Jimmy Martin v. Reginald Lloyd

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

JIMMY MARTIN; LUCKY STRIKE 

LLC,

Plaintiffs-Appellants,

v.

REGINALD I. LLOYD, as Chief of the

South Carolina Law Enforcement

Division; SCARLETT A. WILSON, as

Solicitor of the Ninth Judicial

Circuit; ALAN WILSON, as The

Attorney General for the State of

South Carolina,  No. 11-1405

Defendants-Appellees,

and

ROBERT STEWART, as Chief of the

South Carolina Law Enforcement

Division; HENRY MCMASTER, as

Attorney General of the State of

South Carolina; RALPH HOISINGTON,

as Solicitor of the Ninth Judicial

Circuit,

Defendants.



Appeal from the United States District Court

for the District of South Carolina, at Charleston.

David C. Norton, District Judge.

(2:06-cv-00400-DCN)

Argued: September 18, 2012

Decided: November 21, 2012

2 MARTIN v. LLOYD

Before WILKINSON, MOTZ, and GREGORY,

Circuit Judges.

Affirmed by published opinion. Judge Gregory wrote the

opinion, in which Judge Wilkinson and Judge Motz joined.

COUNSEL

ARGUED: James Mixon Griffin, LEWIS, BABCOCK &

GRIFFIN, LLP, Columbia, South Carolina, for Appellants.

Kenneth Paul Woodington, DAVIDSON & LINDEMANN,

PA, Columbia, South Carolina, for Appellees. ON BRIEF:

Richard A. Harpootlian, LAW OFFICES OF RICHARD A.

HARPOOTLIAN, Columbia, South Carolina, for Appellants.

Alan Wilson, Attorney General, Robert D. Cook, Deputy

Attorney General, C. Havird Jones, Jr., Senior Assistant

Attorney General, OFFICE OF THE ATTORNEY GEN-

ERAL, Columbia, South Carolina, for Appellees Alan Wilson

and Scarlett A. Wilson; William H. Davidson, II, DAVID-

SON & LINDEMANN, PA, Columbia, South Carolina, for

Appellee Reginald I. Lloyd.

OPINION

GREGORY, Circuit Judge:

Appellants Jimmy Martin ("Martin") and Lucky Strike,

LLC ("Lucky Strike") appeal the district court’s grant of sum-

mary judgment in an action to enjoin enforcement of two

South Carolina statutes, S.C. Code Ann. §§ 12-21-2710 and

12-21-2712, which prohibit certain "device[s] pertaining to

games of chance." Appellants put forward two theories: first,

that § 2710 is void for vagueness and thus violates the Due

MARTIN v. LLOYD 3

Process Clause of the Fourteenth Amendment to the United

States Constitution. Second, applying a little-used holding of

Ex Parte Young, 209 U.S. 123, 145-48 (1908), they argue that

the statutes violate their right to equal protection under the

Fourteenth Amendment because they are required to risk

imprisonment, fines and forfeiture of property to obtain a

determination as to the legality of a game under the statutes.

Because the statutes in question have a legitimate application,

we affirm the district court’s vagueness holding. We further

conclude that the statutes do not fall within the scope of Ex

Parte Young’s holding. As such, we affirm the district court’s

ruling.

I.

Appellant Martin is a citizen of South Carolina in the busi-

ness of developing and operating gaming machines. After the

South Carolina legislature passed anti-gaming legislation in

1999 that outlawed a type of video poker game he was operat-

ing, Martin removed all of his machines from the state. See

1999 S.C. Act 125. He currently operates games only on

Indian-owned sites in Oklahoma. Martin claims that he would

like to develop a game that he can operate in South Carolina,

but is unable to do so because he is unclear on the reach of

the disputed statutes and unwilling to risk criminal prosecu-

tion if he unwittingly develops a non-compliant game.

