Hope for Families & Community Service, Inc. v. Warren

MEMORANDUM OPINION AND ORDER

W. KEITH WATKINS, District Judge.

Given the complexity of this case and for the reader’s convenience, this opinion is prefaced with the following table of contents.

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I. INTRODUCTION........................................................1086

II. JURISDICTION AND VENUE............................................1088

III. STANDARD OF REVIEW................................................1088

IV. BACKGROUND.........................................................1090

A.

Ratification of Amendment No.

744....................................1090

B.

Parties

.............................................................1090

C.

Sheriff Warren’s Rules and Regulations Governing Bingo in Macon

County............................................................1093

1. Original Rules (December 2003)

...................................1093

2. First Amended Rules (June

2004)..................................1097

3. Second Amended Rules (January

2005).............................1098

4. VictoryLand’s Electronic Bingo

Licenses...........................1100

5. VictoryLand’s and the Charities’

Income...........................1102

6. Lucky Palace’s Pursuit of Class B Bingo Operations in Macon

County........................................................1103

7.

This Lawsuit (December

2006).....................................1106

8. Third Amended Rules (December

2008).............................1107

V. DISCUSSION............................................................1108

A.

RICO (Counts I and II)

..............................................1108

1.

§

1962(c)

— Count I...............................................1108

a. Bribery: Alabama Code § 13A-10-61(a)........................1109

i. Nature of the Theory.....................................1109

ii. Grounds for Summary Judgment..........................1110

iii. Thing of Value, Pecuniary Benefit, and Corrupt Influence.............................................1110

iv. Alabama Bribery Law....................................1112

v. Application .............................................1115

b. Honest Services Mail and Wire Fraud: § 1962(c)................1119

i. Nature of the Theory.....................................1119

ii. Initial Observation: Skilling .............................1120

iii. Grounds for Summary Judgment..........................1122

iv. § 1964(c): RICO Standing................................1123

a. Injury to Business of Property........................1123

b. Proximate Cause ....................................1125

2. § 1962(d)

— Count II..............................................1134

B.

Equal Protection (Counts III and

IV)..................................1134

1. Vice

Activities...................................................1136

2. Facial Challenges to the Second Amended Rules (The First

Category)......................................................1137

a. Rational Basis Review........................................1137

b. Existing Facility Requirement................................1140

c. Numerical Licensing Requirements............................1145

d. Plaintiffs’ Arguments Against Rational Basis Review...........1150

3. Disparate Impact (Second

Category)...............................1153

4. Unequal Administration of a Facially Neutral Statute (Third

Category)......................................................1155

a. Nature of the Theory.........................................1155

b. Analysis......................................................1156

i. Intentional Discrimination...............................1156

(a) E & T Realty and Olech..............................1156

(b) Analysis.............................................1159

ii. Similarly Situated.......................................1162

c. Conclusion ..................................................1167

5. § 1983 Conspiracy to Deny Equal

Protection........................1167

a. Defendants’ Summary Judgment Motion.......................1167

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b. Plaintiffs’ Summary Judgment Motion.........................1168

C.

Issues Particular to Sheriff Warren’s Summary Judgment

Motion........1168

1. Absolute Legislative

Immunity....................................1168

2. Qualified

Immunity..............................................1170

3. Article III

Standing..............................................1170

4. Exhaustion of Administrative

Remedies............................1173

5. Equal Protection Claims and Statute of Limitations: RG Apartments and Greater White

Church...........................1173

a. Count III....................................................1174

b. Count IY....................................................1176

D.

State Law Claims Against Mr. McGregor and VictoryLand

..............1177

1. Tortious Interference with Contractual or Business Relationships (Count

V)......................................................1178

a. Knowledge (Element Two)....................................1178

i. Plaintiffs’ Arguments....................................1178

ii. Defendants’ Arguments..................................1179

iii. Analysis................................................1180

b. Intentional Interference (Element Four).......................1182

c. Summary....................................................1185

2. Tortious Interference with Prospective Business Relationships (Count

VI).....................................................1185

3. Statute of

Limitations............................................1188

4.

Summary........................................................1190

VI. CONCLUSION ..........................................................1190

VII. ORDER.................................................................1192

I. INTRODUCTION

Before 1983, Macon County, Alabama, was primarily known as the home of historic Tuskegee Institute, now Tuskegee University, and its famous founder and first president, Dr. Booker T. Washington. The quiet hamlet began to awaken in 1983 when parimutuel gambling came to Macon County in the form of VictoryLand greyhound racing. Officially named Macon County Greyhound Park, Inc., Victory-Land was and still is run by its president and majority shareholder, Milton McGregor.

In 2003, with dog racing having run its course, so to speak, the Alabama legislature proposed a constitutional amendment allowing “charitable” bingo in Macon County, and a majority of the qualified Macon County voters favored the amendment. Lest the reader deduce that Alabama requires a constitutional amendment for mere games of pleasure such as, say, Monopoly® or canasta, what the Alabama legislature had in mind was charitable bingo gambling. And what others had in mind was electronic bingo gambling, though the word “electronic” does not appear in the amendment.

The constitutional amendment charged the sheriff of Macon County with writing the regulations and with enforcing them.

1

The word “electronic” surfaced in the sheriffs regulations governing bingo in Macon County. The regulations were written and adopted within thirty-one days of the passage of the constitutional amendment, and within thirteen days after that, charitable electronic bingo was licensed by Sheriff Warren at VictoryLand. (According to the regulations, charities have to be licensed first and then contract, if they wish, with an operator of electronic bingo gaming. VictoryLand is a for-profit

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operator of charitable electronic bingo, operating under an operator’s license, for nonprofit organizations that have bingo licenses. The distinction between the operator’s license and the charity bingo license is important.) Since December 2003, VictoryLand has been the only “qualified location” for charitable electronic bingo licensed by the sheriff of Macon County.

It is said that charity begins at home, and by any measure short of the national debt, charitable electronic bingo in Macon County was immediately, and has continued to be, successful for VietoryLand and its investors. It is not surprising, then, that other charitable-minded business people noticed an opportunity. In 2004, with some Macon County charities in tow, Lucky Palace, Inc., formed by its president Paul Bracy after the passage of the constitutional amendment, began a conversation with Sheriff Warren about licensing another electronic bingo operation in Macon County in competition with VietoryLand. Soon thereafter, in June 2004, Sheriff Warren amended the regulations, making the licensing of electronic bingo a bit more challenging.

Nevertheless, Lucky Palace continued its planning and stayed in touch with Sheriff Warren. After charitable electronic bingo drew the attention of the public and the Attorney General of Alabama, the Attorney General conducted a road trip investigation of electronic bingo and issued a written news release on the topic in late 2004. Sheriff Warren articulated the findings in that news release as the reason he amended the regulations again, on January 1, 2005, this time to redefine “bingo” and to limit the number of available charity licenses for electronic bingo in Macon County.

Lucky Palace filed an application for an operator’s license with Sheriff Warren in November 2004, which was denied in January 2005. The reason given for the denial was that Lucky Palace did not have a “qualified location” for electronic bingo in Macon County. By “qualified location” the sheriff meant a completed facility ready to inspect. The charities which had aligned with Lucky Palace filed an application for their licenses in July 2005; Sheriff Warren denied their applications on the same basis, that there was no “qualified location.” To date, no Plaintiff has received a license from Sheriff Warren.

In an attempt to cover its bets, and considering that the regulations had been amended twice in thirteen months, Lucky Palace took a political detour in 2006 and tried to defeat Sheriff Warren in his reelection bid. Sheriff Warren took Lucky Palace to the woodshed, winning an overwhelming reelection victory. Lucky Palace and its charities, having not been so lucky, turned to the courts for relief. That is this case, which is against Sheriff Warren, VietoryLand and Mr. McGregor.

As it turns out, Sheriff Warren had considerable help drafting the bingo regulations and subsequent amendments. After a conversation with Mr. McGregor within a week or so of the passage of the constitutional amendment, Sheriff Warren called his own lawyer to help with drafting the regulations. That lawyer is the son and law partner of the lawyer who has represented VietoryLand and has been a minority shareholder in VietoryLand since its founding in 1983. Mr. McGregor offered the services of other attorneys retained by him or VietoryLand, an offer Sheriff Warren’s attorney accepted.

Because VietoryLand attorneys had a hand in drafting the regulations adopted by the sheriff, Lucky Palace and its charities allege that VietoryLand corruptly influenced Sheriff Warren’s lawyer to draft and recommend regulations and amendments thereto, by bribery, loss of honest services, and conspiracy to do the same, all

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in violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968 , and to the damage of Plaintiffs. (None of the involved attorneys is a party to this suit, however.) Moreover, Plaintiffs allege violations of their right to equal protection under the United States Constitution through 42 U.S.C. § 1983 in what they claim is unequal treatment by Sheriff Warren and his regulations, and the conspiracy of all Defendants to violate the Constitution to the detriment of Plaintiffs.

2

Finally, Plaintiffs contend Alabama law has been violated by Mr. McGregor’s and VictoryLand’s unlawful interference with business and contractual relations between Lucky Palace and its charities, and with unnamed future patrons of a proposed Lucky Palace charitable electronic bingo operation. Plaintiffs seek money damages and injunctive relief.

These claims are before the court on motions for summary judgment. Presently pending are: (1) One motion filed by Mr. McGregor and VictoryLand (Doc. # 421); (2) six motions filed by Sheriff Warren (Docs. # 423, 425, 427, 429, 431, 433); (3) and one motion filed by Plaintiffs (Doc. # 445).

3

The motions have been fully briefed, and are ready for adjudication.

II. JURISDICTION AND VENUE

The parties do not dispute subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367; nor do the parties contest personal jurisdiction or venue. There are adequate allegations in support of each.

III. STANDARD OF REVIEW

“Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”

Greenberg v. BellSouth Telecomms., Inc.,

498 F.3d 1258, 1263 (11th Cir.2007)

(per

curiam) (citation and internal quotation marks omitted); Fed.R.Civ.P. 56(c) (Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.”). The party moving for summary judgment “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record, including pleadings, discovery materials and affidavits], which it believes demonstrate the absence of a genuine issue of material fact.”

Celotex Corp. v. Catrett,

477 U.S. 317, 323 , 106 S.Ct. 2548 , 91 L.Ed.2d 265 (1986). The movant may meet this burden by presenting evidence indicating there is no dispute of material fact or by showing that the non-moving party has failed to present evidence in support of some element of its case on which it bears the ultimate burden of proof.

Id.

at 322-24 , 106 S.Ct. 2548 .

If the movant meets its evidentiary burden, the burden shifts to the nonmoving party to establish, with evidence beyond the pleadings, that a genuine issue material to each of its claims for relief exists. Fed.R.Civ.P. 56(e)(2);

Clark v. Coats & Clark, Inc.,

929 F.2d 604, 608 (11th Cir.1991). What is material is determined by the substantive law applicable to the case.

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Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 248 , 106 S.Ct. 2505 , 91 L.Ed.2d 202 (1986);

see also Lofton v. Sec’y of the Dep’t of Children & Family Servs.,

358 F.3d 804, 809 (11th Cir.2004) (“Only factual disputes that are material under the substantive law governing the case will preclude entry of summary judgment.”). Furthermore, “[t]he mere existence of some factual dispute will not defeat summary judgment unless that factual dispute is material to an issue affecting the outcome of the case.”

McCormick v. City of Fort Lauderdale,

333 F.3d 1234, 1243 (11th Cir.2003)

(per curiam)

(citation and internal quotation marks omitted).

A genuine issue of material fact exists when the nonmoving party produces evidence that would allow a reasonable fact-finder to return a verdict in its favor.

Greenberg,

498 F.3d at 1263 ;

Waddell v. Valley Forge Dental Assocs.,

276 F.3d 1275, 1279 (11 th Cir.2001). However, if the evidence on which the nonmoving party relies “is merely colorable, or is not significantly probative, summary judgment may be granted.”

Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 249-50 , 106 S.Ct. 2505 , 91 L.Ed.2d 202 (1986) (citations omitted). “A mere ‘scintilla’ of evidence supporting the [nonmovant’s] position will not suffice; there must be enough of a showing that the [trier of fact] could reasonably find for that party,”

Walker v. Darby,

911 F.2d 1573, 1577 (11th Cir.1990), and the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts,”

Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,

475 U.S. 574, 586 , 106 S.Ct. 1348 , 89 L.Ed.2d 538 (1986). Conclusory allegations based on subjective beliefs are likewise insufficient to create a genuine issue of material fact and do not suffice to oppose a motion for summary judgment.

Holifield v. Reno,

115 F.3d 1555 , 1564 n. 6 (11th Cir.1997)

(per curiam)

(A plaintiffs “conclusory assertions ... in the absence of supporting evidence, are insufficient to withstand summary judgment.”). Hence, when a plaintiff fails to set forth specific facts supported by appropriate evidence sufficient to establish the existence of an element essential to his case and on which the plaintiff will bear the burden of proof at trial, summary judgment is due to be granted in favor of the moving party.

Celotex Corp., All

U. S. at 323, 106 S.Ct. 2548 (“[F]ailure of proof concerning an essential element of the nonmoving party’s case necessarily renders all other facts immaterial.”).

Thus, in cases where the evidence before the court is admissible on its face or can be reduced to admissible form and indicates there is no genuine issue of material fact, and where the party moving for summary judgment is entitled to it as a matter of law, summary judgment is proper.

Celotex Corp., All

U. S. at 323-24, 106 S.Ct. 2548 (summary judgment appropriate where pleadings, evidentiary materials and affidavits before the court show there is no genuine issue as to a requisite material fact).

The standard of review is unaffected by the filing of cross-motions for summary judgment.

See Gerling Global Reinsurance Corp. of Am. v. Gallagher,

267 F.3d 1228, 1233 (11th Cir.2001);

see also Monumental Paving & Excavating, Inc. v. Pa. Mfrs.

’

Ass’n Ins. Co.,

176 F.3d 794, 797 (4th Cir.1999) (“When considering motions from both parties for summary judgment, the court applies the same standard of review and so may not resolve genuine issues of material fact. Instead, [it must] consider and rule upon each party’s motion separately and determine whether summary judgment is appropriate as to each under the Rule 56 standard.” (citations omitted)).

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IV. BACKGROUND

A.

Ratification of Amendment No. 744

On November 4, 2003, in a referendum, a majority of the qualified electors in Macon County, Alabama, approved a proposed constitutional amendment, which became Amendment No. 744 to the Alabama Constitution.

See

Ala. Const. 1901 amend. No. 744;

see also

Ala. Const. 1901 Art. XVIII § 284.01 (Recomp.) (Amend. No. 425

&

Amend. No. 555).

4

Amendment No. 744

5

makes it legal for nonprofit organizations to operate bingo in Macon County and requires the sheriff to promulgate rules and regulations governing licensing and operation of the county’s bingo games.

6

B.

Parties

Defendant Macon County Greyhound Park, Inc., which does business as Victory-Land (“VietoryLand”), currently operates the only electronic bingo facility in Macon County, Alabama.

7

VietoryLand was incorporated in 1983 for the purpose of conducting parimutuel wagering in Macon County.

8

Defendant Milton McGregor

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(“McGregor”) is VictoryLand’s president and majority shareholder. (McGregor Dep. 66-67 (Ex. 3 to Doc. # 443 & Ex. I to Doc. #446).) VictoryLand operates electronic bingo under the rules and regulations as implemented, amended, and enforced by Defendant David Warren (“Sheriff Warren”). In November 2003, and at all relevant times to this litigation, Warren was the sheriff of Macon County.

Plaintiff Lucky Palace, LLC (“Lucky Palace”), also desires to conduct electronic bingo operations in Macon County, but, as detailed later, Sheriff Warren’s rules, as amended, have been applied so as to preclude it from doing so. In a nutshell, the current form of the rules requires Class B Bingo Licenses for electronic bingo to be issued only to nonprofit organizations, which in turn can contract with an operator to run electronic bingo gaming. However, “[a]t no time shall there be issued and outstanding more than sixty (60) Class B Licenses for the operation of bingo in Macon County.” (2d Am. Rules § 2.) Victory-Land operates electronic bingo at its greyhound racing facility for sixty nonprofit organizations that are Class B Bingo License-holders, meaning that no more Class B Bingo Licenses are available in Macon County (until an incumbent licensee surrenders it license or a licensee loses its license).

9

(Warren Dep. 113 (Ex. 8 to Doc. # 443 & Ex. M to Doc. # 446).)

Presently joined with Lucky Palace as plaintiffs in this lawsuit are fifteen Macon County nonprofit organizations (“Plaintiff Charities”) that have contracted with Lucky Palace to conduct electronic bingo at a presently undeveloped location in Macon County. The Plaintiff Charities are: (1) Hope for Families & Community Services, Inc.; (2) Beulah Missionary Baptist Church; (3) E.D. Nixon Apartments, Inc.; (4) Greater White Church; (5) McRae Prostate Cancer Awareness Foundation; (6) Milstead Community Center, Inc.; (7) New Elam Missionary Baptist Church; (8) RG Apartments, Inc.; (9) Shorter Community Development, Inc.; (10) Shorter Lodge # 533; (11) Shorter Volunteer Fire Department; (12) Sweet Gum AME Zion Church; (13) Tabernacle Baptist Church; (14) Tubman Gardens, Inc.; and (15) Tuskegee Macon County Community Foundation, Inc. (6th Am. Compl. (Doc. # 342).)

The operative complaint, which is the Sixth Amended Complaint, also implicates three “relevant non-parties.” (6th Am. Compl. ¶¶ 25-27.) They are: (1) the law firm of Gray, Langford, Sapp, McGowan, Gray, Gray

&

Nathanson, P.C. (“Gray Law Firm”), an Alabama professional corporation; (2) Fred D. Gray Sr. (“Gray Sr.”), who is Mr. Gray Jr.’s father, and who is an attorney and the majority owner of the Gray Law Firm (Gray Sr. Dep. 25-26, 233 (Ex. 14 to Doc. #443

&

Ex. F to Doc. # 446)); and (3) Fred D. Gray Jr. (“Gray Jr.”), who, as an associate in the Gray Law Firm,

10

represented Sheriff Warren in drafting the bingo rules and regulations and certain amendments to those rules.

(See generally

Gray Jr. Dep. (Ex. 13 to Doc. # 443 & Ex. G to Doc. # 446).)

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The Gray Law Firm has performed legal work for VictoryLand since 1983, but does not represent VictoryLand in this lawsuit. (McGregor Aff. ¶ 10 (Ex. 39 to Doc. # 441); Gray Sr. Aff. 1, 3 (Ex. 2 to Doc. # 445).) Since 1984, VictoryLand has paid the Gray Law Firm a quarterly retainer, and the amount of the retainer has not changed. (McGregor Aff. ¶ 11; Gray Sr. Dep. at 54-55 (Ex. 14 to Doc. # 443).) The Gray Law Firm also has received other payments from VictoryLand for legal representation in litigation and other matters. (VictoryLand Receipts, FGJ0174, FGJ0217, FGJ0220-21 (Ex. 4 to Doc. # 445); Gray Sr. Dep. 47; McGregor Dep. 77, 84.)

