ATTORNEY GENERAL V POWERPICK PLAYER'S CLUB OF MICHIGAN LLC
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STATE OF MICHIGAN
COURT OF APPEALS
ATTORNEY GENERAL,
FOR PUBLICATION
January 5, 2010
9:05 a.m.
Plaintiff-Appellant,
v
No. 283858
Kent Circuit Court
LC No. 06-011767-CP
POWERPICK PLAYER’S CLUB OF
MICHIGAN, LLC, a/k/a POWERPICK,
Defendant-Appellee.
Advance Sheets Version
Before: Jansen, P.J., and Hoekstra and Markey, JJ.
JANSEN, P.J.
In this action brought to enjoin an alleged public nuisance, plaintiff Attorney General
appeals by leave granted the circuit court’s order denying his motion for summary disposition.
We reverse and remand for further proceedings consistent with this opinion.
I
Defendant PowerPick Player’s Club of Michigan, LLC, operates what it characterizes as
a professional lottery club. The Attorney General filed the present action alleging that
PowerPick’s operations violated several of Michigan’s antigambling statutes and therefore
constituted an enjoinable public nuisance. The Attorney General also alleged that PowerPick’s
operations violated the Michigan Consumer Protection Act (MCPA), MCL 445.901 et seq.
A
Contrary to the ruling of the circuit court, the material facts of this case are beyond
serious dispute. Indeed, PowerPick, itself, confirms the majority of the relevant factual details of
this case through its own exhibits and documentary evidence. PowerPick is a subsidiary of
PowerPick America, LLC, which was started in Arizona in the mid-1990s by Andrew and Judy
Amada. It has operated in Michigan since 2002. PowerPick’s main business is pooling lottery
players. On its website, under the heading “What is PowerPick all about”, PowerPick describes
the nature of its business in broad overview:
PowerPick is about giving people HUNDREDS MORE chances of
becoming a lottery jackpot winner through pools put together by PowerPick, and
all you need is yourself. Our pools include many benefits . . . . We do everything
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for you, so you can start out sharing HUNDREDS of tickets instead of sharing
just a few tickets! While the best example of pooling is the “office pool” where
groups of players combine their dollars to share the tickets and share the
winnings, with PowerPick, each person in the group ends up with dramatically
more chances of becoming a big winner because of the large blocks of tickets that
are purchased. Plus you will benefit from so many of our other free services . . . .
PowerPick does all the work [for] you. One call can answer your
questions and we can place your order by phone or mail. You can use a credit
card, debit card or check over the phone. You won’t be standing in line,
forgetting to buy tickets or making last minute dashes to the store. It’s simply the
most powerful, exciting and convenient way of playing.
Customers join PowerPick by paying a nominal “one-time setup fee.” Once a customer
has joined, he or she may then select from PowerPick’s various pooling packages. PowerPick
uses a computer system to randomly assign each customer to a particular pool of the type that he
or she has chosen. After the assignment is made, PowerPick mails the customer a confirmation
certificate, listing all the numbers purchased for the particular pool. PowerPick operates several
different types of pooling packages that its customers can choose to join.
PowerPick’s primary pooling packages are called “PowerPools,” which consist of Mega
Millions pools, Classic Lotto 47 pools, Keno pools, and Fantasy 5 pools. According to
PowerPick’s website, the Mega Millions pools and Classic Lotto 47 pools consist of either 25 or
50 shares each. The Keno pools and Fantasy 5 pools consist of 10 shares each. After the
participants in a particular PowerPool pay their money, PowerPick uses a portion of it to buy
lottery tickets from a licensed Michigan lottery retailer.
The participants in the particular PowerPool then share any winnings on a pro rata basis.
Thus, for example, if a customer buys one share in a 25-share PowerPool, he or she receives 1/25
of any winnings for that particular pool. Similarly, if a customer buys three shares in a 50-share
PowerPool, he or she receives 3/50 of any winnings for that particular pool.
PowerPick operates other pools as well. For example, customers who have bought into
one of PowerPick’s main PowerPools may also participate in one or both of the “Million Dollar
Clubs” (MDCs). PowerPick offers a $50 MDC and $100 MDC. PowerPick’s website describes
the $100 MDCs as follows:
We will purchase up to 5 blocks of 1,000 tickets . . . on EVERY drawing
night the Mega Millions jackpot is estimated to be $100 MILLION or more. In
addition you can purchase up to 3 shares in each block [pool], which makes your
share of the prize 3 times greater!
We will try to keep the number of shares in each pool to about 1,200 plus
or minus about 100 to produce an approximate range of 1100 to 1300 shares, with
1100 being the absolute minimum. PowerPick receives any shares under 1100
that are not ordered. So, if there are 1,200 shares in the pool, then each prize will
be divided 1,200 ways. And, of course, all the prizes, not just the jackpot, will be
distributed.