Lucky Strike is a limited liability corporation which oper-

ates gaming machines in convenience stores and other loca-

tions. Lucky Strike has stated that since 2003, the South

Carolina Law Enforcement Division ("SLED"), the agency

tasked with enforcing the statutes, has confiscated and

destroyed hundreds of its machines. Lucky Strike never chal-

lenged any of the seizures. Instead, it chose, along with Mar-

tin, to bring this facial challenge to the statutes.

Section 2710 is part of South Carolina’s legal framework

regulating coin-operated machines and devices. It establishes

that:

4 MARTIN v. LLOYD

It is unlawful for any person to keep on his premises

or operate or permit to be kept on his premises or

operated within this State any vending or slot

machine, or any video game machine with a free

play feature operated by a slot in which is deposited

a coin or thing of value, or other device operated by

a slot in which is deposited a coin or thing of value

for the play of poker, blackjack, keno, lotto, bingo,

or craps, or any machine or device licensed pursuant

to Section 12-21-2720 and used for gambling or any

punch board, pull board, or other device pertaining

to games of chance of whatever name or kind,

including those machines, boards, or other devices

that display different pictures, words, or symbols, at

different plays or different numbers, whether in

words or figures or, which deposit tokens or coins at

regular intervals or in varying numbers to the player

or in the machine, but the provisions of this section

do not extend to coin-operated nonpayout pin tables,

in-line pin games, or to automatic weighing, measur-

ing, musical, and vending machines which are con-

structed as to give a certain uniform and fair return

in value for each coin deposited and in which there

is no element of chance.

Any person violating the provisions of this section is

guilty of a misdemeanor and, upon conviction, must

be fined not more than five hundred dollars or

imprisoned for a period of not more than one year,

or both.

Section 2712 sets forth procedures for enforcement of

§ 2710:

Any machine, board, or other device prohibited by

Section 12-21-2710 must be seized by any law

enforcement officer and at once taken before any

magistrate of the county in which the machine,

MARTIN v. LLOYD 5

board, or device is seized who shall immediately

examine it, and if satisfied that it is in violation of

Section 12-21-2710 or any other law of this State,

direct that it be immediately destroyed.

II.

This Court reviews a district court’s grant of summary

judgment de novo, applying the same legal standards as the

district court. Nader v. Blair, 549 F.3d 953, 958 (4th Cir.

2008). Summary judgment is only appropriate where there is

no genuine issue of material fact and the movant is entitled to

judgment as a matter of law. Id. In determining whether a

genuine issue of material fact exists, the Court views the evi-

dence in the light most favorable to the non-moving party. Id.

A statute is unconstitutionally vague under the Due Process

Clause if it "fails to provide a person of ordinary intelligence

fair notice of what is prohibited, or is so standardless that it

authorizes or encourages seriously discriminatory enforce-

ment." United States v. Williams, 553 U.S. 285, 304 (2008);

see also South Carolina Medical Ass’n v. Thompson, 327 F.3d

346, 354 (4th Cir. 2003). When considering a facial chal-

lenge, courts first determine whether the enactment implicates

a substantial amount of constitutionally protected conduct.

Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc.,

455 U.S. 489, 494 (1982). If it does not, then the challenge

should only succeed if the law is "impermissibly vague in all

of its applications." Id. at 494-95. As we have explained, a

facial challenge is ineffective if the statute has a "plainly

legitimate sweep." United States v. Comstock, 627 F.3d 513,

518 (4th Cir. 2010) (quoting Crawford v. Marion Cnty Elec-

tion Bd., 553 U.S. 181, 202 (2008)). However, where a statute

imposes criminal penalties, the standard of certainty is higher

and the statute can be invalidated on its face "even where it

could conceivably have . . . some valid application." Wright

v. New Jersey, 469 U.S. 1146, 1152 (1985) (quoting Kolender

v. Lawson, 461 U.S. 352, 358 n.8 (1983)).

