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25007 - Joytime Distributors and Amusement Col, Inc. V. State

THE STATE OF SOUTH CAROLINA

In The Supreme Court

________

Joytime Distributors

and Amusement Co., Plaintiff,

Inc.,

v.

The State of South

Carolina, Defendant.

________

IN THE ORIGINAL JURISDICTION

________

Opinion No. 25007

Heard October 12, 1999 - Filed October 14, 1999

________

Frank L. Eppes and L. Lee Plumblee, of Eppes &

Plumblee, P.A., of Greenville, for plaintiff.

Attorney General Charles Molony Condon, Assistant

Deputy Attorney General Robert D. Cook, Senior

Assistant Attorneys General Nathan Kaminski, Jr.,

and Kenneth P. Woodington, Assistant Attorney

General Christie Newman Barrett, and Assistant

Deputy Attorney General J. Emory Smith, Jr., all of

Columbia, for defendant.

James B. Richardson, Jr., of Richardson & Birdsong, of

Columbia, and J. Boone Aiken, III, of Aiken, Nunn,

Elliott & Tyler, P.A., of Florence, for Amicus Curiae

PedroLand, Inc.

Reginald I. Lloyd, Counsel to the House Judiciary

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Joytime Distributors and Amusement Co., Inc. v. State

Committee, and Charles F. Reid, Counsel to the

Speaker of the House, both of Columbia, for Amicus

Curiae David H. Wilkins.

________

PER CURIAM: This matter is pending in the Court's original

jurisdiction. Plaintiff (Joytime) is a South Carolina corporation engaged in the

video gaming industry with gaming machines located in several South Carolina

counties. Joytime seeks a declaration as to the constitutionality of Act No. 125,

1999 S.C. Acts. Joytime asserts that Part II of Act 125 is an unconstitutional

delegation of power by the legislature to the voters of this State and asks the

Court to enjoin the enforcement of Act 125. The State has filed a brief

contending that Act 125 is constitutional and, if not, the Act is severable. We

agree with Joytime that Part II of Act 125 is unconstitutional but hold the

portion of Act 125 which constitutes an unconstitutional delegation of power is

severable from the remainder of the Act.

Facts and Proceedings

Because the General Assembly was unable to agree on

comprehensive video gaming legislation, the Governor, by Executive Order,

called an extra session of the General Assembly to meet on Tuesday, June 29,

1999. Executive Dep't, State of South Carolina, Exec. Order No. 99-192 (signed

by Governor James Hovis Hodges). During that extra session, the General

Assembly enacted Act 125, which was ratified on July 1, 1999, and signed by the Governor on July 2, 1999.

Act 125 is legislation relating to video gaming machines and is

composed of six parts. Part I prohibits cash payouts on video gaming devices

effective July 1, 2000. Part II requires that a referendum be held "to ascertain

whether or not video game machine payouts will continue to be allowed in this

State." Act 125, Part II, § 9(1), 1999 S.C. Acts. The specific question voters are

asked to consider is: "Shall cash payouts for credits earned on video game

machines continue to be allowed after June 30, 2000?" Act 125, Part II, § 9(2),

1999 S.C. Acts. Part III provides for regulation of the video gaming industry if

the referendum called for in Part II results in a majority "yes" vote. Part IV

deals with gambling losses and civil actions. Part V includes a severability

clause, a savings clause, and an intent section, and Part VI states the effective

dates of the various parts and certain specific sections of the Act.

Joytime initiated this action on September 2, 1999, alleging that Act

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Joytime Distributors and Amusement Co., Inc. v. State

125 is violative of the South Carolina Constitution. Prior to the expiration of

the time for answering the complaint, the Attorney General petitioned this

Court to hear the matter in its original jurisdiction. By order dated September

24, 1999, the Court granted the Attorney General's petition and ordered an

expedited briefing schedule. The Court also granted the petitions of PedroLand,

Inc., a South Carolina Corporation which owns and operates Class III video

game machines (video poker machines) at locations in Dillon County, South

Carolina, and David H. Wilkins, Speaker of the South Carolina House of

Representatives, to appear as amici curiae.