11

Mr. Gray Sr. has represented VictoryLand on non-bingo legal matters continuously since 1983. (Gray Sr. Aff. 1-2; McGregor Dep. 198.) Mr. Gray Sr. and Stanley Gray are the primary attorneys in the Gray Law Firm who have represented VictoryLand.

12

(Gray Sr. Aff. 3; Gray Sr. Dep. 62.) Mr. Gray Sr. typically determines which lawyers work on which VictoryLand matters.

13

(Gray Sr. Aff. 3)

In addition to being a shareholder of the Gray Law Firm, Mr. Gray Sr. also has been a minority shareholder in Victory-Land since 1983, and has received dividend payments as a VictoryLand shareholder based upon an ownership percentage that has never changed.

14

(Gray Sr. Aff. 1-2.) He has received regular shareholder dividends from VictoryLand based on his ownership interest in the company. (McGregor Aff. ¶¶ 13, 16-17; Gray Sr. Dep. 47.)

Mr. Gray Jr. “ha[s] been [Sheriff Warren’s] attorney for years” (Warren Dep. 50-51 (Ex. 8 to Doc. #443 & Ex. M to Doc. # 446); Gray Jr. Dep. 57), and in that capacity, rendered legal advice regarding all versions of the bingo rules promulgated by Sheriff Warren.

15

(Gray Sr. Aff. 2;

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Warren Dep. 52-55, 69-70.)

C.

Sheriff Warren’s Rules and Regulations Governing Bingo in Macon County

At the core of this litigation are the rules promulgated by Sheriff Warren pursuant to the authority vested in him by Amendment No. 744.

See

Ala. Const.1901 amend. No. 744 (“The sheriff shall promulgate rules and regulations for the licensing and operation of bingo games within the county.”). The Original Rules have been amended three times, pursuant to a section in all versions of the Rules that “reserves” the sheriffs “right to amend” them “from time to time as necessary.”

(See

Original Rules, effective Dec. 5, 2003 (Ex. A to Doc. # 342); 1st Am. & Restated Rules & Regulations for the Licensing & Operation of Bingo Games in Macon County, Alabama, effective June 2, 2004 (Ex. B to Doc. # 342); 2d Am. & Restated Rules & Regulations for the Licensing & Operation of Bingo Games in Macon County, Alabama, effective Jan. 1, 2005 (Ex. C to Doc. # 342); 3d Am. & Restated Rules & Regulations for the Licensing & Operation of Bingo Games in Macon County, Alabama, effective Dec. 15, 2008 (Ex. D to Doc. # 342).)

16

1. Original Rules (December 2003)

Sheriff Warren adopted the Original Rules thirty-one days after the passage of Amendment No. 744. In summary, two types of bingo licenses are authorized by the Original Rules: Class A Bingo Licenses (paper bingo) and Class B Bingo Licenses (electronic bingo).

17

(See, e.g.,

Original Rules §§ 1(g), (h) & 4.) Nonprofit organizations are permitted to operate bingo games, but must have a license from the sheriff of Macon County to do so.

18

To obtain a Class B Bingo License, a nonprofit organization must complete an application and submit it to the sheriff for approval or denial. The holder of a Class B Bingo License can conduct electronic bingo games only at a “qualified location,” which has been “inspected and approved by the sheriff’ and for which “satisfactory evidence” of specified criteria has been demonstrated. A nonprofit organization can contract with another entity to operate electronic bingo games on its behalf at a “qualified location.” Here is how the Original Rules came to be.

Within a week of voter approval of Amendment No. 744, and after a telephone call from Mr. McGregor, Sheriff Warren sought assistance from Mr. Gray Jr. in drafting the Rules for electronic bingo in Macon County. (Warren Dep. 50-51; Gray Jr. Dep. 57.) At that time, Mr. Gray Jr. was an associate, not a shareholder, in the Gray Law Firm.

19

(Gray Sr. Dep. 185.)

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Sheriff Warren “did not care if Mr. Gray [Jr.] discussed [the bingo Rules] with [third parties, including VictoryLand’s agents and Mr. Gray Sr.] in accomplishing what [he] had asked [Mr. Gray Jr.] to do.” (Warren Dep. 170, 177-78, 219.) Sheriff Warren testified that Mr. Gray Jr. could consult others during the rule-drafting process because he trusted Mr. Gray Jr. “to act in the best interest of the citizens of Macon County [and] in [Sheriff Warren’s] best interest.” (Warren Dep. 162.) Sheriff Warren also testified that, during the drafting process and at the time of his deposition, he did not know to whom Mr. Gray Jr. spoke or from whom he received input during the drafting process. (Warren Dep. 178-79.)

Within days of the passage of Amendment No. 744, Mr. McGregor contacted Sheriff Warren to request a meeting. (Warren Dep. 81.) Sheriff Warren and Mr. McGregor scheduled the meeting to be held on or about November 11, 2003. (Warren Dep. 78; Warren Answer to 6th Am. Compl. ¶33 (Doc. #358).) Sheriff Warren believed that the purpose of the meeting would be to discuss gaming, and he invited his attorney, Mr. Gray Jr., to attend. (Warren Dep. 81-84; Gray Jr. Dep. 99-100.) Mr. Gray Jr., Sheriff Warren and Mr. McGregor met at the law offices of the Gray Law Firm. (Warren Dep. 80-81, 86-87; Gray Jr. Dep. 98-100; McGregor Answer to 6th Am. Compl. ¶ 33 (Doc. # 356); Warren Answer to 6th Am. Compl. ¶ 94.) The meeting lasted about twenty minutes. (Gray Jr. Dep. 104.) The “gist” of what Mr. McGregor conveyed during that meeting was that he had “an interest in gaming” (Warren Dep. 91, 95) and, in particular, “in bingo in Macon County,” given that the referendum had passed (Gray Jr. Dep. 104).

Another topic discussed among Mr. McGregor, Mr. Gray Jr. and Sheriff Warren was the fact that Amendment No. 744 “didn’t give a lot of guidance” concerning the promulgation of the rules for which Sheriff Warren was responsible. (Gray Jr. Dep. 104-05.) Mr. McGregor informed Sheriff Warren that he (Mr. McGregor) “knew of a lawyer ... who would get in touch with [Mr. Gray Jr.] and render any kind of support” needed. (Gray Jr. Dep. 105.) That lawyer was John Bolton (Gray Jr. Dep. 96, 105),

20

and Mr. Gray Jr. left that meeting with the distinct “feeling” that Mr. Bolton would be contacting him. (Mr. Gray Jr. Dep. 105.) That intuition proved correct. Beginning with this November 11 meeting between the regulator (Sheriff Warren) and the soon-to-be regulated (VictoryLand/Mr. McGregor), Sheriff Warren, through his counsel Mr. Gray Jr., involved VictoryLand or its counsel in every phase of the drafting process, until the Original Rules were adopted on December 5, 2003.

As promised, Mr. Bolton contacted Mr. Gray Jr. “within two weeks of the referendum passing.” (Gray Jr. Dep. 96-97; Bolton Dep. 39-40 (Ex. 11 to Doc. #443 & Ex. B to Doc. #446).) Mr. Bolton testified that, during his initial conversation with Mr. Gray Jr., he does not “recall” telling Mr. Gray Jr. that he represented Mr. McGregor. Mr. Bolton, however, “understood” that Mr. Gray Jr. represented Sheriff Warren. “I believe he understood that I represented [VictoryLand]. I can’t tell you ... that I recall ... specifically telling Mr. Gray [Jr.] that or him specifically telling me who he represented.” (Bolton Dep. 54.) Similarly, Mr. Gray Jr. “understood” that Mr. Bolton’s client was either VictoryLand or Mr. McGregor.

*1095

(Gray Jr. Dep. 118;

see also

Gray Jr. Dep. 105.)

During that initial conversation, Mr. Gray Jr. told Mr. Bolton that he planned to issue bingo regulations; that he had obtained a copy of the Montgomery County bingo regulations and planned to use them as a model; that he planned to impose some financial or other standards for bingo operators; and that he was considering imposing either a square footage requirement or an investment requirement for bingo operators in Macon County. (Bolton Dep. 42-43.) Mr. Bolton offered his assistance in drafting the Rules. (Bolton Dep. 51-53.) He told Mr. Gray Jr. that he “had worked on a case involving the Montgomery County regulations” and “offered to take a first cut at a draft of the regulations” using the Montgomery County Rules as a “model.” (Bolton Dep. 52-53, 63, 80.) Mr. Gray Jr. accepted Mr. Bolton’s offer, and within approximately one week, Mr. Bolton submitted a draft set of rules to Mr. Gray Jr. (Bolton Dep. 53, 63, 72, 85, 119; Draft Rules, MCGP(JMB) 002188 (Ex. 5 to Doc. #445).) For this work and all related work on the Macon County bingo Rules, Mr. Bolton was paid by VictoryLand. (Bolton Dep. 26.)

Following the initial submission of draft rules, there were several communications between Mr. Gray Jr. and Mr. Bolton, and the two exchanged by email annotated drafts of Mr. Bolton’s initial draft of rules.

21

(Bolton Dep. 78-79, 85-88; McGregor Answer to 6th Am. Compl. ¶ 36 (Doc. # 356).) On November 26, 2003, an email was sent from Mr. Bolton’s assistant to Mr. Gray Jr. and others, with the message, “Please see attached. Macon Co. Bingo Regulations.” (Emails, FGJ0226-227 (Ex. 5 to Doc. # 445).) Mr. Bolton, Mr. Gray Jr., George David Johnston (“Johnston”),

22

Sheriff Warren and Mr. McGregor met at the Gray Law Firm sometime before Thanksgiving 2003. (Bolton Dep. 90; Johnston Dep. 21 (Ex. 15 to Doc. # 443; Ex. H to Doc. # 446).) During the meeting, which lasted fifteen to twenty minutes, the parties discussed the then-current draft of the Rules. (Bolton Dep. 95-97; Johnston Dep. 22-24.) They did not discuss potential conflicts of interest.

23

(Gray Jr. Dep. 110-11; Bolton Dep. 110.)

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Mr. Gray Jr. “did not think there was any conflict” concerning his representation of Sheriff Warren related to drafting bingo Rules while the Gray Law Firm and Mr. Gray Sr. continued to represent Victory-Land on non-bingo matters, and while Mr. Gray Sr. maintained a minority shareholder interest in VictoryLand. (Gray Jr. Dep. 87-88;

see also

Warren Dep. 28-29.) In short, Mr. Gray Jr. did not perceive, anticipate or consider any conflicts regarding his representation of Sheriff Warren. (Gray Jr. Dep. 87-88, 177.) Mr. Gray Jr. already represented Sheriff Warren on other matters when he was retained with respect to the Rules. (Gray Jr. Dep. 86.) The Gray Law Firm does not have a written process for checking conflicts. (Gray Jr. Dep. 39-41; Gray Sr. Dep. 207-08.) It does, however, check for conflicts. (Gray Jr. Dep. 40.)

Moreover, Sheriff Warren was aware of the Gray Law Firm’s ties to and representation of VictoryLand. (Warren Dep. 179-80.) Sheriff Warren also knew that Mr. Gray Sr. had an “affiliation with” Victory-Land, but he did not know the “extent” of that affiliation. (Warren Dep. 179-80.) Additionally, Mr. Gray Sr. testified that Sheriff Warren was “fully aware” not only that the Gray Law Firm represented VictoryLand, but also that Mr. Gray Sr. was a shareholder in VictoryLand. (Gray Sr. Dep. 92-93, 97, 99,104-05,110.)

Mr. Gray Jr., Sheriff Warren, Mr. McGregor and Mr. Bolton reconvened at a later date, but this time in Mr. McGregor’s office in Montgomery, Alabama.

24

(Bolton Dep. 121-22.) They discussed bingo “regulations in general” at that meeting. (Bolton Dep. 125.)

On December 3, 2003, Mr. Bolton’s assistant sent an email to Mr. Gray Jr., with a message, “Please see attached. Macon Co. Bingo Regulations.” (Email, FGJ0231; MCGP(JMB)002201-2213 (Ex. 5 to Doc. #445).) On December 5, 2003, Mr. Gray Jr. sent an email to Linda Pittman (Mr. McGregor’s secretary,

see

McGregor Dep. 323), Mr. Johnston and Beth Herrington (Mr. Johnston’s assistant) and attached a revised draft of the bingo rules. (Email, MCGP(GDJ)0020992111 (Ex. 5 to Doc. # 445).) Mr. Gray Jr. asked the recipients to “[c]all upon review.” (Email, FGJ0226 (Ex. 5 to Doc. # 445).) In the email, Mr. Gray Jr. noted that his “client” (Sheriff Warren) had not reviewed the attached draft. (Email, FGJ0226 (Ex. 5 to Doc. # 445).) Mr. Gray Jr. emailed two more drafts on the same day to the same VictoryLand recipients, the last with the notation, “This is the draft that is currently being reviewed. READ CAREFULLY.” (Email, MCGP(GDJ)002126-2146 (Ex. 5 to Doc. # 445).)

Mr. Gray Jr. and Sheriff Warren reviewed the Original Rules together, maybe not “every word,” but “every section.” (Warren Dep. 196.) During the editing process, Sheriff Warren made some changes to the draft rules. (Gray Jr. Dep. 123-24, 128-29, 138-39, 207-10; Bolton Dep. 86-88, 107, 141-43.) No evidence, however, has been cited as to what those changes were. (Bolton Dep. 106-08 (testifying that edits were made to his proposals, but that he (Mr. Bolton) did not have a record of those edits).) According to Mr. Bolton, Sheriff Warren also “intended to have an investment requirement ... [, and Mr. Bolton] drafted some proposed language.” (Bolton Dep. 100.) Sheriff Warren, however, testified as follows:

And the rules and what Mr. Gray [Jr.] and I came up with was what I wanted. I used my discretion on the information

*1097

that he brought to me. I exercised what judgment I could, given my knowledge of this issue, which was — which I used as best I could and the rules and regulations that I came up with, I approved and intended that they govern this activity.

(Warren Dep. 159-60.) Sheriff Warren also testified that “[w]hat Mr. Gray [Jr.] came up with, we discussed. I used my discretion. I approved what I wanted to approve and the rules that are adopted are the rules that were adopted by the Macon County sheriff.” (Warren Dep. 157.)

Sheriff Warren signed the Original Rules on December 5, 2003.

25

(Gray Jr. Dep. 127-28.) They were adopted without public hearing, comment or other public notice or involvement. As of December 5, 2003, “VictoryLand met the requirements set forth in the [Original Rules]” and “was the only qualified location in Macon County.” (Warren Dep. 146^17; Original Rules § l(j) (defining “qualified location”).)

On December 16, 2003, Mr. McGregor signed a sworn Operator’s Certificate. The Operator’s Certificate contained information relevant to Mr. McGregor’s position that VictoryLand was a “qualified location” within the meaning of the Original Rules. (Operator’s Certificate (Ex. 10 to Doc. # 445); Warren Aff. ¶ 11 (Ex. 38 to Doc. # 441).) On December 18, 2003, Sheriff Warren issued VictoryLand a Class B “Bingo Operator’s License.”

26

(Victory-Land Bingo Operator’s License (Ex. 12 to Doc. #445).) By the end of December 2003, VictoryLand had gross receipts from electronic bingo of $586,867, with gross profits of $408,481. (VictoryLand’s Independent Auditor’s Report; VictoryLand’s 2d Suppl. Resp. to Lucky Palace Interrog. No. 9.)

2. First Amended Rules (June 2004)

On June 2, 2004, approximately six months after adopting the Original Rules, Sheriff Warren amended them, again without public notice, comment or input.

27

*1098

(Warren Dep. 147; 1 st Am. Rules.) VictoryLand’s attorneys were involved again in the rule-making process. Proposals for the amendments originated from Mr. Bolton by email. (Gray Jr. Dep. 179; Email, MCGP(JMB)002214-29 (Ex. 6 to Doc. # 445).) Mr. Gray Jr. made handwritten notes on the draft that Mr. Bolton emailed him. (Draft 1 st Am. Rules (Ex. 6 to Doc. # 445, FGS0054-64); Gray Jr. Dep. 185-90.) On June 2, 2004, Mr. Gray Jr. faxed a copy of the First Amended Rules to Mr. McGregor, Mr. Bolton and Mr. Johnston. (Fax Transmission Cover Sheet and attachment (Ex. 15 to Doc. # 445).)

The First Amended Rules implemented amendments that (1) clarified that a nonprofit organization must be “active and in good standing,” § 1(d); (2) increased the capital investment requirement of a qualified location from $5 million to $15 million, § l(j); (3) required that “[n]o Class B Licensee shall be authorized to operate bingo at any qualified location, as defined herein, unless a minimum of fifteen (15) applicants shall first obtain Class B Licenses for such location,” § 2; (4) increased the Operator’s License Fee from $40,000 to $250,000, § 4(a); (5) increased the single prize limitation from $1 million to $20 million, § 9(f); and (6) added a provision regarding transportation of bingo equipment, § 15. The First Amended Rules also contained a Commentary, setting forth reasons for the amendments. For example, the Commentary set forth the following reason for § l(j)’s amendment for raising the capital investment requirement:

The capital investment amount required for a “qualified location” for the holder of a Class B License is hereby increased to $15,000,000 and limited to actual cost in order to require any qualified location to prove a significant investment and financial commitment to Macon County prior to becoming a “qualified location.” Further, the capital investment requirement is restricted to actual cost, not based on any valuation, in order to avoid potential dispute or abuse based on any real estate appraisal submitted with an application.

(1st Am. Rules, Commentary, § l(j).) The Commentary also provided that § 2, imposing a fifteen-license Class B Bingo License minimum, was added

to maximize economic benefits to numerous nonprofit organizations in Macon County and to further avoid the potential abuse of a third party individual or business entity from using one nonprofit organization (or a minimal number) as a “front” to operate bingo games under a Class B License.... By requiring at least fifteen (15) nonprofit organizations to obtain Class B Licenses prior to authorizing such a bingo operation at a qualified location, assurance is provided that a large representative group of charities is afforded the opportunity to obtain the economic benefits associated with a Class B License.

(1st Am. Rules, Commentary, § 2.)

3. Second Amended Rules (January 2005)

On December 1, 2004, Alabama Attorney General Troy King concluded a six-month long review of gambling in Alabama and published a news release containing his “findings” from that review. Those findings defined requirements for legal bingo video machines. (King Press Release, Dec. 1, 2004 (Ex. 42 to Doc. #441).) Sheriff Warren testified that, based on those findings, he instructed Mr. Gray Jr.

