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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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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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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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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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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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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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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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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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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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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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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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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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.