Tomm's Redemption, Inc. v. Hamer

• Decision Date: 10 March 2014
• Docket Number: No. 1–13–1005.,1–13–1005.
• Citation: 2014 IL App (1st) 131005,7 N.E.3d 750,379 Ill.Dec. 912
• Parties: TOMM'S REDEMPTION, INC., Plaintiff–Appellant, v. Brian HAMER, The Department of Revenue, Aaron Jaffe, Lee Gould, Michael Holewinski, Meribeth Vander Weele, and the Illinois Gaming Board, Defendants–Appellees.
• Court: United States Appellate Court of Illinois

2014 IL App (1st) 131005

7 N.E.3d 750

379 Ill.Dec. 912

TOMM'S REDEMPTION, INC., Plaintiff–Appellant,

v.Brian HAMER, The Department of Revenue, Aaron Jaffe, Lee Gould, Michael Holewinski, Meribeth Vander Weele, and the Illinois Gaming Board, Defendants–Appellees.

No. 1–13–1005.

Appellate Court of Illinois, First District, First Division.

March 10, 2014.

George E. Becker, George E. Becker P.C., Chicago, for appellant.

Lisa Madigan, Attorney General, Chicago (Michael A. Scodro, Solicitor General, Timothy M. Maggio, Assistant Attorney General, of counsel), for appellees.

OPINION

Presiding Justice CONNORS delivered the judgment of the court, with opinion.

¶ 1 Plaintiff Tomm's Redemption, Inc., is in the business of providing coin-operated amusement devices to various establishments in the Chicago area. Section 35(a) of the Video Gaming Act (230 ILCS 40/35(a) (West 2010)), however, prohibits the possession or operation of “any device that awards credits and contains a circuit, meter, or switch capable of removing and recording the removal of credits when the award of credits is dependent upon chance.” ¹ Violation of the provision is a Class 4 felony. Claiming that the provision is unconstitutionally vague and a violation of due process, plaintiff filed this lawsuit. The circuit court dismissed the complaint, and we affirm.

¶ 2 Constitutional challenges to statutes can be made in one of two ways. First, a challenge can be “as applied,” in which a plaintiff argues that the statute is unconstitutional under circumstances specific to that plaintiff. In that situation, “the facts surrounding the plaintiff's particular circumstances become relevant.” (Internal quotation marks omitted.) Jackson v. City of Chicago, 2012 IL App (1st) 111044, ¶ 26, 363 Ill.Dec. 351, 975 N.E.2d 153. Alternatively, a plaintiff can raise a “facial” challenge, which is a significantly more difficult route. Unlike an as-applied challenge, “an enactment is invalid on its face only if no set of circumstances exists under which it would be valid.” (Internal quotation marks omitted.) Id. ¶ 25. Importantly, the plaintiff's individual circumstances are irrelevant in the context of a facial challenge. See id. ¶ 27.

¶ 3 A review of plaintiff's complaint demonstrates that plaintiff has raised only a facial challenge to section 35(a). Although plaintiff mentions that it owns coin-operated amusement devices, there are no details about the devices and plaintiff does not seek a determination that the statute is unconstitutional under any particular circumstances. Instead, plaintiff challenges the statute in general. This is an important point because it means that in order to succeed plaintiff bears the “burden of proving that no situation exists in which the ordinance would be valid.” Id. ¶ 30 (citing People v. One 1998 GMC, 2011 IL 110236, ¶ 20, 355 Ill.Dec. 900, 960 N.E.2d 1071).

¶ 4 We review the constitutionality of a statute de novo. See One 1998 GMC, 2011 IL 110236, ¶ 20, 355 Ill.Dec. 900, 960 N.E.2d 1071. In this case, plaintiff argues that section 35(a) is unconstitutional for two reasons.² First, plaintiff contends that the statute is unconstitutionally vague. “A law survives a vagueness challenge so long as it ‘give[s] a person of ordinary intelligence a reasonable opportunity to know what conduct is lawful and what conduct is unlawful’ and ‘convey[s] sufficiently clear standards so as to avoid its arbitrary enforcement.’ ” Nicholson v. Wilson, 2013 IL App (3d) 110517, ¶ 15, 373 Ill.Dec. 288, 993 N.E.2d 594 (quoting People v. Bailey, 167 Ill.2d 210, 228, 230, 212 Ill.Dec. 608, 657 N.E.2d 953 (1995)). “If the plain language of the statute sets forth clearly perceived boundaries, the vagueness challenge fails, and our inquiry ends.” Bartlow v. Costigan, 2014 IL 115152, ¶ 42, ––– Ill.Dec. ––––, –––N.E.3d ––––.

