Opinion ID: 1270103
Heading Depth: 3
Heading Rank: 1

Heading: Does federal law pre-empt state law?

Text: Appellant contends possession of the machines was not unlawful because federal legislation preempts state law. We disagree. Appellant relies on the Gambling Devices Transportation Act, 15 U.S.C. § 1172(a) (1997), which provides: It shall be unlawful knowingly to transport any gambling device to any place in a State or a possession of the United States from any place outside of such State or possession: Provided, that this section shall not apply to transportation of any gambling device to a place in any State which has enacted a law providing for the exemption of such State from the provisions of this section, or to a place in any subdivision of a State if the State in which such subdivision is located has enacted a law providing for the exemption of such subdivision from the provisions of this section, nor shall this section apply to any gambling device used or designed for use at and transported to licensed gambling establishments where betting is legal under applicable State laws: Provided, further, that it shall not be unlawful to transport in interstate or foreign commerce any gambling device into any State in which the transported gambling device is specifically enumerated as lawful in a statute of that State. 15 U.S.C. § 1172 (1962) (emphasis added). Appellant argues that in enacting this statute, Congress preempted the power of South Carolina to act when the gambling machines have already been placed into the stream of interstate or foreign commerce with a destination `into any State in which the transported gambling device is specifically enumerated as lawful in a statute of that State.' This argument is without merit. First, the federal statute does not pre-empt state law. Federal law may pre-empt a state law as follows: (1) Congress may explicitly define the extent to which it intends to pre-empt state law, (2) Congress may indicate an intent to occupy an entire field of regulation, or (3) federal law may pre-empt state law to the extent the state law actually conflicts with the federal law, such that compliance with both is impossible or the state law hinders the accomplishment of the federal law's purpose. Michigan Canners & Freezers Ass'n v. Agricultural Marketing & Bargaining, 467 U.S. 461, 469, 104 S.Ct. 2518, 81 L.Ed.2d 399 (1984). None of the above scenarios exist here. There is no indication in the statute, explicit or implicit, of Congress's intent to occupy the field of gambling regulation. On the contrary, the language of the federal statute makes it clear that it is designed to act in concert with state laws prohibiting gambling. See Smith v. McGrath, 103 F.Supp. 286 (D.C.Md.1952) (the main purpose of the act is to aid states in the local enforcement of antigambling laws by prohibiting the interstate transportation of gambling devices). The statute prohibits the transportation of gambling devices into any state unless the state has enacted a law exempting itself from the statute or legalizing the specific gambling machine being transported into the state. Thus, the federal statute anticipates state legislation in this area and seeks to provide additional federal protection for those states which do not legalize gambling machines. To hold the federal law nullifies state antigambling laws would be to construe the statute in a way that utterly defeats its purpose. Moreover, compliance with both the state and federal statutes is not impossible, as the federal statute prohibits interstate transportation of gambling machines, whereas the state statute prohibits their possession or operation within the state. See generally Casino Ventures v. Stewart, 183 F.3d 307, 311 (4th Cir.1999) (Congress has explicitly recognized the preeminent state interests in controlling gambling and has sought to extend, not curb, state police power in this field.). Second, the machines in question were not in the stream of interstate commerce. The machines were warehoused in appellant's facility in various states of disrepair, and by all indications had been in storage since the beginning of 1995, when this Court decided State v. Four Video Slot Machines, 317 S.C. 397, 453 S.E.2d 896 (1995). Appellant's bare assertion that it intended to send the machines to Georgia does not place the machines into the stream of interstate commerce. Third, even if the machines were in interstate commerce, they did not comply with the provisions of the Gambling Devices Transportation Act necessary to earn exemption from state law. Section 1174 requires all gambling devices and packages containing such devices to be clearly labeled so that the name and address of the shipper and consignee and the nature of the contents are readily ascertainable from the outside of the package. 15 U.S.C. § 1174 (1962). The circuit court correctly ruled these requirements were designed to put others on notice that the machines are in interstate commerce and to prevent persons from merely asserting that the machines are in interstate commerce to avoid state antigambling laws.