*1099

to draft the Second Amended Rules. (Warren Dep. 182.) Continuing a familiar pattern, Mr. Bolton sent Mr. Gray Jr. a draft of the Second Amended Rules, with proposed amendments. (Mr. Gray Jr. Dep. 179-81; Bolton Dep. 201-02.) On January 6, 2005, Sheriff Warren signed the Second Amended Rules, with an effective date of January 1, 2005. (Warren Dep. 147; 2d Am. Rules.) According to Defendants, the Second Amended Rules were published in

The Tuskegee News

on December 30, 2004. (Doc. # 440, at 16 (citing Ex. 161).

28

)

Of primary relevance, the Second Amended Rules capped the total number of Class B Bingo Licenses available in Macon County at sixty, as set out in § 2:

No Class B Licensee shall be authorized to operate bingo at any qualified location, as defined herein, unless a minimum of fifteen (15) applicants shall first obtain Class B Licenses for such location.....At no time shall there be issued and outstanding more than sixty (60) Class B Licenses for the operation of bingo in Macon County.

(2d Am. Rules § 2.) Mr. Gray Jr. communicated to Mr. Bolton the idea of a limit on the number of charities that could participate in electronic bingo. (Bolton Dep. 202-03.) Sheriff Warren limited that number to sixty. (Warren Dep. 150.) The Second Amended Rules also modified § 4 to permit Class B Bingo Licenses to be valid for five years, rather than one year. (2d Am. Rules § 4.) The Commentary to the Second Amended Rules provided, in part:

The Attorney General for the State of Alabama has recently conducted an exhaustive investigation and review of gaming activities in the State of Alabama, including but not limited to, bingo games conducted in Macon County, Alabama, pursuant to Amendment No. 744 of the Constitution of Alabama. In response to the Attorney General’s recent findings and pronouncements, the First Amended and Restated Rules and Regulations For the Licensing and Operation of Bingo Games in Macon County (the “Macon County Bingo Regulations”) are hereby amended and restated to comport and comply with the Attorney General’s definition of bingo games and policy to limit Class B bingo gaming activities in Macon County, Alabama, at a reasonable level whereby the Sheriff can more adequately and effectively regulate and enforce the proper conduct of such bingo games. Accordingly, the following changes have been made to the Macon County Bingo Regulations.

Section 2: A new sentence has been added to the end of Section 2 to limit the number of Class B Licenses that may be issued in order to follow the policy of the Attorney General to limit Class B bingo gaming activities in Macon County, Alabama, and to allow the Sheriff to more effectively regulate and enforce the proper conduct of such bingo games.

(2d Am. Rules, Commentary.)

Sheriff Warren testified that “[t]he attorney general never publicly stated that he wanted to limit gaming in Macon County.” (Warren Dep. 269.) Sheriff Warren said, however, that his rule limiting the number of Class B Bingo Licenses to sixty “was simply stating what [he] honestly believed the spirit of the attorney general’s language meant to [him]” and that “anybody who knows Mr. King knows his opposition to gaming in the state of Alabama.” (Warren Dep. 270.)

Sheriff Warren also testified that the monetary requirement for a “qualified lo

*1100

cation” was included to keep “fly by nighters” from Macon County. (Warren Dep. 139, 150-51.) He wanted to ensure that a “substantial investment” was made to attract only “serious” investors. (Warren Dep. 139.) He said that when he wrote the Rules, he had “no desire or plans that VictoryLand be the only qualified location in Macon County.” (Warren Dep. 149.) VictoryLand, however, “met the requirements set forth in the [Original Rules].” (Warren Dep. 146.) And each time the Rules were amended, VictoryLand “was the only qualified location in Macon County.” (Warren Dep. 147.)

4. VictoryLand’s Electronic Bingo Licenses

On December 8, 2003, three days after the promulgation of the Original Rules, VictoryLand presented Sheriff Warren with applications from twelve Macon County charity organizations that had contracted with VictoryLand for the operation of electronic bingo.

29

(Twelve VictoryLand Charity Applications (Ex. 8 to Doc. # 445).) There is evidence suggesting that at least some of the applications of the initial twelve VictoryLand charities did not contain all the required information, such as “[a] certified copy of the charter, certificate of incorporation, by-laws, or other evidence of legal existence of the organization,” and tax exemption documentation. (Original Rules § 4(c)(2)

&

(3); Ex. 8 to Doc. #445; Deputy Tommy Miller Dep. 50-51 (Ex. J to Doc. # 446 & Ex. 13 to Doc. #461); Warren Dep. 332.) On December 16, 2003, Mr. McGregor signed an “Operator’s Certificate.” The Operator’s Certificate was submitted to Sheriff Warren with the Tuskegee-Macon County YMCA’s Class B Bingo License materials “as evidence that VictoryLand met the requirements of a qualified location.” (Operator’s Certificate (Ex. 10 to Doc. # 445); McGregor Aff., MCGP00001-03; Warren Aff. ¶ 11.)

On December 17, 2003, Sheriff Warren issued Class B Bingo Licenses to the twelve charity-applicants for the operation of electronic bingo at VictoryLand. (Class B Bingo Licenses (Ex. 11 to Doc. #445); Ex. C to Warren Aff.)

On December 18, 2003, Sheriff Warren issued VictoryLand a Class B “Bingo Operator’s License.” (VictoryLand Operator’s License (Ex. 12 to Doc. # 445).) Sheriff Warren did not conduct a “formal investigation of VictoryLand” prior to declaring it a “qualified location,” but he “made inquiries” that “satisfied” him of VictoryLand’s “standing.” (Warren Dep. 189.) Also, Sheriff Warren’s deputy, Tommy Miller (“Deputy Miller”), did not speak to Mr. McGregor about the Operator’s Certificate or inspect VictoryLand to ensure that the statements in that certificate were correct. (Miller Dep. 68-69.) Also in December 2003, VictoryLand opened its

*1101

electronic bingo operations with 303 electronic bingo machines. (McGregor Aff. ¶ 20.) Over the next six months Victory-Land increased the number of electronic bingo machines, and by June 1, 2004, VictoryLand had 928 machines. (McGregor Aff. ¶ 21.) The number of machines continued to increase, and as of September 2009, VictoryLand had approximately 6,400 electronic bingo machines in operation. (McGregor Aff. ¶ 23.)

VictoryLand also gradually increased the number of its contracts with Class B Bingo License holders. Between January 1, 2004, and June 1, 2004, while the Original Rules remained in effect, seventeen additional applications were submitted from VictoryLand charities to Sheriff Warren for Class B Bingo Licenses and were granted. These applicants also had contracted to conduct electronic bingo at VictoryLand, bringing the total number of VictoryLand’s Class B Bingo Licenses to twenty-nine. Thereafter, on June 2, 2004, the First Amended Rules went into effect. Between June 2, 2004, and December 31, 2004, Sheriff Warren granted ten more Class B Bingo Licenses to charity organizations contracting with VictoryLand.

30

(Warren Aff. ¶ 17.) Hence, as of December 31, 2004, thirty-nine charities had obtained Class B Bingo Licenses, and all thirty-nine of those charities had entered into contracts with VictoryLand for the operation of electronic bingo.

On January 1, 2005, the Second Amended Rules went into effect. Also, by that date, VictoryLand had negotiated contracts with an additional twenty charities, although those twenty charities had not yet submitted applications to Sheriff Warren for Class B Bingo Licenses. On February 7, 2005, fourteen of those additional twenty charities received Class B Bingo Licenses from Sheriff Warren, bringing VictoryLand’s total number of licensed charities to fifty-three. Pursuant to the Second Amended Rules, as of February 7, 2005, no other entity could be a “qualified location” for the holder of a Class B Bingo License and conduct electronic bingo in Macon County. (Warren Dep. 128-29, 115-17.) This was because the Second Amended Rules required that a “qualified location” have a minimum of fifteen Class B Bingo Licenses, but at the same time prohibited the issuance of more than sixty Class B Bingo Licenses in Macon County.

Six more VictoryLand charities obtained their Class B Bingo Licenses between April 29, 2005 and June 14, 2005; hence, as of June 14, 2005, VictoryLand was operating electronic bingo on behalf of fifty-nine licensed charities. (Warren Aff. ¶ 26; Ex. C to Warren Aff.) By March 20, 2006, VictoryLand had secured all sixty Class B Bingo Licenses. (VictoryLand Charities 2006 Class B Bingo Licenses (Ex. 31 to Doc. # 446); Ex. C to Warren Aff.; McGregor Answer to 6th Am. Compl. ¶ 74.) There is no evidence that Sheriff Warren refused a Class B Bingo License to any VictoryLand charity.

The following chart summarizes the timeline for the issuance of Class B Bingo Licenses for VictoryLand charities, measured against the effective dates of the Rules:

Dates

Number of Class B Bingo

Number of Class B Bingo

*1102

[[Image here]]

5. VictoryLand’s and the Charities’ Income

VictoryLand’s annual gross receipts and annual gross profits from electronic bingo for the years 2003, 2004, 2005, 2006, 2007, and 2008 reflect steady and substantial increases, as set out in the chart below. (VictoryLand’s Independent Auditor’s Report (Ex. 30 to Doc. # 446); VictoryLand’s 2d Suppl. Resp. to Lucky Palace Interrog. No. 9 (Doc. # 521).) Since the inception of electronic bingo at VictoryLand, Mr. Gray Sr.’s income derived from his minority ownership interest in Victory-Land also has increased substantially.

Combined, the charities contracting with VictoryLand received the following payments from VictoryLand in the years 2004-2008: 2004 ($546,350); 2005 ($978,-250); 2006 ($797,650); 2007 ($797,650); and 2008 ($1,300,026). (VictoryLand Charity Payouts (Ex. 28 to Doc. #446).) In 2008, VictoryLand and its charities entered into new lease agreements under which the charities received $3,751.50 as a Bingo Session Charity Fee.

31

VictoryLand’s Gross Receipts from

VictoryLand’s Gross Profits

32

Total Payments from VictoryLand

*1103

_Electronic Bingo_from Electronic Bingo_to its Charities

2002

33

_

2003_$ 586,867_$ 408,481_

2004_$ 64,070,688_$ 49,902,963_$ 546,350_

2005_$112,693,949_$ 89,148,794_$ 978,250_

2006_$139,853,391_$110,936,378_$ 797,650_

2007_$157,498,710_$126,706,748_$ 797,650_

2008_$162,571,464_$125,860,684 (estimated)_$1,300,026_

6. Lucky Palace’s Pursuit of Class B Bingo Operations in Macon County

The preceding recital of facts has little contextual meaning absent the overlay of Lucky Palace’s timeline. In early 2003, Paul Bracy, Lucky Palace’s president, “became interested” in operating electronic bingo in Macon County. (Bracy Dep. 59-60 (Ex. 12 to Doc. # 443 & Ex. C to Doc. #446).) Lucky Palace was incorporated on February 17, 2004, for the purpose of developing an electronic bingo establishment in Macon County. (Bracy Letter (Ex. 562 to Doc. #440); Lucky Palace Articles of Incorporation (Ex. 702 to Doc. # 441).) Mr. Bracy and his associates met with Sheriff Warren and Deputy Miller in the sheriffs office sometime in the spring of 2004, which was prior to any amendments to the Original Rules. (Dwight Washington Dep. 24-25 (Ex. N to Doc. # 446).) At that meeting, Sheriff Warren assured Mr. Bracy that there would be no problem with another entity obtaining an Operator’s License, so long as it “follow[ed] the rules and regulations.” (Washington Dep. 26.)

On June 11, 2004, unaware that on June 2 Sheriff Warren had amended the Original Rules, Mr. Bracy notified Sheriff Warren by letter that Lucky Palace still intended to establish an electronic bingo facility in Macon County and explained the steps Lucky Palace had taken toward the attainment of that goal. In the closing paragraph, Mr. Bracy said,

Given that [Lucky Palace] intends to meet or exceed all of the requirements set forth in the Rules and Regulations issued by the Sheriff of Macon County, Alabama, is there any reason for [Lucky Palace] to expect that a license will not be granted? [Lucky Palace] is very willing to meet with you or your representative(s) if there is something that may have been overlooked.... If [Lucky Palace] has not heard from your office or representative by June 21, 2004[,] we will assume that a license will be granted.

(June 11, 2004 Letter (Ex. 16 to Doc. # 445, PTF00563).)

On June 15, 2004, Mr. Bracy sent another letter to Sheriff Warren, expressing his “surprise[]” to read the First Amended Rules in

The Tuskegee News,

dated June 10, 2004. (June 15, 2004 Letter (Ex. 16 to Doc. #445, PTF00564-565).) Mr. Bracy sought “clarification of the impact of the new requirements on [Lucky Palace’s] planned development.” (June 15, 2004 Letter (Ex. 16 to Doc. #445, PTF00564565).) In the closing paragraph, Mr. Bracy said, “We are prepared to continue moving ahead with our project as scheduled ... governed under” the Original Rules. (June 15, 2004 Letter (Ex. 16 to Doc. # 445, PTF00565).)

On July 21, 2004, Mr. Bracy and Sheriff Warren met in Sheriff Warren’s office to discuss Lucky Palace’s plans. On July 30, 2004, Mr. Bracy sent Sheriff Warren a letter and, per a phone conversation earli

*1104

er that day, sought a signed statement from Sheriff Warren that the First Amended Rules would not be amended again and that there would be “no delays or problems in obtaining the license for a ‘Class B’ qualified location, for the operation of electronic bingo in Macon County, Alabama.” (July 30, 2004 Letter & Proposed Statement (Ex. 16 to Doc. # 445, PTF00566, PTF00609, PTF00567); Warren Dep. 230-31.) Sheriff Warren did not sign this statement. (Warren Answer to 6th Am. Compl. ¶ 64 (Doc. # 358); Warren Dep. 229-30.) However, on August 5, 2004, Sheriff Warren sent Mr. Bracy a letter stating that, while he “reserve[d] the right to amend the regulations as necessary,” he did “not foresee any need for any substantive changes in the foreseeable future.” (Aug. 5, 2004 Letter (Ex. 16 to Doc. # 445, PTF00609).) On August 17, 2004, Mr. Bracy responded to Sheriff Warren’s August 5 letter, thanking him for his “prompt response.” (Aug. 17, 2004 Letter (Ex. 16 to Doc. # 445, PTF00568).)

On September 25, 2004, the

Montgomery Advertiser

published an article about Lucky Palace’s efforts to open an electronic bingo facility in Macon County. (Jannell McGrew,

Die Cast for New Bingo Facility, Montgomery Advertiser,

Sept. 25, 2004 (Ex. 17 to Doc. #445).) That article paraphrases Mr. McGregor as saying that “he was not concerned about competition from the new facility” and includes a direct quote from Mr. McGregor that “ ‘competition doesn’t concern me at all.’ ” (Ex. 17.) Mr. McGregor testified that he first learned of Lucky Palace’s efforts to become a qualified location for electronic bingo from an article in the

Montgomery Advertiser

(McGregor Dep. 327), but he did not give the date of the article from which he acquired this knowledge.

By November 10, 2004, Lucky Palace had secured contracts with more than fifteen local charities (including the fifteen Plaintiff Charities). (Lucky Palace/Charity Contracts (Ex. 18 to Doc. # 445).) Under those contracts, the charities that affiliated with Lucky Palace would be entitled to a semiannual payment of $21,000 each. (Lucky Palace/Charity Contracts § 5.) Although the Rules do not contain provisions requiring or permitting preapproval, Lucky Palace attempted to secure preapproval of its planned facility by submitting an application for an electronic bingo Operator’s License on November 10, 2004. (Warren Dep. 111-12; Nov. 10, 2004 Application (Ex. 16 to Doc. # 445, PTF00572575).)

On January 14, 2005, when VietoryLand was operating electronic bingo for thirty-nine charities under the Second Amended Rules, and more than sixty days after he (Sheriff Warren) had received Lucky Palace’s application, Sheriff Warren returned Lucky Palace’s November 10, 2004 application for an electronic bingo Operator’s License. (Warren Dep. 272-73; Bracy Dep. 193-201; Envelopes (Ex. 23 to Doc. # 446).) On the envelope returning the application, Mary Davis, Sheriff Warren’s administrative assistant, handwrote the following: “Return,” “Not Approved,” “Building not completed,” “Building must qualify.” (Envelopes (Ex. 23 to Doc. #446); Warren Dep. 125-28, 261; Bracy Dep. 199-200.) Lucky Palace received the returned Operator’s License application on January 19, 2005. (Envelopes (Ex. 23); Bracy Dep. 197-201.)

It was Sheriff Warren’s intent “that a building be present to inspect before a license was issued.” (Warren Dep. 133-34, 144.) Sheriff Warren testified, ‘You know ... every store I’ve seen open, before they get a license, there was a store there for somebody to inspect; every — every restaurant that I know of had to have a building to inspect before they were licensed.... I don’t think that expecting someone to have

*1105

a building there before they get a license is asking too much.” (Warren Dep. 134;

see also

Warren Dep. 144 (“My intention was to provide rules that would govern bingo. And in my opinion, before I approved a qualified location, there would have to be a building there for me to approve.”).) Hence, the sole reason Sheriff Warren has refused to issue Lucky Palace an Operator’s License is because it does not have a “qualified location.” (Warren Dep. 111-13; Warren Dep. 113 (When asked if there was “[a]ny other reason[]” Lucky Palace could not get a license, Sheriff Warren responded, “At this time, there aren’t ... any other reasons.”).)

On July 25, 2005, when VictoryLand was operating electronic bingo on behalf of fifty-nine charities, thereby foreclosing another entity from conducting electronic bingo operations in Macon County, Lucky Palace attempted to deliver twenty-two applications for Class B Bingo Licenses, along with checks for the licensing fees, to Sheriff Warren.

34

(July 25, 2005 Letter & 22 Checks, at PTF00578-PTF00584 (Ex. 16 to Doc. # 445).) On that same date, Mr. Bracy also sent Sheriff Warren a letter providing information about Lucky Palace that Mr. Bracy believed satisfied the Second Amended Rules pertaining to a “qualified location.” (July 25, 2005 Letter, PTF00578-PTF00584 (Ex. 16 to Doc. # 445).) Sheriff Warren’s office refused to accept Lucky Palace’s charity applications and returned them immediately. (Bracy Dep. 205-06.) Sheriff Warren’s assistant, Ms. Davis, told Mr. Bracy that the charity license applications were “premature” because the applicants “did not have a building,”

ie.,

did not have a “qualified location” at which to conduct electronic bingo. (Bracy Dep. 206.) No mention was made of the dispositive fact that VictoryLand had sewn up all but one of the available licenses. The denial was not appealed by the Plaintiff Charities, as permitted by § 14 of the Rules.