6 MARTIN v. LLOYD

Because Appellants bring a facial attack, the first question

is whether the statute implicates constitutionally protected

conduct. The district court answered this question by pointing

to the well-settled proposition that gambling "implicates no

constitutionally protected right." See United States v. Edge

Broad. Co., 509 U.S. 418, 426 (1993). The parties dispute

whether § 2710 can be used to confiscate games that are not

used for gambling.* In any case, Appellants make no argu-

ment that § 2710 infringes on constitutionally protected con-

duct. The appropriate inquiry, then, is whether § 2710 is

invalid "in all of its applications," keeping in mind that,

because this is a criminal statute, it must be more than a mere

"conceivable application." See Hoffman, 455 U.S. at 495;

Kolender, 461 U.S. at 358 n.8.

Appellants concede in their Reply Brief that the statute,

taken as a whole, is not impermissibly vague in all its applica-

tions. For instance, they do not dispute that poker, blackjack,

*South Carolina cases interpreting § 2710 have frequently upheld

enforcement of the statute where machines are used to gamble. In ruling

that machines dispensing game cards that could be redeemed for a cash

prize were illegal under § 2710, the Supreme Court of South Carolina

stated that "[t]he three elements of gambling – consideration, chance and

reward – are [ ] clearly present in a device which, for a price, and based

upon chance, offers a monetary or merchandise reward to the successful

player." Ward v. West Oil Co., 692 S.E.2d 516, 522 (S.C. 2010); see also

Sun Light Prepaid Phonecard Co. v. State of South Carolina, 600 S.E.2d

61, 64 (S.C. 2004) (holding that machines dispensing phone cards with

game pieces attached affording chance to win prize money were illegal

under § 2710); State v. 192 Coin-Operated Video Game Machines, 525

S.E.2d 872, 877 (S.C. 2000) (holding that possession of slot machines vio-

lated § 2710). However, none of these cases state that § 2710 applies only

to machines used for gambling. In a recent case, the Court of Appeals of

South Carolina agreed with SLED that machines need not be used for

gambling to be illegal under the statute. SLED v. 1-Speedmaster S/N

00218, 723 S.E.2d 809, 812 (S.C. Ct. App. 2011) ("SLED is correct that

section 12-21-2710 does not specifically require that an illegal gaming

device be used for gambling."). Respondents in this case appear to contra-

dict the SLED position in 1-Speedmaster S/N 00218, arguing instead that

§ 2710 only prohibits games used for gambling.

MARTIN v. LLOYD 7

keno, lotto, bingo and craps are clearly outlawed. However,

they argue that one phrase in the statute—the blanket prohibi-

tion against possessing any "other device pertaining to games

of chance of whatever name or kind," is impermissibly vague

in all its applications.

Even when bringing a facial challenge, a party may contest

certain provisions of a statute without taking on the whole of

the statute. See, e.g., Reno v. American Civil Liberties Union,

521 U.S. 844 (1997). However, a court is not confined to the

plain language of the contested statute when assessing a void-

for-vagueness claim. See Kolender, 461 U.S. at 355. A federal

court must "consider any limiting construction that a state

court or enforcement agency has proffered." Village of Hoff-

man Estates, 455 U.S. at 494 n.5. Further, when considering

phrases or words within a statute, those phrases or words

should be considered in the context of the statute as a whole.

The Real Truth About Abortion, Inc. v. Fed. Election

Comm’n, 681 F.3d 544, 554 (4th Cir. 2012).

The Supreme Court of South Carolina has provided signifi-

cant clarity to the disputed phrase by deciding several cases

based, at least in part, on whether a device is a game of

chance under § 2710 and its predecessor statute. See State v.

DeAngelis, 183 S.E.2d 906, 908 (S.C. 1971) (affirming a

jury’s determination that a game requiring "no skill" was ille-

gal under a predecessor statute); see also Ward v. West Oil

Co., 692 S.E.2d 516, 522 (S.C. 2010) (holding that pull-tab

game machines were illegal games of chance); Sun Light Pre-

paid Phonecard Co. v. State of South Carolina, 600 S.E.2d

61, 64 (S.C. 2004) (holding that machine dispensing phone

cards with pull-tab attached was an illegal game of chance).