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PowerPick further describes how to participate in the $100 MDCs:
All you do is sign up saying that you would like to share in 1,000 extra
Mega Millions tickets each drawing night that the Mega Millions jackpot is $100
Million or higher. What does this cost? Just a Buck! You will own 1 share in
1,000 tickets for only $1 per drawing.
The $50 MDCs operate similarly except that PowerPick purchases 500 tickets, rather
than 1,000 tickets, when the Mega Millions jackpot is more than $50 million but less than $100
million. PowerPick’s website further describes the $50 MDCs:
This club works identically the same as the $100 MDC, except that each
pool is 500 tickets instead of 1,000 tickets and the number of shares in each pool
is about half as many, so the number of shares in each pool will be approximately
600-700, with 600 being the absolute minimum. PowerPick receives any shares
under 600 that are not ordered.
Unlike the participants in the PowerPools, the participants in the MDCs do not know how
many other participants will be in their respective pool at the time they buy their tickets.
According to Andrew Amada’s deposition testimony, PowerPick decides how many players will
be in an MDC pool only after considering how many shares have been bought. If more than
1,300 shares are bought, a second MDC pool is opened. The number of participants is then split
evenly between the two MDC pools.
PowerPick also conducts what it calls “MegaPools.” It describes the MegaPools on its
website as follows:
Each MegaPool is a separate pool of 100 Mega Millions tickets that are
purchased every Tuesday and Friday night. This pool is a FREE bonus and is in
addition to each player’s PowerPool.
***
Each MegaPool is made up of approximately 700-1,400 players. Every active
member with a PowerPool selection is included in a MegaPool!
Thus, every PowerPick customer is included in one of the MegaPools as an additional “FREE
bonus” as long as he or she is participating in at least one PowerPool.
It also appears that PowerPick can purchase shares in any of its pooling packages just like
any of its customers can. In this way, PowerPick, itself, receives a pro rata share of any money
won by the particular pools in which it participates.
PowerPick conducts additional games of chance that it announces from time to time in its
newsletter. For instance, in one game, newsletter readers were asked to count the “Shamrocks
hidden” within the newsletter and send in their count. The newsletter announced that “[t]he first
three randomly drawn with the correct answer will each win 10 of the $10 Take Home Millions
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scratch tickets.” PowerPick regularly awards Michigan Lottery scratch-off tickets as prizes in
these periodic newsletter games.
PowerPick claims to be substantially similar to a typical office lottery club. But unlike
the practice of a typical office lottery club, PowerPick does not use all the money it collects from
its customers to buy lottery tickets. According to its website, only 51 percent of the money that
PowerPick collects from its customers is used to buy lottery tickets. Forty-one percent goes to
“[c]ompany operating costs” and eight percent is taken as PowerPick’s profit. Further, as noted
previously, PowerPick can supplement its profits by purchasing its own shares in the various
pools that it operates. PowerPick, itself, receives a pro rata share of any winnings when it does
so.
B
In March 2006, the Attorney General sent a letter to PowerPick, demanding that
PowerPick
cease and desist using the “Michigan Lottery” and “MegaMillions” names and
any versions of those names, cease and desist selling or reselling Michigan
Lottery tickets or shares and providing Michigan Lottery tickets or shares as
bonuses or awards to its customers, and that PowerPick disconnect, disable and
discontinue its Michigan Web site for the reason that engaging in these activities
violates [federal law] and the Michigan Penal Code.
The Attorney General pointed out that MCL 432.27(1) provides that “[a] person shall not sell a
ticket or share at a price greater than that fixed by rule of the commissioner. A person other than
a licensed lottery sales agent shall not sell lottery tickets or shares.” The Attorney General also
noted that “MCL 750.301 prohibits accepting money with the understanding that money will be
paid to any person contingent upon the happening of an uncertain event.” The Attorney General
went on to state:
The Penal Code further prohibits buying and selling pools, MCL 750.304;
publishing information concerning making bets or selling pools, MCL 750.305;
keeping or occupying a building for gaming, MCL 750.302; possessing pool
tickets, MCL 750.[3]06(1); promoting a lottery for money, MCL 750.372(1); and
setting up or aiding in the setting up, managing, or drawing of a lottery or gift
enterprise, id. The Penal Code also declares pool tickets a common nuisance,
MCL 750.306(1).
PowerPick continued its operations, leading the Attorney General to issue a notice of
intended action in September 2006. The notice contained the allegations set out in the cease and
desist letter. The Attorney General then filed a complaint containing the same allegations.
