Torch Elec. v. Mo. Dep't of Pub. Safety

694 S.W.3d 548

TORCH ELECTRONICS, LLC, et al., Appellants-Respondents,

v.MISSOURI DEPARTMENT OF PUBLIC SAFETY, et al., Respondents,Missouri Gaming Association, Appellant.

WD 86610 (Consolidated with WD 86674 and WD 86689)

Missouri Court of Appeals, Western District.

Opinion filed: May 28, 2024

Application for Transfer Denied September 3, 2024

APPEAL FROM THE CIRCUIT COURT OF COLE COUNTY, MISSOURI, THE HONORABLE DANIEL R. GREEN, JUDGE

Charles W. Hatfield, Jefferson City, for Appellants-Respondents.

Scott R. Pool, Jefferson City, for Respondent Missouri Department of Public Safety and Missouri State Highway Patrol.

Marc H. Ellinger, Jefferson City, for Appellant Missouri Gaming Association.

Division Three: Cynthia L. Martin, Presiding Judge, Mark D. Pfeiffer, Judge and Edward R. Ardini, Jr., Judge

EDWARD R. ARDINI, JR., JUDGE

Torch Electronics, LLC ("Torch") operates and licenses electronic gaming devices, and placed its devices in convenience stores owned by Warrenton Oil Co. ("Warrenton") pursuant to a license agreement. The Missouri State Highway Patrol (the "Highway Patrol") seized the devices, deeming them to be illegal "gambling devices." Torch and Warrenton (collectively "Plaintiffs") initiated this action against the Highway Patrol and the Missouri Department of Public Safety ("DPS"), seeking a declaration that the devices are not "gambling devices" as defined in section 572.010, RSMo,¹ and an injunction preventing the Highway Patrol from seizing them as such. The Missouri Gaming Association (the "Gaming Association") intervened and filed a counterclaim against Plaintiffs, seeking a declaration that the devices are illegal and an injunction prohibiting Plaintiffs from operating them. Plaintiffs moved to dismiss the Gaming Association’s counterclaim; the Highway Patrol and DPS moved to dismiss Plaintiffs’ amended petition. The Circuit Court of Cole County (the "trial court") granted both motions and dismissed all claims with prejudice. Plaintiffs and the Gaming Association appeal. We affirm the dismissals on the grounds that the parties sought declaratory judgments and injunctive relief relating to a criminal law, Missouri courts do not provide equitable relief relating to a criminal statute absent a challenge to the statute’s constitutionality or validity, and no such challenge was raised by the parties.

Factual and Procedural Background

Plaintiffs initiated this action against the Highway Patrol and DPS in February 2021. They alleged that Warrenton granted Torch licenses to place and operate its gaming devices in Warrenton convenience stores for customer use, the Highway Patrol determined that Torch gaming devices are illegal gambling devices, the Highway Patrol engaged in a campaign of harassment of stores that housed Torch gaming devices, and the Highway Patrol seized Torch devices pursuant to a warrant. Plaintiffs alleged that the Highway Patrol and DPS "persist in their position that the machines are illegal and intend to take future actions to seize them" and the Highway Patrol and DPS’s actions were "based on an unlawful and unreasonable interpretation of the definition of ‘gambling device’ " found in section 572.010, RSMo. Plaintiffs further alleged the Highway Patrol and DPS "have actively communicated their position to multiple prosecutors including prosecutors in jurisdictions where Plaintiffs operate" and that "[b]ased on the advice and encouragement of [the Highway Patrol and DPS], prosecutors across Missouri are taking different interpretations of the law and different enforcement positions."

Plaintiffs sought a declaration that Torch’s devices are not "gambling devices" as defined in section 572.010 and that Plaintiffs "have the legal right to operate the amusement devices and/or locate them within businesses controlled by the Plaintiffs." They also requested the Highway Patrol and DPS be enjoined from "enforcing any policy that declares Torch’s amusement devices to be gambling devices" and removing the devices from convenience stores.

