Lead Opinion
¶1 This case was filed in a county other than where it was to be adjudicated. We are asked today to decide whether, as a consequence, the case will not be heard. We conclude that the proper forum is a question of venue, not the subject matter jurisdiction of superior courts. We affirm the Court of Appeals. ZDI Gaming, Inc. v. Wash. State Gambling Comm’n,
FACTS
¶2 For many years ZDI Gaming Inc., a family owned business, has provided “ ‘just about anything to do with the gambling industry in the state of Washington.’ ” Administrative Record (AR) at 410 (quoting Verbatim Report of Proceedings (VRP) at 88); Clerk’s Papers (CP) at 18. This includes distributing pull-tabs and pull-tab machines. A pull-tab machine is a fairly modern gaming device. A traditional pull-tab involves a paper ticket containing a series of windows that hide numbers or symbols. The player “opens one of the windows to reveal the symbols below to determine if the ticket is a winner.” CP at 1026. If the ticket’s combination of numbers or symbols matches those listed on a sheet called a “flare” as a winning ticket, the ticket’s purchaser is entitled to a prize. Id. Modern pull-tab machines can both dispense and read pull-tab tickets and can produce sounds and displays mimicking electronic slot machines.
¶3 In 1973, when gambling was legalized in Washington State, the legislature declared pull-tabs, along with certain other games of chance, would be authorized, but “closely controlled.” Laws of 1973, ch. 218, § 1 (currently codified as RCW 9.46.010); AR at 410. Accordingly, the Washington State Gambling Commission (Gambling Commission) has heavily regulated pull-tabs and pull-tab machines. E.g., former WAC 230-02-412(2) (2001); former WAC 230-08-017 (2003), former WAC 230-12-050 (2004); former WAC 230--08-010(2) (2004).
¶4 Historically, and broadly in the context of games of chance, the commission prohibited giving gifts or extending credit to players for the purposes of gambling. Former WAC 230-12-050. Accordingly, players were required to pay the consideration “required to participate in the gambling activity ... in full by cash, check, or electronic point-of-sale bank transfer, prior to participation,” with some exceptions not relevant here. Former WAC 230-12-050(2). The Gambling Commission also had required a pull-tab player to receive winnings “in cash or in merchandise.” Former WAC 230-30-070(1) (2001).
¶5 ZDI Gaming distributes the VIP (video interactive display) machine, an electronic pull-tab machine featuring a video display screen, a currency bill acceptor, and (in a later version) a cash card acceptor, all housed in a decorative cabinet. ZDI Gaming intentionally designed the current VIP machine to resemble a video slot machine and programmed it to use the same “attractor” sounds used to lure players. Players see rows of spinning characters that ultimately line up and stop in winning or losing combinations. The version of the machine at issue allows a player to purchase pull-tabs from the machine itself using a prepaid card. The VIP machine credits pull-tab winnings of $20 or less back to the card. If a player wins more than $20, the VIP machine directs the player to an employee to receive payment. A player who stops playing the VIP machine with a balance on the card can use it to purchase food, drink, merchandise, or turn it in for cash at the establishment featuring the VIP machine.
¶6 An earlier version of the VIP machine was approved by the Gambling Commission in 2002. However, once the cash card acceptor was added to the machine, things became more complicated. While initially, it appears Gambling Commission employees were “optimistic” that such technology would be approved, once they understood that a player’s winnings would be credited directly back onto the card itself, they became concerned. AR at 14. After working with Gambling Commission staff for some time, ZDI Gaming submitted a formal application to the Gambling Commission requesting permission to distribute the new VIP machine, with the cash card acceptor, in Washington. After the assistant director of licensing operations
¶7 On September 11, 2006, ZDI Gaming filed a petition for judicial review in Pierce County Superior Court, challenging the validity of the rules the ALJ and the Gambling Commission found it had violated. Ten days later, the State informed ZDI Gaming that, in its view, RCW 9.46.095 granted exclusive jurisdiction of the matter to the Thurston County Superior Court and suggested that it may wish to withdraw its petition from Pierce County and file in Thurston County before the statute of limitations would run on October 4, 2006. The State told ZDI Gaming that it would otherwise move to dismiss the case for want of jurisdiction after October 4, 2006.