PowerPick answered the complaint and asserted several affirmative defenses, including failure to
state a claim on which relief could be granted, equal protection, laches, and unclean hands.
The parties filed cross-motions for summary disposition. At a hearing in January 2008,
the Attorney General asserted that there was no dispute as to the facts and that the only matter to
be decided was what legal conclusions could be drawn from the facts. The Attorney General
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asked the circuit court to construe the applicable statutes and to consider the undisputed evidence
from PowerPick’s website and handbook, as well as the relevant deposition testimony. The
Attorney General argued that PowerPick illegally collected wagers into pools and then sold
interests in the pools. The Attorney General further argued that PowerPick’s random drawings
for scratch-off tickets constituted an illegal lottery, and that PowerPick illegally promoted both
its own lottery and the Michigan Lottery for money in contravention of MCL 750.372. The
Attorney General also argued that PowerPick was illegally selling shares in lottery tickets and
possessed pool tickets in violation of MCL 750.306.
PowerPick argued that it was entitled to summary disposition, but also asserted that even
if the court was not inclined to grant summary disposition in its favor, the court should at least
deny the Attorney General’s motion because there was “a clash of evidence.” However, despite
this assertion, PowerPick never specifically identified which evidence was in dispute.
PowerPick’s attorney argued that PowerPick had not promoted a lottery for money, but had
simply promoted its own business. PowerPick pointed to a federal case in which its Arizona
operation had been accused of violating federal lottery laws, but in which the federal court had
ruled against the government on the ground that PowerPick was simply being compensated for
services it provided to its customers. PowerPick asserted that it provided valuable services, such
as eliminating the need for its customers to wait in line to buy lottery tickets, holding the lottery
tickets in trust for its customers, and making sure that none of the lottery tickets was lost.1
PowerPick further argued that it was not reselling lottery tickets, but was merely acting as the
representative or agent of its customers in buying the tickets.
The Attorney General argued that the federal case cited by PowerPick was not
comparable to the present situation because Michigan lottery law is different from federal lottery
law.
PowerPick then argued that the Attorney General’s complaint should be dismissed on the
basis of the doctrine of laches. This argument was premised on extensive correspondence among
PowerPick, its attorney, the lottery commissioner, the Bureau of State Lottery, and the Attorney
General’s office. That correspondence had begun in November 2001, when PowerPick was first
contemplating starting its Michigan operations. At that time, a consultant for PowerPick had
sent Michigan’s acting lottery commissioner a package of materials regarding PowerPick’s
proposed business operations. In the ensuing correspondence, PowerPick explained why it
should be allowed to operate in Michigan, and the acting lottery commissioner, Bureau of State
Lottery, and the Attorney General’s office wrote back to PowerPick, asking for various
information, expressing concerns, and giving explanations. PowerPick pointed to certain
statements within some of the letters that, it argued, showed that the officials had led it to believe
that its operation would not be illegal in Michigan. For instance, PowerPick pointed out that in
one letter, the acting lottery commissioner had seemed to compare PowerPick’s proposed
1
PowerPick has also described other services that it allegedly provides for its customers,
including organizing the pools, sending out confirmation certificates, checking tickets for
winnings, mailing out winnings statements, and overseeing the collection and distribution of all
winnings.
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operations to those of a legal lottery club. PowerPick also pointed to a letter in which one of the
Michigan officials stated that PowerPick’s “innovative lottery ticket pooling and agency
relationship is very interesting.” Finally, PowerPick pointed to a news report that discussed
PowerPick’s proposed operations and announced that “state lawyers haven’t found anything
wrong with PowerPick.” The Attorney General argued that PowerPick could not prevail on its
laches defense because it had shown no prejudice.
Lastly, PowerPick argued that the Attorney General had acted with unclean hands and
that the Attorney General’s actions violated the guarantee of equal protection because other
similarly situated lottery clubs were operating in Michigan and had not been targeted by the
Attorney General. The Attorney General’s representative responded that these other lottery
clubs were operating legally.
Following the parties’ arguments, the circuit court ruled from the bench:
All right. . . . [T]he Court does agree with [the Attorney General] that the
[federal] Arizona case does not necessarily control this case and was brought by
the postal service, it’s Arizona law, and also that it’s the legal meaning of the
facts.
However, the Court’s of the opinion that there are a number of factual
issues here which will have to be decided at trial and that defendant here has
properly pled its affirmative defenses.
II
The Attorney General argues that the circuit court erred by denying his motion for
summary disposition brought pursuant to MCR 2.116(C)(10). We agree with the Attorney
General’s argument insofar as it relates to his nuisance claim.
A
We review de novo the circuit court’s decision on a motion for summary disposition.
