United States v. One Bally Sun Valley Pinball Machine
| Decision Date | 28 March 1972 |
| Docket Number | 16959-16963.,Civ. A. No. 16941 |
| Citation | 340 F. Supp. 307 |
| Parties | UNITED STATES of America v. ONE BALLY SUN VALLEY PINBALL MACHINE et al. UNITED STATES of America v. ONE BALLY LAGUNA BEACH PINBALL MACHINE et al. UNITED STATES of America v. ONE BALLY VENICE PINBALL MACHINE et al. UNITED STATES of America v. ONE BALLY CARNIVAL QUEEN PINBALL MACHINE et al. UNITED STATES of America v. ONE BALLY ORIENT PINBALL MACHINE et al. UNITED STATES of America v. ONE BALLY COUNTY FAIR PINBALL MACHINE et al. |
| Court | U.S. District Court — Western District of Louisiana |
Donald E. Walter, U. S. Atty., L. Edwin Greer, Asst. U. S. Atty., Shreveport, La., for the United States.
Reule P. Bourque, Lafayette, La., for all defendants.
The government has petitioned for a new trial or modification of judgment. It is accurately alleged that the court erroneously found that intervenor had no previous knowledge that the taxes had not been paid upon the due dates. There is really no serious factual dispute in these cases and we appreciate that in this type of case the record should be as clear as possible factually in order to obtain a Fifth Circuit ruling squarely on the law.
We have filed an amended opinion herewith eliminating the finding complained of. A review of the record does reveal that in most instances intervenor did know at the time of seizure that the operator had not applied for his license. It was anticipated by intervenor that the operator would wait until he accumulated the money and then pay the penalty.
We agree with the government's appraisal of the Louisiana law and that as a result intervenor's contention that payment would violate his privilege against self-incrimination is totally without merit. But, because the operation of pinball machines, per se, is not illegal in Louisiana, the language of United States v. Coin and Currency, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434, continues to haunt us:
"When the forfeiture statutes are viewed in their entirety, it is manifest that they are intended to impose a penalty only upon those who are significantly involved in a criminal enterprise," 401 U.S. 715 at 721, 91 S. Ct. 1041 at 1045,
and makes it difficult to reconcile forfeiture with "due process" under the facts of these cases.
The motion for a new trial is denied.
AMENDED OPINIONThe United States seized 17 pinball machines located on premises of retail establishments for nonpayment of the federal tax due by the owners of the establishments on coin-operated gaming devices. The seizure was made without any prior notification to the owners that the tax was due, or that seizure would be the penalty for nonpayment.1 The United States now seeks to forfeit the machines for nonpayment of the tax.
The owners complain that payment of the tax would violate their privilege against self-incrimination because such payment would constitute admission of a crime under state law. Additionally, they contend that the seizure, without prior warning or hearing, violates their constitutional right to due process of law. The first contention appears to be without merit; the second is based on firm ground.
The litigants agree that the Louisiana Gambling Device Confiscation Statute expressly excludes "pin ball games" from its operation. The government position as stated in its brief is: "26 U.S. C.A. § 44612 imposes a valid tax on an activity which is both legal and expressly permitted in the State of Louisiana and compliance would not in any way place claimants in danger of prosecution."3 We agree with the government's appraisal of the Louisiana law. That, coupled with the language of United States v. Coin and Currency, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434, makes it difficult to reconcile forfeiture with "due process" under the facts of these cases:
"When the forfeiture statutes are viewed in their entirety, it is manifest that they are intended to impose a penalty only upon those who are significantly involved in a criminal enterprise." 401 U.S. 715 at 721, 91 S. Ct. 1041 at 1045.
The facts are:
1. The seventeen coin-operated devices which are the subject matter are gaming devices within the meaning of the federal statute so as to require the payment of a special tax of $250.00 on each, pursuant to 26 U.S.C.A. § 4461(a) (2).
2. Intervenors are the owners of all the machines. They were not personally liable for the tax imposed. The tax was levied not on the owner, but on the "person who maintains for use or permits the use of, on any place or premises occupied by him."
3. The persons who carried on the business located on the premises described in Actions 16,959, 16,960, 16,961, 16,962 and 16,963 were R. C. Van Hoosen, Henry Boutte, Alice Allemand, James Benoit and Mrs. Leroy Michoud.4
4. Seizures of the machines were effectuated in October 13, 1970. When intervenor became aware of the seizure it contacted Mr. Clifford A. Broussard, Internal Revenue Officer of Lafayette (since 1948), prepared the proper 11-B forms, and paid all taxes due.
5. Intervenor had no previous knowledge of any forfeiture provisions for non-payment. Prior to 1958 the forfeiture provisions were inapplicable to them and U. S. Treasury Department Form B, Revised February, 1967, made no mention of forfeiture.
6. For many years the Internal Revenue people in Lafayette, Louisiana accepted belated payments and no mention was made of forfeiture. Mr. Broussard himself was not aware of the fact that forfeiture could be instituted. (Tr. 41).
7. For several years, intervenor had paid and/or made certain that others paid the taxes due and no effort was ever made to evade.