Having considered the briefs and appendices filed with the Court,

and the arguments of the parties at the hearing in this matter, we discuss the

questions of whether Joytime has standing to bring this matter, whether the

referendum constitutes an unlawful delegation of the legislature's power,

whether portions of Act 125 are severable, whether it is proper for this Court

to issue an injunction, and whether the surcharge on license fees is valid.

Standing

PedroLand, as amicus curiae, asserts that Joytime does not have

standing to prosecute this action. PedroLand contends that Joytime has not

alleged an injury to differentiate it from the general public. We disagree.

Standing to sue is a fundamental requirement in instituting an

action. A private individual may not invoke the judicial power to determine the

validity of an executive or legislative act unless the private individual can show

that, as a result of that action, a direct injury has been sustained, or that there

is immediate danger a direct injury will be sustained. Ex parte Levitt, 302 U.S.

633, 58 S. Ct. 1, 82 L. Ed. 493 (1937); Blandon v. Coleman, 285 S.C. 472, 330

S.E.2d 298 (1985). Moreover, the injury must be of a personal nature to the

party bringing the action, not merely of a general nature which is common to

all members of the public. Citizens for Lee County v. Lee County, 308 S.C. 23,

416 S.E.2d 641 (1992).

In this case, Joytime is required by Part II, § 9(4) of Act 125 to pay

a license surcharge to fund the referendum. Further, Act 125 will directly affect

Joytime's business. Part I of Act 125 bans video gaming machines as of July 1,

2000. Part III of Act 125 provides for more extensive regulation and taxation

than that in effect when Act 125 was adopted and requires Joytime to connect

to a central monitoring system.

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Joytime Distributors and Amusement Co., Inc. v. State

Although this action is of general interest to all members of the

public, in our opinion, Joytime has alleged an injury which is sufficiently

personal to confer standing.

Unconstitutional Delegation of Power

Joytime contends that the legislature unconstitutionally delegated

its power to enact laws by enacting Part II of Act 125. We agree.

This Court has a very limited scope of review in cases involving a

constitutional challenge to a statute. All statutes are presumed constitutional

and will, if possible, be construed so as to render them valid. Davis v. County

of Greenville, 322 S.C. 73, 470 S.E.2d 94 (1996). A legislative act will not be

declared unconstitutional unless its repugnance to the constitution is clear and

beyond a reasonable doubt. Westvaco Corp. v. South Carolina Dep't. of

Revenue, 321 S.C. 59, 467 S.E.2d 739 (1995). A legislative enactment will be

declared unconstitutional only when its invalidity appears so clearly as to leave

no room for reasonable doubt that it violates a provision of the constitution. Id.

Article III, § 1 of the South Carolina Constitution states:

The legislative power of this State shall be vested in two distinct

branches, the one to be styled the "Senate" and the other the

"House of Representatives" and both together the "General

Assembly of the State of South Carolina."

The Constitution of 1868 had an identical clause and had an additional

provision, Art. I, § 41, which stated: "The enumeration of rights in this

constitution shall not be construed to impair or deny others retained by the

people and all powers not herein designated are reserved for the people." In

1873, this Court was called upon to construe the two sections and stated the

following:

The true effect of this declaration [Art. I, § 41] is that it reserves to

the people whatever is not granted by the instrument; as, for

instance, the right to make changes in the form of government is

not granted, and, under this clause, remains in the hands of the

people, capable of exercise when they may see fit so to do. As the

legislative power is granted in express terms, importing a grant of

general powers, such general powers of legislation cannot be

regarded as reserved to the people under this section. Such general

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Joytime Distributors and Amusement Co., Inc. v. State

language as that contained in section 41 of article 1 cannot be

allowed such force and effect as to change entirely the nature of the

legislative power, and to introduce anomalous ideas in the

structure of the government.

State v. Hayne, 4 S.C. 403, 421 (1873)(emphasis added). The present South

Carolina Constitution does not have a reserve clause similar to Art. I, § 41, and,

since the constitution does not contain a specific provision reserving to the

people the power to legislate, in our opinion, Art. III, § 1 requires the

legislature, not the people, to enact the general law.

