Hicks William HELTON, d/b/a B & H Video, Plaintiff-Appellee, v. Jeff HUNT, Rutherford County District Attorney, Defendant-Appellant, and Daniel J. Good, Sheriff of Rutherford County, Defendant. Hicks William Helton, d/b/a B & H Video, Plaintiff-Appellee, v. Daniel J. Good, Sheriff of Rutherford County, Defendant-Appellant, and Jeff Hunt, Rutherford County District Attorney, Defendant.
Nos. 02-1853, 02-1890.
United States Court of Appeals, Fourth Circuit.
Decided: May 27, 2003.
Argued: April 2, 2003.
330 F.3d 242
Before WILKINSON, NIEMEYER, and WILLIAMS, Circuit Judges.
Affirmed in part and reversed in part by published opinion. Judge WILKINSON wrote the opinion, in which Judge WILLIAMS joined. Judge NIEMEYER wrote an opinion concurring in parts I and II and dissenting from parts III and IV.
OPINION
WILKINSON, Circuit Judge:
In response to a South Carolina law banning video gaming machines from that state, North Carolina amended its gambling statutes to prevent an influx of machines from South Carolina. The revised statutes made the operation of certain machines illegal unless exempted by a grandfather clause under the statute. The statutes also authorized the immediate destruction of any unlawful machines.
Plaintiff Hicks Helton owned and operated machines which became unlawful under the statute. Helton filed a complaint challenging the constitutionality of the statutes. He argued that
I.
On July 2, 1999, South Carolina enacted a law, effective July 1, 2000, banning all vending, slot, and video gaming machines. See
The statute does not ban all video gaming machines, however.
The revised statute also makes it unlawful to “warehouse any video gaming machine except in conjunction with the permitted assembly, manufacture, and transportation of such machines,” and requires the owner of any video game machine regulated by the statute to register the machine with the Sheriff in the county where the machine is located no later than October 1, 2000.
Sometime in early 2000, plaintiff Hicks Helton purchased 70 new video gaming machines and put them into operation in Rutherford County, North Carolina. The machines were placed into operation before June 30, 2000, but not listed for ad valorem taxation by January 31, 2000. Helton‘s machines therefore did not fall under the grandfather clause of the statute and were in violation of
Helton filed this action in the superior court for Rutherford County, North Carolina, on October 30, 2000, alleging that
The defendants then moved for summary judgment. On July 5, 2002, the district court denied their motion and granted judgment in favor of Helton. Although the court acknowledged that North Carolina‘s objective of preventing an influx of machines from South Carolina constituted a legitimate government objective, the court found that the two separate dates under the grandfather clause were not rationally related to that goal. The court also held that
We review the district court‘s decision de novo. McLaughlin v. N.C. Bd. of Elections, 65 F.3d 1215, 1221 (4th Cir.1995).
II.
Helton argues that
Given the inherent difficulties in drawing lines and creating classifications, the Supreme Court has accorded legislative enactments a strong presumption of validity so long as they do not discriminate against any protected class or burden any fundamental right. Id. at 314, 113 S.Ct. 2096. A state‘s enactment must be upheld “so long as it bears a rational relation to some legitimate end.” Vacco v. Quill, 521 U.S. 793, 799, 117 S.Ct. 2293, 138 L.Ed.2d 834 (1997) (citation omitted). In other words, where there are “plausible reasons” for the legislature‘s action, “our inquiry is at an end.” Beach Communications, 508 U.S. at 313-14, 113 S.Ct. 2096 (quoting Fritz, 449 U.S. at 179, 101 S.Ct. 453).
Courts have further recognized that a state has a “paramount interest in the health, welfare, safety, and morals of its citizens.” Johnson v. Collins Entm‘t Co., 199 F.3d 710, 720 (4th Cir.1999). And because “[t]he regulation of lotteries, betting, poker, and other games of chance touch all of the above aspects of the quality of life of state citizens” the regulation of gambling “lies at the heart of the state‘s police power.” Id. It is thus beyond question that North Carolina has a legitimate government interest in the supervision of the video gaming industry.
We also find that
Helton takes particular aim at the requirement that his gambling machines be listed for ad valorem taxation by January 31, 2000, even though they need not have been in lawful operation until June 30, 2000. Since Helton did not purchase his machines until after January 31, the legislature enacted a provision with which he claims he could not possibly comply, despite his full compliance with the June 30 requirement. None of this impugns, however, the rationality of the legislature‘s scheme. As the State points out, machines
Although the validity of the North Carolina law is not dependent on the existence of the South Carolina ban on video gaming machines, their interconnectedness leaves no doubt as to the rationality of the enactment. The two separate dates under
III.
We turn next to
The absence of due process in this provision is apparent. “The constitutional right to be heard is a basic aspect of the duty of government to follow a fair process of decisionmaking when it acts to deprive a person of his possessions.” Fuentes v. Shevin, 407 U.S. 67, 80, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972). The due process clause operates to protect the “use and possession of property from arbitrary encroachment—to minimize substantively unfair or mistaken deprivations of property....” Id. at 81, 92 S.Ct. 1983. The enforcement of
Video gaming machines that are in operation or possessed for the purpose of being put into operation are contraband unless they satisfy
Unlike per se contraband, “a property interest in derivative contraband is not extinguished automatically if the item is put to unlawful use....” Cooper, 904 F.2d at 305. Derivative contraband may be subject to forfeiture, but only when authorized by a statute that provides appropriate procedural safeguards. Id.; United States v. Farrell, 606 F.2d 1341, 1344 (D.C.Cir.1979). In a case such as this one, where one cannot determine the legality of any given machine by simply viewing its physical properties or the nature of its use, the need for process becomes apparent. A determination of whether a machine was lawfully in operation before June 30, 2000, or listed for taxation by January 31, 2000, may produce questions of fact in any given case. The statute in fact provides no opportunity for the owner of a machine to be heard in court on the lawfulness of its use before the owner‘s property is destroyed. And although machines complying with
Of course states can lawfully ban gaming machines and subject them to forfeiture. Unlike
Defendants argue that we should construe the statute as providing due process protections, because the general practice in enforcing
We need not go so far in this case to say what kind of process North Carolina must provide to machine owners because
IV.
For the foregoing reasons, the judgment of the district court is
AFFIRMED IN PART AND REVERSED IN PART.
NIEMEYER, Circuit Judge, concurring in part and dissenting in part:
I concur in Parts I and II of the majority opinion and dissent from Parts III and IV. Part II upholds, against an equal protection attack,
North Carolina makes illegal the operating or possessing for the purpose of operating any new video gaming machine that was not “grandfathered in” by registration and operation before certain stated dates. See
There can be no doubt that when the use and possession of gaming machines are
Because the use and possession of banned machines are illegal and their existence is a public nuisance, I would not only uphold the constitutionality of