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Federal judges uphold W.Va. lottery restrictions

By John O'Brien | Jan 14, 2009


RICHMOND, Va. (Legal Newsline) - A three-member panel of federal appellate judges has sided with West Virginia Attorney General Darrell McGraw's argument that certain advertising restrictions on the video lottery industry should be maintained.

Judges Harvie Wilkinson III and Allyson Duncan of the U.S. Court of Appeals for the Fourth Circuit were joined by U.S. District Judge Richard Bennett of Maryland, sitting by assignment, overturned a ruling that prevented state laws regarding advertising restrictions.

"The Supreme Court has cautioned that we not casually invalidate state legislation on facial grounds... for the simple reason that such challenges 'often rest on speculation' and 'run contrary to the fundamental principle of judicial restraint,'" Wilkinson wrote.

Assistant Attorney General Katherine Anne Schultz argued the case for the West Virginia Lottery Commission. The West Virginia Association of Club Owners and Fraternal Services filed the suit in Feb. 2007 on behalf of its members that are video lottery retailers.

It argued that its Constitutional rights to free speech and due process were being violated. U.S. District Judge Joseph Goodwin agreed, and the Lottery Commission appealed.

"The state has a longstanding and substantial interest in regulating the implementation and promotion of its own lottery," Wilkinson wrote.

"It has done so by attempting to raise revenues necessary for education and infrastructure without magnifying the social maladies often associated with gambling addictions. It is this interest in a balanced approach to lottery promotion that would be eviscerated by the wholesale invalidation of West Virginia's advertising restrictions."

Those restrictions prevented the use of words like "casino," or "dough," while also prohibiting the use of known casino destinations.

The judges made a distinction between the manner of speech being censored by the restrictions. The club owners feel it was of a private commercial nature, while the Lottery Commission feels it is governmental.

"The speech at issue does not fit neatly into either category; it is hybrid speech," Wilkinson wrote. "(S)ome speech is 'mixed' speech because it has aspects of both private speech and government speech. To say it is all one or the other is to oversimplify.

" First, the government is conveying a message, which is a prerequisite to a finding of government speech. By requiring that the lottery only be advertised through uniform signs and by prohibiting all other
advertisements, the state is conveying a message supporting measured use of the video lottery.

"The district court erred when it rejected this as a message because, in its view, any message was 'mixed at best.' Here, however, the government is not conveying a mixed or inconsistent message -- it is conveying a message of balance."

Despite this, Wilkinson wrote the speech could be construed as private.

"Invalidation of the large range of regulations that plaintiff challenges is not only subversive of the state's interest but of the means that directly and substantially advance that interest," he wrote. "In other words, the breadth of the invalidation here dismembers the state's lottery program from stem to stern."

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.

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