Court Opinion

ID: 882672
Source: CourtListenerOpinion
Date Created: 2013-06-05 01:43:09.991628+00
Date Added: 2024-06-11T13:14:10.783725
License: Public Domain

NO.    93-295
            IN THE SUPREME COURT OF THE STATE OF MONTANA
                                    1993

JANET HAMAN, d/b/a
RAINBOW DISTRIBUTING,
            Plaintiff and Respondent,
     -vs-
STATE OF MONTANA,
            Defendant and Appellant.

APPEAL FROM:     District Court of the Ninth Judicial District,
                 In and for the County of Teton,
                 The Honorable R. D. McPhillips, Judge presiding.

COUNSEL OF RECORD:
            For Appellant:
                 Robert F. W. Smith, Assistant Attorney General,
                 Gambling Control Division, Helena, Montana

            For Respondent:
                 Kirk D. Evenson; Marra, Wenz, Johnson       & Hopkins,
                 Great Falls, Montana

                              Submitted on Briefs:       October 21, 1993
                                              Decided:   December 16, 1993
Filed:
Justice John Conway Harrison delivered the Opinion of the Court.

     Janet    Haman    (Haman)   d/b/a   Rainbow    Distributing         sought   a

declaratory judgment to reverse a decision by the State Gambling

Control    Division,   which concluded that Haman could not obtain a
license to purchase and export illegal gambling devices commonly

known as pull tabs or break-open tickets.                   The Ninth Judicial

District Court, T&on County, granted summary judgment in favor of

Haman and granted her a license effective July 15, 1992.                 The State

appeals.    We reverse.

     On July 12, 1991, the         State     received   a   license   application

from Haman.      Haman sought a license            "to manufacture gambling

devices that are not legal for public play in the state and are

manufactured only for export from the state."                      See    5   23-5-

152(3)(a), MCA.        Across the front of the application were these

words:     "To distribute pull tabs outside of Montana."

     The State attempted to clarify the activity for which Haman

sought the license.         Subsequently,      Haman was notified that she

would not be granted a license if she intended to purchase pull

tabs, which were not legal for public play in the state (Montana-

illegal), from a manufacturer in Montana and then export those pull

tabs out of the state.

     Haman contacted her attorney, who attempted to persuade the

State to change its decision.                Haman's attorney and the State

discussed the application on many occasions.                Finally, the parties

requested that the District Court answer the legal question of

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whether § 23-5-152(3), MCA, permitted the State to license Haman's

proposed       activities.       The controversy centered on whether the

statute specifically authorized a person to purchase Montana-

illegal pull tabs in Montana (emphasis added).

        The    parties   proceeded        under    the   Montana   Administrative

Procedure      Act,   5 2-4-702,    MCA, which allows a district court to

grant     a    declaratory    judgment       when    the   parties    dispute   the

interpretation of a statute.              The parties submitted a stipulation

of the facts and legal issues along with Haman's complaint for
declaratory      judgment.

        Both   parties   moved     for   summary    judgment.      On February 12,

1993, the District Court granted Haman summary judgment because no

rule specifically existed which precluded the State from granting

her a license.         Further,    the court retroactively granted Haman a

license effective July 15, 1992.

        Although both parties raised several issues, we determine that

one issue is dispositive:                Whether the District Court erred by

granting Haman a license pursuant to 5 23-5-152(3), MCA, when it

justified its decision by declaring that no specific rule prevented

the State from granting Haman              a license to conduct her proposed

activities.

        Gambling is a highly regulated activity in Montana. In

examining gambling statutes, we are mandated to strictly construe

the statutes to only allow gambling activity which is specifically

authorized by the statutes.              Section 23-5-111, MCA.       Article III,

5 9 of Montana's 1972 Constitution states that:

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     [a]11 forms of gambling, lotteries, and gift enterprises
     are prohibited   unless authorized by acts of the
     legislature or by the people through initiative or
     referendum.
Further, § 23-5-111, MCA (1991),          states:
     In view of Article III, section 9, of the Montana
     constitution, Chapter 642, [the gambling] Laws of 1989,
     must be strictly construed by the department [of Justice]
     and the courts to allow only those types of gambling and
     gambling activity that are specifically and clearly
     allowed by Chapter 642, [the gambling] Laws of 1989.
     Here,    the District Court           noted the constitutional and
statutory     directives    of    strict      construction    and   specific
authorization.       The court,     however,        failed to follow these
directives.      Instead,   the court granted Haman summary judgment
because "[t]he Department has never adopted a rule to specifically
permit [the] denial of a license in the factual situation of this
case."
     Strict construction and specific authorization do not require
"a rule to specifically permit [the] denial of a license . . . .'I
Rather, these directives require a gambling statute to specifically
authorize the proposed activity: here,              the in-state purchase of
Montana-illegal pull tabs.       We hold that the District Court erred
by inverting the constitutional and statutory directives of strict
construction and specific authorization.
     Haman contends, however, that § 23-5-152(3)(b), MCA (1991),
authorized her to purchase the pull tabs in Montana and export them
out-of-state.     Section 23-5-152(3)(b), MCA (1991),         states:
     A person may not manufacture or Possess an illegal
     gambling device for export from the state without having
     obtained a license from the department [of Justice].
     [Emphasis added.]
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Haman maintains that the disjunctive *'or" allows a person to both
manufacture and possess illegal gambling devices.             She argues that
inherent in the word "possess" is the implication that a person can
purchase illegal gambling devices within Montana (emphasis added).
She concludes that 5 23-5-152(3)(b), MCA (1991),                 specifically
authorized her to purchase and export Montana-illegal pull tabs
and,   therefore,      she argues that the State should have created
administrative rules which would have allowed her to obtain a
license.     We disagree.
       We are guided by the directives of strict construction and
specific     authorization.         The       proposed   activity is        either
specifically authorized or it is not.              Further,
       "[iIn construing a statute, it is our function as an
       appellate court to ascertain and declare what in terms or
       in substance is contained in a statute and not insert
       what has been omitted." State v. Crane (1989),. 240 Mont.
235, 238, 784 P.2d 901, 903.     Whenever possible, this
       court is to look to the plain meaning of the statute in
       determining legislative intent. State ex rel. Roberts v.
       Public Service Commission (1990), 242 Mont. 242, 790 P.2d
489.
Holly Sugar v. Dep't of Revenue (1992), 252 Mont. 407, 412, 830
P.2d 76, 79.
       A plain reading of 5 23-5-153(3)(b), MCA (1991), reveals that
Haman's     proposed     activity--purchasing      Montana-illegal   pull     tabs
within     Montana--is    not   authorized.       The word "purchasel'   is not
encompassed in the word "possess."            Since "purchase" does not exist
in the statute, we refuse to insert that word into the statute. We
hold that § 23-5-152(3)(b), MCA (1991), does not specifically allow
a person to "purchase" Montana-illegal pull tabs in Montana.

