Leong's, Inc. v. Oregon State Lottery Commission

921 P.2d 988, 142 Or. App. 460, 1996 Ore. App. LEXIS 1076
CourtCourt of Appeals of Oregon
DecidedJuly 31, 1996
Docket9410-07028; CA A88825
StatusPublished

This text of 921 P.2d 988 (Leong's, Inc. v. Oregon State Lottery Commission) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Leong's, Inc. v. Oregon State Lottery Commission, 921 P.2d 988, 142 Or. App. 460, 1996 Ore. App. LEXIS 1076 (Or. Ct. App. 1996).

Opinion

HASELTON, J.

Petitioners1 appeal from the trial court’s judgment affirming the Oregon Lottery Commission’s (Commission) order denying their application for a video lottery contract. Petitioners argue that the trial court erred in finding that the Commission could deny their application based on the underlying circumstances of a conviction that had been set aside under ORS 137.225. We affirm.

The material facts are as follows: Petitioners own and operate a restaurant in Estacada. In 1989, petitioners’ restaurant was one of several Estacada businesses subject to a criminal investigation for illegal gambling activities. Based on information uncovered by that investigation, petitioner Pak Man Leong was found guilty in November 1990 of promoting gambling in the second degree.

In February 1993, petitioners submitted an application for a video lottery retailer contract. In the application, petitioners disclosed Leong’s 1990 conviction. In May 1993, invoking OAR 177-100-060(2)(b),2 the Commission denied petitioners’ application because of Mr. Leong’s 1990 gambling conviction.

Leong subsequently petitioned the Clackamas County Circuit Court, pursuant to ORS 137.225,3 to set aside [463]*463his gambling conviction and to seal the record of the prosecution. In February 1994, the court granted that relief.

In April 1994, petitioners submitted a second application for a video lottery retailer contract. Question 15 of the application asked whether the applicant, or any control persons, had ever been the subject of a grand jury or criminal investigation. Petitioners responded, “yes.” Question 16 asked whether the applicant had ever been indicted, convicted or arrested for any criminal offense. Petitioners responded, “no.” In accordance with the instructions, petitioners elaborated on their answers to questions 15 and 16 in attachments included with the application. In one attachment, they stated:

“Mr. Leong * * * was the subject of a criminal investigation for illegal gambling alleged to have taken place between February 8 and March 18,1989 at [applicants’ restaurant] in Estacada, begun as well against other restaurants in town[.] The investigation disclosed that Mr. Leong managed ‘cash-outs’ from a drawer in the kitchen.
“The investigation further revealed that Mr. Leong opened the gambling tables in self-defense; this is that other restaurant establishments in Estacada had long maintained similar operations that forced applicant for compliance to maintain such an operation. * * * There was no evidence that Mr. Leong personally profited from the-illegal gaming. On November 14, 1990, Mr. Leong did indeed stipulate to facts from which the court determined that he was guilty of ‘promoting gambling in the second degree,’ a Class A Misdemeanor.
“On February 7, 1994, the Circuit Court for Clackamas County, Judge John Lowe signed an order setting aside the conviction and any record of arrest.”

In addition to attaching this explanation to their application, petitioners also attached a copy of the transcript of Leong’s gambling offense trial and a copy of the order setting aside his conviction for that offense. The trial transcript contained the state’s presentation of the factual circumstances that gave rise to the gambling charges.

[464]*464On August 15, 1994, the Commission denied petitioners’ application. The basis of the denial was explained as follows:

“[We have] determined that you do not qualify as a Video Lottery retailer under OAR 177-100-060 and OAR 177-040-010 for the following reason(s):
“A conviction for any gambling offense in any jurisdiction; specifically information of a criminal nature regarding [Mr. Leong]; and
“Any aspect of the applicant’s past conduct which the Director determines would adversely affect the integrity, security, honesty or fairness of the Lottery; specifically information of a criminal nature regarding [Mr. Leong].”

Following that denial, petitioners sought judicial review of the Commission’s order in Multnomah County Circuit Court. ORS 183.484. Petitioners asserted that ORS 137.225 precluded the Commission from treating either Leong’s “expunged” conviction or the circumstances underlying that conviction as a basis for denying their application.4 In addition, petitioners raised constitutional challenges under Article I, section 20, of the Oregon Constitution, and the equal protection clause of the Fourteenth Amendment to the United States Constitution,5 asserting that the Commission had impermissibly denied petitioners’ application while granting or renewing the applications of others who were similarly situated.

The trial court sustained the Commission’s action. It agreed with petitioners that ORS 137.225 precluded the [465]*465Commission from considering Leong’s “expunged” conviction. Nevertheless, the court also concluded that ORS 137.225 did not preclude the Commission from basing its denial on the conduct underlying that conviction, as distinct from the “expunged” conviction itself, because that conduct could reasonably be deemed to “adversely affect the integrity, security, honesty or fairness of the Lottery.” OAR 177-100-060(2)(c). With respect to that conclusion, the court specifically noted:

“[The Commission] and the Oregon State Police were aware of the Estacada gambling situation, and Mr. Leong’s involvement with it, independent of any matters contained within the sealed court' records relating to the expunged conviction.”

The trial court also rejected petitioners’ constitutional arguments:

“[Petitioners] argue that because two Estacada establishments which were involved in the ‘raid’ now have lottery contracts, and because the operators or ‘control persons’ of those establishments still have gambling convictions on their records, Petitioners are being treated unfairly by Respondents’ denial.
“Petitioners’ argument fails because it requires a court to accept the proposition that once an agency makes a mistake, it must continue to apply that mistake to all similarly situated applicants. Just because a prior Director exercised peremptory powers to override a denial recommended by staff (and for which the prior Director was reprimanded * * *), does not mean the agency must perpetuate the mistake.
“At the time of the application in this case, and since late 1992, the agency’s position has been that all applicants with prior gambling convictions or gambling conduct would be denied a lottery contract.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Delehant v. Board on Police Standards & Training
855 P.2d 1088 (Oregon Supreme Court, 1993)
State v. Langan
718 P.2d 719 (Oregon Supreme Court, 1986)

Cite This Page — Counsel Stack

Bluebook (online)
921 P.2d 988, 142 Or. App. 460, 1996 Ore. App. LEXIS 1076, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leongs-inc-v-oregon-state-lottery-commission-orctapp-1996.