35

(Bracy Dep. 201.)

By March 20, 2006, VictoryLand had secured all sixty Class B Bingo Licenses. (VictoryLand Charities 2006 Class B Bingo Licenses (Ex. 31 to Doc. # 446); Ex. C to Warren Aff.; McGregor Answer to 6th Am. Compl. ¶ 74.) Plaintiffs attempted to rectify their perceived injury through political means. Those means included selecting and funding a candidate to run against Sheriff Warren- — -a candidate who was supportive of Lucky Palace’s project and who was committed to expanding gaming in Macon County. (Windom Dep. 345

*1106

(Ex. 1 to Doc. # 443).) Those efforts, however, did not achieve their desired result, as in the primary election in June 2006, the voters of Macon County overwhelmingly reelected Sheriff Warren over the candidate supported by Plaintiffs. (Windom Dep. 182.)

7.

This Lawsuit (December 2006)

On December 18, 2006, seventeen nonprofit organizations — which had contracted with Lucky Palace to conduct electronic bingo at a facility to be constructed and operated by Lucky Palace and which had applied with Sheriff Warren for, but had not been issued, Class B Bingo Licenses— filed this lawsuit against Sheriff Warren in his official capacity. (Compl. ¶¶ 4-20, 31-32 (Doc. # 1).) Mr. McGregor and VictoryLand were added as defendants in the Amended Complaint, filed March 12, 2007. (Am. Compl. (Doc. # 24).) Thereafter, four of the original Plaintiffs — NCO Nile Club, Notasulga High School PTSA, Sojourner Truth Chapter # 265, and Tuskegee National Alumni Association — were dismissed without prejudice upon Plaintiffs’ motions. (Docs.# 123, 127, 180, 182, 196, 200.) Lucky Palace was brought in as a plaintiff by the Third Amended Complaint, filed on June 29, 2007. (3d Am. Compl. (Doc. # 67).) Greater White Church and RG Apartments were added as plaintiffs in the Fifth Amended Complaint, filed May 13, 2008. (5th Am. Compl. (Doc. # 185).)

Presently, Plaintiffs are Lucky Palace and fifteen nonprofit organizations that have contracted with Lucky Palace for the operation of electronic bingo in Macon County. Defendants are Sheriff Warren, sued in his official capacity, and Mr. McGregor and VictoryLand.

The claims have evolved through a series of amendments to the complaint. The Sixth Amended Complaint is the operative complaint. Plaintiffs contend that “VictoryLand and [Mr.] McGregor, through the unlawful influence [of Mr. Gray Jr.], caused [Sheriff] Warren to arbitrarily promulgate unreasonable rules and regulations for the operation of bingo in Macon County that allowed only one entity — VictoryLand — to operate electronic bingo games.” (6th Am. Compl. ¶ 3.) Plaintiffs further allege that, although Mr. Gray Jr. is a private attorney, he acted as a “public servant” when advising Sheriff Warren concerning the promulgation and amendment of the Rules governing electronic bingo in Macon County. (6th Am. Compl. ¶¶ 2, 86,115.)

The Original Rules, First Amended Rules and Second Amended Rules were promulgated by Sheriff Warren, with the assistance of his counsel, Mr. Gray Jr., and Mr. McGregor’s and VictoryLand’s counsel, Mr. Bolton and Mr. Johnston. (6th Am. Compl. ¶¶ 58, 68; Warren Dep. 69-70.) It is alleged that the amendments were implemented to prevent competition with VictoryLand. The First Amended Rules added a provision that “[n]o Class B Licensee shall be authorized to operate bingo at any qualified location ... unless a minimum of fifteen (15) applicants shall first obtain a Class B License for such location.” (1st Am. Rules § 2; 6th Am. Compl. ¶ 60.) The Second Amended Rules included a new provision that “[a]t no time shall there be issued and outstanding more than sixty (60) Class B Licenses for the operation of bingo in Macon County.” (2d Am. Rules § 2; 6th Am. Compl. ¶ 69.) This provision was added at the point in time when more than forty-five Class B Bingo Licenses “had been, or soon would be, issued to nonprofit organizations with contractual ties to ... VictoryLand.” (6th Am. Compl. ¶ 70;

see also

Warren Dep. 115-17, 128-29 (confirming that by February 7, 2005, VictoryLand’s total number of licensed charities was fifty-three); Ex. C to Warren Aff.) The sixty-license maximum combined

*1107

with the fifteen-license minimum, in effect, “foreclosed the operation of [electronic] bingo games in Macon County at any location other than VictoryLand.” (6th Am. Compl. ¶¶ 70,112.)

The Sixth Amended Complaint contains six counts. The first two counts allege RICO violations. Count I alleges that Defendants violated 18 U.S.C. § 1962 (c) by conducting and participating in the conduct of an enterprise through a pattern of racketeering activity. (6th Am. Compl. ¶¶ 150-55.) The racketeering activity includes acts of bribery chargeable under state law (Ala.Code § 13A-10~61(a)) and acts indictable under 18 U.S.C. §§ 1341 (wire fraud) and 1343 (mail fraud). (Sixth Am. Compl. ¶¶ 88-135.) Plaintiffs allege that Mr. McGregor and VictoryLand bribed Mr. Gray Jr. for favorable Rules, and that those alleged bribes took the form of legal fees and retainer payments made to the Gray Law Firm, and shareholder dividends paid to Mr. Gray Sr. based upon his minority ownership interest in VictoryLand. (6th Am. Compl. ¶¶ 88, 89, 92, 95, 104, 106, 108, 110, 113.) The RICO mail and wire fraud claim is premised on the theory that, with regard to the promulgation of the Rules, Defendants, the Gray Law Firm, Mr. Gray Sr. and Mr. Gray Jr. engaged and participated in three schemes or artifices: The citizens of Macon County allegedly were defrauded of the honest services of Mr. Gray Jr. and Sheriff Warren, and Sheriff Warren allegedly was defrauded of the honest services of Mr. Gray Jr.,

see

§§ 1341, 1343, 1346. (6th Am. Compl. ¶ 120.) The details of these alleged schemes or artifices will be discussed later in this opinion.

Count II alleges a RICO conspiracy under § 1962(d), based upon racketeering activities of bribery, mail fraud, and wire fraud. All Defendants are named in this count. (6th Am. Compl. ¶¶ 156-60.)

Count III, a Fourteenth Amendment equal protection claim brought pursuant to 42 U.S.C. § 1983 , alleges that Sheriff Warren denied Plaintiffs equal protection of the laws by effectively denying Lucky Palace the right to operate a “qualified location” for the conduct of electronic bingo and the Plaintiff Charities’ the rights to obtain Class B Bingo Licenses, as allowed by Amendment No. 744. (6th Am. Compl. ¶¶ 161-68.) Count IV alleges a § 1983 conspiracy against all Defendants to deprive Plaintiffs of equal protection. (6th Am. Compl. ¶¶ 169-75.) Counts V and VI allege state-law tortious interference claims against Mr. McGregor and Victory-Land. (6th Am. Compl. ¶¶ 176-88.)

Plaintiffs seek injunctive relief against Sheriff Warren, requiring him to “issue Class B Bingo Licenses to each of the [Plaintiff] Charities,” to “issue a Class B Bingo Operator’s License to Lucky Palace,” to “suspend the Fifteen License Minimum and the Sixty License Maximum,” and to “allow the [Plaintiff] Charities to operate any and all games of bingo at the Lucky Palace location.” (6th Am. Compl. 54.) No damages are sought against Sheriff Warren. (6th Am. Compl. 54 n. 3.) As to Mr. McGregor and VictoryLand, Plaintiffs ask for “damages in an amount to be proven at trial, treble damages and punitive damages.” (6th Am. Compl. 54.) Plaintiffs also seek costs, including attorney’s fees, and “such further and additional relief as the Court deems just and appropriate.” (6th Am. Compl. 54.)

8. Third Amended Rules (December 2008)

On December 15, 2008, after this lawsuit was filed, Sheriff Warren adopted the Third Amended Rules. The Third Amended Rules are identical to the Second Amended Rules with two exceptions: They increase the Operator’s License fee from

*1108

$250,000 to $500,000 per year, and they increase the charity licensing fees from $1000 to $3000 per year. As set out in the commentary to the Third Amended Rules,

The revisions are necessary due to the increased litigation over charity

bingo in

Macon County. When the Sheriff, in his official capacity, is named in a lawsuit he has no other source of income to pay for his defense other than monies generated through bingo licensing fees. The fees associated with Class B Bingo Licenses and the Operator’s Licenses Fee were initially meant to be divided and used for protecting the citizens of Macon County at bingo-related functions, to support administrative activities associated with the regulation of bingo operations, and to provide for litigation defense. The substantial increase in litigation threatens to hinder the Sheriffs ability to provide for administrative oversight of bingo regulations and the necessary protection of citizens at bingo-related functions. Therefore, an increase in Class B Bingo License fees and the Operator’s License Fee is necessary.

(3d Am. Rules, Commentary.) The discussion now turns to the analysis of the three sets of legal claims — RICO, constitutional and state law — in that order.

V. DISCUSSION

A.

RICO (Counts I and II)

RICO violations are alleged against VictoryLand, Mr. McGregor and Sheriff Warren in Counts I and II of the Sixth Amended Complaint. (6th Am. Compl. ¶¶ 150-60.) Count I alleges that Defendants violated § 1962(c), by conducting and participating in the conduct of an enterprise through a pattern of racketeering activity. (6th Am. CompLIffl 150-55.) The racketeering activity includes acts of bribery chargeable under state law and acts indictable under §§ 1341 (wire fraud) and 1343 (mail fraud). (6th Am. Compl. ¶¶ 83-135.) Count II alleges a RICO conspiracy claim under § 1962(d), based upon predicate acts of bribery and honest services mail and wire fraud, involving all Defendants. (6th Am. Compl. ¶¶ 156-60.)

Mr. McGregor and VictoryLand move for summary judgment on the § 1962(c) substantive RICO claim in Count I and the § 1962(d) conspiracy claim in Count II. (Doc. # 421.) Sheriff Warren also moves for summary judgment on the RICO claims “to the extent that any claims exist or are perceived to be alleged against [him] under RICO.” (Doc. #424, at 39.) Plaintiffs filed a cross-motion for partial summary judgment on the RICO claims in Counts I and II that are based upon predicate acts of honest services mail and wire fraud against Mr. McGregor and Victory-Land. Because Plaintiffs contend that there are “disputed questions of fact” regarding Sheriff Warren’s knowing participation in the enterprise, they have not moved for summary judgment on the RICO claims brought against Sheriff Warren. (Doc. #445, at 19 n. 7.) Nor have Plaintiffs pressed for summary judgment on the substantive and conspiratorial claims of racketeering in Counts I and II, which are based upon predicate acts of bribery. (Doc. # 445, at 20 n. 8.)

1. § 1962(c)

— Count

I

It is illegal “for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity.” § 1962(c). A § 1962(c) violation requires proof of “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.”

Williams v. Mohawk Indus., Inc.,

465 F.3d 1277 , 1282

*1109

(11th Cir.2006) (citation and internal quotation marks omitted). These four elements “apply whether the RICO claim is civil or criminal in nature.”

Id.

There also are two additional requirements in civil RICO cases:

In civil cases, ... RICO plaintiffs must also satisfy the requirements of 18 U.S.C. § 1964 (c). Section 1964(c) states that “[a]ny person injured in his business or property by reason of’ RICO’s substantive provisions has the right to “recover threefold the damages he sustains .... ” 18 U.S.C. § 1964 (c). Thus, under § 1964(c), civil RICO claimants, such as the plaintiffs here, must show (1) the requisite injury to “business or property,” and (2) that such injury was “by reason of’ the substantive RICO violation.

Id.

at 1282-83.

The third and fourth

Williams

elements requiring proof of a pattern of racketeering activity are the subject of Defendants’ summary judgment motions. A pattern of racketeering activity requires at least two acts of racketeering.

36

Williams,

465 F.3d at 1283;

see 18

U.S.C. § 1961 (5).

a. Bribery: Alabama Code § 13A-10-61(a)

“Racketeering activity” is broadly defined and includes “any act or threat involving ... bribery ... which is chargeable under State law and punishable by imprisonment for more than one year.” § 1961(1)(A). Plaintiffs contend that the racketeering activity of Defendants

37

includes an ongoing pattern of bribery, in violation of § 13A-10-61(a) of the Alabama Code. A person commits felony bribery under Alabama law if:

(1) He offers, confers or agrees to confer any thing of value upon a public servant with the intent that the public servant’s vote, opinion, judgment, exercise of discretion or other action in his official capacity will thereby be corruptly influenced; or

(2) While a public servant, he solicits, accepts or agrees to accept any pecuniary benefit upon an agreement or understanding that his vote, opinion, judgment, exercise of discretion or other action as a public servant will thereby be corruptly influenced.

§ 13A-10-61(a).

i. Nature of the Theory

Plaintiffs allege specific violations of § 13A-10-61(a)(l) and (a)(2). First, concerning (a)(1), Plaintiffs contend that Mr. Gray Jr., in his capacity as Sheriff Warren’s legal advisor, was a public servant (6th Am. Compl. ¶ 86), and that Mr. McGregor and VictoryLand conferred and offered to confer things of value on Mr. Gray Jr. with the intent that Mr. Gray Jr.’s “actions in advising and consulting with [Sheriff] Warren in the promulgation of, and subsequent amendments to, the rules and regulations for the operation of

*1110

bingo in Macon County would be corruptly influenced.” (6th Am. Compl. ¶¶ 88, 92.) Those things of value to Mr. Gray Jr. allegedly came in the form of legal fees and retainer payments made to the Gray Law Firm, and shareholder dividend payments made to his father, Mr. Gray Sr.

Second, Plaintiffs allege as predicate acts violations of § 13A-10-61(a)(2). They contend that Mr. Gray Jr. “has violated” § 13A-10-61(a)(2) because he “solicited, accepted, and/or agreed to accept pecuniary benefits from [Mr.] McGregor and VictoryLand upon an agreement or understanding that, [Mr.] Gray Jr.’s opinion, judgment, exercise of discretion, or other actions in promulgating and amending rules and regulations for the operation of bingo in Macon County would be corruptly influenced.” (6th Am. Compl. ¶ 89.) Absent any distinction made by Plaintiffs, it is presumed that the “things of value” allegedly bestowed upon Mr. Gray Jr. also comprise the “pecuniary benefits” allegedly accepted by Mr. Gray Jr., as required by § 13A — 10—61(a)(1) and (a)(2).

(See, e.g.,

Doc. # 464, at 28 (arguing that Defendants conferred three “ ‘things of value’ upon [Mr.] Gray Jr. (and [that Mr.] Gray Jr. subsequently accepted them”)).)

ii. Grounds for Summary Judgment

Defendants argue that they are entitled to summary judgment on Plaintiffs’ RICO bribery theory on essentially four grounds. The first two arguments rely on Mr. McGregor’s and Mr. Gray Jr.’s affidavits, as well as on the Plaintiff Charities’ Rule 30(b)(6) deposition testimony, for the contention that there is no evidence that § 13A-10-61(a) has been violated. As the third ground, Defendants argue that there is no evidence that the payments to the Gray Law Firm and/or Mr. Gray Sr. of retainers, legal fees, and shareholder dividends are either “things of value” bestowed upon Mr. Gray Jr. with the intent to corruptly influence him or “pecuniary benefits” accepted by Mr. Gray Jr. with an understanding that his actions would be corruptly influenced. Fourth and finally, Defendants argue that there are

no

evidentiary facts to support Plaintiffs’ allegation that Mr. Gray Jr. is a “public servant,” within the meaning of § 13A-10-61(a). Plaintiffs assert that they have produced sufficient evidence to create a genuine issue of material fact regarding this RICO claim.

Because Defendants’ third ground is dis-positive, it is unnecessary to address the other grounds. More elaboration on the arguments surrounding the third ground is contained in the next subsection, followed by a discussion of the relevant law and its application to the facts of this case,

iii. Thing of Value, Pecuniary Benefit and Corrupt Influence

Defendants argue that the legal fees and quarterly retainers Mr. McGregor and VictoryLand paid to the Gray Law Firm and the shareholder dividends paid to Mr. Gray Sr. based upon his ownership interest in VictoryLand do not qualify as “things of value” conferred upon Mr. Gray Jr. with the intent to corruptly influence his actions regarding the formulation of bingo Rules, and were not “pecuniary benefits” accepted by Mr. Gray Jr. with the understanding that his actions would be corruptly influenced, within the meaning of § 13A-10-61(a). (Doc. #440, at 81-84.) For one, Defendants argue that “[t]hese payments ... are all inherently and presumptively lawful activities” (Doc. #475, at 17;

see also

Doc. # 440, at 83), and commenced more than two decades prior to the onset of electronic bingo in Macon County and the alleged bribery scheme. For another, they argue that the potential value (or benefit) to Mr. Gray Jr. is too speculative and remote because it would require Mr. Gray Jr. to believe that the payments would cause “his father’s law firm [to] profit and his father’s estate [to]

*1111

increase,” so that “when his father eventually died, [Mr.] Gray Jr. might stand to share in the inheritance of that estate.” (Doc. #475, at 19.) Defendants expound upon their argument in a 282-word sentence:

Plaintiffs’ argument requires Defendants to have predicted twenty years before it happened that a constitutional amendment would authorize electronic bingo to be played in Macon County, that the amendment would permit third parties to run bingo games for charities, that it would authorize Sheriff Warren to promulgate the rules and regulations for electronic bingo, that Sheriff Warren would ask Mr. Gray Jr. to assist him in preparing the rules, that VictoryLand would already have a facility suitable for electronic bingo operations at the time the bingo amendment was passed, and that electronic bingo would be profit

able

— and

then,

based upon that prophecy, VictoryLand and Mr. McGregor entered into an agreement with Gray Jr. in 1983 (five years before he was even licensed to practice law in Alabama and twenty-four years before he would become a partner in his father’s law firm), under which VictoryLand would patiently make shareholder payments to Gray [Jr.’s] father and make retainer and legal fee payments to the Gray Law Firm for more than twenty years in the hope that once the predicted events came to pass, Gray Jr. would be able to prevent anyone but VictoryLand’s lawyers from having any input into the drafting of the rules that would be promulgated by Sheriff Warren in order to ensure that Lucky Palace could not comply with the rules so that VictoryLand could be the only operator of electronic bingo games in Macon County, and that Gray Jr. would agree to the scheme so that his father’s law firm could profit and his father’s estate would increase and, as a result, when his father eventually died, Gray Jr. might stand to share in the inheritance of that estate.

(Doc. # 475, at 19 (internal record citations omitted).)