Direct Legislation

In a direct democracy, the people are given the power to legislate

directly. Direct legislation by the people may consist of initiatives by petition,

referenda, and recalls. With initiatives by petition, a certain percentage of the

voters of a state may propose by petition that a constitutional amendment or

general law be enacted. If the subject matter of the initiative is not enacted by

the lawmaking body, it must be submitted to the voters for ratification. A

referendum is a vote by the people of the state as to whether to accept or reject

a measure passed by the lawmaking body of that state. A recall allows the

electors of a state to end the term of an elected official's office before its

expiration date. William Munro, The Initiative Referendum and Recall, 1-2

(1912). Direct legislation grants the voters the option to propose legislation and

decide state-wide policy issues themselves. It is direct democracy as opposed

to representative democracy. David B. Magleby, Direct Legislation (1984).

However, Article III, § 1, of the South Carolina Constitution

provides for a representative form of government in this state as opposed to a

direct democracy. In Opinion of the Justices (Tax Plan Referendum), 725 A.2d

1082 (N.H. 1999), the New Hampshire Supreme Court considered whether a bill

which proposed to allow the voters to determine which of two tax plans would

be put into effect was unconstitutional direct legislation. The New Hampshire

Constitution contains a provision that prohibits taxation ". . . without the

consent of the people, or their representatives in the legislature, or authority

derived from that body . . . " N.H. Const. pt. I, art. 28. The court concluded that

the phrase "the consent of the people" was not intended to establish a right of

direct legislation on taxes, stating:

Two broad rules of law apply in determining whether, and under what

circumstance, the legislature has the authority to delegate its legislative

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Joytime Distributors and Amusement Co., Inc. v. State

powers to the voters. The first is that the legislature is prohibited from

abdicating its legislative power . . . . The first rule is rooted both in the

philosophy of John Locke - because the power to legislate is a delegated

power from the people, the legislature has no power to delegate it to

anyone else, . . . and in the separation of powers doctrine . . . .

Id. at 1090 (internal citations omitted). Like New Hampshire's constitution,

this state's constitution is premised upon the philosophy of John Locke and this

Court agrees with the statement made by the New Hampshire Supreme Court

in 1881, and reaffirmed by that Court this year, that:

The government organized by the constitution was considered to be,

as it undoubtedly is, that of a representative republic, and no power

existed in the legislature to convert it, on any occasion, or for any

purpose, into a pure democracy. Legislative power can be delegated

to towns only in local affairs. By the constitution, legislative power

is vested not in the towns, but in the senate and house of

representatives. And without a well established ground of

exception, the senate and house are as incapable of delegating their

legislative power, as the governor and council are of delegating the

power of pardon, or the court of delegating the power of deciding

the constitutional question raised in these cases. All power is

derived from the people, and all magistrates and officers of

government are their agents, and at all times accountable to them.

And these agents have not a general authority to avoid their official

responsibility by relegating their duties to their assignees. If the

legislative seats were filled with substitutes, it would not be

claimed that a bill passed by them was law. The vote of a body of

substitutes, assembled in the state-house or elsewhere, is not

legislation, unless authorized by a legal construction of the

constitution . . . .

Id. at 1087 (citing State ex rel. Pearson v. Hayes, 61 N.H. 264, 329

(1881)(internal citations and quotation marks omitted).

The West Committee, charged in 1969 with recommending

amendments to the Constitution of 1895, considered a proposal to amend the

constitution to allow for direct legislation through initiative petitions and

referenda. The proposal was summarily rejected. Minutes of the West

Committee, September 16, 1967, page 72. Further, as late as 1996, a bill was

introduced in the House which would have provided for an amendment to the

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Joytime Distributors and Amusement Co., Inc. v. State

constitution to allow for direct legislation by the people of the state. It was

referred to committee and saw no further action. H. R. 4479, 111th Leg., 2d

Sess. (1996); [1996] I S.C. House J. 267-68.

In our opinion it is clear that our constitution does not give the

people the right of direct legislation by referendum.

Delegation of Authority to Execute Laws

On a number of occasions, this Court has held that the power to

legislate cannot be delegated to private persons or corporations. See State v.