Dressel v Ameribank, 468 Mich 557, 561; 664 NW2d 151 (2003). Summary disposition of all or
part of a claim or defense may be granted when, “[e]xcept as to the amount of damages, there is
no genuine issue as to any material fact, and the moving party is entitled to judgment or partial
judgment as a matter of law.” MCR 2.116(C)(10). “A genuine issue of material fact exists when
the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue
upon which reasonable minds might differ.” West v Gen Motors Corp, 469 Mich 177, 183; 665
NW2d 468 (2003).
B
We conclude that, at the time of the circuit court’s ruling in this case, there remained no
genuine issue of material fact that would have precluded the grant of summary disposition under
MCR 2.116(C)(10) with respect to the Attorney General’s nuisance claim. PowerPick and the
circuit court were simply incorrect in their belief that the evidence presented disputed issues of
fact. Indeed, the circuit court’s ruling was internally inconsistent on this very issue. On the one
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hand, the circuit court agreed with PowerPick that what was at issue was “the legal meaning of
the facts.” But on the other hand, the court stated that “there are a number of factual issues.” Of
critical importance, the circuit court never identified exactly what these “factual issues” were.
Nor did PowerPick identify any actual factual disputes.
PowerPick continues to maintain that “[d]etermining the meaning of the facts at issue is a
quintessential jury question.” But PowerPick is clearly confused about what constitutes a factual
dispute and about the proper role of a jury. In general, a factual dispute exists when there is
conflicting evidence concerning what happened, when something happened, where something
happened, how something happened, who was involved, or some other similar factual inquiry. In
this case, a jury question would have been presented, for instance, if there had been conflicting
evidence concerning how defendant’s business actually operated. But no such conflicting
evidence was presented.
The proper role of a jury is to decide what the facts are—not what the facts mean. As
aptly noted by the United States Court of Appeals for the Fourth Circuit in Atlantic Purchasers,
Inc v Aircraft Sales, Inc, 705 F2d 712, 719 (CA 4, 1983):
A jury . . . does not directly determine whether a litigant has contravened
the statutes. Rather, the jury’s function is to find the facts, and based on the jury’s
findings the court must then determine as a matter of law whether the defendant’s
conduct violated [the statutes]. [Quotation marks and citations omitted.]
The Attorney General correctly argues that what is at issue here is the legal meaning of the
undisputed facts. The critical facts in this case consist of PowerPick’s own description of its
business operations in its player handbook, on its website, in its newsletters, in the deposition
testimony of its owners and employees, and in the various other documents presented to the
circuit court. The operations described in these materials and documents are somewhat
complicated, but there is no dispute concerning what these materials and documents actually say
or mean. The only question presented for resolution was whether PowerPick’s operations—as
described in the uncontroverted materials and documents presented to the circuit court—fell
within the scope of the statutes cited by the Attorney General. This was a purely legal question,
not a factual one. See People v Rutledge, 250 Mich App 1, 4; 645 NW2d 333 (2002) (observing
that “[w]hether conduct falls within the statutory scope of a criminal statute is a question of law
that is reviewed de novo on appeal”).
C
We also find that because PowerPick’s operations constituted an enjoinable nuisance, the
Attorney General was entitled to judgment as a matter of law with respect his nuisance claim.
1
We first conclude that PowerPick’s PowerPool scheme contemplates the placement of
bets under MCL 750.301, that PowerPick “registers” these bets in violation of MCL 750.304,
and that PowerPick possesses “memoranda of . . . bet[s]” in violation of MCL 750.306. In a
typical office lottery club, all the money contributed by the participants is used to purchase
commonly held lottery tickets. In other words, each member of a typical office lottery club is
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simply playing the Michigan Lottery—a legal lottery authorized by Michigan law, see Const
1963, art 4, § 41; MCL 432.1 et seq.—albeit in concert with the other members of the club. As
such, each participant in a typical office lottery club places only one bet—a legal bet that the
underlying lottery ticket or tickets will win. In contrast, each PowerPick customer who
participates in a PowerPool actually places two bets each time he or she purchases lottery tickets
through the PowerPick scheme. As will be explained more fully hereinafter, the customer places
a legal bet on the underlying lottery tickets that PowerPick purchases for that customer’s
particular pool. But the customer also places a second bet, wagering that PowerPick will
randomly assign him or her to a winning pool. It is this second bet that renders PowerPick’s
PowerPool scheme an illegal betting operation.
PowerPick admits that it uses only 51 percent of the money it collects from its customers
to buy lottery tickets. In other words, PowerPick’s customers pay an amount substantially in
excess of the face value of the lottery tickets that PowerPick actually purchases. One reason for
this is certainly the customers’ desire to pay for PowerPick’s alleged services.2 But we conclude
that another reason for these payments substantially in excess of the face value of the lottery
tickets is to buy the chance of being assigned to one or more winning pools by PowerPick.