Plaintiffs, however, assert that beginning in January 2003

38

these payments— legal fees and retainer payments to the Gray Law Firm, and shareholder dividends to Mr. Gray Sr. — were transformed into offerings of “things of value” upon Mr. Gray Jr. with the intent to corruptly influence him with respect to the promulgation and amendment of the Rules governing electronic bingo in Macon County, and that Mr. Gray Jr. accepted these “pecuniary benefits” with the understanding that his work on the Rules would be corruptly influenced. As set out in the margin, Plaintiffs give three reasons why each of these payments should be viewed as valuable to Mr. Gray Jr.

39

Plaintiffs further

*1112

argue that they have adduced ample circumstantial evidence that Mr. McGregor and VictoryLand “intended to corruptly influence the rule[-]drafting process and that [Mr.] Gray Jr. was aware of those intentions,” and that this evidence satisfies the intent element of their bribery claims. (Doc. # 464, at 33.)

iv. Alabama Bribery Law

The overarching issue is whether these payments- — -retainer payments and legal fees to the Gray Law Firm, and dividend payments to Mr. Gray Sr. — were “things of value” conferred upon Mr. Gray Jr. with the intent to corruptly influence his actions in the rule-drafting process and were “pecuniary benefits” accepted by Mr. Gray Jr. with the understanding that his actions would be corruptly influenced regarding his role in the formulation of the bingo Rules. Before analyzing the parties’ competing positions on this issue, the parameters of the law must be established.

Pursuant to § 13A-10-60(a)(2), a public servant’s acceptance of a “pecuniary benefit” with the understanding that his judgment will be corruptly influenced is a felony. A “[pecuniary benefit” is defined as a “[b]enefit in the form of money, property, commercial interests or anything else the primary significance of which is economic gain.” § 13A-10-60(b)(2). Section 13A-10 — 61(a)(1), in turn, prohibits the offering, conferring, or agreeing to confer any “thing of value” to corruptly influence a public servant’s exercise of judgment. The phrase “thing of value” is not defined by statute.

Two decisions relied upon Plaintiffs (Doc. # 440, at 81-84), however, illustrate that Alabama courts have broadly interpreted a “thing of value.”

See Caruthers v. State,

74 Ala. 406 (1883);

Hammond v. State,

354 So.2d 280 (Ala.Crim.App.1977). In

Hammond ,

the defendant, who had served as the Alabama Public Service Commission (“PSC”) president, was convicted under a former version of the Alabama bribery statute for inciting the vice president of South Central Bell Telephone Company (“Bell”) to give him a “thing of value” to influence the defendant’s vote on a telephone rate increase.

See

354 So.2d at 283 . The defendant demanded that Bell’s vice president remove a third party’s vending machines from the telephone company’s plant.

See id.

The defendant allegedly made the demand because the third party vendor had refused to pay the defendant a kickback for helping it secure the vending machine business in Bell’s plant.

Id.

at 283, 288 . The issue was

*1113

whether the “doing of an act” — the removal of the vending machines — was a “thing of value, within the bribery statute.”

Id.

at 288 .

Hammond

held that whether a specified thing has value under Alabama’s bribery statute requires a subjective examination: “[T]he requirement of value is satisfied if the thing has sufficient value in the mind of the person concerned so that his actions are influenced.”

Id.

at 288-89 (citation and internal quotation marks omitted). Accordingly, it is not a prerequisite that the “thing of value” have “pecuniary or intrinsic value.”

Id.

at 289 . “Thing of value” also includes “value in the sense of a personal advantage of some sort to be derived by the recipient.”

Id.-, see also McDonald v. State, 57

Ala.App. 529, 329 So.2d 583, 595 (Ala.Crim.App.1975) (“The test of value is the desire of a person for the thing in question.”). “The word

thing

does not necessarily mean a

substance.

In its more generic signification it includes an act, or action.”

Hammond,

354 So.2d at 289 (citation and internal quotation marks omitted). In this regard, the

Hammond

court reiterated that in prior cases, it had construed “thing of value” to include intangible items, such as offers to provide free labor and sexual favors.

See id.

(citing

Camthers,

74 Ala. at 406 ;

McDonald,

329 So.2d at 583 ). Applying these principles, the Hammond court held that the evidence was sufficient to prove that the defendant “intended that his threat, transmitted through [Bell’s vice president], would cause the [third party vendor] to give in and pay him money.”

Id.

The vice president’s action of removing the vending machines, thus, could “be considered a ‘thing of value’ to [the defendant].”

Id.

in

Camthers,

cited in

Hammond ,

the defendant was convicted of offering a bribe to a juror to “chop cotton a week” in return for an acquittal, in violation of a prior version of Alabama’s bribery statute. 74 Ala. at 406 . At trial, there was evidence that at the close of the case, but prior to deliberations, the defendant signed a note and delivered it to a juror; the note read, “if you will dare [sic] me Will chop cotton a week.”

Id.

The court held that “[t]he promise of the defendant to give his

labor

or

services,

as a reward for the corrupt violation of the juror’s sworn duty, is a ‘gift, gratuity, or thing of value.’ ”

Id.

And, in

McDonald,

relying on

Camthers,

the Alabama Court of Criminal Appeals held that “[t]o constitute an offer to accept a bribe, the thing solicited must be valuable and may be some act.” 329 So.2d at 595 . “The Alabama statute condemns an offer to accept a bribe by promise of a ‘thing of value,’ and a conviction may be had on proof that an offer to accept by an accused was made in exchange for his official partiality in matters pending before him.”

Id.

(interpreting prior version of bribery statute). Based upon those principles, the Alabama Court of Criminal Appeals held that the judge sought a “thing of value” when he solicited sexual favors in exchange for “maybe tak[ing] care of’ a defendant’s case pending on the judge’s docket.

Id.

Plaintiffs also contend that

United States v. Gorman,

807 F.2d 1299 (6th Cir.1986) although it addressed a federal bribery statute, is instructive. (Doc. # 464, at 30.)

Gorman

involved an interpretation of “anything of value” as used in former 18 U.S.C. § 201 (g),

40

now codified as § 201(c)(1)(B). The defendant, a former

*1114

federal prosecutor, argued that the promise of future employment with a private business, would not have been “a thing of value because any compensation received would have been for additional duties performed.”

Gorman,

807 F.2d at 1305 . The Sixth Circuit disagreed. “The purpose of Section 201(g) is to reach all situations in which a government agent’s judgment concerning his official duties may be clouded by the receipt of an item of value given to him by reason of his position.”

Id.

at 1304 . The focus must “be placed on the value which the defendant subjectively attaches to the items received.”

Id.

át 1304-OS. The promised salary would have been three times the defendant’s then-current salary, and the defendant was to remain in his present job for a two-year period, in part so that he could refer cases to his future employer.

Id.

at 1305 . Given that the defendant was suffering severe financial difficulties and that “ ‘thing of value’ must be broadly construed,” the Sixth Circuit held that “such future employment would clearly be a thing of value for purposes of Section 201(g).”

Id.

In addition to reviewing the cases relied upon by the parties, the court has reviewed cases cited in the annotations to § 13A-10-61.

41

In

Williams v. State,

383 So.2d 547 (Ala.Crim.App.1979),

aff'd,

383 So.2d 564 (Ala.1980), in exchange for his needed approval of a proposed legislative bill legalizing dog racing in Macon County, a state senator was promised an appointment as the attorney for the racing commission.

Id.

at 551-52. The state senator was told that there was “no limit on the salary,”

id.

at 551, that the salary could begin at $25,000 the first year with a raise to $50,000 the second year,

id.

at 553, and that the salary would require “about two hours a week working for the commission,”

id.

at 554. Notwithstanding this offer, the state senator refused to give his approval for the bill, and the offeror was convicted of bribery.

See id.

The Alabama Court of Criminal Appeals held that the state senator had been offered or promised money or a “thing of value” in an effort “to influence him in the performance of his public and official duties.”

Id. Williams

further explained that “[t]he statute condemns the unilateral offer or promise of a bribe.”

Id.

at 557. “Proof of a bilateral agreement, that is, that the officer accepted the bribe, is not required” to sustain a conviction.

Id.; see also McDonald v. Headrick,

554 F.2d 253, 254-55 (5th Cir.1977) (rejecting the defendant’s argument on 28 U.S.C. § 2254 review that the Alabama bribery statute required a “bilateral bribery agreement” and holding that there was sufficient evidence to support his bribery conviction for agreeing to accept sexual favors from a female whose case was pending before him in exchange for favorable treatment).

Moreover, in

Ex parte Montgomery,

244 Ala. 91 , 12 So.2d 314 (1943), a monetary payment was made to the sheriff. The petitioner-attorney “was a willing vehicle by which money was carried to the sheriff and paid to him in person or used in paying a debt of the sheriff on which this petitioner was an indorser, and that this was done to influence him in the performance of an official duty.”

42

Id.

at 318.

*1115

Additionally, the following cases demonstrate the type of conduct found prohibitive under former versions of Alabama’s bribery statutes.

See United States v. Chatham,

677 F.2d 800, 801-04 (11th Cir.1982) (affirming RICO judgment of conviction predicated upon a violation of a former version of Alabama’s bribery statute, where the president of a building testing and inspection company offered cash payments to a mayor in hopes of securing a testing contract on a contemplated new public hospital and fictional new city hall);

Leonard v. State,

484 So.2d 1185, 1186 (Ala.Crim.App.1985) (on appeal from a judgment of conviction under § 13A-10-61, for offering police officers $1,000 in cash, a Lincoln Continental, and future monthly payments, in exchange for the police officers’ ignoring the defendant’s drug operation and “bust[ing]” those who interfered with it);

Pope v. State,

365 So.2d 369, 370 (Ala.Crim.App.1978) (holding that the evidence was sufficient to support a bail bondsman’s conviction for bribery for offering a police officer $1,000 to supply him and others with “inside information” to protect a contemplated prostitution business to be disguised as an “escort service,” as well as a percentage of the business’s expected profits);

Fuller v. State,

40 Ala.App. 297 , 115 So.2d 110, 111 (1958) (affirming chief deputy sheriffs judgment of conviction for bribery for accepting periodic monetary payments to permit the operation of a bordello);

Jordan v. State,

26 Ala.App. 122 , 156 So. 642 (1934) (affirming a state senator’s judgment of conviction for demanding money for his vote or official influence concerning a bill that had been introduced in the state senate).

v. Application

It is clear from the foregoing cases that a “thing of value,” in part because it takes into account subjective viewpoints, encompasses a wide variety of things from money and property (such as cars) to services (such as labor and sex) and other acts (removal of vending machines). Legal fees, retainer payments, and shareholder dividends are no doubt pecuniary in nature. There does not appear to be a serious dispute that, excised from the statute and standing alone, any “thing of value” and “pecuniary benefit” include the monetary payments at issue in this case. Rather, the more salient dispute centers on whether the legal fees, retainer payments, and shareholder dividends (1) were conferred

upon Mr. Gray Jr.

43

(2) with the

*1116

intent to corruptly influence his role in the rule-drafting process,

see

§ 13A-10-61(a)(1), and similarly whether (1) Mr. Gray Jr. accepted the pecuniary benefits (2) based upon an understanding that his role in the rule-drafting process would be corruptly influenced,

see

§ 13A-10-61(a)(2).

In each of the Alabama decisions cited, there was evidence that the alleged bribe was conferred directly upon the bribee with the intent to corruptly influence the bribee’s actions. Of course, whether there was an intent to corruptly influence (or an agreement to be corruptly influenced) can be proven by not only direct, but also circumstantial, evidence.

See generally Jackson v. State,

791 So.2d 979, 1017 (Ala.Crim.App.2000) (“Intent, being a state of mind, is rarely, if ever, susceptible of direct or positive proof, and must usually be inferred from the facts testified to by witnesses in the circumstances as developed by and through the evidence.” (citations and internal quotation marks omitted)). For the reasons to follow, it is the absence of any evidence of a connection between the

payments

themselves and the promulgation of the Rules that is fatal to Plaintiffs’ RICO bribery claims.

Although not cited by either party,

United States v. Biaggi,

909 F.2d 662 (2d Cir.1990), contains a discussion pertinent to the present issue. There, the issue was whether legal fees admittedly paid in part for legitimate services also could be considered a bribe, in violation of 18 U.S.C. § 201 (b)(2).

44

See id.

at 671-72, 682-84 . It explained that a jury could have found that the payment of legal fees was paid “in part as compensation for legal services rendered by the law firm,” and in part was a payment that a United States congressman demanded be paid to his son’s law firm in exchange for his “assistance as a public official in securing favorable action from other public officials.”

Id.

at 683 . There was evidence that the United States congressman “expected to be influenced by the payment to render such assistance.”

Id.

The Second Circuit concluded that a “payment may be found to constitute a bribe ... where it is sought and paid for both lawful and unlawful purposes.”

Id.

Hence, “[a] valid purpose that partially motivates a transaction does not insulate participants in an unlawful transaction from criminal liability.”

Id.

However, to amount to bribery, there must be evidence that the “unlawful purposes were of substance, not merely vague possibilities that

*1117

might attend an otherwise legitimate transaction.”

Id.

Also, the court cited

United States v. O’Keefe,

825 F.2d 314 (11th Cir.1987), as an example of where a payment was made to service providers who also held public office, and the evidence was “insufficient to show any purpose for [the] payment other than a lawful one.”

Id.

In

O’Keefe ,

two city officials, who also were partners in a private consulting business, were convicted by a jury for demanding a $32,500 monetary payment in exchange for their votes on city resolutions, in violation of the Hobbs Act.

See

825 F.2d at 317, 319-20 . The district court, however, granted the city officials’ motions for judgment of acquittal, and the government appealed.

See id.

at 317 . On appeal, the Eleventh Circuit explained that there was proof of the payment and the votes, but the issue was “whether the payment was for official acts or legitimate services to which the defendants were entitled compensation.”

Id.

at 320 . The city officials argued that the $32,500 payment “was reasonable compensation for legitimate services rendered,” namely consulting fees performed as part of their private business.

See id.

at 315 & 317. The Eleventh Circuit agreed. Because the “only evidence” was that lawful services were performed and thus that the defendants had a claim of right to the money received, proof of an extortionist nexus between the votes and payments was missing.

Id.

Biaggi’s

discussion of dual purpose payments and

O’Keefe’s

analysis of the absence of an evidentiary link connecting the monetary payment to an illegal purpose illustrate why the same conclusion reached in

O’Keefe

is mandated in this case. Moreover, there are notable factual distinctions between this case and the Alabama bribery cases that further highlight the failings in the evidentiary record on the issue of bribery.

The first consideration is the purpose of the retainers, legal fees, and shareholder dividends. It is significant what Plaintiffs have not argued: that the payments are devoid of any valid purpose whatsoever. Plaintiffs do not dispute, and evidence supports, that for almost a quarter of a century — decades before the inception of electronic bingo in Macon County — Mr. Gray Sr. and the Gray Law Firm have been employed as legal counsel by Mr. McGregor and/or VictoryLand, VictoryLand has paid the Gray Law Firm quarterly retainer fees, and Mr. Gray Sr. has received dividend payments as a VictoryLand minority shareholder based upon an invariant percentage of ownership. (Doc. # 440; Doc. # 475, at 17.) In fact, it is not argued that, prior to January 2003, any of the payments at issue were bribes

45

; those payments thus are not alleged to be things of value or pecuniary benefits, within the parameters of § 13A-10-61(a). Hence, there is no argument of a bribery connection between Mr. Gray Sr.’s

original

purchase of VictoryLand stock in 1983, or the onset in 1983 of the legal relationship between Mr. McGregor/VictoryLand and the Gray Law Firm,

and

Mr. Gray Jr.’s involvement in the formulation of bingo Rules, some twenty years later. Nor is there any evidence or argument that the Grays foresaw or anticipated the high profitability of electronic bingo, which has exponentially increased the share of profits

*1118

payable on Mr. Gray Sr.’s minority interest in VictoryLand. While Plaintiffs point out that the timing of the repayment of the overdue retainer payments coincided with the onset of electronic bingo at Victory-Land, they have not argued or pointed to any evidence suggesting that the past-due retainer payments were not at that time legally owing and due.

46

Plaintiffs also have not contended that the anticipated future retainer payments would differ in kind or amount from those paid since 1984, or would not be supported by any valuable and legal consideration. Moreover, Plaintiffs have not argued that there is anything illegal about the method by which Mr. Gray Sr.’s dividend payments from VictoryLand has been calculated,

ie.,

based upon his unchanging percentage of ownership, or that Mr. Gray Sr.’s dividend payments at any time have not been received in proportion to his shareholding.

Similarly, Plaintiffs have not argued or cited evidence that there was an expectation that future legal fees would not be incurred legitimately for services actually performed by the Gray Law Firm or that future legal fees would exceed the value of legal services rendered by the law firm, or would be based upon fraudulent billing. Moreover, no contention has been advanced that the Gray Law Firm’s simultaneous acceptance of legal fees and retainers is unlawful.

See, e.g., Biaggi

909 F.2d at 682 (“[I]t is not uncommon in the practice of law for legitimate legal fees to be paid in addition to an annual retainer where a law firm handles special tasks and accomplishes significant results.”).

In short, it is uncontroverted that the payments prior to January 2003 were lawful. Plaintiffs also have not contended that the lawful components of those payments wholly ceased in January 2003. The alleged payments thus differ markedly from those in the Alabama cases cited above where a payment was made or promised to a public official who obviously had no colorable or lawful claim to any of it. In

Fuller

and

Pope ,

for example, the cash payments clearly were not offered to law enforcement officials in exchange for lawful services.

See, e.g., Fuller,

115 So.2d at 111 (monetary payments made to a law enforcement officer in exchange for protection of a prostitution operation);

Pope,

365 So.2d at 370 (same). The alleged offer of future legal fees also is distinguishable from the bribe in

Williams,

where an arguably lucrative annual salary was offered to a state senator in exchange for minimal work (two hours of work a week).

See

383 So.2d at 554. Nor has any case been cited where, similar to here, there had been a long history of lawful payments, which suddenly turned corrupt.

Cf. United States v. McNair,

605 F.3d 1152, 1196 (11th Cir.2010) (affirming 18 U.S.C. § 666 bribery convictions and noting that “[tjhere was no evidence of gifts to these ‘friends’ before the sewer project began”).