Watkins, 259 S.C. 185, 191 S.E.2d 135 (1972). Although the legislature may

delegate its authority to create rules and regulations to carry out a law, the

legislature may not delegate its power to make the law. DeLoach v. Scheper,

188 S.C. 21, 198 S.E. 409 (1938); State ex rel. Richards v. Moorer, 152 S.C. 455,

150 S.E. 269 (1929). In discussing the distinction between making and carrying

out the law, the Court in Moorer quoted J. G. Sutherland, Sutherland on

Statutory Construction, § 68 (1891) for the following:

[The distinction] is between the delegation of power to make the

law, which necessarily involves a discretion as to what it shall be,

and conferring authority or discretion as to its execution, to be

exercised under and in pursuance of the law. The first cannot be

done. To the latter, no valid objection can be made.

Id. at 479, 150 S.E. at 297 (internal citations omitted). In the present case, it

is clear that the legislature has not delegated merely the authority to execute

a law but has delegated the authority to make a law.

Constitutional Delegations of Lawmaking Authority

Article XVI, §§ 1 and 2 of our constitution provide that proposed

constitutional amendments must be submitted to the voters. However, even

in amending the constitution, the people of the state have not retained exclusive

power. Although amendments to the constitution must be approved by the

people, even if they are approved, the next General Assembly must still ratify

the approved amendments by a majority vote before they become effective.(1)

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Joytime Distributors and Amusement Co., Inc. v. State

A number of other sections of the constitution specially require a

referendum by the people who will be affected by the legislation. See S.C.

Const. art. VIII, § 8 (incorporation of new municipalities); art. VIII, § 16

(acquisition and operation of public utilities systems); art. X, § 13 (bonded

indebtedness of the state); art. X, § 14 (bonded indebtedness of political

subdivisions); art. X, § 15 (bonded indebtedness of school districts). Under the

maxim of expressio unius est exclusio alterius (the expression of one thing

implies the exclusion of another) the inclusion of provisions for a referendum in

certain circumstances means a referendum is not contemplated in other

circumstances. See Opinion of the Justices, 725 A.2d at 1089 ("That the

framers of our constitution knew how to employ language providing for a direct

vote of the people on an issue of state-wide concern is evidenced by the provision

for constitutional amendment.").

We hold that the silence of the constitution on the ability of the

people to enact laws by referendum does not constitute an implied grant of that

right.

Act 125 as Contingent Legislation

This Court has recognized the general rule that statutes that go into

effect only on a certain contingency are constitutional. Beaufort County v.

Jasper County, 220 S.C. 469, 68 S.E.2d 421 (1951). In Part V, § 22 of Act 125

the legislature acknowledges that there is no provision in the constitution which

allows the people to enact laws by referendum. Section 22 attempts to justify

the constitutionality of the Act by stating that the referendum will result in a

"contingency that is certain" that will determine which parts of Act 125 take

effect.

In Beaufort County, we stated:

The fact that the Legislature saw fit to make the Act effective only

on the happening of a certain contingency does not affect the

validity of the Act. The applicable rule is stated in 11 Am. Jur., p.

926, § 216, as follows: "The rule is well settled that while the

Legislature may not delegate its power to make a law, it may make

a law to become operative on the happening of a certain

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Joytime Distributors and Amusement Co., Inc. v. State

contingency of future event. Moreover, in general it makes no

essential difference what is the nature of the contingency if it is

essentially just and legal. The reason for this rule is that it is not

always essential that a legislative act must in any event take effect

as law after it leaves the hands of the Legislature. If the law is in

its provisions a complete statute in other respects, its taking effect

may be made conditional upon some subsequent event. When that

event happens, the statute takes effect and becomes the law by

force of legislative action as fully as if the time when it should take

effect had been unconditionally fixed."

Id. at 488, 68 S.E.2d at 430 (emphasis added). In Beaufort County, the "event"

upon which the legislation would become effective was a ruling that the

legislation was constitutional. Since the legislation could not be effective if it

were held unconstitutional, we question whether the Court even needed to

address the issue. At any rate, here, the "event" is a vote of the people as to

which portion of Act 125 will become effective.