PowerPick admits that it uses a computer system to randomly assign each customer to a
particular pool of the type that he or she has chosen. These random assignments plainly
introduce an additional element of chance into the PowerPick scheme. By way of example,
assume that there are 200 PowerPick customers at any given time who have chosen the Keno
PowerPool option. Further assume that each of these customers has purchased only one share.
Because the Keno PowerPools consist of 10 shares each, PowerPick would create 20 Keno
PowerPools with 10 shares each, randomly assigning each of the 200 customers to one of these
pools. Rather than purchasing one large set of Keno tickets to be shared equally among all 200
customers, PowerPick will purchase 20 small sets of Keno tickets, and will assign one of these
small sets to each of the 20 pools. Thus, any individual customer who has chosen the Keno
PowerPool option will have a chance of sharing in a winning ticket only within the confines of
the small set of Keno tickets held by his or her 10-share pool. In contrast, if PowerPick had
purchased one large set of Keno tickets to be shared equally among all 200 customers, any
individual customer would have had a much greater chance of sharing in a winning Keno ticket.
As can be seen, the random assignment of customers to the individual PowerPools clearly
injects an additional element of uncertainty into a customer’s chance of sharing in a winning
ticket. PowerPick’s customers plainly “bet” on the outcome of these random computerized
assignments. “‘Betting in common speech means the putting of a certain sum of money or other
valuable thing at stake on the happening or not happening of some uncertain event.’” Michigan
ex rel Comm’r of State Police v One Helix Game, 122 Mich App 148, 155; 333 NW2d 24
2
As explained previously, PowerPick asserts that it provides several valuable services to its
customers, such as eliminating the need for its customers to wait in line, holding the lottery
tickets in trust, ensuring that none of the lottery tickets is lost, sending out confirmation
certificates, checking the tickets for winnings, mailing out winnings statements, and overseeing
the collection and distribution of all winnings.
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(1982), quoting Shaw v Clark, 49 Mich 384, 388; 13 NW 786 (1882). PowerPick’s assignment
of a customer to one PowerPool over another is clearly an “uncertain event” upon which money
is put at stake. Customers do not only bet that the lottery tickets purchased by PowerPick will
win; they also bet that their specific pool will hold the winning ticket or tickets. We conclude
that a portion of the money paid by each PowerPick customer is put at stake in the hope that the
customer will be randomly assigned to at least one pool that holds a winning ticket. Such a
scheme is clearly encompassed within the definition of “betting.” One Helix Game, 122 Mich
App at 155.
Pursuant to MCL 750.301, “[a]ny person or his or her agent or employee who, directly or
indirectly, takes, receives, or accepts . . . any money or valuable thing with the agreement,
understanding or allegation that any money or valuable thing will be paid or delivered to any
person . . . contingent . . . upon the happening of any event not known by the parties to be
certain, is guilty of a misdemeanor . . . .” The legislative goal underlying MCL 750.301 was the
suppression of betting. Michigan ex rel Comm’r of State Police v Nine Money Fall Games, 130
Mich App 414, 419; 343 NW2d 576 (1983). The statute prohibits private betting between
consenting parties, and is not limited to combating only the effects of organized and
commercialized gambling. Oakland Co Prosecutor v 46th Dist Judge, 76 Mich App 318, 325326; 256 NW2d 776 (1977). After applying the plain statutory language, it is clear to us that
PowerPick’s PowerPools violate MCL 750.301. As discussed previously, PowerPick accepts
money from its customers not only with the express understanding that lottery tickets will be
purchased, but also with the express understanding that a valuable prize will be paid out to any
customer who is randomly assigned to a pool holding a winning lottery ticket. MCL 750.301
directly prohibits the acceptance of money on the happening or not happening of such an
uncertain event.3
PowerPick also “registers” these bets in violation of MCL 750.304. Pursuant to MCL
750.304, “[a]ny person or his or her agent or employee . . . who registers bets . . . is guilty of a
misdemeanor . . . .” We have already explained that PowerPick accepts “bets” when its
customers put money at stake for the chance of being randomly assigned to at least one pool that
holds a winning ticket. See One Helix Game, 122 Mich App at 155. We conclude that by
accepting these bets from its customers, randomly assigning its customers to pools in exchange
for their bets, and sending out written confirmation certificates verifying these random
assignments, PowerPick “registers bets” in violation of MCL 750.304.