While these cases may not draw definitive parameters around

the catchall phrase that Appellants contest, they do demon-

strate that use of the term "games of chance" has a "plainly

legitimate sweep" and more than a conceivable application,

which is all that is required to survive a facial challenge to a

8 MARTIN v. LLOYD

criminal statute where constitutional rights are not implicated.

See Comstock, 627 F.3d at 518.

Appellants repeatedly assert that § 2710 can be read to out-

law standard board games like Monopoly. The Supreme Court

of the United States has made clear that, "[a] plaintiff who

engages in some conduct that is clearly proscribed cannot

complain of the vagueness of the law as applied to the con-

duct of others." Village of Hoffman Estates, 455 U.S. at 495;

see also United States v. Lee, 815 F.2d 971, 974 (4th Cir.

1987) (explaining that a statute "is not invalid merely because

some of its hypothetical applications might raise constitu-

tional problems"). Here, the record does not show that Appel-

lants are in the business of developing family board games.

Moreover, they do not describe any concrete example of the

kind of game they seek to develop that would better anchor

their critique of the law. In discussing § 2710, the Supreme

Court of South Carolina has noted that courts should look to

whether a machine is intended as a gaming device and "will

look behind the name and style of the device to ascertain its

true character." Ward, 692 S.E.2d at 522 (citing 38 C.J.S.

Gaming § 10 (Supp. 2010)). South Carolina has taken a mea-

sured approach to enforcement for the eighty-one years

§ 2710 and its predecessor statutes have been in effect. There

is no indication that SLED officers might burst into a family’s

living room and yank a Monopoly board from the hands of a

shocked child. Appellants could not refer the Court to a single

instance demonstrating that South Carolina has enforced these

statutes in this kind of draconian fashion. Appellants made a

tactical decision to bring a facial challenge to this law—that

decision does not allow them to lean on extravagant hypothet-

ical scenarios that bear no resemblance to their own conduct

nor bear out in the historical pattern of enforcement.

Appellants also argue that inconsistent enforcement and

judicial rulings on § 2710 establish its vagueness. A differ-

ence of opinion amongst judges or law enforcement does not

make a statute unconstitutionally vague. See Williams, 553

MARTIN v. LLOYD 9

U.S. at 306 ("Close cases can be imagined under virtually any

statute. The problem that poses is [not] addressed . . . by the

doctrine of vagueness . . ."); The Real Truth About Abortion,

681 F.3d at 554-55 (holding that a difference of opinion

between a district court and the Federal Election Commission

on the enforcement of a regulation does not void the regula-

tion for vagueness). There will be gray areas in the interpreta-

tion of many statutes, and sometimes there will be

inconsistency in the outcomes of marginal cases, but this is

part and parcel of the process of statutory construction that is

integral to our common law legal system. See United States

v. Nat’l Dairy Prods. Corp., 372 U.S. 29, 32 (1963).

While § 2710 may not be artfully written, it is not unconsti-

tutionally vague. The enforcement of this statute and the

South Carolina courts’ interpretation of it has contributed suf-

ficient clarity to meet the relatively low bar for this facial

challenge.

III.

Appellants also argue that the disputed statutes violate the

Equal Protection Clause of the Fourteenth Amendment to the

United States Constitution because they are forced to risk

criminal prosecution, imprisonment, fines, and forfeiture to

gain a determination as to whether a proposed game is legal

under § 2710. In response to a Request to Admit during dis-

covery, Appellees conceded that South Carolina has no for-

mal mechanism in place to determine the legality of a game

other than "to make it operational in the state, subject it to sei-

zure by law enforcement, hav[e] it taken before a magistrate

judge to determine if the machine is legal or illegal and ris[k]

forfeiture of the machine and criminal prosecution." Appel-

lants urge the application of Ex Parte Young’s holding that a

state cannot force a party to risk severe penalties to obtain a

judicial determination if that determination involves a compli-

cated or technical question of fact. 209 U.S. at 145, 148.