¶8 The Thurston County Superior Court reversed the Gambling Commission. It found that cash cards were the equivalent to both cash and merchandise and thus lawful under the regulations. The court denied the Gambling Commission’s motion for reconsideration, remanded the case to the Gambling Commission for action, and awarded ZDI Gaming $18,185 in attorney fees under the equal access to justice act, RCW 4.84.350, which was less than ZDI Gaming had sought.
¶9 Both parties appealed. The Court of Appeals affirmed in part, holding that the Pierce County Superior Court had subject matter jurisdiction over the appeal under the Administrative Procedure Act, ch. 34.05 RCW, and that substantial evidence did not support the Gambling Commission’s determination that the prepaid cards failed to satisfy the regulatory definition of “cash.” ZDI Gaming,
ANALYSIS
¶10 Whether Pierce County Superior Court had subject matter jurisdiction over this case is controlled by Shoop v. Kittitas County,
¶11 Among other things, jurisdiction is a fundamental building block of law. Our state constitution uses the term “jurisdiction” to describe the fundamental power of courts to act. Our constitution defines the irreducible jurisdiction of the supreme and superior courts. It also defines and confines the power of the legislature to either create or limit jurisdiction. See Wash. Const, art. IV, § 4 (defining the power of the Supreme Court), § 6 (defining the power of the superior courts), § 30(2) (explicitly giving the legislature the power to provide for jurisdiction of the Court of Appeals). Our constitution recognizes and vests jurisdiction over many types of cases in the various courts of this State. Wash. Const, art. IV, §§ 1, 4, 6, 30. Superior courts have original jurisdiction in the categories of cases listed in the constitution, which the legislature cannot take away. Wash. Const, art. IV, § 6; State v. Werner,
¶12 The term “jurisdiction” is often used to mean something other than the fundamental power of courts to act. The current edition of Black’s Law Dictionary devotes six pages to different types of jurisdiction, ranging from agency jurisdiction to voluntary jurisdiction, touching on equity jurisdiction, in rem jurisdiction, and spatial jurisdiction, along with many others. Black’s Law Dictionary 927-32 (9th ed. 2009). Sometimes “jurisdiction” means simply the place or location where a judicial proceeding shall occur. Where jurisdiction describes the forum or location of the hearing, it is generally understood to mean venue. See, e.g., Werner,
¶13 In Dougherty,
¶14 By contrast, as we explained in Dougherty, rather than touching on the power or authority of courts to act on certain subjects, venue denotes the setting, location, or place “ ‘where the power to adjudicate is to be exercised, that is, the place where the suit may or should be heard.’ ” Dougherty,
¶15 With these principles in mind, we turn to the statute before us. It says:
No court of the state of Washington other than the superior court of Thurston county shall have jurisdiction over any action or proceeding against the commission or any member thereof for anything done or omitted to be done in or arising out of the performance of his or her duties under this title: PROVIDED, That an appeal from an adjudicative proceeding involving a final decision of the commission to deny, suspend, or revoke a license shall be governed by chapter 34.05 RCW, the Administrative Procedure Act.
