Northville Downs v. Governor of Michigan

622 F.3d 579, 77 Fed. R. Serv. 3d 840, 2010 U.S. App. LEXIS 19926, 2010 WL 3730921
CourtCourt of Appeals for the Sixth Circuit
DecidedSeptember 27, 2010
Docket09-1370
StatusPublished
Cited by57 cases

This text of 622 F.3d 579 (Northville Downs v. Governor of Michigan) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northville Downs v. Governor of Michigan, 622 F.3d 579, 77 Fed. R. Serv. 3d 840, 2010 U.S. App. LEXIS 19926, 2010 WL 3730921 (6th Cir. 2010).

Opinions

GIBBONS, J., delivered the opinion of the court, in which ROGERS, J., joined. MERRITT, J. (pp. 590-91), delivered a separate concurring opinion.

OPINION

JULIA SMITH GIBBONS, Circuit Judge.

Plaintiff-appellant Northville Downs appeals the district court’s grant of judgment on the pleadings to defendants-appellees Jennifer Granholm, Governor of the State of Michigan, Michael A. Cox, Attorney General of Michigan, and MGM Grand Detroit, LLC (collectively, “the defendants”). Northville Downs, Oil Capital Race Venture, Inc., and Great Lakes Quarterhorse Association (collectively, “the plaintiffs”) sued the defendants under 42 U.S.C. § 1983, alleging that article IV, section 41 of the Michigan Constitution, as amended by voter referendum, violates their federal constitutional rights under the First Amendment, Equal Protection Clause, and Commerce Clause. For the following reasons, we affirm the district court’s decision.

I.

The plaintiffs operate several horse-racing tracks in Michigan. A significant part of their operations involves simulcast wagering, in which a horse race that takes place in one location, often outside of Michigan, is simultaneously broadcast to one or more other locations to allow bettors to wager in the same betting pool. The plaintiffs’ business has been decimated in recent years by competition from the state lottery and casino gaming. According to the plaintiffs’ expert, Dr. Richard Thalheimer, wagering at Detroit-area tracks, in real terms, declined eighty-five percent between 1972, when casino gaming began in the state, and 2007. The defendants are state officials and the operator of a casino in Detroit.

Before 1972, horse-racing was the only legal form of gambling in Michigan. In 1972, Michigan amended its constitution to allow the legislature to “authorize lotteries and permit the sale of lottery tickets in the manner provided by law.” Mich. Const. art. IV, § 41 (amended 1972). The legislature created a state lottery in 1972, Mich. Comp. Laws § 432.1 et seq., and authorized charitable gambling soon thereafter, Mich. Comp. Laws § 432.101 et seq. In the 1980s, a number of Indian gaming casinos also opened in the state pursuant [583]*583to a federal law under which tribes may negotiate compacts with states and receive authorization for gambling activities. See 25 U.S.C. § 2701 et seq.

In 1996, Michigan voters expanded legalized gambling in the state through Proposal E. Initiated Law 1 of 1996 (codified at Mich. Comp. Laws §§ 432.201-132.226). This provision allowed limited casino gambling in Detroit. The legislature subsequently created the Michigan Gaming Control Board (“the Board”). Mich. Comp. Laws § 432.204. The new law permitted up to three gaming casinos in any city whose local legislature enacted an ordinance approving casino gambling and that met the following qualifications: (1) population of 800,000 or more; (2) located within 100 miles of any other state or country in which gaming is authorized; and (3) has had casino gaming approved by a majority of the voters in the city. Mich. Comp. Laws §§ 432.206(3), 432.202(i), 432.203, 432.206(1)(a), (2), (3). The Board does not have authority over federally regulated Indian casinos. See Mich. Comp. Laws § 432.203(2)(d).

In the early 2000s, horse-race tracks lobbied the legislature for approval to offer slot machines, off-track racing theaters, and account wagering. They succeeded in persuading the Michigan House of Representatives and Senate to pass bills in their favor in 2004. These bills were not yet enacted when existing casino interests financed a referendum initiative that appeared as Proposal 1 on the 2004 general election ballot. As recounted by the district court, the official ballot language read:

PROPOSAL 04-1
A PROPOSAL TO AMEND THE STATE CONSTITUTION TO REQUIRE VOTER APPROVAL OF ANY FORM OF GAMBLING AUTHORIZED BY LAW AND CERTAIN NEW STATE LOTTERY GAMES

The proposed constitutional amendment would:

• Require voter approval of any form of gambling authorized by law after January 1, 2004.
• Require voter approval of any new state lottery games utilizing “table games” or “player operated mechanical or electronic devices” introduced after January 1, 2004.
• Provide that when voter approval is required, both statewide voter approval and voter approval in the city or township where gambling will take place must be obtained.
• Specify that the voter approval requirement does not apply to Indian tribal gaming or gambling in up to three casinos located in the City of Detroit.
Should this proposal be adopted?
Yes
No

Northville Downs v. Granholm, No. 08-11858, 2009 WL 483076, at * 2 & n. 3 (E.D.Mich. Feb.25, 2009).

The voters approved the proposal and amended article IV, section 41 of the state constitution to read:

The legislature may authorize lotteries and permit the sale of lottery tickets in the manner provided by law. No law enacted after January 1, 2004, that authorizes any form of gambling shall be effective, nor after January 1, 2004, shall any new state lottery games utilizing table games or player operated mechanical or electronic devices be established, without the approval of a majority of electors voting in a statewide general election and a majority of electors voting in the township or city where gambling will take place. This section shall not apply to gambling in up to three casinos [584]*584in the City of Detroit or to Indian tribal gaming.

Mich. Const. art. IV, § 41 (amended 2004) (hereinafter “Proposal 1”).

In May 2008, the plaintiffs brought suit in federal district court under 42 U.S.C. § 1983, seeking an injunction against the enforcement of Proposal 1 and a declaration of its invalidity on the grounds that it violated the federal Constitution and various state laws. The district court dismissed the state law counts, leaving only federal constitutional claims under the Commerce Clause, First Amendment, and Equal Protection Clause of the Fourteenth Amendment.

In August 2008, the defendants moved for judgment on the pleadings. The exhibits to the motion included the legislative history of the 2004 state House and Senate bills, a newspaper article characterizing the proponents of Proposal 1 as “an unlikely combination of anti-gambling interests, Detroit casino owners and Indian tribe-owned casinos,” and a newspaper article reporting on the success of Proposal E’s expansion of gambling in 1996. The plaintiffs filed a response to the motion and filed a cross-motion for partial summary judgment on the basis of their second amended complaint, which was included in the motion papers but had not yet been filed with the district court.

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622 F.3d 579, 77 Fed. R. Serv. 3d 840, 2010 U.S. App. LEXIS 19926, 2010 WL 3730921, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northville-downs-v-governor-of-michigan-ca6-2010.