State's Attorney v. Triplett

²⁷² Barnes, J., delivered the opinion of the Court. In this appeal the constitutionality of Chapter 465 of the Acts of the General Assembly of Maryland of 1968, now Article 56, Section 144A of Code (1957) (the Act), to ban the use of games, contests and other means of promoting business or product of or relating to the sale of motor vehicle fuels in which prizes, gifts or gratuities are given or determined by chance is challenged. A suit in the Circuit Court for Charles County was filed on July 2, 1968, by those individuals who sell gasoline at retail in Maryland and by a corporation engaged in the wholesale distribution of gasoline and related products against John C. Hancock, State’s Attorney for Charles County and others, seeking declaratory relief as well as injunctive relief against the enforcement of the Act. The Chancellor (Bowen, J.) on December 16, 1968, granted the Plaintiffs’ Motion for Summary Judgment declaring the Act unconstitutional and entered a judgment in their favor for $.01 damages, but required the Plaintiffs to pay the costs. 1 An order of appeal was timely entered upon the judgment on January 2,1969.

The Act, which was Senate Bill 850 in the 1968 Session of the General Assembly and signed by the Governor on May 7,1968, is as follows: “AN ACT to add new Section 144A to Article 56 of the Annotated Code of Maryland (1964 Replacement-Volume), title ‘Licenses’, subtitle ²⁷³ ‘Motor Vehicle Fuel Tax’, to follow immediately after Section 144 thereof to ban the use of games, contests and other means of promoting business or product of or relating to the sale of motor vehicle fuels, whereby prizes, gifts or gratuities are offered or given or determined by chance whether or not a purchase is required to participate in the game or contest. “SECTION 1. Be it enacted by the General Assembly of Maryland, That new Section 144A be and it is hereby added to Article 56 of the Annotated Code of Maryland (1964 Replacement Volume), title ‘Licenses’, subtitle ‘Motor Vehicle Fuel Tax’, to follow immediately after Section 144 thereof and to read as follows: “144A. “Any dealer or seller who dispenses and/or sells motor vehicle fuel in this state shall not engage in, promote, or in any way operate or perform any contest or game, by or through the use of any scheme or device which for the purpose of promoting, furthering or advertising any business or product, whereby a person or persons may receive gifts, prizes or gratuities as determined by chance and the fact that no purchase is required in order to participate in the contest or game does not exclude such contest or game from the provision of this Article. “SEC. 2. And be it further enacted, That this Act shall take effect July 1, 1968.” In support of their Motion for Summary Judgment, the plaintiffs and appellees filed four affidavits, i. e., of Harlan Triplett, Lemuel R. Green, James L. Curley and James A. Wise. They also filed a copy of the Hearings Before the Subcommittee on Activities of Regulatory Agencies of the Select Committee on Small Business of the House of Representatives of the Ninetieth Congress of the United States, held June 20 and July 11, 1968, in ²⁷⁴ regard to the use of games of chance in gasoline marketing and their impact upon small business (House Subcommittee Hearings).

The affidavits of the plaintiffs Triplett and Curley and of Green may be summarized as follows: Triplett and Curley sell gasoline to the public. They also sell to the public at their gasoline service stations various non-gasoline products, such as tires, batteries, automotive accessories, replacement parts, soft drinks, cigarettes, candy, sandwiches, bread and other products customarily marketed by some gasoline stations. Their sales of products other than gasoline account for approximately 20% to 25% of their total gross sales. They used promotional games of chance in order to promote their businesses and their products, both gasoline and non-gasoline, prior to July 1, 1968.

They used these promotional games of chance because they believed that such legal games would help them increase their sales of all products sold by them to the public, and they found that these games helped to increase their sales of all products. Members of the public would often come to their stations to play one of the games (no purchase was necessary in order to play the games) and they would be able to sell such persons a tire or a battery or a similar product. They discontinued the games on July 1, 1968, (when the Act became effective) because they feared criminal penalties and they have experienced losses in their gross sales since that time, Triplett’s gross sales having declined on the average of $50 per day and sometimes as much as $100 per day and Curley’s gross sales having been reduced by approximately 10%. They compete with other retailers in the sale of their products and in regard to their non-gasoline products they compete with others who do not sell gasoline.