Biaggi

teaches that the existence of a valid purpose for payment does not necessarily mean that the alleged bribee is home free, as a payment can constitute a bribe when lawful and unlawful (ie., bribery) purposes for the payment coincide. But, here, evidence of any unlawfulness is glaringly absent. Plaintiffs posit that there is ample evidence that Mr. McGregor’s and VictoryLand’s agents had a hand in drafting the Rules, which at every angle and amendment clearly favored Victory-Land. But, even accepting Plaintiffs’ argument as

true

— ie., that Mr. McGregor and VictoryLand “intended to corruptly influence the ruledrafting process and that

*1119

[Mr.] Gray Jr. was aware of those intentions” (Doc. # 464, at 33) — there is no evidence, direct or circumstantial, that the payments were tainted with an intent to corruptly influence Mr. Gray Jr. There is, similar to the scenario in

O’Keefe ,

evidence of payments (retainers, legal fees, and shareholder dividends) and Rules favorable to VictoryLand, but what is lacking is any evidence that lawful services were not performed for the legal fees, that the retainers were unlawful, that the fees were excessive, or that Mr. Gray Sr. was not legitimately entitled to the dividends based upon his ownership interest in Victory-Land. In other words, there is no evidence from which to infer that all of a sudden in 2003, Mr. McGregor turned these payments — legal fees and retainer payments to the Gray Law Firm, and shareholder dividends to Mr. Gray Sr.— into offerings of “things of value” upon Mr. Gray Jr. with the intent to corruptly influence him with respect to the promulgation and amendment of the Rules governing electronic bingo in Macon County, or that Mr. Gray Jr. accepted these “pecuniary benefits” with the understanding that his work on the Rules would be corruptly influenced.

Indeed, the evidence tends in the opposite direction. In spite of the birth of bingo, the retainer has remained unchanged, Mr. Gray Sr.’s ownership percentage has held steady (though the returns have increased astronomically), and Mr. Gray Jr. started the bingo project with no VictoryLand stock and continues in that poor state. On this record, to infer a bribery nexus between the Rules and the payments requires speculation far too excessive to overcome summary judgment.

See Chapman v. Am. Cyanamid Co.,

861 F.2d 1515 , 1518 (11th Cir.1988) (noting that an inference is not reasonable if it is based upon “speculation and conjecture”). In other words, there is insufficient evidence from which it reasonably can be inferred that the “unlawful purposes were of substance, not merely vague possibilities that might attend an otherwise legitimate transaction.”

Biaggi,

909 F.2d at 683 .

It should also be noted here that discovery has been liberally permitted in this case.

{See, e.g.,

Mem. Op. & Order, at 21 (Doc. # 144) (“Because the case is moving forward on all claims, the parties can expect full discovery.”).) This is why earlier in the litigation, this court reasoned that prior to full discovery, it could not assume either that Mr. Gray Jr. did or did not accept pecuniary benefits, within the meaning of § 13A-10-61(a), but at the same time it could not “ignore the allegations that he

did

receive pecuniary benefits.” (Doc. # 252, at 27.) Discovery was permitted to ferret out “whether Mr. Gray Jr. did receive pecuniary benefits — evidence the existence or nonexistence of which is unknown to this court.” (Doc. # 252, at 28.) Despite the expansion in scope, discovery has not uncovered any significantly probative evidence that permits the RICO bribery theory to survive summary judgment. Accordingly, Defendants are entitled to summary judgment on Plaintiffs’ RICO bribery claim,

b. Honest Services Mail and Wire Fraud: § 1962(c)

i. Nature of the Theory

In Count I, Plaintiffs bring a RICO claim against Mr. McGregor, VictoryLand and Sheriff Warren for a violation of § 1962(c), based on predicate acts of honest services mail and wire fraud, which, pursuant to § 1964(c), would entitle them to recover treble damages. Plaintiffs allege that the predicate acts of mail and wire fraud defrauded the citizens of Macon County of the honest services of Mr. Gray Jr. and Sheriff Warren, and defrauded Sheriff Warren of the honest services of Mr. Gray Jr., see §§ 1341, 1343, 1346. (6th Am. Compl. ¶ 120.) Hence, there are three alleged schemes to defraud.

*1120

First, Plaintiffs allege that Defendants engaged in a scheme or artifice to deprive the public of Sheriff Warren’s honest services by ensuring that the Rules were promulgated for the benefit of Victory-Land, and not the public. Specifically, Plaintiffs claim that Sheriff Warren “turn[ed] a blind eye” to the conflicts of interest created by Mr. Gray Jr.’s and Mr. McGregor’s involvement in the rule-drafting process. (6th Am. Compl. ¶¶ 120-26.) Second, Plaintiffs allege that Defendants engaged in a scheme or artifice to deprive the public of Mr. Gray Jr.’s honest services following the ratification of Amendment No. 744. (6th Am. Compl. ¶ 129.) Plaintiffs allege that Mr. Gray Jr. drafted the Rules to further his own personal interests, that those personal interests created conflicts of interest that Mr. Gray Jr. did not disclose to the public, and that the Gray Law Firm and Mr. Gray Sr. failed to prevent the conflicts of interest. (6th Am. Compl. ¶¶ 128-30.) Third, Plaintiffs aver that Defendants engaged in a scheme or artifice to deprive Sheriff Warren of the honest services of Mr. Gray Jr., who did not fully disclose the conflicts of interest to Sheriff Warren or advise Sheriff Warren that VietoryLand’s agents drafted the Rules.

47

(6th Am. Compl. ¶¶ 120,131.)

Mr. McGregor and VictoryLand allegedly participated in these three schemes to defraud in two principal ways. First, they directed their attorneys Mr. Bolton and Mr. Johnston to draft Rules (and amendments thereto), highly favorable to VictoryLand and prohibitively exclusionary to competitors, for Sheriff Warren’s promulgation. Second, they bestowed benefits (retainer payments and legal fees) on the Gray Law Firm and Mr. Gray Sr. so that Mr. Gray Jr. would advise Sheriff Warren to enact the Rules drafted by Victory-Land’s agents. (6th Am. Compl. ¶¶ 123, 129, 132.) It further is alleged that Mr. McGregor and VictoryLand used the mails and interstate wires in furtherance of the schemes to defraud, namely, by exchanging with Mr. Gray Jr. proposed Rules governing bingo by email and facsimile, and mailing numerous checks over a five-year period to the Gray Law Firm and/or Mr. Gray Jr. (6th Am. Compl. ¶¶ 134-35.) Plaintiffs also contend that Sheriff Warren used the mails on at least two occasions, sending letters to Mr. Bracy and returning Lucky Palace’s application for an Operator’s License. (Doc. # 465, at 23.)

Plaintiffs contend that Defendants’ honest services mail and wire fraud has resulted in Rules that favor VictoryLand, but that have prevented Plaintiffs from obtaining the necessary licenses for operating and conducting electronic bingo in Macon County. As a result, Plaintiffs allege that Lucky Palace has been injured in the form of lost profits and that the Plaintiff Charities have suffered injuries based upon the semi-annual contractual payments of $21,000 they would have received from Lucky Palace had it received a license to operate electronic bingo in Macon County. (Doc. #445, at 37-38; 6th Am. Compl. ¶¶ 143,145-46.)

ii. Initial Observation:

Skilling

RICO “takes aim at ‘racketeering activity,’ which it defines as ... any act ‘indictable’ under numerous specific federal criminal provisions, including mail and wire fraud.”

Sedima, S.P.R.L. v. Imrex Co.,

473 U.S. 479, 481 , 105 S.Ct. 3275 , 87 L.Ed.2d 346 (1985) (citing § 1961(1)). “Mail or wire fraud occurs when a person (1) intentionally participates in a scheme to defraud another of money or property and (2) uses the mails or wires in furtherance

*1121

of that scheme.”

Am. Dental Ass’n v. Cigna Corp.,

605 F.3d 1283, 1290 (11th Cir.2010) (citation and internal quotation marks omitted). The terms “scheme or artifice to defraud,” as used in the mail and wire fraud statutes, “include[ ] a scheme or artifice to deprive another of the intangible right of honest services.” § 1346.

This term, § 1346 was under scrutiny in three cases pending before the United States Supreme Court. In

Skilling v. United States,

— U.S. —, 130 S.Ct. 2896 , 177 L.Ed.2d 619 (2010), the Court examined the high-profile conviction of Jeffrey Skilling, a former Enron top executive, who was convicted of a conspiracy to defraud Enron’s shareholders of their right to his honest services “by misrepresenting the company’s fiscal health, thereby artificially inflating its stock price,” and benefitting financially because his compensation was tied to the performance of Enron’s stock.

Id.

at 2934 . The issue was “whether Skilling’s conspiracy conviction was premised on an improper theory of honest-services wire fraud.”

Id.

at 2925 . Skilling argued that § 1346 was unconstitutionally vague and, alternatively, that his conduct did not fall within the statute’s reach.

Id.

The Supreme Court did not invalidate § 1346, but rather held that it “encompasses] only bribery and kickback schemes,” thereby saving the statute from a due process void-for-vagueness challenge.

Id.

at 2933. In reaching its holding, the Court examined the origin of the honest services doctrine, in particular, Congress’ enactment of § 1346 in response to the Court’s decision in

McNally v. United States,

483 U.S. 350 , 107 S.Ct. 2875 , 97 L.Ed.2d 292 (1987), which “stopped the development of the intangible-rights doctrine in its tracks.”

Id.

at 2927. “Congress responded swiftly” to

McNally ,

enacting § 1346 to include in the definition of “scheme or artifice to defraud” schemes or artifices “to deprive another of the intangible right of honest services.” § 1346.

Id.

The

Skilling

Court explained: “While the honest-services cases preceding

McNally

dominantly and consistently applied the fraud statute to bribery and kickback schemes — schemes that were the basis of most honest-services prosecutions — there was considerable disarray over the statute’s application to conduct outside that core category.”

Id.

at 2929. “It has long been our practice ... before striking a federal statute as impermissibly vague, to consider whether the prescription is amenable to a limiting construction.”

Id.

And, in view of § 1346’s history and

pre-McNally

decisions, the Court opined:

[T]here is no doubt that Congress intended § 1346 to reach at

least

bribes and kickbacks. Reading the statute to proscribe a wider range of offensive conduct, we acknowledge, would raise the due process concerns underlying the vagueness doctrine. To preserve the statute without transgressing constitutional limitations, we now hold that § 1346 criminalizes only the bribe-and-kickback core of the

pre-McNally

case law.

Id.

at 2931. Under this limiting construction of § 1346, “Skilling did not commit honest-services fraud.”

Id.

at 2934. The government had not alleged that Skilling “solicited or accepted side payments from a third party in exchange for making the [charged] misrepresentations,” and, thus, he did not conspire to commit honest services fraud.

48

Id.

*1122

The Supreme Court also rejected the government’s argument that § 1346 should proscribe “undisclosed self-dealing by a public official or private employee — ie., the taking of official action by the employee that furthers his own undisclosed financial interests while purporting to act in the interest of those to whom he owes a fiduciary duty.”

Id.

at 2932 (internal quotation marks omitted). “In light of the relative infrequency of conflict-of-interest prosecutions in comparison to bribery and kickback charges, and the intercircuit inconsistencies they produced, ... a reasonable limiting construction of § 1346 must exclude this amorphous category of cases.”

Id.

at 2932.

The issue is the effect

Skilling’s

holding has on Plaintiffs’ RICO honest services mail and wire fraud claim. The answer is that

Skilling ,

in large part, dooms the claim. Plaintiffs’ three § 1346 theories, as discussed, focus primarily on honest services fraud by means of self-dealing and undisclosed conflicts of interests resulting in personal gain to VictoryLand and Mr. McGregor (in the form of favorable electronic bingo Rules). These theories fall squarely within the category of cases rejected by the

Skilling

Court as coming within § 1346’s confines.

Confusingly, however, Plaintiffs also allude to honest services fraud predicated on VictoryLand’s and Mr. McGregor’s alleged bribery of Mr. Gray Jr., a purported public official. While bribery of a public official fits within the scope of § 1346, as narrowed by

Skilling ,

the theory nonetheless fails for the reasons discussed in the preceding section. It is not necessary to analyze further

Skilling’s

impact on Plaintiffs’ theories, the impact of which has not been briefed, because there is another reason in the civil RICO context, which has been fully briefed, why the honest services mail and wire fraud theory cannot survive summary judgment. The summary judgment briefing, which preceded

Skilling ,

focused on § 1964(c)’s proximate cause requirement (a requirement in civil, not criminal, RICO cases), and as explained below, evidence of proximate cause is lacking. In other words, assuming

arguendo

that some part of Plaintiffs’ RICO honest services mail and wire fraud claim survives

Skilling ,

Defendants nonetheless are entitled to summary judgment because Plaintiffs’ injuries were not proximately caused by the RICO violation,

iii. Grounds for Summary Judgment

In addition to satisfying the four elements of § 1962(c),

Williams,

465 F.3d at 1282 , civil RICO plaintiffs also must demonstrate the demands of § 1964(c) to merit a private right of action for treble damages; namely, RICO plaintiffs must show that they suffered an injury to their “business or property by reason of a violation” of RICO’s substantive provisions (ie., § 1962), § 1964(c). In

Williams,

the Eleventh Circuit referred to § 1964(c) as a “statutory standing” requirement, rather than as a standing requirement under Article III of the United States Constitution. 465 F.3d at 1291 .

Mr. McGregor and VictoryLand raise two main challenges to Plaintiffs’ RICO honest services mail and wire fraud claim.

49

First, they argue that Plaintiffs lack RICO standing, as required by § 1964(c), because they have failed to show both (1) an injury to “business or property” and (2) that such injury was “by reason of’ the substantive RICO violation. Sec

*1123

ond, as to § 1962(c)’s four elements, they contend that Plaintiffs’ honest services mail and wire fraud claim fails on the first element: “[N]one of the conduct that Plaintiffs have imputed to Defendants, even if it were true, constitutes the deprivation of honest services by mail or wire fraud under 18 U.S.C. § 1346 .”

50

(Doc. #440, at 92-93.) The latter argument implicates

Skilling ,

and the negative effect of

Skilling

on Plaintiffs’ honest services mail and wire fraud theory is addressed above. Alternatively, Defendants are entitled to prevail at summary judgment on one of their standing arguments, as discussed below.

iv. § 1964(c): RICO Standing

Based upon the summary judgment standard, there is sufficient evidence of harm to Plaintiffs’ business or property. There, however, is insufficient evidence that Plaintiffs’ alleged injuries were proximately caused by the RICO violation, as required by § 1964(c)’s “by reason of’ language. Accordingly, as explained below, Plaintiffs do not have RICO statutory standing to bring an honest services mail and wire fraud claim.

a. Injury to Business or Property

The terms “ ‘business or property’ are ... words of limitation.”

Grogan v. Platt,

835 F.2d 844, 846 (11th Cir.1988);

see also Reiter v. Sonotone Corp.,

442 U.S. 330, 339 , 99 S.Ct. 2326 , 60 L.Ed.2d 931 (1979) (“The phrase ‘business or property’ ... retains restrictive significance.”). The Eleventh Circuit has applied that limitation to exclude, for example, “damages normally recoverable for personal injuries, such as mental anguish, [from] ... the rubric of ‘business or property[,]’ ”

Grogan,

835 F.2d at 846 , and “for those pecuniary losses that are most properly understood as part of a personal injury claim,”

id.

at 848

51

;

accord Pilkington v. United Airlines,

112 F.3d 1532, 1536 (11th Cir.1997).

Mr. McGregor and VictoryLand contend that the alleged deprivation of Sheriff Warren’s and the Macon County citizens’ right to honest services is not an injury to business or property because the “direct injury” resulting from honest services fraud is “a deprivation of an intangible right, rather than an injury to business or property.” (Doc. # 475, at 32.) In other words, they assert that any alleged § 1346 scheme to defraud “could at most only deprive Plaintiffs of an intangible right to honest services, which is not a sufficiently particularized and concrete loss to business or property to confer standing.” (Doc. # 459, at 22-23.) Plaintiffs, however, contend that their compensable

injuries

are their lost profits, not the deprivation of honest services.

52

(Doc. # 445, at

*1124

37-38.) Having examined the cases relied upon by Mr. McGregor and VictoryLand in light of the arguments presented, the court finds that they are mistaken as to the nature of the injuries alleged.

53

In

Doe v. Roe,

958 F.2d 763 (7th Cir.1992), the plaintiff-client brought RICO claims against her divorce lawyer, claiming that the lawyer coerced her into having sexual relations with him as payment for his legal services.

See id.

at 765 . The plaintiff argued that she had suffered at least three § 1964(c) “property” injuries, one of which allegedly arose from the lawyer’s concealment of his fraudulent practice of requiring sexual services from female clientele and demanding increased unbargained-for fees.

See id.

at 769. The

Doe

court opined that this injury, at best, amounted to a “breach of [the lawyer’s] fiduciary duty to provide honest services,” but that “these fiduciary violations did not harm [the plaintiff] in a commercial or proprietary sense” or “result in any economic loss to [the plaintiff].”

Id.

Mr. McGregor and VictoryLand hone in on footnote five of the

Doe

opinion. In that footnote, the Seventh Circuit noted that, although the plaintiffs “claim sounding in the loss of honest services might satisfy” the mail and wire fraud statutes to the extent that the alleged violations occurred after § 1346’s effective date

(i.e.,

November 18, 1988), and consequently “could serve as the predicate racketeering acts, they could not be a direct basis for civil RICO liability since § 1964(c)’s requirement of injury to property would still not be met.”

Doe,

958 F.2d at 769 n. 5.

Similarly, in

Marina Point Development Associates v. United States,

364 F.Supp.2d 1144 (C.D.Cal.2005), also relied upon by Mr. McGregor and VictoryLand, the plaintiff alleged that the § 1964(c) injury was the deprivation of honest government services pertaining to the denial of a permit needed for the development of a resort on the plaintiffs lakefront property.

See id.

at 1145^16. Citing Ninth Circuit decisions that had defined “ ‘business or property’ injury to include only tangible and concrete financial loss,” the court concluded that “the deprivation of the right to honest governmental services is not a tangible and concrete financial loss, and so is not injury to ‘business or property’ as required by section 1964(c).”

Id.

at 1148.

The remainder of the cases relied upon by Mr. McGregor and VictoryLand stand for essentially the same principle,

i.e.,

that a § 1964(c)

injury

cannot take the form of an alleged deprivation of honest services.

See Ove v. Gwinn,

264 F.3d 817, 825 (9th Cir.2001) (“[T]he deprivation of ‘honest services’ does not constitute concrete financial loss” sufficient to establish an

injury

to state a RICO claim). The court, however, need not belabor these cases, as they, as well as

Doe

and

Marina Point,

are distinguishable.

54

*1125

It is true that the alleged

predicate acts

here sound in a loss of honest services, but Plaintiffs do not claim, as did the plaintiffs in

Doe

and the other cases cited above, that the loss of honest services is the § 1964(c)

injury.

