804 N.W.2d 428
S.D.2011Background
- City of Sioux Falls enacted Ordinance 60-80 purportedly regulating placement of video lottery machines through conditional-use zoning.
- Rick Law applied for an on-sale liquor license and anticipated locations would be subject to the ordinance’s requirements.
- Law challenged the ordinance as preempted by the state’s comprehensive video lottery regulatory scheme.
- South Dakota Lottery intervened, arguing the ordinance is a zoning tool consistent with municipal power and does not regulate video lottery itself.
- Circuit court ruled the ordinance exceeded municipal authority by encroaching on a field fully occupied by state regulation.
- Supreme Court affirmed, holding state law preempts municipal regulation of video lottery placement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Ordinance 60-80 valid municipal regulation or preempted? | Law contends state occupies field of video lottery regulation. | City asserts ordinance is a zoning tool, not a video lottery regulation, validated by police power. | Ordinance 60-80 preempted; city exceeded authority. |
| Does the SD video lottery scheme preclude any local regulation (implied preemption)? | Legislation intended exclusive state control of video lotteries. | No express preemption; local zoning can address location without regulating the lottery itself. | State scheme impliedly preempts local regulation of video lottery placement. |
| Did the Legislature delegate municipal control to the South Dakota Lottery or a special commission in violation of art. III, §26? | Delegation to Lottery Commission would infringe municipal functions. | Lottery is a state division; no improper delegation of municipal powers. | Not necessary to decide; no evidence that delegation infringes art. III, §26. |
Key Cases Cited
- State ex rel. Jackley v. City of Colman, 2010 S.D. 81 (2010) (municipal powers limited to what legislature grants; preemption concerns)
- Elkjer v. City of Rapid City, 2005 S.D. 45 (2005) (home rule and municipal authority limitations)
- Olesen v. Town of Hurley, 2004 S.D. 136 (2004) (statutory framework governs municipal regulation authority)
- City of Rensch v. Rapid City, 77 S.D. 242 (1958) (historical view on municipal regulation vs state regulation)
- Minn. Agric. Aircraft Ass’n v. Twp. of Mantrap, 498 N.W.2d 40 (Minn. Ct. App. 1993) (field preemption analysis where state regulation is comprehensive)
- Hillsborough Cnty. v. Automated Med. Labs., Inc., 471 U.S. 707 (U.S. 1985) (preemption concepts in federal context)