Triplett competes with a Western Auto Store approximately one-half mile from his station, which sells almost everything he sells except gasoline. Curley competes with at least three stores in Waldorf which do not sell gasoline but do sell tires. The competing retailers are free to use ²⁷⁵ promotional games to promote their businesses and to promote products in direct competition with the non-gasoline products sold by Triplett and Curley, the Act preventing them from using such games. The affidavit of Green, with its attached exhibits, indicates that the use of promotional games involving chance is widespread throughout the State of Maryland both for the promotion of the entire business by the retailer and for the promotion of products by the manufacturer.

A number of specific non-gasoline products sold in Maryland, the sales of which are promoted by the use of games involving chance, are set forth together with copies of magazine advertisements indicating the nature of the games for the various non-gasoline products. The affidavit of Wise indicates that he is a member of the Maryland Bar practicing law in Denton, Maryland. He was employed in February, 1968 by a client as a legislative representative before the 1968 Session of the General Assembly to oppose the passage of Senate Bill 350 (which later became the Act) and duly registered as a legislative representative of his client for that purpose. He found that the bill had already been favorably reported by the Senate Committee on second reading and was ready for passage by the Senate of Maryland.

It passed the Senate on March 6, his inquiry revealing that it had received little notice and practically no opposition. In the House of Delegates, the bill was referred to the Consumer Affairs Subcommittee and at the hearing before the Subcommittee on March 1 12, the affiant was in charge of the presentation of the opposition to the bill. The testimony of the proponents of the bill was that it should be passed for the following reasons: “1. The games deceived the public and were subject to rigging. 2.

Retailers were coerced by their suppliers, the oil companies, into purchasing these games. ²⁷⁶ 3. The customers did not really want or like the games, and they were not worth the trouble. 4. The games were a form of gambling and thus offensive. 5. Profits of retail gasoline dealers had been reduced by the games and gasoline prices had been raised in some instances because of the games.” The affiant followed the proposed legislation closely and the reasons above stated were the only public purposes he knew of which were considered by the General Assembly in its deliberations in regard to the bill.

All of the affidavits noted that the respective affiants were competent to be witnesses and had personal knowledge of the facts stated in the respective affidavits. The House Subcommittee Hearings consisted of some 394 pages of testimony, 29 pages of which (pages 82 to 111) are concerned with the use of games of chance in gasoline marketing and their impact upon small business in Maryland. In addition to the testimony of A. L. Collins, then president of the Maryland Association of Petroleum Retailers, Inc. (the Association), of Mrs. Mildred Trostle, wife of an Esso dealer and a vice-president of the Association, and of Rex Wright, a dealer in the petroleum industry in Baltimore, numerous documentary exhibits were introduced into evidence before the Subcommittee. These documentary exhibits consisted principally of formal statements. of Mr. Collins and Mrs. Trostle, letters to then Governor Agnew, to the Attorney General of Maryland, to State’s Attorneys, to State Senators and to representatives of certain oil companies.

There were also copies of various articles in the press in regard to Senate Bill 350, as well as in regard to Senate Bill 81 which would have added a new Section 40A to Article 27 of Code (1957) to prohibit any contests or games used for the purpose of promoting or advertising a business or product whereby any gifts, prizes or ²⁷⁷ gratuities are awarded and the persons receiving the gifts, prizes or gratuities are determined by chance. Copies of both Senate Bills 81 and 850 were introduced into evidence before the House Subcommittee. Interesting comments in an article issued by the Annapolis Bureau of The Sun on March 22, 1968, in regard to the passage of Senate Bill 350 by the House of Belegates were as follows: “Gasoline station promotional games will be banned in Maryland after June 30 under a bill enacted today by the General Assembly. “Among those who had pushed for passage of the measure, by Senator James Clark (B„, Howard-Montgomery), were gas station operators handling the products of major oil companies. “They contended that the games are rigged, that they are forced on operators by the companies, and that they cost the motoring public at least a penny a gallon extra for their gasoline. “During the 40-minute House debate that pre-. ceded the 119-9 final approval of the bill, which now goes to Governor Agnew for his signature, several delegates told of committee '’demonstrations’ in which station operators picked from among supposedly foolproof, sealed envelopes the winning tickets. “What opposition there was to the measure came from delegates who wanted to extend the ban to supermarket and other merchants’ giveaway promotional games. “The ‘Tigerino’ bill, as it has been dubbed by legislators, has no punitive clause. However, lawyer-legislators said that once the bill gets on the books, any taxpayer can go to court and demand an injunction to stop them.” The defendants in their answer generally denied the . facts alleged, neither admitted nor denied the conclusions ²⁷⁸ of law alleged, but admitted the allegations that the plaintiffs would be subject to criminal penalties if they violated the law.