To the contrary, Plaintiffs claim that they sustained economic business and/or property injuries in the form of lost profits and contractual payments when they were unable to obtain the necessary licenses from Sheriff Warren to operate and conduct electronic bingo in Macon County. The court, thus, finds that Mr. McGregor and VictoryLand have not demonstrated that the dictum in footnote five of the

Doe

opinion applies in this case because Plaintiffs do not allege that the loss of honest services is the “direct basis for civil RICO liability.”

Doe,

958 F.2d at 769 n. 5.

Moreover, as Plaintiffs point out (Doc. # 464, at 52), the Eleventh Circuit has held that lost profits can constitute an “injury to business or property” flowing from a violation of § 1962(c).

See Maiz v. Virani,

253 F.3d 641 , 663-64 (11th Cir.2001). However, there is a caveat: “The recoverability of these kinds of damages is a function of proximate cause, and must be assessed on a case-by-case basis.”

Id.; see also Sound Video Unlimited, Inc. v. Video Shack Inc.,

700 F.Supp. 127, 142 (S.D.N.Y.1988) (observing that under RICO, “recovery of lost profits should be subject to the ordinary limitations concerning remoteness (or proximate cause) and speculativeness (or certainty)” (citation and internal quotation marks omitted)). The failure of Mr. McGregor and Victory-Land to prevail on this argument, however, ultimately does not save Plaintiffs’ claim, because even assuming

arguendo

that Plaintiffs have suffered a compensable injury under RICO, they still must show proximate cause, which they cannot do.

b. Proximate Cause

Mr. McGregor and VictoryLand also assert that Plaintiffs cannot show that the lost profits and contractual payments they claim that they would have received had they obtained licenses from Sheriff Warren to operate and conduct electronic bingo in Macon County were proximately caused by the alleged RICO violations. They argue that Plaintiffs’ claimed injuries of lost profits and contractual payments are not the “direct result of the alleged conduct constituting the RICO violation.” (Doc. # 459, at 26, 29; Doc. # 440, at 102-04; Doc. #475, at 46.) Instead, relying upon

Anza v. Ideal Steel Supply Corp.,

547 U.S. 451 , 126 S.Ct. 1991 , 164 L.Ed.2d 720 (2006), Mr. McGregor and Victory-Land contend that these claimed financial losses are “secondary injuries].” (Doc. # 475, at 44-45.) In response, Plaintiffs argue that Sheriff Warren’s “refusal to consider” their license applications, “which arose from the rules and regulations produced by ... Defendants’ racketeering activity, has been and continues to be the direct and proximate cause of an injury to Lucky Palace’s business.” (Doc. # 445, at

*1126

37; Doc. #464, at 42.) Plaintiffs farther argue that Defendants’ “racketeering activities have prevented the [Plaintiff] Charities from obtaining ... licenses” to operate electronic bingo in Macon County at a proposed Lucky Palace facility. (Doc. # 445, at 38.)

Section 1964(c)’s “by reason of’ language embodies a proximate cause requirement. “[A] plaintiff may sue under § 1964(c) only if the alleged RICO violation was the proximate cause of the plaintiffs injury.”

55

Anza,

547 U.S. at 453 , 126 S.Ct. 1991 (relying on

Holmes v. Secs. Investor Prot. Corp.,

503 U.S. 258, 268 , 112 S.Ct. 1311 , 117 L.Ed.2d 532 (1992));

Liquidation Comm’n of Banco Intercontinental, S.A. v. Renta,

530 F.3d 1339 , 1350 n. 14 (11th Cir.2008) (noting that “RICO standing is really just a heightened proximate causation standard, as it requires a claimant to prove that he was injured in his business or property ‘by reason of the RICO violation”).

“When a court evaluates a RICO claim for proximate causation, the central question it must ask is whether the alleged violation led directly to the plaintiffs injuries.”

Anza,

547 U.S. at 461 , 126 S.Ct. 1991 . This central question originates from the “common-law foundations of the proximate-cause requirement, and specifically the ‘demand for some direct relation between the injury asserted and the injurious conduct alleged.’ ”

Id.

at 457 , 126 S.Ct. 1991 (quoting

Holmes,

503 U.S. at 268 , 112 S.Ct. 1311 );

see also Williams,

465 F.3d at 1287 . Hence, a plaintiff who complains “of harm flowing merely from the misfortunes vested upon a third person by the defendants’ acts [is] generally said to stand at too remote a distance to recover.”

Holmes,

503 U.S. at 268-69 , 112 S.Ct. 1311 . Under the remoteness concept, standing is limited to those “directly” injured by a defendant’s conduct.

See id.

at 269-70 , 112 S.Ct. 1311 .

In

Anza ,

the plaintiff and the defendant were competitor companies, both offering steel products and related services in the same geographical area.

56

547 U.S. at 454 , 126 S.Ct. 1991 . The plaintiff brought a § 1962(c) civil RICO claim, alleging that the defendant was able to reduce its prices, thereby gaining market share at the plaintiffs expense, by not charging the required state sales tax and concealing that illegality by filing fraudulent state tax returns.

See id.

The goal of the defendant’s conduct “was to give [the defendant] a competitive advantage over [the plaintiff].”

Id.

at 455-56, 126 S.Ct. 1991 . As to this claim, the court below (the Second Circuit) held that “where a com

*1127

plaint alleges a pattern of racketeering activity ‘that was intended to and did give the defendant a competitive advantage over the plaintiff, the complaint adequately pleads proximate cause, and the plaintiff has standing to pursue a civil RICO claim.’ ”

Id.

at 445, 126 S.Ct. 1991 (citation omitted). The Supreme Court disagreed: “A RICO plaintiff cannot circumvent the proximate-cause requirement simply by claiming that the defendant’s aim was to increase market share at a competitor’s expense.”

Id.

at 460 , 126 S.Ct. 1991 .

Relying principally upon

Holmes ,

the

Anza

Court concluded that the plaintiff lacked statutory standing under § 1964(c) and, thus, could not maintain its § 1962(c) claim.

See Anza,

547 U.S. at 457 , 126 S.Ct. 1991 . The Court reiterated that the compensable injury that flows from a § 1962(c) violation “ ‘necessarily is the harm caused by predicate acts sufficiently related to constitute a pattern, for the essence of the violation is the commission of those acts in connection with the conduct of an enterprise.’ ”

Id.

(quoting

Sedima,

473 U.S. at 497 , 105 S.Ct. 3275 ). The plaintiffs “theory” was that the defendant “harmed it by defrauding the New York tax authority and using the proceeds from the fraud to offer lower prices designed to attract more customers.”

Id.

at 457-58, 126 S.Ct. 1991 . The RICO violation was that the defendant’s business was “conducted ... through a pattern of mail and wire fraud.”

Id.

at 458 , 126 S.Ct. 1991 . “The direct victim of this conduct was the State of New York, not [the plaintiff].”

Id.

The Supreme Court concluded that the “proper referent of the proximate-cause analysis [was] an alleged practice of conducting [the defendant’s] business through a pattern of

defrauding the State.” Anza,

547 U.S. at 458 , 126 S.Ct. 1991 (citation omitted). It acknowledged that the plaintiff may have “suffered its own harms” when the defendant did not require customers to pay the applicable state sales tax.

Id.

The Court explained that “[t]he cause of [the plaintiffs] asserted harms

[i.e.,

lost profits], however, is a set of actions (offering lower prices) entirely distinct from the alleged RICO violation (defrauding the State).”

Id.

The alleged RICO violation directly caused the State to be defrauded of taxes, not the plaintiff to lose money to its competitor. Given the plaintiffs indirect injury, the Court held that § 1964(c)’s requirement of proximate cause was not satisfied.

See id.

at 460, 126 S.Ct. 1991 .

The Court explained that two of the “motivating principle^]” for requiring proximate causation under § 1964(c), as set out in

Holmes ,

further illustrated why the plaintiffs injury was not the “direct result” of a RICO violation.

Anza,

547 U.S. at 458-59 , 126 S.Ct. 1991 . Those motivating principles include (1) the difficulty of calculating damages caused by remote actions and distinguishing among causal factors unrelated to the asserted racketeering activity, and (2) the prospect that more immediate victims of an alleged RICO violation can be expected to pursue their own claims.

See id.

at 458-60 , 126 S.Ct. 1991 .

Applying the first principle, the

Anza

Court observed that the plaintiff categorized its “injury” as “its own loss of sales resulting from [the defendant’s] decreased prices for cash-paying customers.” 547 U.S. at 458 , 126 S.Ct. 1991 . However, the defendant “could have lowered its prices for any number of reasons unconnected to the asserted pattern of fraud.”

Id.

Moreover, as to the second principle, the

Anza

Court concluded that the state of New York, the more “immediate victim[ ],” could have in “relatively straightforward” fashion calculated the tax revenue unpaid by the defendant and pursued remedies to

*1128

collect the delinquency.

57

Id.

at 460 , 126 S.Ct. 1991 .

The Supreme Court also found § 1964(e)’s proximate cause requirement lacking in its recent decision in

Hemi Group, LLC v. City of New York,

— U.S. —, 130 S.Ct. 983 , — L.Ed.2d — (2010). In

Hemi Group,

the city of New York (“City”) brought a RICO action against Hemi Group (“Hemi”), an out-of-state company that sold cigarettes online to City residents, but did not, as required by federal law

(i.e.,

the Jenkins Act), submit information about its sales to New York residents.

Id.

at 986-87 . It was alleged that Hemi’s “ ‘interstate sale of cigarettes and the failure to file Jenkins Act reports identifying those sales’ constitute[d] the RICO predicate offenses of mail and wire fraud in violation of § 1962(c), for which § 1964(c) provide[d] a private cause of action.”

Id.

at 987. The City further alleged that it “suffered injury in the form of lost tax revenue — its ‘business or property’ in RICO terms — ‘by reason of ” Hemi’s fraud.

Id.

at 988. Based upon these allegations, the Supreme Court held that the City had not suffered an injury “by reason of’ the alleged fraud.

Id.

at 994. The Supreme Court discussed its prior teachings in

Holmes

and

Anza

concerning the proximate cause requirement embedded in § 1964(c)’s “by reason of’ language.

Id.

at 988-90. It explained that the City’s RICO claim “suffere[d] from the same defect as the claim in

Anza

Here, the conduct directly responsible for the City’s harm was the customers’ failure to pay their taxes. And the conduct constituting the alleged fraud was Hemi’s failure to file Jenkins Act reports. Thus, as in

Anza ,

the conduct directly causing the harm was distinct from the conduct giving rise to the fraud.

Id.

at 990 (citing

Anza,

547 U.S. at 458 , 126 S.Ct. 1991 ).

Turning back to this case, Plaintiffs formulate the proximate cause analysis as follows: Sheriff Warren’s refusal to consider and grant licenses to Lucky Palace and the Plaintiff Charities, “which arose from the rules and regulations produced by Defendants’ racketeering activities, has been and continues to be the direct and proximate cause of an injury to Lucky Palace’s business” (in the form of lost profits), and to the Plaintiff Charities’ “business and property” (in the form of lost semi-annual contractual payments from Lucky Palace). (Doc. # 445, at 37.) This formulation is devoid of analysis; it is but a mere legal conclusion, and it is incorrect.

The analysis appropriately begins by identifying the predicate acts.

See Anza,

547 U.S. at 457 , 126 S.Ct. 1991 (“[T]he compensable injury flowing from a [§ 1962(c) ]

violation ...

‘necessarily is the

harm caused by predicate acts

sufficiently related to constitute a pattern, for the essence of the violation is the commission of those acts in connection with the conduct of an enterprise.’ ” (quoting

Sedima,

473 U.S. at 497 , 105 S.Ct. 3275 ) (emphasis added)). Mail and wire fraud are the predicate acts and require, among other things, proof of a scheme or artifice to defraud.

See

§§ 1341, 1343. Here, the alleged scheme or artifice is one to defraud the citizens of Macon County and Sheriff Warren — of the intangible right of honest services,

see

§ 1346. More specifically, the predicate acts are that Mr. McGregor and VictoryLand exchanged with Mr. Gray Jr. by email and facsimile proposed Rules governing bingo, and caused numerous checks for legal fees and retainer pay

*1129

ments to be mailed over a five-year period to the Gray Law Firm and/or Mr. Gray Sr. in furtherance of the scheme to defraud the citizens of Macon County and Sheriff Warren of honest services.

{See

6th Am. Compl. ¶¶ 118-35.) Sheriff Warren, in turn, used the mails on at least two occasions, sending letters to Mr. Bracy and returning Lucky Palace’s application for an Operator’s License, all allegedly in furtherance of a scheme or artifice to deprive the citizens of Macon County of the honest services of Sheriff Warren. (Doc. # 465, at 23.) The RICO violation alleged is that Mr. McGregor, VictoryLand and Sheriff Warren conducted their affairs through this pattern of honest services mail and wire fraud.

See Anza,

547 U.S. at 458 , 126 S.Ct. 1991 (“The RICO violation alleged by [the plaintiff] is that the [defendant] conducted [its] affairs through a pattern of mail fraud and wire fraud.”).

Plaintiffs’ theory is that Mr. McGregor and VictoryLand harmed Plaintiffs by participating in schemes to defraud the citizens of Macon County and Sheriff Warren of their intangible right to receive honest services (by clandestinely drafting proposed Rules for Sheriff Warren’s promulgation and by bribing Mr. Gray Jr. to advise Sheriff Warren to adopt those Rules). Furthermore, as to Sheriff Warren, the theory is that he harmed Plaintiffs by remaining willfully blind to the conflicts of interest created by Mr. Gray Jr.’s and Mr. McGregor’s involvement in the rule-drafting process. The product of those dishonest services (Rules governing electronic bingo in Macon County) allowed Sheriff Warren to reject Plaintiffs’ applications for licenses to conduct and operate electronic bingo. (Doc. # 445, at 37; 6th Am. Compl. ¶ 145);

accord Anza,

547 U.S. at 457-58 , 126 S.Ct. 1991 (The plaintiffs “theory is that [the defendant] harmed it by defrauding the New York tax authority and using the proceeds from the fraud to offer lower prices designed to attract more customers.”). The

direct victims

of Mr. McGregor’s and VictoryLand’s alleged misconduct were the citizens of Macon County and Sheriff Warren — not Plaintiffs. Similarly, the direct victims of Sheriff Warren’s alleged misconduct were the citizens of Macon County — not Plaintiffs.

First, the citizens of Macon County allegedly have been defrauded, and those citizens deprived of the honest services of Sheriff Warren and Mr. Gray Jr. The citizens are the ones who Plaintiffs assert have lost the benefits associated with a competitive market, including higher quality products and services, lower prices, increased jobs and services, and additional infrastructure. (Doc. # 445, at 33.) Indeed, Plaintiffs make a point of particularizing the harms to the citizens of Macon County, to include: (1) “reduced competition and thus reduced checks on price and controls on quality,” which among other things allows VictoryLand to “increase charges to its patrons”; (2) “the loss of additional jobs and additional infrastructure

{e.g.,

sewers) that would have been provided by Lucky Palace had Victory-Land not secured a monopoly”; and (3) “limit[ed] governmental revenues, which, in turn, limit the provision of services to the citizens of Macon County.” (Doc. # 445, at 33; Michael A. Williams, Ph.D. ¶¶ 45-57.) As to these contentions, “[t]he proper referent of the proximate-cause analysis” is an alleged practice of providing dishonest services through a pattern of defrauding the citizens of Macon County.

Second, with respect to Sheriff Warren (as the victim), he was allegedly defrauded of the honest services of his lawyer, Mr. Gray Jr. As to this contention, the proper referent of the proximate-cause analysis is an alleged practice of providing dishonest services through a pattern of defrauding Sheriff Warren. The direct victim here is Sheriff Warren. Plaintiffs nonetheless contend that they have been “directly in

*1130

jured by ... Defendants’ interference in the attorney-client relationship between [Mr.] Gray Jr. and Sheriff Warren.” (Doc. # 464, at 49-50.) Namely, “[b]y depriving Sheriff Warren of the honest services of [Mr.] Gray Jr.,” Plaintiffs contend that “Defendants secured a monopoly on electronic bingo in Macon County,” thereby preventing Plaintiffs “from participating in the market for electronic bingo.” (Doc. #464, at 50.) Plaintiffs cite

Bridge v. Phoenix Bond & Indem. Co.,

553 U.S. 639 , 128 S.Ct. 2131 , 170 L.Ed.2d 1012 (2008), as support for their argument that they suffered a direct injury. (Doc. # 464, at 49-50.)

In

Bridge ,

regular bidders at the county’s auctions of tax liens sued competitors, alleging that the competitors engaged in mail fraud by submitting false affidavits that they had complied with the “single, simultaneous bidder rule.” 128 S.Ct. at 2135-36 . As a result of their falsifications to the county, the competitors were able to place multiple bids and received a greater number of liens than they legally should have.

Id.

at 2136. The competitors argued that the regular bidders lacked standing to raise RICO claims because they could not show that they — as opposed to the county — were the recipients of the false affidavits or that they actually relied on the false attestations.

Id.

at 2136-37. The Supreme Court disagreed. It held that “a plaintiff asserting a RICO claim predicated on mail fraud need not show, either as an element of its claim or as a prerequisite to establishing proximate causation, that it relied on the defendant’s alleged misrepresentations.”

Id.

at 2145.

To be sure,

Bridge

rejected the argument that a plaintiff who brings a mail fraud claim

must

demonstrate that it relied on the defendant’s misrepresentations to establish § 1964(c)’s proximate cause requirement.

Id. Bridge,

however, did not disturb

Anza’s

and

Holmes’s

holdings that the alleged violation must be both the “but for” and the proximate cause of the injury to demonstrate that the injury was “by reason of’ a RICO violation.

Id.

at 2141-42. Rather, in

Bridge ,

the Supreme Court picked up where

Anza

left off. The

Anza

Court had declined to address the defendants’ alternative argument that a RICO claim predicated on mail or wire fraud requires proof that the plaintiff relied on the defendant’s misrepresentations.

See

547 U.S. at 461 , 126 S.Ct. 1991 . Hence,

Anza’s

and

Holmes’s

principles still must be satisfied in that a plaintiff must demonstrate that “ ‘the alleged violation led directly to the plaintiffs injuries.’ ”

Bridge,

128 S.Ct. at 2142 (quoting

Anza,

547 U.S. at 461 , 126 S.Ct. 1991 );

see also Hemi Group,

130 S.Ct. at 992

(Bridge

“reaffirmed the requirement that there must be ‘a sufficiently direct relationship between the defendant’s wrongful conduct and the plaintiffs injury.’ ”).

58

*1131

Moreover, in

Bridge ,

proximate cause was neither in doubt nor at issue; it was undisputed that the plaintiff, a competitor, was the “primary and intended victim[ ] of the scheme to defraud.” 128 S.Ct. at 2139 . Indeed, the

Bridge

Court cited favorably the lower courts’ conclusions that the plaintiffs and other losing bidders “were the

only

parties injured by [the defendants’] misrepresentations.”

