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.
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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.
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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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