RCW 9.46.095. Read as the State would have us read it, this statute violates article IV, section 6 because it would limit the original jurisdiction of the superior court bench county by county. Contra Dougherty,
¶16 We interpret statutes as constitutional if we can, and here we can. The legislature wanted to have cases involving the Gambling Commission heard in Thurston County. By interpreting the word “shall” to be permissive, RCW 9.46.095 relates to venue, not jurisdiction. Cf. In re Elliott,
¶17 We recognize that here, the superior court was sitting in its appellate capacity. Our constitution suggests, and our cases have from time to time assumed, that the legislature has greater power to sculpt the appellate jurisdiction of the individual superior courts. See Wash. Const. art. IV, § 6 (“The superior court... shall have such appellate jurisdiction in cases arising in justices’ and other inferior courts in their respective counties as may be prescribed by law.”). But whether or not the appellate jurisdiction of the superior court can be limited county by county, the simple fact is, original jurisdiction may not be. Werner,
Article II, Section 26
¶18 The State contends that under article II, section 26 of the Washington State Constitution, the legislature has the authority to limit trial court jurisdiction to consider suits against the State. That provision says that “[t]he legislature shall direct by law, in what manner, and in what courts, suits may be brought against the state.” Wash. Const. art. II, § 26. It is true that prior to the general legislative abolition of sovereign immunity, we held that the legislature could limit which county could hear suits brought against the State under one of the more limited waivers, and often couched the legislature’s power in terms of the court’s jurisdiction. See, e.g., State ex rel. Thielicke v. Superior Court,
the state being sovereign, its power to control and regulate the right of suit against it is plenary; it may grant the right or refuse it as it chooses, and when it grants it may annex such condition thereto as it deems wise, and no person has power to question or gainsay the conditions annexed.
Pierce County, 86 Wash, at 688; see also Thielicke,
¶19 But in 1961, the Washington State Legislature abolished sovereign immunity. Laws of 1961, ch. 136, § 1, codified as RCW 4.92.090. We have recognized that in so doing, the State intended to repeal all vestiges of the shield it had at common law. See Hunter v. N. Mason High Sch.,
¶20 Article II, section 26 and article IV, section 6 may be harmonized. In order to give effect to both, we hold that the legislature can sculpt the venue, but not the subject matter or original jurisdiction, of the individual superior courts in this State.
Cash Cards and Cash Equivalents
¶21 We must decide whether the agency erred in concluding that the VIP machine violated these repealed regulations. We sit in much the same position as the trial court, reviewing the agency record directly and showing all due deference to that agency. Ingram v. Dep’t of Licensing,
¶22 ZDI Gaming argues that its cash card is the functional equivalent of cash and that “[d]efining cash to exclude cash equivalents was an abuse of discretion because cash equivalents are commonly accepted forms of cash.” Suppl. Br. of Resp’t at 7. One can find several definitions of “cash” in dictionaries: Black’s Law Dictionary and The American Edition of the Oxford Dictionary. AR at
¶23 If a player wins more than $20 on a VIP machine, the machine directs the player to an employee of the establishment to receive cash, food, drink, or merchandise, and a player who stops playing can similarly immediately receive cash or the credits to make purchases from the gaming establishment. While we agree with the State that an extra step is required to convert the cash card to cash, the step is de minimis. Unlike gift certificates, coupons, or rebates, the player does not have to travel or wait to receive cash. Because the cash card can be immediately converted into cash currency at the establishment where the player is playing, the VIP cash card is functionally equivalent to cash.
¶24 ZDI Gaming’s request for attorney fees under RAP 18.1 is denied as untimely.
CONCLUSION
¶25 Despite its invocation of the word “jurisdiction,” we find that RCW 9.46.095 is a venue statute and that the courts below properly considered ZDI Gaming’s suit. We find that ZDI Gaming has met its burden of showing the Gambling Commission erred in concluding that the VIP machine violated then-in-force regulations. Accordingly, we affirm.
Notes
Perhaps presciently, the ALJ noted that “[t]he Commission was justified in denying approval for the equipment based on violation of the above regulations but has the inherent authority to revise the rules to better comport with the modern realities of the industry if it elects to do so.” AK at 423-24. Since then, many of these rules have been revised.
We are mindful of the fact that the State has acted forthrightly by bringing this issue to ZDI Gaming’s attention..
