# FILED
July 30, 1999 Cecil Crowson, Jr. Appellate Cou rt Clerk IN THE COURT OF A

PPEALS OF TENN ESSEE, WESTERN SECTION A T JACKSON TENNESSEE DOWNS, INC. , in its ) corporate capacity and on behalf of its ) On appeal from the Shelby employees, JOHN DOES and JANE DOES, ) County Chancery Cour t, ) Part 2 Plaintiffs/Appellees, ) Case No. 98-0675 ) v. ) C.A. No. 02A01-9812-CH-0037 9 ) WILLIAM L. GIBBONS , in his official ) capacity as Distri ct Attorney General ) for the State of Tennessee, 30th Judicial ) District, ) ) Defendant/Appellant. ) On Appeal from the Chancery Co urt for Shelby County, Tennessee Honorable Chancellor Floyd Peete, Jr. Scott K. Haynes , Nashville, Tennessee Henry Walker , Nashville, Tennessee Luther Wright, Jr. , Nashville, Tennessee Handel R. Durham, Jr. , Memphis, Tennessee Attorneys for Plaintiffs/Appellees.

Paul G. Summers , Attorney General & Repor ter Michael E. Moore , Solicitor General Gina J. Barnham , Deputy Attorney Gener al Janet M. Kleinfelter , Senior Counsel Attorneys for Defendant/Appellant.

OPINION FILED: REVERSED AND

DISMISSED INJUNCTION DISSOLVED TATUM, S.J. HIGHERS, J. : (Concurs) FARME R, J.: (Concurs)2 O P I N I O N
This case presents an appeal as of right of W illiam L. Gibbons, Dist rict Atto rney General, for the State of Tennessee, 30 th Judicial

District , from a

decision by the

Chancery Court of Shelby County, Part I I. Plaintiff, Tennessee Downs, Inc., who proposed to conduct pari-mutuel

wagerin g on horse r acing in M emp h is, Tennessee, sought a declaration from the Chancery Court under 42 U.S.C. § 1983 that such acti vity was legal and not proh ibited under Tennessee’s anti-gambli ng statutes, and, therefore, it had a lawful right to engage in such activ ity. The Plaintiff also sought a permanent injunction enjoining General Gibbons from prosecuting, or thr eaten ing to prosecute, Plainti ff under Tennessee’s anti-gambling statutes.

In his answer, General G ibbons denied that the Cha nce ry Court had jurisd iction. He further asserted that Plaintiff had f ailed to state a claim upon which re lief co uld be granted and that the activities that P laintiff proposed to engage in are illegal under Tennessee law. General Gibbons resisted the motion for an injunction on various grounds.

General Gibbons filed his own affidavit in whi ch he testified that he would pros ecute Plainti ff and its employees for vi olating Tennessee’s anti -gambling statutes if they attempted to conduct pari-mutuel w agering on horse raci ng without a vali d licen se. Pla intiff informed the court that it was on ly seeking injunctive relief pursuant to its claim under

42 U.S.C. § 1983 and that its declaratory judgment action and any action for damages were not before the court.

After the hearing, the Chancellor issued a memorandum opinion in which it found that it had subject matter juri sdiction solely by virtueof the language of 42 U.S.C. § 1983. The Chancellor further found that “a property right that has been

bestow ed on the Plaint iffs bythe passing of the

Racing Control Act, which did vest in Tennessee resi dents the right to engage in the pursuit of this particular business a nd p rofession under certain circumstances,”

such circumstances being the possession of a license. However, because3

the Tennessee Racing Commission was no longer in existen ce, the chancery court found that the need for a license was suspended and, therefore, could “not be enforced by the Attorney General or any other agency.”

The chancery court also found that the Plaintiff had a liberty interest in the “rig ht to engage in whatever lega l business one elects to pursue without arbitrary

governmental interference”and that “the threat ened prosecution of Plaintiff’s [si c] by the Attorney Gener al appears to this Court to be an unlaw ful and arbit rary governmental interference.” Accordin gly, the chancery cou rt enjoined General Gibbons “from depriving Plaintiffs of their liberty and property

rights without due p rocess.”

