Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Minnesota Gambling Control Board,
Filed May 5, 1998
Paul W. Rogosheske, Thuet, Pugh & Rogosheske, Ltd., 833 Southview Boulevard, South St. Paul, MN 55075 and Gary A. Van Cleve, Karin M. Nelsen, Larkin, Hoffman, Daly & Lindgren, Ltd., 1500 Norwest Financial Center, 7900 Xerxes Avenue South, Bloomington, MN 55431 (for relator)
Hubert H. Humphrey III, Attorney General, E. Joseph Newton, Assistant Attorney General, 1200 NCL Tower, 445 Minnesota Street, St. Paul, MN 55101 (for respondent)
Considered and decided by Klaphake, Presiding Judge, Willis, Judge, and Mulally, Judge*.
*Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.
U N P U B L I S H E D O P I N I O N
Relator Double Dollar Distributing, Inc., challenges respondent Minnesota Gambling Control Board's denial of Double Dollar's application for licensure. We affirm.
Lucky Seven Gambling, Inc., was formerly a distributor of gambling equipment licensed by the Minnesota Gambling Control Board. Robert Doebel owned and managed Lucky Seven until 1990, when the legislature amended the gambling statutes to require the revocation of the license of a distributor if any of its principals had ever been convicted of a felony. 1990 Minn. Laws ch. 590, art. 1, § 18. The gambling control board issued an order in 1990 requiring Doebel to sell his interest in Lucky Seven because he had been convicted in the 1970s of felony armed robbery. A subsequent investigation showed that although Doebel claimed he was only a consultant, he in fact continued to own and manage Lucky Seven until 1996, when he pleaded guilty to two additional felonies: submitting false information to the gambling control board and aggravated forgery. Pursuant to a consent order dated March 19, 1997, the gambling control board revoked Lucky Seven's distributor license.
In the same month that Lucky Seven's license was revoked, relator Double Dollar Distributing, Inc., submitted an application to the gambling control board for a license to distribute gambling equipment. Richard Connelly, who had been a sales representative for Lucky Seven, was and is president and a shareholder of Double Dollar. In April 1997, Connelly co-authored a letter to Lucky Seven's customers indicating that although Lucky Seven was winding up its business, a new company had been organized under the name Double Dollar Distributing, and it had applied for a distributor license. As authorized by Minn. Stat. § 349.151, subd. 8 (Supp. 1997), the gambling control board requested the Department of Public Safety, Alcohol & Gambling Enforcement Division ("A&GED") to conduct a background investigation of Double Dollar and its principals.
The A&GED's investigation of Connelly's finances determined that his total line of credit for several accounts was $40,324 and that he had encumbered $36,740 of that total. The A&GED concluded that Connelly had a negative net worth and would be "dependent on early and prompt payment by existing accounts as well as credit from manufacturers * * * to pay his operating expenses."
The A&GED's investigation also concluded that in 1994 Connelly had aided Doebel in a prohibited activity by signing a $5,000 promissory note designed to conceal an illegal loan Doebel made to an organization that conducted lawful gambling. Connelly told investigators that he did not recall the promissory note, and although he admitted that the signature on the note looked like his, he did not believe that it was. Doebel had testified at his 1996 felony plea hearing that he "believe[d]" Connelly signed the promissory note. The Bureau of Criminal Apprehension performed a handwriting analysis on the note and concluded that it was "highly probable" that Connelly had signed it.
The A&GED forwarded copies of its reports to the gambling control board, which denied Double Dollar's application for a distributor's license. The board based its decision on four grounds: (1) Double Dollar, of which Connelly was then the sole shareholder, had a negative net worth; (2) Connelly signed a promissory note designed to conceal an illegal loan; (3) Connelly failed to comply with lawful requests during the A&GED's investigation; and (4) Connelly provided false and misleading information to the A&GED during its investigation. This appeal followed.
D E C I S I O N
On appeal from an agency decision, this court may reverse or modify the agency's decision if it is based on an error of law or unsupported by substantial evidence in the record. Minn. Stat. § 14.69 (1996). Substantial evidence is "[s]uch relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Cable Communications Bd. v. Nor-West Cable Communications Partnership, 356 N.W.2d 658, 668 (Minn. 1984) (citing Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 825 (Minn. 1977)). The gambling control board may deny a license to an applicant for any reason listed in Minn. Stat. § 349.155, subd. 4 (1996).
based on past activities or criminal record poses a threat to the public interest or to the effective regulation and control of gambling, or creates or enhances the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gambling or the carrying on of the business and financial arrangements incidental to the conduct of gambling.
Minn. Stat. § 349.155, subd. 4(9).
Double Dollar first argues that section 349.155, subdivision 4(9), is unconstitutionally vague because it does not specify the "past activities" that the gambling control board may consider. Where possible, this court construes statutes so as to uphold their constitutionality. Minn. Stat. § 645.17(3) (1996); Port Auth. of St. Paul v. Fisher, 275 Minn. 157, 165, 145 N.W.2d 560, 567 (1966). We will presume an act to be constitutional and will not declare the act unconstitutional "unless its invalidity appears clearly or unless it is shown beyond a reasonable doubt that it violates some constitutional provision." Minneapolis Gas Co. v. Zimmerman, 253 Minn. 164, 173, 92 N.W.2d 642, 650 (1958).