10 MARTIN v. LLOYD

In Young, a Minnesota law set caps on rail transportation

rates and subjected agents or employees of any rail company

exceeding the rate to high fines and imprisonment. Id. at 145.

No pre-enforcement mechanism existed to test the legality of

the rates. Id. at 145-46. The Court held that the lack of a pre-

enforcement hearing violated due process and equal protec-

tion because any railroad agent or employee would have to

risk enormous fines and possible imprisonment to test the

validity of the rates. Id. at 146-47. The Court reasoned that the

statutory scheme effectively closed off access to the courts.

Id. As the Court clarified in a later case, "th[e] right [to judi-

cial review] is merely nominal and illusory if the party to be

affected can appeal to the courts only at the risk of having to

pay penalties so great that it is better to yield to orders of

uncertain legality rather than to ask for the protection of the

law." Wadley S. Ry. Co. v. Georgia, 235 U.S. 651, 661

(1915).

While Young addressed railroad rates, courts have recog-

nized this theory in other contexts. See Solid State Circuits v.

U.S. Env. Prot. Agency, 812 F.2d 383, 391-92 (8th Cir. 1987)

(holding CERCLA damages scheme constitutional under

Young only because parties opposing a clean-up order may

test its validity without risk of punitive damages if they have

an objectively reasonable basis for believing the order invalid

or inapplicable); Pactiv Corp. v. Chester, 455 F. Supp. 2d

680, 691-93 (E.D. Mich. 2006) (recognizing viability of

Young theory in determining constitutionality of Michigan’s

Natural Resources and Environmental Protection Act); Reedy

v. Borough of Collingswood, 2005 WL 1490478, at 9-10

(D.N.J. June 22, 2005) (recognizing viability of Young theory

in the context of property maintenance and fire safety codes

that landlords could not appeal without risk of substantial

penalty); Aminoil v. United States, 599 F. Supp. 69, 74-75

(C.D. Cal. 1984) (granting preliminary injunction on basis

that CERCLA daily penalty and damages scheme was likely

unconstitutional under Young because there was no opportu-

nity for a hearing prior to issuance of administrative order).

MARTIN v. LLOYD 11

We do not believe that Young is applicable in this case, how-

ever, because § 2710’s scope and validity is sufficiently clear

and the risks are too attenuated.

The Young Court warned that its holding did not apply to

the typical statute where application is apparent without

investigation, but only to statutes where application "depends

upon the existence of a fact which can be determined only

after investigation of a very complicated and technical charac-

ter." 209 U.S. at 147-48. To reiterate, there is no question

about the multiple categories of games that § 2710 specifi-

cally covers. Even when considering the application of the

disputed catchall provision in the statute, a simple formula

determines the outcome: if skill predominates, then it is per-

missible, and if chance predominates, then it is prohibited. We

do not believe that understanding which side of the line a

game falls on necessitates the kind of intensive investigation

and technical analysis that Young requires. There will cer-

tainly be close calls when a game is in the gray area. Magis-

trate judges determining the legality of these games may very

well admit evidence from experts and examine the results of

complex testing. But, there are countless statutes with catchall

phrases that contain infirmities. Deciding that this catchall

phrase should fail because it, too, contains a gray area would

place this Court on a slippery slope.

Additionally, the historical record of enforcement of § 2710

does not support Appellants’ argument that they risk dire

criminal prosecution if they put a game into operation that

turns out to be illegal. The statute that the Court struck down

in Young was newly minted and untested. 209 U.S. at 126-27.

Here, Appellants had an eighty-one year long track record at

their disposal and could not cite to a single instance in which

South Carolina had instituted the kind of criminal prosecution

that concerns them. To the extent this statutory scheme may

give rise to abuse in the future, the Appellants are free to

bring an as-applied challenge. However, there is little basis

for the facial challenge they bring here.

12 MARTIN v. LLOYD

For the foregoing reasons, we affirm the judgment of the

district court.

AFFIRMED