A majority of courts addressing this issue has rejected the argument

that a vote of the majority of the people constitutes a certain contingency. In

rejecting an argument that a referendum of the people sufficed as a contingent

event, the court in Ex parte Wall, 48 Cal. 279, 315 (1874), stated:

The Legislature cannot transfer to others the responsibility of

deciding what legislation is expedient and proper, with reference

either to present conditions or future contingencies. To say that

the legislators may deem a law to be expedient, provided the people

shall deem it expedient, is to suggest an abandonment of the

legislative function by those to whose wisdom and patriotism the

Constitution has intrusted the prerogative of determining whether

a law is or is not expedient.

The court in Barto v. Himrod, 8 N.Y. 483 (1853), which is cited by most courts

rejecting the theory that a vote of the people is an event upon which legislation

may be contingent, explained:

The event or change of circumstances on which a law may be made

to take effect, must be such as in the judgment of the legislature

affects the question of the expediency of the law: an event on which

the expediency of the law, in the judgment of the law makers,

depends. On this question of expediency, the legislature must

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Joytime Distributors and Amusement Co., Inc. v. State

exercise its own judgment definitively and finally. When a law is

made to take effect upon the happening of such an event, the

legislature in effect declare the law inexpedient if the event should

not happen; but expedient if it should happen. They appeal to no

other man or men to judge for them in relation to its present or

future expediency. They exercise that power themselves and then

perform the duty which the constitution imposes upon them.

Id. at 490. In our opinion, Act 125 cannot stand under the general rule

regarding "certain contingencies."(2) Act 125 is not a "complete statute in other

respects," and leaves to the majority of the voters the decision as to which

portion of the Act is "expedient."

State-wide versus Local Referenda

The State also asserts that there is no reason to distinguish a state-

wide referendum from local option referenda which have been held valid. In the

case of local options, however, the legislature has enacted a complete law and

left to municipalities or other governmental entities, each having unique needs

and circumstances, the decision whether the law will be effective. The

Constitution mandates that the legislature provide by general law the powers,

duties, and functions of counties and municipalities. S.C. Const. art. VIII, §§

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Joytime Distributors and Amusement Co., Inc. v. State

7 and 9. That the legislature may on occasion provide that local governments

may, by popular vote, decide if a legislative enactment, relating to the local

governmental entities' police, taxing, or other power, should have effect in that

locality is not an unlawful delegation of legislative power. As stated in Gaud

v. Walker, 214 S.C. 451, 462, 53 S.E.2d 316, 321 (1949)(quoting 11 Am.Jur.

Constitutional Law, § 223):

It is a well settled rule, supported with practical unanimity by the

authorities, that the general doctrine prohibiting the delegation of

legislative authority has no application to the vesting in political

subdivisions of powers to govern matters which are local in scope.

Here, in contrast, the legislature has left it to the people to determine what the

general law will be.

In our opinion, Part II of Act 125 constitutes an unconstitutional

attempt to delegate to the people the legislature's power to set the policy of the

state and enact laws to effectuate that policy.(3)

Severability

Part V, § 20 of Act 125 is a severability clause which provides as

follows:

If any section, subsection, paragraph, subparagraph, sentence,

clause, phrase, or word of this act is for any reason held to be

unconstitutional or invalid, such holding shall not affect the

constitutionality or validity of the remaining portions of this act,

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Joytime Distributors and Amusement Co., Inc. v. State

the General Assembly hereby declaring that it would have passed

this chapter, and each and every section, subsection, paragraph,

subparagraph, sentence, clause, phrase, and word thereof,

irrespective of the fact that any one or more other sections,

subsections, paragraphs, subparagraphs, sentences, clauses,

phrases, or words hereof may be declared to be unconstitutional,

invalid, or otherwise ineffective.

The State asserts that Part II, which requires the referendum, is severable from

the remainder of the Act. The State argues that since Part VI, § 23(C) states

that Part I becomes effective on July 1, 2000, if the referendum is found to be

unconstitutional, video gaming will be outlawed on July 1, 2000. Joytime

asserts that the Act is not severable and must be invalidated in its entirety. We

agree with the State that Part II of Act 125 is severable.