We also find that PowerPick possesses “memoranda of . . . bet[s]” in violation of MCL
750.306. Under MCL 750.306, “[a]ll . . . memoranda of any . . . bet, manifold, or other policy or
pool books or sheets are . . . declared a common nuisance and the possession of 1 or more of
those items is a misdemeanor . . . .” The written confirmation certificates sent by PowerPick to
its customers are, in essence, receipts. The certificates verify that the customers have been
3
It is irrelevant that the underlying Michigan Lottery tickets are, themselves, issued as part of a
legal lottery. See People v Weithoff, 51 Mich 203, 212; 16 NW 442 (1883). Even when a game
is itself legal, “the betting upon the game . . . constitutes gaming, and those [who] game or
gamble . . . thus bet.” Id.
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randomly assigned to one or more pools in exchange for their bets. PowerPick’s confirmation
certificates, which memorialize these betting transactions, therefore constitute “memoranda
of . . . bet[s]” within the meaning of MCL 750.306. See People v Taylor, 89 Mich App 238, 242;
280 NW2d 500 (1979) (observing that MCL 750.306 prohibits the “possession of various written
memoranda used in gambling operations”).
2
PowerPick also violates MCL 432.27 by reselling lottery tickets to its customers and by
charging a price greater than that fixed by the Michigan Lottery commissioner. MCL 432.27(1)
provides:
A person shall not sell a ticket or share at a price greater than that fixed by
rule of the commissioner. A person other than a licensed lottery sales agent shall
not sell lottery tickets or shares. This section shall not be construed to prevent a
person from giving lottery tickets or shares to another as a gift.
PowerPick argues that it is merely an “agent” for its customers, and that it buys Michigan
Lottery tickets directly on their behalf. Indeed, PowerPick asserts that because of this agency
relationship, title in the lottery tickets passes directly from the state of Michigan to the individual
customers at the time the tickets are purchased. We are unconvinced by PowerPick’s argument
in this regard, and conclude that PowerPick “sell[s] lottery tickets or shares” to its customers
within the meaning of MCL 432.27(1). We find particularly persuasive the reasoning of the
Attorney General in OAG, 1985-1986, No 6392, pp 382, 384 (October 7, 1986), which addressed
a similar question arising under MCL 432.27(1):
The final sentence of [MCL 432.27(1)], exempting gifts of lottery tickets,
is of particular significance and indicates a clear legislative intent that the
prohibition against sales by persons who are not licensed agents is to be read
broadly. The fact that the Legislature expressly excluded gift transactions from
the prohibition set forth in § 27(1) demonstrates that the Legislature viewed this
prohibition as being sufficiently broad so as to include even gifts had they not
been expressly excluded by that final sentence. If third-party transfers in the form
of gifts would be barred in the absence of the express exemption in § 27(1),
certainly for-profit third-party transfers would also be barred.
This conclusion is further supported by application of the well-established
maxim of statutory construction known as the expressio uniu[s] est exclusio
alterius, i.e., that express mention in a statute of one thing implies the exclusion
of other similar things. See, e.g., Stowers v Wolodzko, 386 Mich 119, 133; 191
NW2d 355 (1971). The fact that the Legislature expressly exempted third-party
transfers of lottery tickets which take the form of a gift, but did not expressly
exempt for-profit third-party transfers such as that proposed here, manifests the
legislative intent that the latter type of transaction not be permitted. [Emphasis
added.]
“Although Attorney General opinions are not binding on this Court, they can be
persuasive authority.” Lysogorski v Bridgeport Charter Twp, 256 Mich App 297, 301; 662
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NW2d 108 (2003); see also Williams v Rochester Hills, 243 Mich App 539, 557; 625 NW2d 64
(2000). We agree with the Attorney General’s observation that the Legislature must have
viewed the general prohibition of MCL 432.27(1) as sufficiently broad to encompass even gifts.
Otherwise, if the Legislature had believed that gifts already fell outside the scope of the general
prohibition, the final sentence of MCL 432.27(1) would have been superfluous and unnecessary.
It is a basic tenet of statutory construction that no language in a statute should been interpreted as
unnecessary surplusage. In re Kiogima, 189 Mich App 6, 13; 472 NW2d 13 (1991); see also
Apsey v Mem Hosp, 477 Mich 120, 127; 730 NW2d 695 (2007). Indeed, courts presume that
every statutory word and phrase has some meaning, and must give effect to each provision of the
statute if possible. Danse Corp v Madison Hts, 466 Mich 175, 182; 644 NW2d 721 (2002). “It
is presumed that the Legislature is aware of the rules of statutory construction and has drafted its
enactments accordingly.” Michigan Employment Security Comm v Westphal, 214 Mich App
261, 264; 542 NW2d 360 (1995).