"SELF-INCRIMINATION"
Intervenor endeavors to bring himself within the rule of Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889; Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L. Ed.2d 906; Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923; and Leary v. United States, 395 U.S. 6, 89 S.Ct. 1532, 23 L.Ed.2d 57, by asserting that the forfeiture is violative of his Fifth Amendment privilege against self-incrimination. The position is untenable for two reasons. First, to prevent the danger of self-incrimination in states where this activity may not be condoned by law, Congress has removed the provisions of federal law that might have resulted in self-incrimination. The Secretary of the Treasury and the Internal Revenue Service are no longer authorized to offer for public inspection a list of the names of the persons paying the tax. The requirement of conspicuous display has been repealed. Second, the litigants agree that the Louisiana Gambling Device Confiscation Statute, LSA-R.S. 15:31 expressly excludes "pinball games" from its operation. The state could successfully prosecute under Louisiana law only if the possessor or owner was engaged in a gambling operation, which in practice means proving actual payoffs. The Government insists that 26 U.S.C.A. § 4461 imposes a valid tax on an activity which is both legal and expressly permitted in Louisiana. We agree with its appraisal of the Louisiana Law. Intervenor's contention that payment of the tax would violate their privilege against self-incrimination because such payment would constitute admission of a crime under state law is totally without merit.
"DUE PROCESS"
Prior to United States v. Coin and Currency (April, 1971) no doubt as to validity of the forfeiture proceedings, even against innocent owners, existed. Goldsmith, Jr.-Grant Co. v. United States, 254 U.S. 505, 41 S.Ct. 189, 65 L. Ed. 376 (1921). Owners of chattels lost consistently, Voglino v. United States, 253 F.2d 794 (4th Cir., 1958); United States v. One Bally County Fair Pinball Machine (W.D.La., 1965), 238 F.Supp. 362.
The cases citing United States v. Coin and Currency reported to date offer little guidance. A number of per curiam reversals speaking in broad language state categorically that the statutory forfeiture proceeding, 26 U.S.C.A. § 7302, is constitutionally impermissible. United States v. One Philco Television (5th Cir., 1971), 443 F.2d 369; United States v. One Olivetti-Underwood Electric Adding Machine (5th Cir., 1971), 443 F.2d 372. Further discussion is found in several recent cases. Cole v. Cardoza (6th Cir., 1971), 441 F.2d 1337, 1340. The taxpayer challenged the constitutionality of the wagering excise tax. While holding the tax constitutional, the Court stated:
United States v. Coin & Currency merely held that the forfeiture provisions of Section 7302 of the Internal Revenue Code violated the self-incrimination clause of the Fifth Amendment. Urban v. United States, 5th Cir., 1971, 445 F.2d 641, 643.
These cases illustrate sharply the changing attitude toward what was once a routine procedure.
In United States v. One Lot of Eighteen Firearms (D.C.N.H., 1971), 325 F. Supp. 1326, a court examined closely the Supreme Court decision. The facts are interesting. Briand purchased a firearm from a sports shop. In doing so, he signed an Internal Revenue form certifying that he was not a felon. Twenty-five years earlier Briand, then 20 years old, had plead guilty to a charge of abetting another in the willful destruction of a car to defraud an insurer. Consequently, he was charged with violating a statute by knowingly making a false statement on the Internal Revenue form to a licensed firearms dealer. After a lengthy hearing before the United States Commissioner, the criminal charge was dismissed, but an action asking for forfeiture of the weapon was commenced under 18 U.S.C.A. § 924(d). Subsequently, the Governor granted a full pardon for the 1944 offense. The Court compared the firearms forfeiture statute with that found in the Internal Revenue laws, 26 U.S.C.A. § 7302. Basing its decision on United States v. Coin and Currency, it observed that forfeiture was a penalty which the pardon was granted to prevent:
"Requiring forfeiture under these facts would not only be unjust, but...
To continue reading
Request your trial
-
United States v. Four (4) Pinball Machines
...91 S.Ct. at 1044-1045 (citations and footnotes omitted). Coin and Currency seemingly was followed in United States v. One Bally Sun Valley Pinball Machine, 340 F.Supp. 307 (W.D.La.1972). The facts in Sun Valley Pinball Machine are similar to the case at hand. The owner of the machine did no......
-
Fell v. Armour
...represents the logical terminus of the trend and the adherence to the proposition stated above. In United States v. One Bally Sun Valley Pinball Machine, 340 F.Supp. 307 (W. D.La.1972), the Court noted that, prior to Coin & Currency, there was no doubt as to the validity of forfeiture proce......
-
United States v. Various Gambling Devices
...United States Coin & Currency, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434 (1971), and the holding of United States v. One Bally Sun Valley Pinball Machine, 340 F.Supp. 307 (W.D. La.1972). Coin & Currency was based on the constitutional privilege against self-incrimination. To avoid forfeit......
-
United States v. Ten Coin-Operated Gaming Devices, Civ. A. No. 71-13-C.
...of the machines is unconstitutional. The strongest support for intervenor's contention appears to be United States v. One Bally Sun Valley Pinball Machine, 340 F.Supp. 307 (W.D.La. 1972). There, as in the instant case, a number of "Bally" type pinball machines were seized from retail establ......