Although the defendants filed no affidavits in opposition to the motion of the plaintiffs for summary judgment, they filed an answer to that motion in which they alleged that there was a genuine dispute between the parties in regard to material facts as follows : “a. The intent of the General Assembly of Maryland, in adopting Chapter 466 of the Laws of Maryland of 1968. b. The need for the legislation adopted to regulate an evil existing in the State of Maryland. c. The availability of other remedies to regulate the evil existing in the State of Maryland intended to be obviated by the adoption of Chapter 466 of the Acts of 1968. d.

The nature of the relationship existing between dealers and sellers of gasoline to their suppliers.” Both before the Chancellor and before us, the plaintiffs and appellees raised and argued three principal grounds indicating the unconstitutionality of the Act. These were: 1. The Act denies the plaintiffs due process of law contrary to Article 23 of the Declaration of Rights of the Maryland Constitution and the Fourteenth Amendment to the Constitution of the United States as being vague, indefinite, confusing and incomprehensible. 2. The Act denies the plaintiffs due process of law because it is arbitrary, unreasonable and capricious and no conceivable legislative purpose could justify it. 3.

The Act denies the plaintiffs the equal protection of the laws as prohibited by the Fourteenth Amendment as it unreasonably discriminates against one class of retailers. The Chancellor declined to hold that the Act was unconstitutional because it was too vague or indefinite or ²⁷⁹ that it was unenforceable because of vagueness in the penalty section of Article 56 of the Code. The Chancellor, however, was of the opinion that the language of the Act as it appeared in the body of the Act was arbitrary, unreasonable and discriminatory and denied the plaintiffs due process of law and the equal protection of the laws. In his oral opinion, the Chancellor stated in part as follows: “Now, as the Attorney General argues, and everyone agrees, the evil sought to be prohibited here by the legislature was solely and only the promotional give-away or gambling games, originated by the manufacturers and distributors of gasoline or other related motor vehicle fuel products, and carried on by them through their dealer outlets.

Manifestly, it was not the intention of the legislature to ban these promotional give-away programs that are run by the flour companies, the soap companies, the tire companies, and other large nationally-known brand manufacturers, who from time to time as a promotional scheme run a contest or a giveaway program, based on Social Security numbers, or automobile tag numbers, or any of the other items of chance that they sometimes select to determine who will participate in their prize.” “The all-encompassing language of the statute which prohibits a gasoline dealer from using such a scheme to promote, further or advertise ‘any business or product’ really meant to say ‘from advertising for the purpose of promoting, furthering or advertising the sale or distribution of motor vehicle fuel.’ It is the give-away promotional schemes in motor vehicle fuel that the legislature sought to correct by this statute, as the Attorney General represents, and as is manifest in the history of the legislation. ²⁸⁰ “To include along with that all of the other Items in a statute dealing solely and only with filling, stations we think is manifestly unconstitutional. If the legislature had designed to do away with all such programs, then they should have, we think, to provide equal protection of all of the class, and the class here, if we are dealing with all give-away programs, is all retailers, any dealer or seller at retail, makes the law apply equally to everyone; or, conversely, any dealer or seller dispensing motor vehicle fuel is prohibited from promotional schemes designed to promote or further the business or products sold for motor vehicle fuel. “For these reasons, Gentlemen, the Court concludes that the Statute as drawn was so narrow in the class it deals with, and so broad in the acts which it proscribes as to constitute an arbitrary, unnecessary and unreasonable exercise of the legislature’s undoubted right to regulate gambling, and to regulate business practices which are unfair, unhealthy or improper for the economic welfare of the State. And