The facts in this case are not in dispute. Plaintiff, Tennessee Downs, Inc., is a Tennessee corporat io n that proposes to engage i n the operation of pari-mutuel betti ng facilitiesand horse racing tracks in Tennessee. Defendant, W illiam L. Gibbons, is the duly elected District Attor

ney General for the State of Tennessee, 30th Judicial Distric t.
By Chapter 311, §1, Public Acts of 1987, (codified at Tenn. Code Ann. §§ 4-36- 101, et seq. ) Tennessee legislature passed the “Racing Contr ol Act of 1987,” which cr eated the Tennessee State RacingCommission and vested the Commission “w ith plenary power t

o control and regulate racing in Tennessee, with full recognition of the statement that racing is a privilege and is not a right.” This Act went into effect on May 7, 1987, for the purposes of appointing the membership of the Commission, authorizin g the promulgation of rules by the Commission, and authorizi ng the referenda established by the Act. The Commission promulgated Race Meeting License rules and regul ations under the Act.

On October 8, 1987, the City of Memphis conducted a referendum pursuant to Tenn. Code Ann. § 4-36-401, in which over 60% of the voters appr oved of conducting horse rac ing with par i-mutue l wagering with in the cit y.

In 1993, the legislature amended the Tennessee Governmental Entity Review Law4

to add the Commi ssio n as one of the governmental enti ties scheduled to terminate on Ju ne 30, 1997. Pursuant to that law, the legislative ev aluation committee review ed th e continued existence of the Commission i n June of 1996 and recommended that the Commission be c on tinued until June 30, 2000; how ever, legislation to continue the Commission failed to pass out of the Senate Government Operation s Committee and was
never acted upon by the legisl ature. Other attempts wer e made to extend thetermination date of the Commission, but all failed t o pass in the Senate. Accordi ngly, at the end of the one-year wind up period, the Commis sion was terminatedand ceased all activities on June 30, 1998. See Tenn. Code Ann. §§ 4-3L-101, et seq.; 4-29-112; Acts of 1993, ch. 391, § 2.

On April 3, 1998, the Commissi on awarded a race meeting license to Plaintiff for a term that “begins on April 3, 1998, and expires at midnig ht December 31, 2000, or upon the Tennessee State Racing Commiss ion going out of existence, whichev

er occurs first.” With the termination of the Commission on June 30, 1998, Plaintiff’s race meeting license also terminated.

Under the chancellor’s ruli ng, the Plaintiff and all other person s may engage in the business of pari-mutuel wage ring on horse racing , without regulation,in Memphis and throughout

the State. The Act provides that only one license shall be issued in each Grand Division, but the chancellor held that a license is not necessary, si nce the issuing authority is no longer in existen ce; hence, any n umber of persons may lawfully engage in this business in all three grand divisions.

We ad dress the first issue w hich raises the threshold question as to whethe r th e chancerycourt of Shelby County had juris dicti on to declare Plaintiff’s proposed conduct legal, and to enjoin a threatened cri minal prosecution. As prev iously stated, the chancel lor found that he had jurisdiction on the sole ground that it was g ranted to the chancery court of Shelby County pursuant to the enactment of 42 U.S.C. § 1983. That federal statute provides:5 Eve ry person, who, under color of any statute, ordinan ce , regulation, cu stom, or usage, of any State or Terri tory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other per son within the jurisdiction thereof to the deprivation of any rights, privileges, or immun ities s ecured by the Constituti on and laws, shall be li able t o the party injured in an action at law, suit i n equity, or other proper proceeding for redr ess. For thepurposes of this section, any Act of Congress applicable e xclusively t o the District of Columbia shall be considered to be a statute of the District of Columbia. In his decree, the Chancell or stated: Section 1983 clearly by it s lang uage g ives this Court, a court of equity, jurisdiction to adjudicate this action as construed by the Plaintiff. By bringing the action under Section 1983, th e Plainti ffs have successfully bypassed the Defendants [sic] jurisdictionalargument. Congress cl early intended for Courts such as this to have jur isdiction over such actions as the one brought by this Plaint iff. By the enactmentof § 1983, Congress did not i ntend nor attempt to tamper with or alter jurisdiction of state cour ts, and it is our opinion that federal ism would have prev ented it from doing so. Article 3 of the United States Con s titution authorizes Con gress to establish and define the jurisdiction of federal courts; bu t nowher e in the United States Constitution is the power granted to Congress to esta blish or de fine jurisdiction of state courts. This power was retained by the states. The fundamental principle of “federalis m” is succinctly stated by Mr. Justice Black, speaking for the United States Supreme Court in Afroyim v. Rusk , 387 U.S. 253, 87 S. Ct. 1660, 18 L. Ed. 2d 757 (1967):

