McVeigh v. Cal. Dept. of Justice

Filed 8/31/09 McVeigh v. Cal. Dept. of Justice CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

APPEAL from a judgment of the Superior Court of Los Angeles County, Bob T. Hight, Judge. Affirmed.

Tom McVeigh, in pro. per., for Plaintiff and Appellant.

Edmund G. Brown, Jr., Attorney General, Robert L. Mukai, Senior Assistant Attorney General, Sara J. Drake and William L. Williams, Jr., Deputy Attorneys General, for Defendant and Respondent.

______________________

INTRODUCTION

In this action for declaratory and injunctive relief, plaintiff Tom McVeigh (McVeigh) appeals from the judgment entered in favor of defendant California Department of Justice (the Department) after the trial court determined that the so-called sweepstakes McVeigh used to promote the sale of $1 domestic long-distance telephone cards constituted a punchboard as that term is defined in Penal Code section 330c^[1]and thus violated California gaming laws. We affirm.

FACTUAL BACKGROUND^[2]

McVeigh, doing business as Dollar Promotions, Inc., is in the for-profit business of distributing and supplying domestic long-distance telephone cards (phone cards) to retailers in California, who in turn sell them to retail customers for $1 apiece. The sale of the phone cards is promoted by a sweepstakes (hereinafter referred to as a game piece), which is connected to the phone cards by a perforation.

McVeigh distributes two types of phone cards: break-open cards that are dispensed from vending machines^[3]and peel-open cards that are dispensed from plastic containers. In order to determine if the customer is a winner, the customer must either break open or peel open the game piece attached to the phone card.

McVeighs break-open cards display the dollar amounts that can be won, along with the number of winners per 4,428 phone cards. The cash prizes vary depending on the sweepstakes plan chosen by the retailer.^[4] Prizes range from $1 to $500, $1 to $400 and $1 to $250. Cash prizes are paid based upon chance, and the odds for winning are set forth on McVeighs website. Winning break-open game pieces are paid by the retailer upon submission of the winning game piece.

McVeighs peel-open phone cards are sold to retailers in rolls of 1200. Winning game pieces pay from $1 to $9,999. Like the break-open game pieces, cash prizes are paid based upon chance based on odds listed on McVeighs website. The retailer pays prizes up to $500 upon submission of the winning game piece. Prizes greater than $500 are mailed to the winner following verification.

The rules and regulations pertaining to McVeighs game pieces specify that no purchase is necessary. Anyone over the age of 18 who is not a distributor of the cards is eligible to obtain a game piece free of charge by calling a toll-free number or by writing to T&G Promotions^[5]and requesting one and providing the necessary information. The free game piece would be mailed to the individual by T&G Promotions.

On May 17, 1999, the Departments Division of Gambling Control issued a law enforcement advisory regarding phone card vending machines with a sweepstakes component. The Division of Gambling Control considered these machines^[6]to be unlawful gambling devices, i.e., slot machines, within the meaning of sections 330a, 330b and 330.1, as well as unlawful lottery schemes, within the meaning of sections 319 and 321.

On May 24, 2007, following an undercover investigation that commenced on January 26, 2007, the California Department of Alcoholic Beverage Control seized one of McVeighs vending machines from a private club in Los Alamitos. When an investigator, prior to the seizure, asked the bartender about the vending machine, the bartender said they were pull tabs and described the vending machine as a paper slot machine.

PROCEDURAL HISTORY

In an amended complaint filed on December 4, 2007 against the Department, McVeigh sought a declaration that promotion of his products with free sweepstakes and distribution via an ordinary vending machine is not in violation of California Penal Code, Section 330a, 330b, 330.1 and any other sections [the Department] may claim during this matter. McVeigh also sought an order directing the Department to rescind its May 1999 advisory, as well as injunctive relief prohibiting the Department from asserting that McVeighs machines and products were illegal.

On October 14, 2008, following a court trial, the court issued its judgment in favor of the Department, addressing the merits of plaintiffs operative complaint and reasoning as follows:

Plaintiff is unable to establish that his products are not illegal gambling. Plaintiffs product cards, or game pieces, constitute a punchboard under Penal Code section 330c, which therefore renders the product an illegal slot machine or device.

Plaintiffs reliance on Trinkle v. California State Lottery, (2003) 105 Cal.App.4th 1401 is unavailing. Trinkle held that the use of vending machines to sell lottery tickets did not render the machines purpose to be slot machines under Penal Code section 330b. Id. at 1411-12.