The test for severability is whether the constitutional portion of the

statute remains complete in itself, wholly independent of that which is rejected,

and is of such a character that it may fairly be presumed the legislature would

have passed it independent of that which conflicts with the constitution.

Thomas v. Cooper River Park, 322 S.C. 32, 471 S.E.2d 170 (1996); Thayer v.

South Carolina Tax Comm'n, 307 S.C. 6, 413 S.E.2d 810 (1992). "When the

residue of an Act, sans that portion found to be unconstitutional, is capable of

being executed in accordance with the Legislative intent, independent of the

rejected portion, the Act as a whole should not be stricken as being in violation

of a Constitutional Provision." Dean v. Timmerman, 234 S.C. 35, 43, 106 S.E.2d

665, 669 (1959).

Initially we find that the severability clause in Act 125 is strongly

worded and evidences strong legislative intent that the several parts of Act 125

be treated independently. This intent to treat the several parts independently

is also evident in the Title to the Act. See Lindsay v. Southern Farm Bureau

Casualty Ins. Co., 258 S.C. 272, 188 S.E.2d 374 (1972)(it is proper to consider

the title or caption of an act in aid of construction to show the intent of the

legislature). The first clauses of the Title relate solely to Part I and end by

stating the purpose as "prohibiting cash payouts for credits earned on video

games machines on and after July 1, 2000." The first clauses are clearly

separate from the next clause of the Title providing for the referendum in Part

II of the Act, which we have determined is unconstitutional, and Part III, which

regulates video games in the event Part I does not become effective.

The various substantive parts of the Act are also clearly separable:

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Joytime Distributors and Amusement Co., Inc. v. State

Part I, as previously stated, bans payouts on video game machines; Part II

provides for the referendum; Part III regulates the video game industry and

provides for revised penalties and license fees if the referendum results in a

"yes" vote; and Part IV amends S.C. Code Ann. §§ 32-1-10 to -30, to allow for

recovery of gambling losses only where the gambling activity which resulted in

the loss is unlawful. See Berkebile v. Outen, 311 S.C. 50, 426 S.E.2d 760

(1993)(holding § 32-1-10, originally enacted in 1712 when the Statutes of Anne

were adopted, applied to losses incurred in playing legalized video gaming

machines).

Part VI of Act 125 sets forth the effective dates of the various parts

of the Act. While Section 23 (C) definitively states that Part I takes effect July

1, 2000, and Part IV takes effect on the governor's signature, the remaining

effective dates are all contingent upon the outcome of the referendum contained

in Part II.

Finally, the severability clause is followed by the intent clause in

which, as previously noted, the General Assembly acknowledges that the

constitution does not expressly provide for legislation by referendum. This

acknowledgment, coupled with the severability clause, lends strong support to

a finding that the legislature intended the referendum sections of the act be

severable from the ban on video gaming.

Joytime asserts, however, that certain provisions in Act 125 became

effective on June 1 and July 1 of this year and are only repealed in the case of

a majority "no" vote; Act 125 contains no provision for their repeal without a

referendum. Joytime contends this shows the entire Act is connected to the

outcome of the referendum and Part II is incapable of being severed. However,

those provisions relate, in the interim, to registering machines, to the number

of video machines which are located on any one premise, and to casinos. The

provisions are not inconsistent with the intent of the legislature to ban video

gaming on July 1, 2000. Should the legislature fail to repeal those provisions

when it reconvenes, they will be repealed by necessary implication. Chris J.

Yahnis Coastal, Inc. v. Stroh Brewery Co., 295 S.C. 243, 368 S.E.2d 64 (1988).

This Court must be hesitant to declare any portion of a statute

unconstitutional, and may invalidate only the unconstitutional part where to

do so does not impair the remainder of the statute. Stone v. Traynham, 278

S.C. 407, 297 S.E.2d 420 (1982). In harmonizing the several Parts of Act 125

we believe the intent of the legislature to sever the referendum portions of Act

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Joytime Distributors and Amusement Co., Inc. v. State

125 is clear. We believe that Part I of Act 125 is capable of being executed

independently of Part II without destroying the legislature's intent in passing

Act 125 and invalidate only Part II and those other portions of Act 125 which

rely on the outcome of the referendum to become effective.

