction (Sands 4th ed. 1985) § 21.14, pp. 127-128.) As a corollary to the rule requiring significance and useful meaning to be given to each word, construction of section 330 should avoid making any word surplusage. (See J.R. Norton Co. v. Agricultural Labor Relations Bd. (1979) 26 Cal.3d 1, 36-37, 160 Cal.Rptr. 710, 603 P.2d 1306; Merandette v. City and County of San Francisco (1979) 88 Cal.App.3d 105, 113, 151 Cal.Rptr. 580.) With these principles in mind, stating a definition of a percentage game is not difficult.

Section 330 embodies several differing approaches to gambling regulation. Those games specifically mentioned are banned outright. Rather than undertaking numerous piecemeal amendments every time a new game is deemed worthy of prohibition, the Legislature adopted the "banking or percentage game" test as a flexible means of reaching two evils perceived by the Legislature. The first pertains to situations where the house is actually involved in play, its status as the ultimate source and repository of funds dwarfing that of all other participants in the game. This is covered by section 330's prohibition against banking games. The other situation finds the house in a more passive role. Where the house is not directly participating in game play, it can still be involved if it collects a percentage from the game. This percentage may be computed from the amount of bets made, winnings collected, or the amount of money changing hands. The percentage may be assessed collectively or individually. Regardless of the precise formula employed, the house benefits. The house has no interest in the outcome of play, but it is far from disinterested in the amount of play. It is in the enviable position of obtaining profit without incurring risk of loss from the actual play. Its actual participation is nil, thereby distinguishing it from the banking game situation, but it nevertheless gains. In any event, the house derives benefit from commercial gambling, the elimination of which is the legitimate objective of statutes such as section 330. (See Jacques, Inc. v. State Bd. of Equalization (1957) 155 Cal.App.2d 448, 459, 318 P.2d 6; People v. Sullivan (1943) 60 Cal.App.2d 539, 542-543, 141 P.2d 230.)

We construe the language in section 330 referring to percentage game as encompassing any game of chance from which the house collects money calculated as a portion of wagers made or sums won in play, exclusive of charges or fees for use of space and facilities. (See People v. Ambrose, supra, 122 Cal.App.2d Supp. 966 at p. 970, 265 P.2d 191.) This definition comports with the broad sweep of section 330 (see People v. Sam Lung (1886) 70 Cal. 515, 516, 11 P. 673) and with the applicable rules of statutory construction cited previously. Parenthetically, it may be noted that our definition of percentage game accords with that adopted in an analogous context by the state which has the greatest aquaintanceship with commercial gambling. Nevada, for purposes of its taxation statutes, accepts that "[p]ercentage games are ... games where patrons wager against each other and the house takes a percentage of each wager as a 'rake-off.' " (Hughes Properties, Inc. v. State (1984) 100 Nev. 295, 680 P.2d 970, 971.) It must now be decided whether plaintiffs' declarations establish that the manner in which they would permit pai gow to be played is outside of our definition of what constitutes a percentage game.

Plaintiffs in action No. 302073 and numerous amici challenge our definition on several grounds. The former submit that the chapter and section headings indicate that the only conduct prohibited by section 330 is "gaming," which they equate with actual participation in play, something they do not do. Although chapter and section headings are legitimate extrinsic aids in construing ambiguous statutory language (see In re Bandmann (1958) 51 Cal.2d 388, 392, 333 P.2d 339; Barnes v. Jones (1876) 51 Cal. 303, 306; People v. Rocca (1980) 106 Cal.App.3d 685,...