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Quick Charge Kiosk LLC v. Schimel

Court of Appeals of Wisconsin, District I

August 13, 2019

Quick Charge Kiosk LLC and Jeremy Hahn, Plaintiffs-Appellants,
v.
Brad Schimel, in his official capacity as Attorney General, Defendant-Respondent.

          APPEAL from an order of the circuit court for Milwaukee County No. 2016CV6655, JOHN J. DiMOTTO, Judge. Affirmed.

          Before Brash, P.J., Brennan and Dugan, JJ.

          DUGAN, J.

         ¶1 Quick Charge Kiosk LLC and Jeremy Hahn (collectively Quick Charge) appeal the trial court's order granting the Attorney General's motion for summary judgment declaring that Quick Charge's "cell phone charging machines" (Machines), also referred to as cell phone charging kiosks, constituted illegal gambling machines.[1] We agree with the trial court's determination and, therefore, affirm.

         BACKGROUND

         ¶2 In 2014 Hahn founded Quick Charge, which operates the Machines and places them in retail establishments throughout the State. The Machines resemble video gambling machines commonly found in casinos or taverns, and they function in same manner. The Machines and their electronic video displays look similar to those of a mechanical slot machine. The major components of the Machines are (1) a cabinet structure; (2) electronic parts and associated software; and (3) electronic device charging ports that fit almost all portable electronic devices, including mobile phones and tablets.

         ¶3 When a customer puts one dollar into the Machine, that customer receives 100 credits to play the video chance game, and one minute of charging time. A customer who charges an electronic device cannot continue to play the game after the expiration of the charging time, but the customer may cash out any remaining credits by printing out a paper receipt using the Machine's printer and redeeming the receipt for cash at the Machine's site. The credits are redeemable at the ratio of one dollar per 100 credits, the same rate at which the credits are acquired. Thus, a customer need not use any game credits while charging a phone and may redeem all the credits for cash when the charging time expires. For instance, a customer may deposit one dollar in exchange for one minute of charging time and 100 game play credits. When the one minute of charging time expires, the customer may redeem all 100 game play credits for one dollar, effectively receiving one free minute of cell phone charging. A customer may also play the video chance game without connecting an electronic device for charging. The Machines also have a random number generator that determines if a player wins and, if so, the amount the player wins.

         ¶4 Based on an Attorney General opinion that the Machines are unlawful gambling machines, the City of Greenfield ordered Quick Charge to remove three Machines from a retail location in Greenfield. In Brown County, representatives of the State obtained a search warrant for removal of the Machines based on a probable cause finding that the Machines were illegal gambling machines.

         ¶5 In August 2016, Quick Charge filed an action in Milwaukee County Circuit Court seeking declaratory judgment that its Machines complied with the "in-pack chance promotion" statute, Wis.Stat. § 100.16 (2017-18), [2] and that they did not violate Wisconsin's gambling statutes found in Wis.Stat. ch. 945. Thereafter, the Attorney General filed a summary judgment motion seeking an order declaring that the Machines are unlawful gambling machines under Wis.Stat. § 945.01(3). Quick Charge filed a cross motion for summary judgment seeking an order declaring that its Machines and promotional games complied with the "in-pack chance promotion" exception, and, therefore, did not violate Wisconsin's gambling statutes.

         ¶6 The trial court heard oral arguments from the parties on the summary judgment motions and then issued a written decision granting the Attorney General's summary judgment motion. The trial court held that the Machines do not comply with the "in-pack chance promotion exception" in Wis.Stat. § 100.16(2); that the exception does not apply to Wis.Stat. § 945.01(3), the gambling machine subsection; and that the Machines are "gambling machines" pursuant to § 945.01(3) and violate Wis.Stat. ch. 945. This appeal follows.

         DISCUSSION

         ¶7 Quick Charge argues that its Machines are lotteries, not gambling machines, under Wis.Stat. § 945.01(5) (the lottery subsection) and Wis.Stat. § 100.16(2). It asserts that the Machines do not involve consideration under the lottery subsection because its machines use in-pack chance promotions, which the lottery subsection exempts from its definition of consideration. It further argues that, because exempted lotteries do not constitute gambling, the Machines cannot be deemed to be gambling machines.

         ¶8 The Attorney General argues that because the lottery definition in Wis.Stat. § 945.01(5) explicitly references the in-pack chance promotion of Wis.Stat. § 100.16(2), the chance promotion exception only applies to lotteries. He further argues that the in-pack chance promotion exception does not apply to the definition of consideration in § 945.01(3) because the gambling machine subsection does not include any reference to § 100.16(2). He argues that because the Machines are gambling machines they are illegal.

         ¶9 As we further explain, we agree with the Attorney General.

         I. Standard of review and principles of statutory construction

         ¶10 Whether summary judgment has been properly granted is a question of law which we review de novo, applying the same methodology as the trial court, but benefiting from its analysis. See Eichenseer v. Madison-Dane Cty. Tavern League, Inc., 2008 WI 38, ¶30, 308 Wis.2d 684, 748 N.W.2d 154. Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Wis. Stat. § 802.08(2).

         ¶11 Here, the parties disagree over the interpretation and application of Wis.Stat. §§ 945.01(3), 945.01(5), and 100.16(2) which involves questions of law involving statutory interpretation. "Judicial deference to the policy choices enacted into law by the legislature requires that statutory interpretation focus primarily on the language of the statute. We assume that the legislature's intent is expressed in the statutory language." See State ex rel. Kalal v. Circuit Ct. for Dane Cty., 2004 WI 58, ¶44, 271 Wis.2d 633, 681 N.W.2d 110. Thus,

statutory interpretation begins with the language of the statute. If the meaning of the statute is plain, we ordinarily stop the inquiry. Statutory language is given its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning.

See id., ¶45 (citation omitted); see also Wis. Stat. § 990.01(1). "Statutory language is read where possible to give reasonable effect to every word, in order to avoid surplusage." Kalal, 271 Wis.2d 633, ¶46.

         II. The Machines qualify as illegal gambling machines under Wis.Stat. § 945.01(3)(a); they are not exempted lotteries under § 945.01(5) and Wis.Stat. § 100.16(2)

         A. The ...


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