Propriety of Injunctive Relief

At oral argument, counsel for Joytime asked the Court to enjoin, not

only the enforcement of Act 125, but the referendum itself. Traditionally, this

Court has declined to enjoin elections since, after an election, an action at law

may be brought to determine the validity of the results of the election.

However, in a situation such as this, where the challenge to the referendum

involves only a question of law we believe the Court should take action prior to

the referendum being held.

In Chappell v. McCown, 103 S.C. 6, 87 S.E. 147 (1915), the Court

was asked to enjoin the holding of a referendum which was very similar to the

one at issue here. The General Assembly had passed an act calling for a

popular vote on the question of continuing the manufacture and sale of liquor

in the State. Act No. 76, 1915 S.C. Acts 88. That act provided that a majority

"yes" vote would mean that all laws relating to the manufacture and sale of

alcoholic beverages would remain in effect, and a "no" vote would repeal

existing laws and make unlawful the manufacture and sale of liquor. A petition

in the Court's original jurisdiction was filed seeking to have the referendum

enjoined.

The Court, sitting en banc with eleven circuit court judges, issued

an order refusing to issue an injunction and stating that the reasons for the

denial would be reduced to writing at a later date. Some three months later,

the Court issued an order entitled "On the Merits." However, the order

specifically stated the Court declined to address any of the reasons offered why

the injunction should have been issued or why it should not and simply said the

Court was unanimously of the opinion that the injunction should be denied

because the petitioner had an adequate remedy at law.

Prior to its decision in Chappell, the Court had decided Parler v.

Fogle, 78 S.C. 570, 59 S.E. 707 (1907). In Parler, the Court stated:

[T]he power to interfere by injunction to prevent the expression of

the popular will by an election, if it exists, should be exercised with

the greatest caution; and only where, under the well-recognized

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Joytime Distributors and Amusement Co., Inc. v. State

rule of equity, there is no other adequate legal remedy, and it is

made clear that an irremediable wrong will result from holding the

election.

However, the Parler Court also recognized that:

[C]ourts have enjoined popular elections . . . where there was no

constitutional or statutory authority whatever for holding them.

This doctrine has been applied principally where it was proposed

under an unconstitutional statute to hold an election, the result of

which would affect property rights.

Id. at 575, 59 S.E. at 709.

In Town of Hilton Head Island v. Coalition of Expressway

Opponents, 307 S.C. 449, 415 S.E.2d 801 (1991), this Court reaffirmed its

holding in Parler that a court rarely, if ever, may enjoin the expression of the

popular will. At issue in that case was the validity of an ordinance initiated by

petition. The Court held that pre-election review of the validity of the ordinance

was appropriate to determine if the ordinance was facially invalid. The Court

stated it was ". . . convinced that if an initiated ordinance is facially defective

in its entirety, it is 'wholly unjustified to allow voters to give their time,

thought, and deliberation to the question of the desirability of the legislation as

to which they are to cast their ballots, and thereafter, if their vote be in the

affirmative, confront them with a judicial decree that their action was in vain

. . . .'" Id. at 455, 415 S.E.2d at 805 (quoting Schultz v. Philadelphia, 385 Pa. 79,

86, 122 A.2d 279, 283 (1956)).

In our opinion, the fact that the Court declined to review the merits

of the petition for an injunction in Chappell is not dispositive of the present

case. The Court in Chappell specifically declined to address the question of

whether legislation by referendum was an unconstitutional delegation of the

legislature's power.

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Joytime Distributors and Amusement Co., Inc. v. State

We have determined that there is no constitutional authority for the

referendum provided for in Part II of Act 125 and find this is one of those rare

cases where an election should be enjoined.

Surcharge on License Fee

Part II, § 9(4) of Act 125 provides for a one-time surcharge license

fee of $50 per licensed machine to be used to defray the costs of the referendum

called for in Part II. Joytime states it paid the one-time surcharge fee on each

license it holds under protest and contends that the fee imposed by Part II, §

9(4) violates various portions of the constitution. Because we have held that the

referendum called for in Part II is unconstitutional, Joytime is entitled to a

refund of the surcharge fees it has paid and the other constitutional arguments

it raises are moot.