Judge Chushcoff also observed, with a great deal of insight, that “sometimes when the state Supreme Court uses the word ‘jurisdiction,’ they mean something else.” VHP (Dec. 1, 2006) at 5.
Interpreting jurisdiction as venue is precisely what the Pierce County Superior Court and the Court of Appeals did below. ZDI Gaming,
Dissenting Opinion
¶26 (dissenting) — In contrast to the majority’s view, the question in this case is whether the Washington State Constitution prohibits the legislature from adopting a statute granting exclusive jurisdiction to Thurston County Superior Court to review appeals of certain decisions of the Washington State Gambling Commission (Commission). RCW 9.46.095 limits the superior court’s appellate jurisdiction rather than its original jurisdiction. Additionally, sovereign immunity concerns attach where the state or one of its agencies is named as a party to the suit. I would hold that RCW 9.46.095 does not violate the grant of general jurisdiction to superior courts found in article IV, section 6 of the Washington Constitution, and thus dissent.
¶27 RCW 9.46.095 expressly grants Thurston County Superior Court exclusive jurisdiction to review the decisions of the Commission and provides that “[n]o court of the state of Washington other than the superior court of Thurston county shall have jurisdiction over any action or proceeding against the [CJommission.” (Emphasis added.) The Commission denied the application of ZDI Gaming Inc. to distribute its VIP (video interactive display) electronic pull-tab machine. ZDI Gaming filed in Pierce County Superior Court to seek review. I would hold that Pierce County Superior Court lacked subject matter jurisdiction and dismiss the case.
1. The History of Gambling in Washington
¶28 I begin my analysis by briefly noting the history of gambling in Washington State. In 1889, our state constitution originally provided that “[t]he legislature shall never authorize any lottery____” Wash. Const, art. II, § 24 (original text) (emphasis added), amended by Wash. Const, amend. 56. In subsequent cases, we interpreted the term “lottery” broadly to encompass virtually any game involving “ ‘prize, chance and consideration’ ” so long as it did not involve “ ‘ any substantial degree of skill or judgment....’” State ex rel. Evans v. Bhd. of Friends,
¶29 In 1972, the people of the state of Washington amended the state constitution to remove this broad and absolute prohibition. Wash. Const, amend. 56. The amended article II, section 24 permitted lotteries, but only where affirmatively approved by a supermajority (i.e., 60 percent) of the legislature.
2. Subject Matter Jurisdiction over Claims against the Commission
¶30 With respect to subject matter jurisdiction, the proper standard of review is de novo. “Whether a court has subject matter jurisdiction is a question of law reviewed de novo ’’Dougherty v. Dep’t of Labor & Indus.,
¶31 The term “subject matter jurisdiction” refers to the power of a court to hear a case. Morrison v. Nat’l Austl. Bank Ltd.,_U.S._,
¶32 In addition to these broad jurisdictional considerations, special sovereign immunity concerns attach where the State or one of its agencies is named as a party to the suit as well. The state constitution provides that “[t]he legislature shall direct by law, in what manner, and in what courts, suits may be brought against the state.” Wash. Const. art. II, § 26. “It may be said without question that an action cannot be maintained against the state without its consent----Since the state, as sovereign, must give the right to sue, it follows that it can prescribe the limitations upon that right.” O’Donoghue v. State,
“the state being sovereign, its power to control and regulate the right of suit against it is plenary; it may grant the right or refuse it as it chooses, and when it grants it may annex such condition thereto as it deems wise, and no person has power to question or gainsay the conditions annexed.”
State ex rel. Shomaker v. Superior Court,
¶33 Thurston County Superior Court possesses exclusive appellate jurisdiction over challenges to the decisions of the Commission. The Washington State gambling act provides:
No court of the state of Washington other than the superior court of Thurston county shall have jurisdiction over any action or proceeding against the commission or any member thereof for anything done or omitted to be done in or arising out of the performance of his or her duties under this title: PROVIDED, That an appeal from an adjudicative proceeding involving a final decision of the commission to deny, suspend, or revoke a license shall be governed by chapter 34.05 RCW, the Administrative Procedure Act.