Our Constitution governs

us and we must never forget that our Co ns titution limits the [United States] Government to those p owers specifically grant ed or those that are necessary an d proper to carry out the specifically granted ones.
The United StatesSupreme Court, dealing w ith questions of

equitable jurisdicti on of federal Courts, has recognized that 42 U .S.C. § 1983 did not attempt to bestow equity jurisdiction even in federal courts, when equity jurisdiction did not previously exist. It was
so held in Giles v. Harris , 189 U.S. 475, 23 S. Ct. 639, 47 L.Ed. 909, 912 (1903). Giles
v. Harris was follow ed with approval by the U.S. Supreme Court in Rizzo v. Goode , 423 U.S. 362, 378-79, 96 S. Ct. 598, 607-08,42 L. Ed. 2d 561 (1976) when the Court stated:6 “Section 1983 by its terms confers authority to grant equitable relief as well as damag es, but its words “al low a suit in equit y only when that is the proper proceeding for redress, and they refer to exist ing standards to determine w hat is proper proceeding.”
In arguing this juri sdictional question, the Plaintiffs have cited Babbittv. United Farm Work ers National U nion , 442 U.S. 286, 99 S. Ct. 2301, 60 L . Ed. 2d 895 (1979), and Steffel v. Thompson , 415 U.S. 452, 94 S. Ct. 1209, 39 L. Ed . 2d 505 (1974). These cases, like Gilesand Rizzo , deal o nly with ju risdiction of federal courts and have no bearing on the question of jurisdicti on of Tennessee equity courts. There are no cases holding that Congress has power to fix jur isdiction of state courts; and, as stated , there is no langu age in § 1983 indicating an attempt to do so.

For the foregoing reasons, we hold that 42 U.S.C. § 1983 did not bestow jurisdi ction in Tennessee cou rts of e quity to enjoin threat ened criminal proceedings and that the jurisdiction of chancery courts in this regard remains as fixed by existing state law. It is a well-establish ed rul e of equity jurisprudenc e that courts of equity hav e no jurisdiction to enjoin the enforcement of state criminal laws. In accordance with thi s rule, the Tennessee SupremeCourt has consistently held that the chancery cour ts of this s tate have no jurisdiction, inherent or statutory,t o enjoi n threatened criminal prosecutions, particularly
as the defense of such prosecution provides an ade quate remedy. This proposition is discussed at length in Kelly v. Conner, 122 Tenn. 3 39, 391, 396-97,123 S.W. 622, 635, 636-37 (1909) wherein the court stated:

Courts of equity are not constituted to deal wit h crime a nd cri minal proceedings. If the law be held valid, they

canno t p unis h the complainant for the offenses committed, or compensate those injure d by his wrongful ac tion while the hands of the officers of the law are stayed by injunctio n. The exercise of the jurisdiction contended for would greatly confuse and embarrass the enforcement of the po lice power, and, upon sound principles of public pol icy, it ought not to be favored. * * * We are further of the opi nion that courts of equity have no jurisdiction to enjoin threa tened criminal proceedings under a statute enacted by a State in the ex ercise of thepolice power in relation to which the legislature has complete juri sdictio n, although it be cha rged that the statute is inval id and that a multiplicity