The purpose of the "void-for-vagueness" doctrine is to assure that a person of common intelligence is put on notice of what conduct is subject to the statute without having to guess at the meaning of the language. See St. Cloud Newspapers, Inc. v. District 742 Community Schs., 332 N.W.2d 1, 7 (Minn. 1983) (stating that statute is unconstitutionally vague if person of common intelligence must guess at statute's meaning) (quoting Broadrick v. Oklahoma, 413 U.S. 601, 607, 93 S. Ct. 2908, 2913 (1973)); Minter-Weisman Co. v. Commissioner of Revenue, 520 N.W.2d 1, 4 (Minn. App. 1994) (stating that general purpose of doctrine is to "assure that ordinary people are put on notice of what conduct is prohibited"), review denied (Minn. Sept. 28, 1994). The application of this principle to a civil statute is different from its application to a criminal statute. See Getter v. Travel Lodge, 260 N.W.2d 177, 180 (Minn. 1977) ("the void-for-vagueness principle in civil law is different than in criminal law"); see also State v. Newstrom, 371 N.W.2d 525, 528 (Minn. 1985) ("[w]here a statute imposes criminal penalties, a higher standard of certainty of meaning is required") (citing Kolender v. Lawson, 461 U.S. 352, 358 n.8, 103 S. Ct. 1855, 1859 n.8 (1983)). This court will not void legislation that is otherwise valid on the ground that it is
unintelligible and meaningless unless it is so imperfect and so deficient in its details as to render it impossible of execution and enforcement, and is susceptible of no reasonable construction that will support and give it effect, and the court finds itself unable to define the purpose and intent of the legislature.
Wichelman v. Messner, 250 Minn. 88, 111, 83 N.W.2d 800, 819 (1957).
The language of section 349.155, subdivision 4(9), is virtually identical with the language of a Nevada gambling licensure statute. In State v. Glusman, 651 P.2d 639 (Nev. 1982), the Nevada Supreme Court considered a vagueness challenge to a statute that authorizes the Nevada gaming commission to require any person who does business on the premises of a licensed gaming establishment to apply for determination of suitability to be associated with a gaming enterprise. Id. at 642. The court found that the standards of conduct applicable to determination of suitability were described "with specificity" in the Nevada statute that parallels the Minnesota statute at issue. Id. at 645.
Section 349.155, subdivision 4(9), describes the conduct that will be considered by the gambling control board in determining an applicant's suitability to hold a gambling equipment distributor's license. A person of ordinary intelligence is put on notice that an investigation of an applicant's suitability will involve determining whether the applicant or the applicant's principals have engaged in past activities that (1) threaten the public interest or the "effective regulation and control of gambling"; (2) create or enhance the dangers of illegal conduct in the operation of gambling or the "carrying on of the business and financial arrangements incidental to the conduct of gambling." Minn. Stat. § 349.155, subd. 4(9). Where the administration of a law turns on a question of personal fitness, legislation need not specifically prescribe a standard of action controlling and guiding administrative officers. Anderson v. Commissioner of Highways, 267 Minn. 308, 311-12, 126 N.W.2d 778, 780-81 (1964) (examining whether statute is unconstitutionally vague where commission given authority to suspend driver's licenses of "habitual violator[s]" of traffic laws).
This is so because it is impossible for the legislature to deal directly with the many details in the varied and complex conditions on which it legislates, but must necessarily leave them to the reasonable discretion of administrative officers.
Id. at 312, 126 N.W.2d at 781. One of the stated purposes of the gambling regulations is "to insure integrity of operations." Minn. Stat. § 349.11 (1996). The legislature is not required to anticipate in statutory language all activities that could threaten the public safety or the integrity of the gaming industry. Furthermore, the statute at issue does not subject an applicant to criminal sanctions but only to the denial of a request for a license. Applying the vagueness standard applicable to a civil statute, we concur with the determination of the Nevada Supreme Court in reviewing its almost identical statute and conclude that the "past activities" that could result in denial of a license are described with sufficient specificity in section 349.155, subdivision 4(9), and the statute is not, therefore, unconstitutionally vague.
Double Dollar also argues that the gambling control board erred in considering Connelly's net worth as a past activity that could be considered in denying a license to Double Dollar, contending that the term "past activities" does not include an individual's current financial status. But net worth is the result of all of a person's past financial activities. The gambling control board did not err in considering Connelly's financial status in denying Double Dollar's license application.
No distributor or any representative, agent, affiliate, or employee of a distributor may:
* * *
directly or indirectly give * * * loans of money * * * to gambling organizations, or their employees * * *.
Minn. R. 7863.0010, subpt. 4E (1997). The gambling control board concluded that (1) at Doebel's request, Connelly signed a blank promissory note as a borrower from Lucky Seven; and (2) the note was designed to conceal an illegal loan to an organization licensed to conduct lawful gambling in violation of rule 7863.0010. The gambling control board concluded that Connelly had, therefore, engaged in conduct that was "contrary to the public health, welfare, or safety, or to the integrity of gambling." See Minn. Stat. § 349.155, subds. 4(8), 4(9). Connelly claims that he has no recollection of the note and denies signing it. But there is ample evidence in the record to support the board's conclusions and its decision to deny Double Dollar's application for licensure on this ground.
Because of our decision, we need not address whether the gambling control board's decision to deny a license to Double Dollar for failure to provide information and for providing false and misleading information was contrary to law or unsupported by the evidence.
[ 1] Nev. Rev. Stat. § 463.170(2)(b) (1997) provides that the state gaming commission will grant licenses only to persons
whose prior activities, criminal record, if any, reputation, habits and associations do not pose a threat to the public interest of this state or to the effective regulation and control of gaming or charitable lotteries, or create or enhance the dangers of unsuitable, unfair or illegal practices, methods and activities in the conduct of gaming or charitable lotteries or in the carrying on of the business and financial arrangements incidental thereto * * * .
[ 2] Double Dollar also raised two other arguments for the first time at oral argument: immunity and a First Amendment right of association. Because it did not address these issues in its brief, we do not review them here. See Melina v. Chaplin, 327 N.W.2d 19, 20 (Minn. 1982) (holding issues not briefed on appeal are waived).