However, Trinkle did not consider whether the products sold by the machines constitute punchboards under Penal Code section 330c.

Penal Code section 330c states: A punchboard as hereinafter defined is hereby declared to be a slot machine or device within the meaning of Section 330b of this code and shall be subject to the provisions thereof. For the purposes of this section, a punchboard is any card, board or other device which may be played or operated by pulling, pressing, punching out or otherwise removing any slip, tab, paper or other substance therefrom to disclose any concealed number, name or symbol.

Plaintiffs game pieces constitute a punchboard under the language of Penal Code section 330c. Thus, Plaintiffs operation constitutes an illegal slot machine or lottery pursuant to Penal Code sections 330a, 330b, and 330.1. Plaintiff fails to establish the existence of any exemption applicable to Plaintiffs operation.

Plaintiff argues that Penal Code section 330c is overly broad. This Court declines to find that the language of Section 330c is overly broad. Instead, the court merely applies the facts of this case to the plain language of the statute. Under the plain language of the statute, Plaintiffs cards constitute a punchboard.

Plaintiff has not met his burden to establish the lawfulness of his products.

This appeal followed.

DISCUSSION

McVeighs Game Pieces Indisputably Constitute Punchboards Within the Meaning of Section 330c.

Whether the game piece component of McVeighs phone cards is a punchboard as defined by statute is a question of law which we determine de novo. (Trinkle v. California State Lottery, supra, 105 Cal.App.4th at p. 1405.) Section 330c defines a punchboard as any card, board or other device which may be played or operated by pulling, pressing, punching out or otherwise removing any slip, tab, paper or other substances therefrom to disclose any concealed number, name or symbol. Section 330c further declares a punchboard to be a slot machine or device within the meaning of Section 330b and subjects punchboards to the provisions of section 330b.

McVeighs game pieces are played either by breaking open or by pulling open a tab on the card to reveal whether or not the person has won a cash prize. As the trial court aptly found, McVeighs game pieces unquestionably constitute punchboards, and thus are illegal slot machines or devices within the meaning of section 330c.

McVeigh Has Waived his Vagueness and Overbreadth Challenges to Section 330c.

McVeigh maintains that section 330c is both vague and overbroad. Although he cites numerous cases discussing both of these constitutional doctrines, what is sorely lacking from his opening brief is any legal analysis demonstrating that these cases compel the conclusion that section 330c is vague and/or overbroad. It is one thing to cite and discuss cases on a particular topic. It is another to analyze those cases and demonstrate their applicability to the facts and issues of the instant case. (Associated Builders & Contractors, Inc. v. San Francisco Airports Com. (1999) 21 Cal.4th 352, 366, fn. 2; In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830.) Clearly, it is not the job of an appellate court to develop the appellants arguments. In the absence of cogent legal argument by McVeigh demonstrating that section 330c is constitutionally vague or overbroad, we treat the contention as waived.^[7] (Falcone & Fyke, supra, at p. 830.)

McVeighs Game Pieces are Slot Machines within the Meaning of Section 330b.

As previously stated, section 330c declares a punchboard to be a slot machine or device within the meaning of Section 330b and subjects punchboards to the provisions of section 330b. Section 330b in pertinent part provides: (a) It is unlawful for any person to manufacture, repair, own, store, possess, sell, rent, lease, let on shares, lend or give away, transport, or expose for sale or lease, or to offer to repair, sell, rent, lease, let on shares, lend or give away, or permit the operation, placement, maintenance, or keeping of, in any place, room, space, or building owned, leased, or occupied, managed, or controlled by that person, any slot machine or device, as defined in this section. [] It is unlawful for any person to make or to permit the making of an agreement with another person regarding any slot machine or device, by which the user of the slot machine or device, as a result of the element of hazard or chance or other unpredictable outcome, may become entitled to receive money, credit, allowance, or other thing of value or additional chance or right to use the slot machine or device, or to receive any check, slug, token, or memorandum entitling the holder to receive money, credit, allowance, or other thing of value. [] . . . []

(d) For purposes of this section, slot machine or device means a machine, apparatus, or device that is adapted, or may readily be converted, for use in a way that, as a result of the insertion of any piece of money or coin or other object, or by any other means, the machine or device is caused to operate or may be operated, and by reason of any element of hazard or chance or of other outcome of operation unpredictable by him or her, the user may receive or become entitled to receive any piece of money, credit, allowance, or thing of value, or additional chance or right to use the slot machine or device, or any check, slug, token, or memorandum, whether of value or otherwise, which may be exchanged for any money, credit, allowance, or thing of value, or which may be given in trade, irrespective of whether it may, apart from any element of hazard or chance or unpredictable outcome of operation, also sell, deliver, or present some merchandise, indication of weight, entertainment, or other thing of value.