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     Moreover, § 23-5-152(3)(a), MCA, states:
     The department [of Justice] may adopt rules to license
     persons to manufacture gambling devices that are not
     legal for public play in the state and are manufactured
     onlv for export from the state.  [Emphasis added.]
Section 23-5-152(3)(a), MCA, is clear:      Montana   manufacturers   can
only export gambling devices, they cannot sell gambling devices in
the State of Montana.       Thus, it necessarily follows that persons
and companies in Montana cannot purchase gambling devices from
Montana    manufacturers.
     In this case, Haman proposed to purchase pull tabs from World-
Wide Ticket, a Montana manufacturer.    World-Wide Ticket cannot sell
pull tabs to in-state buyers.      Thus, there is no possible way for
Haman to legally purchase pull tabs from World-Wide Ticket.
     While the District Court relied on Haman's argument that the
State should have made administrative rules allowing her to obtain
a license, we will not fall into the same trap.       The State is only
required to proceed to rule-making when a gambling statute
specifically authorizes the gambling activity. See 55 23-5-111 and
-115(l),    (2) and (3), MCA; § 2-4-301, MCA.
     Here,    § 23-5-152(3)(b), MCA (1991),     does not specifically
authorize the in-state purchase of pull tabs. Accordingly, we hold
that the statute does not compel the State to establish rules for
the licensing of persons who purchase Montana-illegal pull tabs
within the state.
     We reverse the decision of the District Court. We remand this
case and direct the court to render a decision consistent with this
opinion.
                                    6
     Reversed and remanded.

z*
 J     Chief Justice

          Justices

Justices William E. Hunt, Sr., and Terry N. Trieweiler specially
concurring.
     We concur in the results of the majority opinion, but not with
all that is said therein.

                                 7
Justice James C. Nelson specially concurs.
       While I agree with the result of the Court's opinion and with
what is expressed therein, I am not persuaded that the statutory
basis which supports the State's position is clearly enough set
forth.      I submit that the provisions of § 23-5-152(3), MCA, as
regards licensing are dispositive.
       Montana law requires that:
       In the construction of a statute, the office of the judge
       is simply to ascertain and declare what is in terms or in
       substance contained therein, not to insert what has been
       omitted or to omit what has been inserted. Where there
       are   several   orovisions         narticulars.  such a
       construction is. if DossiblePrto be adooted as will qive
       effect to all.   (Emphasis added.)
Section      l-Z-101,    MCA.        %v?W.ng      that   canon   of   statutory
construction to 55 23-5-152(3)(a), (b) and (c), MCA, and reading
those sections u materia, it is clear that the statute enacted
by the legislature prohibits the conduct for which Haman claims she
is entitled to a license,        and that the statute would, likewise,
prohibit the Department of Justice (department) from adopting rules
to license that conduct.
         Section   23-5-152(3)(a),    MCA,     authorizes the department to
adopt rules to license persons who manufacture Montana-illegal
gambling devices for export from the state.                      Section 23-5-

152 (3)   (c)t MCA, authorizes a person licensed under 5 23-5-152(3),
MCA,     to import Montana-illegal gambling devices into the state
after notifying and receiving authorization from the department.
Section      23-5-152(3)(b),    MCA,         prohibits   the   manufacture   or
possession of Montana-illegal gambling devices for export without

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 a license.

      The dispositive point, here, is that the & license which is
 authorized by § 23-5-152(3), MCA, is the one in subsection (3)(a),
 and that is the license for the manufacture of Montana-illeqal
samblins devices for exoort.           There is no   authorization in
 subsection (3) for the issuance of a license for possession without
manufacture for export.
      Even if it had a mind to, the department, under that statutory
 scheme, could not adopt rules to license possession of Montana-
 illegal gambling devices (or, as the Court's opinion points out,
the t8purchase"   of such devices) without manufacture for export.
Any such rule would be in derogation of the statute and would be
unlawful.     See Winchell v. Dep't of State Lands (1993),   _ Mont.

-I    _ P.2d -, Cause No. 93-311, decided December 7, 1993.
      Accordingly,   I specially concur.

Justice Karla M. Gray joins in the foreg$ing special cwcurrence.

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