Conclusion

In conclusion, we hold that in enacting Part II of Act 125, the

General Assembly unconstitutionally delegated its power to enact the general

law of this state and we invalidate Part II of the Act and enjoin the holding of

the referendum. Since Part II of Act 125 is invalid, those portions of Part III of

the Act which provide for regulation of the video gaming industry, contingent

upon the referendum called for in Part II, are also invalid. Part I is a free

standing enactment of the General Assembly, is severable from the

unconstitutional portions of the Act, and is upheld. Should the General

Assembly wish to revisit the ban on video gaming enacted in Part I when it

meets next year, it may, of course, do so. Part IV of the Act is also a free

standing legislative enactment which is severable from the unconstitutional

portions of the Act and is upheld as constitutional. Finally, Joytime is entitled

to a refund of the surcharge fees on its licenses it paid under Part II, § 9(4) of

the Act.

Rule 221, SCACR, provides that a petition for rehearing must be

received by the appellate court within fifteen days of the filing of an opinion of

the court. Because of the nature of the decision we issue today, we find that the

fifteen days allowed by Rule 221 should be shortened to five days. Accordingly,

should any party desire to file a petition for rehearing, it must be received by

this Court within five days of the date of this opinion.

This Court is directed by the constitution, and our precedent, to

make every effort to find acts of the General Assembly constitutional. Citizens

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Joytime Distributors and Amusement Co., Inc. v. State

and organizations have expended a vast amount of effort and resources in

anticipation of the referendum, and we take no pleasure in holding the

referendum unconstitutional. Although we may view the task with disfavor,

and may have varying personal views on the merits of the controversy that

surrounds video gaming, we cannot ignore precedent and our duty to interpret

the constitution.

s/ Ernest A. Finney, Jr. C.J.

s/ Jean H. Toal A.J.

s/ James E. Moore A.J.

s/ E.C. Burnett, III A.J.

s/ William T. Howell A.A.J.

p.17

1. We note that in the The Final Report of the Committee to Make a Study of the South Carolina Constitution of 1895 123 (1969), a recommendation was made to delete the provision requiring ratification by the legislature after the people voted for an amendment. That recommendation was not adopted.

2. Cases upholding conditional legislation as not being an unlawful delegation of power include: Cargo of the Brig Aurora v. United States, 7 Cranch (11 U.S.) 382, 3 L. Ed. 378 (1812)(suspension of trade with foreign nations contingent upon those nations' continued violation of neutral commerce of United States); Opinion of the Justices, 344 So. 2d 1196 (Ala. 1977)(contingent upon continued federal appropriations); Opinion of the Justices, 251 So. 2d 744 (Ala. 1971)(increase in gas tax contingent upon future adoption of constitutional amendment); State ex rel. Douglas v. Sporhase, 305 N.W.2d 614 (Neb. 1981)(issuance of permit to transfer water out of state contingent upon reciprocal statutory provision in sister state); State v. Padley, 237 N.W.2d 883 (Neb. 1976)(raising speed limit contingent upon presidential termination of federal conservation act); Diversified Inv. Partnership v. Department of Social & Health Services, 775 P.2d 947 (Wash. 1989)(operation of statutes related to state reimbursement for nursing homes conditioned on no conflict with federal law that would jeopardize federal funding). These cases appear to stand for the proposition that the "contingent event" must be outside the control of the body enacting the law.

3. The State also contends that this Court's decision in Chappell v. McCown, 103 S.C. 6, 87 S.E. 147 (1915), refusing to enjoin a 1915 referendum on the manufacture and sale of liquor, was a decision on the merits and should be controlling here. The Court issued an order "On the Merits" which declined to address any of the reasons offered why the injunction should have been issued or why it should not and simply said it was unanimously of the opinion that the injunction should be denied because the petitioner had an adequate remedy at law. In our opinion, Chappell, as discussed below, stands only for the rule that courts will generally not enjoin the holding of an election and does not have any bearing on the question of whether a state-wide referendum is an unconstitutional delegation of legislative power.