Id.

at 2144. The county suffered no loss. Plaintiffs do not and cannot make that contention in this case. As discussed above, their claim rests on the premise that parties other than themselves were directly injured by the schemes to defraud. All in all, the court finds that the facts of this case are more in line with

Anza’s,

than with

Bridge’s.

Here, the cause of Plaintiffs’ asserted harms

(i.e.,

lost sales and contractual payments) is a series of actions (being denied electronic bingo licenses) that are “entirely distinct” from the alleged RICO violation (defrauding the citizens of Macon County and Sheriff Warren of honest services).

Anza,

547 U.S. at 458 , 126 S.Ct. 1991 (“The cause of [the plaintiffs] asserted harms

[ie.,

lost profits], however, is a set of actions

(offering lower prices)

entirely distinct from the alleged RICO violation (defrauding the State).”). In other words, the conduct directly responsible for Plaintiffs’ harm was the promulgation of Rules that had the effect of precluding Plaintiffs’ entry into the Macon County electronic bingo market. The conduct constituting the alleged fraud was Defendants’ failure to provide honest services to Macon County citizens and Sheriff Warren. Hence, “the conduct directly causing the harm [is] distinct from the conduct giving rise to the fraud.”

Hemi Group,

130 S.Ct. at 990 .

Anza

commands this finding, notwithstanding Plaintiffs’ assertions that the ulterior goal of Defendants was to give VictoryLand exclusive control over electronic bingo operations in Macon County and to prevent Lucky Palace and the Plaintiff Charities from competing with it in the electronic bingo business. Plaintiffs’ assertions comport with the court of appeals’ holding in

Anza ,

but that holding was overturned.

See

547 U.S. at 460 , 126 S.Ct. 1991 (rejecting the Second Circuit’s “reasoning that because the [defendants] allegedly sought to gain a competitive advantage over [the plaintiff], it [was] immaterial whether they took an indirect route to accomplish their goal”). Instead, the

Anza

Court held that “[a] RICO plaintiff cannot circumvent the proximate cause requirement simply by claiming that the defendant’s aim was to increase market

*1132

share at a competitor’s expense.”

Id.

And

Hemi Group

drove home this point: “In

Anza

... [the plaintiff] alleged that [the defendants’] scheme Vas to give [the defendants] a competitive advantage over [the plaintiff].’ ”

Hemi Group,

130 S.Ct. at 991 (quoting

Anza,

547 U.S. at 454-55 , 126 S.Ct. 1991 ). “But that allegation did not prevent the Court from concluding that [the defendants’] fraud directly harmed only the State, not [the plaintiff].”

Id.

A RICO plaintiff “cannot escape the proximate cause requirement merely by alleging that the fraudulent scheme embraced all those indirectly harmed by the alleged conduct. Otherwise, our RICO proximate cause precedent would become a mere pleading rule.”

Id.

Also, particularly apropos here is the

Anza

Court’s admonition that a direct causal nexus between the RICO violation and a plaintiffs injuries “has particular resonance when applied to claims brought by economic competitors, which, if left unchecked, could blur the line between RICO and the antitrust laws.” 547 U.S. at 460 , 126 S.Ct. 1991 ;

see also City of New York v. Smokes-Spirits.com, Inc.,

541 F.3d 425, 441-42 (2d Cir.2008) (noting that

“Anza

involved a RICO claim of a competitor complaining of another merchant’s ability to offer lower prices, and the Court’s holding sought to limit RICO standing in that type of case”).

On a similar line of argument, Plaintiffs argue that, as a “foreseeable ... consequence” of the schemes to defraud, they “were prevented from participating in the market for electronic bingo.” (Doc. # 464, at 59.) However, the Supreme Court in

Hemi Group

soundly rejected foreseeability as the governing standard:

The dissent would have RICO’s proximate cause requirement turn on foreseeability, rather than on the existence of a sufficiently “direct relationship” between the fraud and the harm. It would find that the City has satisfied that requirement because “the harm is foreseeable; it is a consequence that Hemi intended, indeed desired; and it falls well within the set of risks that Congress sought to prevent.” Post, at 997-998 (opinion of BREYER, J.). If this line of reasoning sounds familiar, it should. It is precisely the argument lodged against the majority opinion in

Anza .

There, the dissent criticized the majority’s view for “permit[ting] a defendant to evade liability for harms that are not only foreseeable, but the intended consequences of the defendant’s unlawful behavior.” 547 U.S. at 470 , 126 S.Ct. 1991 ... (THOMAS, J., concurring in part and dissenting in part). But the dissent there did not carry the day, and no one has asked us to revisit

Anza.

130 S.Ct. at 991. Based upon this rejection, Plaintiffs’ foreseeability argument is not persuasive.

With that said, the court is mindful of Plaintiffs’ asserted injuries, just as the Court in

Anza

acknowledged the plaintiffs asserted harms.

See

547 U.S. at 458 , 126 S.Ct. 1991 . Plaintiffs contend that they suffered their own harms when the citizens of Macon County and Sheriff Warren were deprived of honest services — Plaintiffs’ applications for licenses to operate and conduct electronic bingo in Macon County were rejected under the Second Amended Rules and they allegedly lost profits and contractual payments. (Doc. # 445, at 37.) Indeed, no matter what efforts Lucky Palace and the Plaintiff Charities expend in pursuit of operating electronic bingo in Macon County, they are precluded from doing so under the current circumstances and the present version of the Rules, given that the maximum number of Class B Bingo Licenses has been issued to Victory-Land’s charities.

59

It, thus, is impossible

*1133

for Plaintiffs to earn even their first Macon County dollar from electronic bingo operations without the necessary licenses from Sheriff Warren. But these circumstances, even assuming

arguendo

that they are sufficient to establish “but for” causation, are too generalized to satisfy the more rigorous requirement for proximate causation.

See generally Hemi Group,

130 S.Ct. at 989 (observing that “ ‘the general [but incorrect] tendency’ ” in the “proximate cause inquiries under RICO” is “ ‘not to go beyond the first [but for] step’” (quoting

Holmes,

503 U.S. at 271-72 , 112 S.Ct. 1311 )).

60

Plaintiffs insist that they did enough to warrant at least an assurance from Sheriff Warren that, if construction of Lucky Palace commenced, he would grant Lucky Palace and the Plaintiff Charities the required Operator’s License and Class B Bingo Licenses. (Doc. # 464, at 41.) Mr. McGregor and VictoryLand take issue with that assertion, contending, among other things, that “there are a plethora of reasons why the Lucky Palace facility was never constructed, why electronic bingo was never played at that conceptual facility, and why the Plaintiff [Charities] never received any fees from this hoped-for electronic bingo operation — reasons that are completely unrelated to the alleged RICO violations.” (Doc. #475, at 46-47; Doc. # 440, at 102-03; Doc. # 459, at 28.)

The problem with Plaintiffs’ position is that they have not explained why the steps they took — purchasing real estate, hiring an engineer,

etc.

— would have qualified them for licenses to operate electronic bingo in Macon County under a set of rules and regulations that had not been allegedly tainted by the schemes to defraud. As has been noted, while Amendment No. 744 commands the sheriff of Macon County to oversee compliance with six listed criteria and requires him to promulgate rules and regulations for the licensing and operation of bingo games in Macon County, it provides virtually no guidance as to what those rules and regulations should or must contain. The constitutional amendment itself obviously leaves the sheriff with sub

*1134

stantial discretion in determining the substance of rules and regulations. It simply is too difficult to envision all of the potential formulations of the rules and regulations that could exist absent the alleged fraud, and to determine whether under those infinite possibilities Plaintiffs could have satisfied all of the requirements to operate and conduct electronic bingo in Macon County. The determination could never be made without a substantial measure of guesswork.

61

In sum, Plaintiffs have not shown that their injuries were proximately caused by the schemes to defraud. Accordingly, all Defendants are entitled to summary judgment on Plaintiffs’ RICO honest services mail and wire fraud claim.

2. § 1962(d)

— Count

II

“Section 1962(d) of the RICO statutes makes it illegal for anyone to conspire to violate one of the substantive provisions of RICO, including § 1962(c).”

Am. Dental Ass’n,

605 F.3d at 1293. Plaintiffs’ § 1962(d) claim alleges that Defendants conspired to violate § 1962(c). “Any claim under section 1962(d) based on a conspiracy to violate the other subsections of section 1962 necessarily must fail if the substantive claims are themselves deficient.”

Lightning Lube, Inc. v. Witco Corp.,

4 F.3d 1153, 1191 (3d Cir.1993);

see Jackson v. BellSouth Telecomm.,

372 F.3d 1250, 1269 (11th Cir.2004) (noting that where a complaint fails to state a substantive RICO claim, the conspiracy allegation “simply concludes that the defendants ‘conspired and confederated’ to commit conduct which in itself does not constitute a RICO violation”). As a result of the findings above, the § 1962(c) substantive claims are no longer viable; thus, the conspiracy claim necessarily fails. Accordingly, summary judgment is due to be entered in favor of Defendants on Count II, the § 1962(d) conspiracy claim.

B.

Equal Protection (Counts III and IV)

Counts III and IV of the Sixth Amended Complaint allege infringements of Plaintiffs’ right to equal protection under the Fourteenth Amendment, as enforced by § 1983. Count III is against Sheriff Warren in his official capacity. Plaintiffs raise facial, disparate impact and as applied equal protection challenges to the Second Amended Rules. (Doc. # 445, at 44-50.) Count IV alleges that Sheriff Warren and Mr. McGregor, individually and as an agent for VictoryLand, engaged in a § 1983 conspiracy to deprive Plaintiffs of equal protection. It is alleged that they

*1135

agreed or had an understanding— reached by, through, and with the assistance and influence of Fred Gray, Fred Gray Jr., and the Gray Law Firm — that Defendant Warren would issue rules and regulations for the licensing and operation of bingo in Macon County that would (1) deprive any nonprofit organization, other than a nonprofit organization associated with VietoryLand, of the ability to obtain a license for the conduct of electronic bingo in Macon County and (2) deprive any organization, other than VietoryLand, of the ability to obtain an operator’s license for the conduct of bingo in Macon County. Accordingly, Defendants McGregor and VietoryLand were jointly engaged with Defendant Warren, a state official, in the deprivation of the Plaintiffs’ equal protection rights.

(6th Am. Compl. ¶ 170.)

The Fourteenth Amendment’s Equal Protection Clause provides that no state shall “deny to any person within its jurisdiction the equal protection of the laws.” U.S. Const, amend. XIV. The mandate of the Equal Protection Clause essentially is “that all persons similarly situated should be treated alike.”

Cleburne v. Cleburne Living Ctr.,

473 U.S. 432, 439 , 105 S.Ct. 3249 , 87 L.Ed.2d 313 (1985);

see also Ross v. Moffitt,

417 U.S. 600, 609 , 94 S.Ct. 2437 , 41 L.Ed.2d 341 (1974) (“ ‘Equal Protection’ ... emphasizes disparity in treatment by a State between classes of individuals whose situations are arguably indistinguishable.”). Section 1983 was enacted to enforce the Fourteenth Amendment.

Conn v. Gabbert,

526 U.S. 286, 290 , 119 S.Ct. 1292 , 143 L.Ed.2d 399 (1999) (“Section 1983 provides a federal cause of action against any person who, acting under color of state law, deprives another of his federal rights.”). A cause of action pursuant to § 1983 requires proof that (1) a person acting under color of law (2) deprived the plaintiff of a federal or constitutional right.

Edwards v. Wallace Cmty. Coll.,

49 F.3d 1517, 1522 (11th Cir.1995). “Conspiring to violate another person’s constitutional rights [also] violates section 1983.”

Rowe v. City of Fort Lauderdale,

279 F.3d 1271, 1283 (11th Cir.2002). To prevail on a § 1983 conspiracy claim, “a plaintiff must show an underlying actual denial of [his] constitutional rights,” and “that the defendants reached an understanding to deny the plaintiffs rights.”

Hadley v. Gutierrez,

526 F.3d 1324, 1332 (11th Cir.2008) (citations and internal quotation marks omitted).

Plaintiffs cite

E & T Realty v. Strickland,

830 F.2d 1107 (11th Cir.1987), for the principle that equal protection claims fall into three categories.

Id.

at 1112 n. 5. The first category enumerated in

E & T Realty

is a claim that a “statute discriminates on its face.”

Id.

To prevail, a plaintiff must prove that there is “no rational relationship” between the regulatory classification and a legitimate governmental goal; however, if a suspect class or fundamental right is at issue, the level of scrutiny is heightened.

Id.

“The second type of equal protection claim is that neutral application of a facially neutral statute has a disparate impact.”

Id.

The third type of claim, an as applied claim, “is that defendants are unequally administering a facially neutral statute.”

Id.; see also

3 Ronald D. Rotunda & John E. Nowak,

Treatise on Constitutional Law, Substance & Procedure,

§ 18.4 (4th ed. 2008) (Under equal protection review, a law may establish a classification either “on its face,” in its purpose or effect, or in its application.). Plaintiffs contend that their equal protection theories fall into all three categories, and that they are entitled to summary judgment on their substantive and conspiratorial equal protection claims. (Doc. # 445, at 41.)

Defendants move for summary judgment on Counts III and IV. Sheriff War

*1136

ren asserts that Plaintiffs have not demonstrated a violation of the Equal Protection Clause, and that, therefore, Counts III and IV fail. (Doc. #424, at 41-45.) Mr. McGregor and VictoryLand, named only in Count IV, argue that Plaintiffs’ § 1983 conspiracy claim falters because “Plaintiffs as a matter of law cannot show that there was a violation of their federal rights.” (Doc. # 440, at 139.) Because Defendants challenge the viability of the substantive equal protection claim on essentially the same grounds, their arguments apply to both Counts III and IV and will be addressed together.

1. Vice Activities

The Supreme Court has placed gambling in the same category as other “products or activities deemed harmful, such as cigarettes, alcoholic beverages, and prostitution.”

Posadas de P.R. Assocs. v. Tourism Co. of P.R.,

478 U.S. 328, 346 , 106 S.Ct. 2968 , 92 L.Ed.2d 266 (1986);

see also id.

at 341, 106 S.Ct. 2968 (observing that gambling brings with it the potential for compulsive gambling, which has as unfortunate secondary effects increased crime and financial ruin);

Grimes v. Bd. of Comm’rs of City of Las Vegas,

53 Nev. 364 , 1 P.2d 570, 572 (1931) (“Gaming as a calling or business is in the same class as the selling of intoxicating liquors in respect to deleterious tendency.”). Gambling, like the other enumerations, is a “vice activity.”

Greater New Orleans Broad. Ass’n v. United States,

527 U.S. 173, 183 , 119 S.Ct. 1923 , 144 L.Ed.2d 161 (1999).

Because gambling “falls into a category of ‘vice’ activity,” it “e[an] be, and frequently has been, banned altogether.”

United States v. Edge Broad. Co.,

509 U.S. 418, 426 , 113 S.Ct. 2696 , 125 L.Ed.2d 345 (1993);

see also Primm v. City of Reno,

70 Nev. 7 , 252 P.2d 835, 837-38 (1953) (“On account of the nature of the business of gambling, which is capable of being so conducted as to be a source of evil, a very wide discretion is thus conferred, not only to restrict the number of licenses in the city, but to pass all reasonable rules and regulations concerning it which the city authorities may deem necessary for the police government of the municipality.” (citation and internal quotation marks omitted)). In the regulatory aspect, thus, courts have distinguished between vice activities and “generic economic” activities.

Artichoke Joe’s Calif. Grand Casino v. Norton,

353 F.3d 712 , 739 (9th Cir.2003) (citing

State v. Heretic, Inc.,

277 Ga. 275 , 588 S.E.2d 224, 225-26 (2003)). In

Heretic,

for example, the court rejected the plaintiffs’ comparison of alcohol sales to furniture sales: “The present case is distinguishable because the state lacks the interest in regulating the sale of furniture that it has in regulating the sale of alcohol, which poses significant risks to the health and safety of the general public.” 588 S.E.2d at 225-26 .

Moreover, it is well established that “[t]he regulation of gambling devices is within the police power of the State.”

Opinion of the Justices,

795 So.2d 630, 646 (Ala.2001);

see also Artichoke Joe’s,

353 F.3d at 737 (“The circuits that have given significant attention to equal protection challenges to state gambling laws have, by and large, held that ‘the regulation of gambling lies at the heart of the state’s police power.’ ” (collecting cases));

Rodriguez v. Jones,

64 So.2d 278, 279 (Fla.1953) (States may exercise “greater control” over gambling “because of the noxious qualities of the enterprise as distinguished from those enterprises not affected with a public interest and those enterprises over which the exercise of the police power is not so essential for the public welfare.”). “Formulations of that [police] power underscore the state’s paramount interest in the health, welfare, safety, and morals of its citizens. The regulation of lotteries, betting, poker, and other games of chance

*1137

touch all of the above aspects of the quality of life of state citizens.”

Johnson v. Collins Entm’t Co.,

199 F.3d 710, 720 (4th Cir.1999). “The question of how best to regulate gambling activity is also one to which different states can arrive at different answers based on their different experiences.”

Id.

Hence, the Supreme Court has rejected “equal protection challenges to legislative classifications aimed at reducing specific harms associated with vice activity.”

Artichoke Joe’s,

353 F.3d at 737-38 (citing

Edge Broad. Co.,

509 U.S. at 426 , 113 S.Ct. 2696 ). And those “classifications have withstood scrutiny whether they distinguish between States, political subdivisions within a state, or establishments within the same locality.”

Id.

at 738. With respect to “vice activities,” a “state is free to enact legislation that accords different treatment to different localities, and even to different establishments within the same locality, so long as that differentiation is tied to a legitimate interest in the health, safety, or welfare of its citizens.”

Id.

at 740;

see also Hawkeye Commodity Promotions, Inc. v. Vilsack,

486 F.3d 430, 438 (8th Cir.2007) (“No one would question that [the State] has the power to regulate gambling in the interest of the public health, safety, and general welfare.” (citation and internal quotation marks omitted)).

Sheriff Warren has the authority to implement rules for the regulation of bingo games in Macon County. Amendment No. 744 grants him that authority.

See

Ala. Const.1901 amend. No. 744 (“The sheriff shall promulgate rules and regulations for the licensing and operation of bingo games within the county.”). Sheriff Warren also has regulatory authority pursuant to his “police powers.”

Opinion of the Justices,

795 So.2d at 630 . There is no challenge in this case to Sheriff Warren’s authority to regulate bingo in Macon County.

2. Facial Challenges to the Second Amended Rules (The First Category)

Plaintiffs’ equal protection claim includes facial challenges to two provisions of the Second Amended Rules. The first relates to the Oper

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