In light of this authority, it is clear that the Legislature would not have included the final
sentence of MCL 432.27(1) if that provision had constituted mere surplusage. And if the
Legislature believed that the general prohibition of MCL 432.27(1) was sufficiently broad to
encompass gifts in the absence of the final sentence, it necessarily follows that the general
prohibition of MCL 432.27(1) encompasses “for-profit third-party transfers,” as explained in
OAG, 1985-1986, No 6392, p 384. We agree with the reasoning of OAG, 1985-1986, No 6392,
and therefore find it persuasive on this issue. See Risk v Lincoln Charter Twp Bd of Trustees,
279 Mich App 389, 398-399; 760 NW2d 510 (2008).
As noted in OAG, 1985-1986, No 6392, p 384, the Legislature intended “that the
prohibition against sales by persons who are not licensed agents is to be read broadly.” It is
undisputed that PowerPick is not “a licensed lottery sales agent” and that PowerPick operates a
for-profit business. When PowerPick accepts payments substantially in excess of the cost of the
lottery tickets it purchases, and then transfers those lottery tickets to its paying customers, it is
engaged in what the Attorney General has described as “for-profit third-party transfers[.]” Id.
We therefore conclude that PowerPick “sell[s] lottery tickets or shares” in violation of MCL
432.27(1).
Having determined that PowerPick “sell[s]” lottery tickets to its customers, it cannot be
seriously disputed that PowerPick sells them “at a price greater than that fixed by rule of the
commissioner” within the meaning of MCL 432.27(1). Indeed, although PowerPick describes
itself as a simple “lottery club,” it admits that it uses only 51 percent of the money collected from
its customers to buy lottery tickets and that its customers pay an amount substantially in excess
of the face value of the lottery tickets that are ultimately purchased. No further proof is
necessary for us to conclude that PowerPick sells lottery tickets to its customers “at a price
greater than that fixed by rule of the commissioner.” MCL 432.27(1).
3
In addition, PowerPick’s periodic random drawings for Michigan Lottery scratch-off
tickets constitute an illegal lottery within the meaning of MCL 750.372, and PowerPick’s
MegaPools constitute an illegal gift enterprise within the meaning of MCL 750.372.
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As an initial matter, we note that neither the term “lottery” nor the term “gift enterprise”
is defined in MCL 750.372. We must give statutory words and phrases their commonly
understood meanings. MCL 8.3a; Lewandowski v Nuclear Mgt Co, LLC, 272 Mich App 120,
126; 724 NW2d 718 (2006). When a term is not defined by statute, it is appropriate for this
Court to look to dictionary definitions. People v Stone, 463 Mich 558, 563; 621 NW2d 702
(2001); Stocker v Tri-Mount/Bay Harbor Bldg Co, Inc, 268 Mich App 194, 199; 706 NW2d 878
(2005). “[B]ut technical words and phrases, and such as may have acquired a peculiar and
appropriate meaning in the law, shall be construed and understood according to such peculiar
and appropriate meaning.” MCL 8.3a; see also Bay Co Prosecutor v Nugent, 276 Mich App 183,
190; 740 NW2d 678 (2007). It is also appropriate for us to consider how a word or phrase has
been defined in the previous caselaw. See Roby v Mt Clemens, 274 Mich App 26, 30; 731
NW2d 494 (2007).
The word “lottery” is “commonly defined as ‘a gambling game or method of raising
money in which a large number of tickets are sold and a drawing is held for prizes,’ ‘a drawing
of lots,’ and ‘any happening or process that is or appears to be determined by chance . . . .’”
FACE Trading, Inc v Dep’t of Consumer & Industry Services, 270 Mich App 653, 666; 717
NW2d 377 (2006), quoting Random House Webster’s College Dictionary (1997). Our Supreme
Court has explained that “the essentials of a lottery [a]re ‘consideration, prize, and chance.’”
Rohan v Detroit Racing Ass’n, 314 Mich 326, 344; 22 NW2d 433 (1946), quoting Glover v
Malloska, 238 Mich 216, 219; 213 NW 107 (1927); see also People v Welch, 269 Mich 449, 452;
257 NW 859 (1934). However, “[w]hile consideration, prize, and chance are often common
factors found in a lottery, . . . the term ‘lottery’ must be construed broadly.” FACE Trading, Inc,
270 Mich App at 667. “‘[T]he word “lottery” must be construed in the popular sense, with the
view of remedying the mischief intended to be prevented, and to suppress all evasions for the
continuance of the mischief.’” Id., quoting People v McPhee, 139 Mich 687, 690; 103 NW 174
(1905). “Thus, while the Supreme Court has indicated that the essentials of a lottery generally
are consideration, prize, and chance, these essentials cannot be used to frustrate the plain and
ordinary meaning of the word ‘lottery.’” FACE Trading, Inc, 270 Mich App at 668.