McVeigh contends that if section 330c is not overbroad, then the determination of whether his game pieces are illegal slot machines or devices requires a further analysis of section 330b. He claims that Trinkle v. California State Lottery, supra, 105 Cal.App.4th 1401 can assist in the analysis. We disagree.

Presented for resolution in Trinkle was the question of whether the mere use of a vending machine by [the California State Lottery Commission] to dispense lottery tickets transforms the lawful sale of a SCRATCHERS ticket into an unlawful use of a slot machine. (Trinkle v. California State Lottery, supra, 105 Cal.App.4th at pp. 1408-1409.) After quoting section 330b and referencing section 330.1, the court in Trinkle observed: Thus, the elements of a slot machine are (1) the insertion of money or other object which causes the machine to operate, (2) the operation of the machine is unpredictable and governed by chance, and (3) by reason of the chance operation of the machine, the user may become entitled to receive a thing of value. (Trinkle, supra, at p. 1410, italics added.)

In concluding that the electronic vending machines used to sell Scratchers lottery tickets was not a slot machine, the court in Trinkle noted that the Legislature in section 330b linked the element of chance to the operation of the machine, requiring that the machine itself determine the element of chance and become the object of play. []  Without the element of chance incorporated into the operation of the machine, the machine is nothing more than a vending machine which dispenses merchandise for consideration.^[8] (Trinkle v. California State Lottery, supra, 105 Cal.App.4th at p. 1410.) The court therefore concluded that the vending machines utilized by the California Lottery Commission to sell and dispense Scratcher lottery tickets were not illegal slot machines within the meaning of section 330b. (Id. at p. 1411.)

In reliance on Trinkle, and recognizing that the propriety of his vending machines is not before us, McVeigh maintains that the game pieces attached to his phone cards contain no element of hazard or chance and therefore cannot be a slot machine or device within the meaning of section 330b. Chance means that winning and losing depend on luck and fortune rather than, or at least more than, judgment and skill. (Hotel Employees & Restaurant Employees Internat. Union v. Davis (1999) 21 Cal.4th 585, 592.) Having himself stipulated that the cash prizes from both his break-open game pieces and his peel-open game pieces are paid based upon chance, McVeigh cannot now be heard to argue to the contrary.

DISPOSITION

The judgment is affirmed. The Department is awarded its costs of appeal.

JACKSON, J.

We concur:

WOODS, Acting P. J.

ZELON, J.

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^[1] All further statutory references are to the Penal Code.

^[2] The facts are compiled from the parties Stipulation Re: Agreed Statement of Facts and the testimony given during trial.

^[3] McVeighs vending machines do not contain a random number generator or any other means by which a phone card with a winning game piece can be selected. Rather, the machines operate as do ordinary vending machines that dispense items such as soft drinks and candy.

^[4] McVeigh lists the various types of break-open phone card sweepstakes in the retailers section of his website (www.dollarpromotions.com).

^[5] T&G Promotions is a company owned and operated by McVeighs father. T&G Promotions manufactures the phone cards with attached game pieces that McVeigh sells to retailers. Before the phone cards are distributed to retailers, T&G Promotions retains five cards from each box of cards. These cards are provided to individuals who request a free game piece.

^[6] The advisory referenced devices manufactured by Venda Tel and Diamond Game Enterprises, neither of which manufactured the vending machines utilized by McVeigh. The advisory noted, however, that other manufacturers may be entering the market.

^[7] We do note, however, that there is no merit to McVeighs assertion that section 330c is overbroad simply because other businesses, such as soft drink, candy and food manufacturers, utilize sweepstakes to promote their products. McVeigh cites no legal authority addressing the propriety of sweepstakes utilized by other businesses.

^[8] In contrast, the vending machines at issue in Trinkle v. Stroh (1997) 60 Cal.App.4th 771 and People ex rel. Lockyer v. Pacific Gaming Technologies (2000) 82 Cal.App.4th 699 were found to be illegal slot machines.