RCW 9.46.095 (emphasis added).
¶34 The Court of Appeals reached the opposite conclusion. It incorrectly rewrote the legislature’s term “jurisdiction” in RCW 9.46.095 to read “venue.” ZDI Gaming, Inc. v. Wash. State Gambling Comm’n,
¶35 The Court of Appeals misapplied the case law. In Dougherty, we held that the filing requirements of a different statute, RCW 51.52.110, referred to venue and not to subject matter jurisdiction. Dougherty,
¶36 The statute
¶37 Only a few months prior to the decision in Dougherty, we decided Shoop. In Shoop, we held that the requirements of the statute there at issue, former RCW 36.01.050 (1997),
¶38 The primary issue in Shoop was our previous holding in Cossel v. Skagit County,
¶39 This case does not raise the constitutional issues at stake in Shoop. Shoop involved constitutional original jurisdiction of a superior court. Id. at 32. So long as the amount in controversy surpasses the jurisdictional threshold, a superior court’s original jurisdiction comes directly from the state constitution. Wash. Const,
¶40 In contrast to Shoop, the present case involves legislatively created appellate jurisdiction of a superior court to review an administrative agency decision. Appellate jurisdiction over administrative decisions is a creature of statute. Residents Opposed to Kittitas Turbines,
¶41 With respect to the Commission, the legislature clearly determined that Thurston County Superior Court possesses exclusive jurisdiction. Thus, Pierce County Superior Court lacked subject matter jurisdiction. Shoop has defined the remedy: “When a court lacks subject matter jurisdiction, dismissal is the only permissible action the court may take.”
Conclusion
¶42 I would hold that, under RCW 9.46.095 as written by the legislature, the Thurston County Superior Court possesses exclusive subject matter jurisdiction to review commission orders. Because the Pierce County Superior Court lacked subject matter jurisdiction, I would dismiss the case.
After modification, further reconsideration denied March 21, 2012.
ZDI Gaming also argues that RCW 9.46.095 provides an exception to the Thurston County jurisdictional requirement for licensing decisions. This argument fails. First, the Commission licenses gaming businesses-, it does not license gaming equipment. See WAC 230-14-001 (defining “licensees” as “the business holding the punch board and pull-tab license”); see also WAC 230-14-045(1) (defining the requirements for “[a]uthorized pull-tab dispensers”). Second, both the superior court and the Court of Appeals applied the jurisdictional provision and treated it as a venue provision with respect to ZDI Gaming’s appeal. The determination of the lower courts also warrants our review of this provision.
The text of the statute at issue in Dougherty reads as follows:
“In cases involving injured workers, an appeal to the superior court shall be to the superior court of the county of residence of the worker or beneficiary, as shown by the [Department’s] records, or to the superior court of the county wherein the injury occurred or where neither the county of residence nor the county wherein the injury occurred are in the state of Washington then the appeal may be directed to the superior court for Thurston county.”
Dougherty,
The text of the statute at issue in Shoop reads as follows:
“(1) All actions against any county may be commenced in the superior court of such county, or in the superior court of either of the two nearest counties ....
“(2) The determination of the nearest counties is measured by the travel time between county seats using major surface routes, as determined by the office of the administrator for the courts.”
Shoop,
See 1 Wilfred J. Airey, A History of the Constitution and Government of Washington Territory 466 (June 5, 1945) (unpublished PhD dissertation, University of Washington) (on file with Washington State Law Library) (stating that the Constitutional Convention of 1889 fixed the jurisdiction of the Washington courts and that “[t]he superior courts were always to be open and to have original jurisdiction in practically all types of criminal, civil, and probate cases if the amount in civil actions exceeded $100”).
