Freedom Road Foundation v. Ohio Department of Liquor Control

685 N.E.2d 522, 80 Ohio St. 3d 202
CourtOhio Supreme Court
DecidedNovember 5, 1997
DocketNo. 96-1006
StatusPublished
Cited by40 cases

This text of 685 N.E.2d 522 (Freedom Road Foundation v. Ohio Department of Liquor Control) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Freedom Road Foundation v. Ohio Department of Liquor Control, 685 N.E.2d 522, 80 Ohio St. 3d 202 (Ohio 1997).

Opinions

Cook, J.

I

FREEDOM ROAD’S REQUEST FOR DECLARATORY JUDGMENT IS PROPER.

The department initially argues that the trial court never should have reached the merits of the declaratory judgment action because Freedom Road lacks standing to challenge the department’s actions. The department’s argument is based on the fact that Regulation 53 has been enforced against liquor-permit premises, not Freedom Road. The department states that it, in fact, has no [204]*204authority to regulate the activities of charitable organizations such as Freedom Road. Accordingly, the department argues that only permit-premises owners have standing to challenge the citations.

By requesting a declaratory judgment, however, Freedom Road is not directly challenging any particular administrative order of the department. Freedom Road would have no standing to make such a challenge. Instead, Freedom Road seeks judicial construction of R.C. 2915.02(D). Judicial construction of R.C. 2915.02(D), while having no direct effect on the department’s administrative orders, will resolve whether the department has correctly interpreted that statute in finding a violation under Regulation 53.

The Declaratory Judgment Act allows “[a]ny person * * * whose rights, status, or other legal relations are affected by a * * * statute [or] rule * * * [to] have determined any question of construction * * * arising under such * * * statute [or] rule * * * and obtain a declaration of rights, status, or other legal relations thereunder.” R.C. 2721.03. Because (1) this action is within the scope of the Declaratory Judgment Act, (2) a justiciable controversy exists between adverse parties, and (3) speedy relief is necessary to preserve rights that may otherwise be impaired or lost, Freedom Road’s request for a declaratory judgment is proper. Compare Burger Brewing Co. v. Ohio Liquor Control Comm. (1973), 34 Ohio St.2d 93, 96-100, 63 O.O.2d 149,150-152, 296 N.E.2d 261, 263-266.

II

SUBSTANTIVE ISSUES BEFORE THE COURT

The remaining issues before the court involve interpretation of R.C. 2915.02(D). The first issue requires an analysis of whether Freedom Road “conduct[s]” the tip ticket operation, as required under R.C. 2915.02(D)(1). The second issue involves the question of whether permit premises owners or their employees derive a benefit prohibited by R.C. 2915.02(D) from their participation in otherwise lawful tip ticket operations.

A

FREEDOM ROAD CONDUCTS THE FUNDRAISING ACTIVITY

Analysis of the statutory terms chosen by the General Assembly to identify the potential actors under R.C. 2915.02(D) resolves the issue of what the General Assembly meant by its requirement under R.C. 2915.02(D)(1) that legal schemes of chance be “conducted” by charitable organizations. R.C. 2915.01(T) defines “conduct” as follows: “‘Conduct’ means to back, promote, organize, manage, [205]*205carry on, or prepare for the operation of a scheme or game of chance * * 1 Because these verbs are listed in the disjunctive, a charitable organization conducts the scheme or game of chance when it executes any of the actions listed.

A corollary of the legislature’s use of the disjunctive “or” in defining the types of actions subsumed in the broader concept of “conducting” a scheme of chance is that a charitable organization may conduct a scheme of chance despite the fact that owners and/or employees of permit premises actually “carry on” that activity. In fact, R.C. 2915.02(D) contemplates operation or assistance in the operation of a scheme or game of chance by persons other than the charitable organization, merely prohibiting such persons from being compensated for that activity.

“Operate,” while not expressly defined in R.C. Chapter 2915, connotes performance of an activity, while the verbs used to define “conduct” would allow a charitable organization to delegate operation of the activity, while retaining a supervisory or organizational role. See, e.g., Webster’s Third New International Dictionary (1986) 1580-1581 (defining “operate”); see, also, R.C. 2915.01(U) (defining a “bingo game operator” as one who carries out any of the bingo gaming functions). Accordingly, the permit-premises owners’ operation or carrying on of Freedom Road’s tip ticket activities does not prevent Freedom Road from “conducting” the scheme of chance, as required by statute.

B

OWNERS AND EMPLOYEES ARE NOT COMPENSATED FOR OPERATING THE FUNDRAISING ACTIVITY

R.C. 2915.02(D) states that “[n]o person shall receive any commission, wage, salary, reward, tip, donation, gratuity, or other form of compensation, directly or indirectly, for operating or assisting in the operation of any scheme or game of [206]*206chance.” (Emphasis added.) Appellant argues that this provision prevents permit-premises owners and employees from participating in on-premises tip ticket operations. The evidence on the issue demonstrates that neither permit-premises owners nor their employees are paid for operating the fundraising activity and that all of the net proceeds from the activity are paid to Freedom Road. Further, the department failed to produce any evidence that permit-premises owners or their employees receive anything in the nature of compensation for operating the fundraising activity.

Appellant argues that permit holders and their employees necessarily receive an impermissible “benefit” from any increased patronage that results from the sale of Freedom Road tip tickets in their establishments. Although the department produced no evidence regarding the effect of tip ticket sales on patronage at trial, Freedom Road’s president, Lindy Douglas, acknowledged in her deposition testimony that sales of tip tickets allow participating permit premises to keep customers who otherwise might go elsewhere to engage in gambling.

In interpreting a statute, we must begin by examining its express terms. The statute itself does not expressly prohibit one who operates or assists a scheme or game of chance from deriving any benefit from that activity. Instead, the statute carefully sets out a list of the types of compensation that such persons are forbidden from receiving. None of the listed forms of compensation may be received “for operating or assisting in the operation of a scheme or game of chance.” The statute thus contemplates a quid pro quo — the receipt of something of value for the giving of another. The benefit of increased patronage, on the other hand, does not come in the form of compensation and therefore is not within the prohibited class.

We conclude that the benefit of increased patronage does not fall within the prohibited class of compensation listed in R.C. 2915.02(D). Thus, there is nothing in the evidence to remove the scheme of chance from R.C. 2915.02(D)’s exception to that section’s general prohibition against gambling.

Ill

FREEDOM ROAD IS NOT ENTITLED TO THE INJUNCTIVE RELIEF THAT IT SEEKS

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Cite This Page — Counsel Stack

Bluebook (online)
685 N.E.2d 522, 80 Ohio St. 3d 202, Counsel Stack Legal Research, https://law.counselstack.com/opinion/freedom-road-foundation-v-ohio-department-of-liquor-control-ohio-1997.