The Gaming Association sought and was granted leave to intervene. The Gaming Association is a statewide trade association, whose members are gaming casinos licensed by the Missouri Gaming Commission.² The Gaming Association filed a counterclaim for declaratory judgment and injunctive relief against Plaintiffs. It asserted that Plaintiffs are not—nor could they be—licensed by the Missouri Gaming Commission as operators of gambling games in a lawful casino, and claimed that the "unregulated and unlawful placement and operation of [Torch’s] illegal devices … has resulted in and will continue to result in lost casino and non-casino income and business for Missouri Gaming Association’s members." The Gaming Association sought a declaratory judgment that Torch’s devices "are illegal lotteries under Article III, Section 39(9) of the Missouri Constitution," that the devices are illegal lotteries, slot machines, and gambling devices under chapter 572, RSMo (governing gambling crimes), and that Plaintiffs are jointly operating an unlawful gambling activity proscribed by chapter 313, RSMo (governing licensed gaming activities). The Gaming Association also sought injunctive relief prohibiting Plaintiffs from operating the devices.

Plaintiffs moved to dismiss the Gaming Association’s counterclaim on the grounds that the Gaming Association lacked standing and "failed to state a claim for declaratory judgment," in that the Gaming Association had no justiciable controversy because the Declaratory Judgment Act did not permit a private entity to sue another private entity regarding the interpretation and/or application of a statute.

The Highway Patrol and DPS moved to dismiss Plaintiffs’ amended petition, asserting "the request to enter a judgment over the meaning and whether a gaming device falls within or outside certain criminal statutes is an improper use of the declaratory judgment act," the trial court lacked the inherent authority to prospectively direct law enforcement agencies over how to exercise their police power, the issue was "not ripe," and Plaintiffs had "available remedies at law and [could not] show an irreparable injury."

The trial court granted both motions to dismiss and entered an amended judgment dismissing all claims with prejudice. The trial court dismissed Plaintiffs’ claim for declaratory relief on multiple grounds, including "Plaintiffs’ relief sought under the Declaratory Judgment Act is not proper as it seeks a declaration over the application of criminal statutes without a concurrent claim regarding unconstitutionality," "there is no justiciable controversy that presents a real, substantial, and presently existing controversy," the "controversy is not ripe," and "Plaintiffs have adequate remedies at law." The trial court dismissed Plaintiffs’ claim for injunctive relief "as the relief sought is outside the jurisdiction of this Court in which it is asked to invade/limit the exercise of legitimate police powers by the Defendant the Missouri State Highway Patrol." The trial court also found Plaintiffs "have available remedies at law and have not suffered irreparable harm."

The trial court dismissed the Gaming Association’s counterclaim on the ground that "these claims lack a justiciable controversy against Plaintiffs."

Plaintiffs and the Gaming Association appeal.

Standard of Review

[1, 2] We review the grant of a motion to dismiss de novo, accepting the facts alleged in the petition as true and liberally construing all reasonable inferences in favor of the plaintiff. Williams v. Bayer Corp., 541 S.W.3d 594, 599 (Mo. App. W.D. 2017). "In reviewing a judgment of dismissal, this court must affirm the dismissal if it can be sustained on any ground which is supported by the motion to dismiss, regardless of whether the circuit court relied on that ground." Salvation Army, Kan. v. Bank of Am., 435 S.W.3d 661, 665 (Mo. App. W.D. 2014) (internal marks omitted). "In fact, if the court correctly dismissed the claim, the ground upon which the dismissal was based is immaterial." Id. (internal marks omitted).

Analysis

[3] The Gaming Association asserts three points on appeal; Plaintiffs assert eight.³ We address Plaintiffs’ appeal first for ease of analysis.

[4] As explained above, the trial court dismissed Plaintiffs’ amended petition on various grounds. In Points I, II, and III, Plaintiffs challenge the trial court’s determination that "Plaintiffs’ relief sought under the Declaratory Judgment Act is not proper as it seeks a declaration over the application of criminal statutes without a concurrent claim regarding unconstitutionality." We find the trial court did not err in dismissing Plaintiffs’ claims on this basis.

The Declaratory Judgment Act permits a person "whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise," to "have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status or other legal relations thereunder." § 527.020. "Further relief based on a declaratory judgment or decree may be granted whenever necessary or proper." § 527.080. Pursuant to these provisions, Plaintiffs sought a declaratory judgment that Torch’s devices are not "gambling devices" as defined in section 572.010 and that Plaintiffs have a legal right to operate them, and an accompanying injunction to prevent the Highway Patrol and DPS from seizing them as illegal gambling devices.

Chapter 572 is located in Missouri’s Criminal Code; its sections set forth the gambling offenses and designate their criminal punishments. Section 572.010 is the definitional section of the chapter, and defines "gambling device" as "any device, machine, paraphernalia or equipment that is used or usable in the playing phases of any gambling activity, whether that activity consists of gambling between persons or gambling by a person with...