of ac tio ns thereunder will injure and destroy civil7 and property rights of the complainants, and that the damages resulting will be irreparable, when the complainant s’ d efense thereto, in a court having j urisdiction of th e offense, is adequate and unembarrassed; and we hold that the chancery courts of Tennessee, neither under their inherent nor statutory jurisdiction, have any such power or jurisdiction, w

hatever may be the exceptions to

the general rule in the c ourts ofequity of other jurisdictions. * * * The rule which prevents a court of cha ncery from interfering with the administration of the criminal laws of this State is a wise one, founded upon sound principles of public policy, and, if we had the power to do so, we fear that changing it would re sult in much co nfusion and emba rrassmen t in prese rvi n g peace and order, and enforcing the police power of the State generally, which would outw eigh the good that

would follow

an immediate decision of this case uponthe merits. The injury to the general pu blic, which wo ul d ultimately result from the e xercise of this jurisdiction, w ould be greater than that t o individua ls when lef t to their remedie s in courts of law.
The rule has been rec ognized a nd followed as late as 1996, w hen the Court of Appeals held in State v. First Trust Money Services, Inc. , 931 S.W.2d 226, 229 (Tenn. Ct. App. 1996), without

discussion, that a counterclaim brought pursuant to 42 U.S.C. § 1983 did not bestow jurisdicti on on courts of equity in this state to enjoin enforcement of stat e criminal laws. See also Spoone v. Mayor & Alderme n of Morri stown , 185 Tenn. 454, 206 S.W.2d 422 (1947); Windrow v. Stephens , 20 Tenn. App. 647, 103 S.W.2d 584, 586 (1937); Brackner v. Estes , 698 S.W.2d 637, 63 9 (Tenn. Ct. App. 1985).

The Plaintiffs point out that Tennessee courts have, in s ome instances, recogniz ed the jurisdiction of the chancer y courts to issue inj unctions “where proper ty rights are affected,” citing Brackner v. Estes , 698 S.W.2d 637 (Tenn. Ct. App. 1985), and Earhart v. Young , 174 Tenn. 198, 124 S.W.2d 693 (Tenn. 1939). In the Brackner case, the Court of Appeals recognized

that the so called “proper ty rights exception” is that a “Plaintiff had a legitimateright to bring a pos sessory action to dete rmine who should have lawful poss ession” of tangible property. In the case before us, possession of pr operty is not involved.

Article VI, Section 8 of the Tennessee Constituti on provides “the juri sdiction of the8

circuit, chancery and other inferio r courts, shall be as now established by law, until changed by the le gislature.” Pursuant to this constitutional provision, the Tennessee General Assembly has vested exclusive and original jurisdiction of all criminal matters in the circuit and criminal courts of this state. Tenn. Code A nn. §§ 16-10-102; 40-1-107 to 108. Only the GeneralAssemblyof Tennessee can increase or dimini sh the jurisdictions of the circui t, c hancery and other inferior courts of this state. Moore v. Lo ve , 171 Tenn. 682, 107 S.W.2d 982, 984 (1937).

A district attorney general is answerable to no superior and has virtually unbridled discretion in determining to prosecute and for what offense. No court may interfere w ith the discretion of a district attorney general to pr osecute, and, in the

formulat ion of this decision, he or she is answerabl e to no one
. See Dea rborne v. State , 575 S.W.2d 259, 262 (Tenn. 1978). The general assembl y cannot enact laws w

hich impede the inherent discretion and responsibility of the office of district attorney general without viol ating Article VI, Section 5, of the Tennessee Constitution. State v. Superior Oil, Inc. , 875 S.W.2d 658, 66 (Tenn. 1994), quoting State v. Taylor , 693 S.W.2d 757, 76 0 (Tenn. Crim. App. 1983).

It results that the first issue is sustained. This issue being dispositiv e of the case, the other issues are pretermi tted. The judgment of

the trial court is reversed, the case is dismissed, and the injunction is dissolved. The Plai ntiffs will pay the cos ts.

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------- - F. LLOYD TATUM, SENIOR J UDGE

CONCUR:

------------------------------------------------------------------- ALAN E. HIGHERS, JUDGE

------------------------------------------------------------------ DAVID R. FARMER, JU DGE