¶ 5 The meaning of the prohibition in section 35(a) is quite clear to any person of reasonable intelligence who is even passingly familiar with the gambling industry: the legislature is referring to devices that contain knockoff switches and retention meters. These two features have a long history in the illegal gambling world and are used to transform ordinary games into gambling devices. The scheme exploits a type of gaming reward called the free replay, which grants the player a free game credit when a certain score is exceeded or other event occurs. For example, this is how the system operates when installed on a pinball machine

“[U]nlike a slot machine, the pinball machine did not directly reimburse the player but did so indirectly through an intermediary, the proprietor, who, in place of the machine, paid the player based upon the number of credits received. Upon ‘cashing-in,’ the proprietor would use the knock-off switch to erase the number of accumulated free games credited. The pinball machine owner then would refund the proprietor based on the replay meter's reading of the number of knocked-off replays. The free replay feature could be manipulated in such a way as to record the number of replays given through a registration meter with a knock-off switch attached to erase the number of accumulated credits. While the amount wagered, as initially limited to one coin, may have seemed nominal, soon multiple coin slots were added to these machines to increase the stakes.” Brian Lester, The Free Replay Feature in Pinball Machines: A Fresh Look at the Elements of Gambling and A Revised Method of Analysis, 41 Brandeis L.J. 297, 308 (2002).

Used in this way, knockoff switches and renewal meters serve as a type of illicit accounting system that transforms gaming devices that do not have a direct-payout system akin to slot machines into gambling devices. See Ronald J. Rychlak, Video Gambling Devices, 37 UCLA L.Rev. 555, 563–65 & n. 48 (1990).

¶ 6 Knockoff switches and renewal meters are not new devices. They have been around since the 1930s and have been prohibited by federal law since at least 1951. See Lester, supra, at 308; Rychlak, supra, at 579; see also United States v. 5 Gambling Devices, 346 F.Supp. 999 (W.D.La.1972) (forfeiture proceedings involving pinball machines that incorporated knockoff switches). They are also not limited to mechanical devices such as pinball machines, but can instead be incorporated into nearly any type of coin-operated gaming device. See Rychlak, supra, at 566 (discussing video gambling machines).

¶ 7 With this context in mind, it is clear that section 35(a) is intended to criminalize the possession of certain kinds of gaming devices that contain a knockoff switch and a retention meter. The legislature did not use those specific terms, but it did not need to. The plain language of the statute prohibits operation or possession of chance-based gaming devices that contain two very specific components. The statute is therefore not unconstitutionally vague.

¶ 8 It is worth noting that plaintiff's chief complaint is not actually about vagueness at all. In fact, plaintiff's briefs demonstrate that it knows exactly what the statute is referring to, which is unsurprising given that it is in the gaming business. Cf. Bartlow, 2014 IL 115152, ¶ 47, –––Ill.Dec. ––––, ––– N.E.3d –––– (observing a similar flaw in the plaintiff's arguments in that case). Instead, plaintiff contends that the statute is vague because “it requires an internal inspection to see into the machine to determine if it has a switch capable of removing all credits and recording removal of the same,” “and requires a determination if a device is played for amusement purposes only.” (Pl.'s Reply Br. at 10.) The problem is that these concerns have nothing to do with vagueness, particularly in the context of a facial challenge to the statute's constitutionality. The only question here is whether the statute is sufficiently definite in its terms that a person of ordinary intelligence can understand what is lawful and that it cannot be arbitrarily enforced. See Nicholson v. Wilson, 2013 IL App (3d) 110517, ¶ 15, 373 Ill.Dec. 288, 993 N.E.2d 594. Any burden imposed by complying with the statute is irrelevant to a vagueness analysis. Cf. Bartlow, 2014 IL 115152, ¶ 49, ––– Ill.Dec. ––––, ––– N.E.3d –––– (noting, in the context of a vagueness challenge, that “[e]ven if [compliance] proves inconvenient for construction contractors, it does not render [the statute] unconstitutionally vague on its face.”)

¶ 9 Plaintiff's second argument is somewhat convoluted, but it is in essence that section 35(a) is a violation of procedural due process. Section 2 of the Coin–Operated Amusement Device and Redemption Machine Tax Act (35 ILCS 510/2 (West 2010)) imposes a yearly privilege tax on owners or lessors of certain gaming devices, payable to the Illinois Department of Revenue. Once the tax is paid, the Department issues a decal that must be displayed on the device. Plaintiff contends that the decals are actually individual licenses to operate the machines, which would mean that plaintiff has a property interest in the license that is subject to procedural due process protections before it can be taken away. According to plaintiff's complaint, section 35 violates procedural due process because it does not provide for a hearing before “any seizure, revocation of license or criminalization of said equipment.” Plaintiff seems to be arguing that the statute unconstitutionally revoked valid licenses to operate coin-operated amusement devices that had been issued before the statute came into effect in July 2012.

¶ 10 The fundamental problem with plaintiff's argument is that in order for procedural due process protections to apply an identifiable property interest must first exist. See Segers v. Industrial Comm'n, 191 Ill.2d 421, 434, 247 Ill.Dec. 433, 732 N.E.2d 488 (2000). While professional licenses and licenses to do business are protected property interests that are subject to due process considerations prior to revocation (see, e.g., Consiglio v. Department of...