In Sproat-Temple Theatre Corp v Colonial Theatrical Enterprise, Inc, 276 Mich 127; 267
NW 602 (1936), our Supreme Court considered the traditional elements of consideration, prize,
and chance to determine whether a drawing held at the defendants’ theaters constituted a
“lottery” under Michigan law. Each patron who purchased an admission ticket at the defendants’
theaters was “given a coupon ticket bearing duplicate numbers . . . .” Id. at 128. When the
patron entered the theater, “one half of each coupon ticket [was] dropped in a barrel by the
purchaser and the other half [was] retained by him[.]” Id. “[A]t an advertised time the barrel
containing the coupon tickets was taken upon the stage of the theatre and several tickets were
withdrawn therefrom. The person holding the coupon or stub with the number corresponding to
the number on the ticket drawn from the barrel was given a valuable money prize.” Id. at 128129.
The plaintiffs argued that the drawings constituted an enjoinable “lottery” within the
meaning of what is now MCL 750.372. Sproat-Temple Theatre, 276 Mich at 129. The
defendants countered, contending that because each patron received a coupon ticket at no
additional cost, there could be no “lottery.” Id. In particular, the defendants argued that because
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“the patron pays nothing for a chance to receive the prize, no consideration runs from the public,
and, therefore, the [lottery] statute is not violated.” Id.
Our Supreme Court disagreed with the defendants, observing that “‘while the patrons
may not pay [for the coupon tickets], and the [defendants] may not receive, any direct
consideration, there is an indirect consideration paid and received. The fact that prizes . . . are to
be distributed will attract persons to the theatres who would not otherwise attend. In this manner
those obtaining prizes pay consideration for them, and the theatres reap a direct financial
benefit.’” Id. at 130-131, quoting Society Theatre v City of Seattle, 118 Wash 258, 260; 203 P 21
(1922). Accordingly, the Supreme Court affirmed the circuit court’s order enjoining the
defendants’ scheme as an illegal lottery. Sproat-Temple Theatre, 276 Mich at 131.
The next year, a similar fact pattern was presented in United-Detroit Theaters Corp v
Colonial Theatrical Enterprise, Inc, 280 Mich 425; 273 NW 756 (1937). Our Supreme Court
again looked to the traditional elements of consideration, prize, and chance—this time for the
purpose of determining whether a “screeno” game played at the defendants’ theaters constituted
a “lottery” within the meaning of what is now MCL 750.372. United-Detroit Theaters, 280
Mich at 427-429. A free screeno card was given to each patron who bought a ticket for
admission to one of the defendants’ theaters. Id. at 427. But unlike the coupon tickets at issue in
Sproat-Temple Theatre, the screeno cards in United-Detroit Theaters were “not confined to
purchasers of admission tickets . . . .” United-Detroit Theaters, 280 Mich at 427. Instead, free
screeno cards were also available “upon request to any person in the foyer of the theater or to
persons on the sidewalk in front of the theater.” Id. Each screeno card contained a series of
random numbers, which were arranged in rows and columns. The first person to match certain
of the numbers on his or her screeno card with those displayed on the theater screen won a prize.
Id.
The plaintiff, a competing theater owner, argued that the screeno game constituted an
enjoinable “lottery” under the statute. Id. at 428. Although the screeno tickets were distributed
for free and were available to patrons and nonpatrons alike, the Supreme Court relied on SproatTemple Theatre to find that the element of consideration had been established, observing that
“the distribution of the tickets unquestionably attracted others to the theater who otherwise
would not have attended and in this way the theater owner profited thereby. This is a sufficient
consideration.” Id. at 429.
Also unlike the facts of Sproat-Temple Theatre, a small amount of skill was apparently
necessary to play the screeno game at issue in United-Detroit Theaters. Nevertheless, the
United-Detroit Theaters Court found that the screeno game retained the element of chance,
stating that “[a]n examination of the method used in the conducting of the game must convince
any one that the element of skill as compared with the element of chance is slight.” Id.
In light of this authority, we are compelled to conclude that PowerPick’s periodic
drawings for Michigan Lottery scratch-off tickets constitute a “lottery” within the meaning of
MCL 750.372. PowerPick, through its newsletter, periodically invites its customers to
participate in drawings for Michigan Lottery scratch-off tickets. As explained previously, one
such contest asked PowerPick’s customers to count the “Shamrocks hidden” within the
newsletter and send in their count. The newsletter announced that “[t]he first three randomly
drawn with the correct answer will each win 10 of the $10 Take Home Millions scratch tickets.”
-13-
In another recent game, newsletter readers were asked to count the total number of times the
word “pumpkin” appeared within the text and to submit their count. The newsletter went on to
state:
Anytime you see that word within the pages of this newsletter, whether
it’s singular or plural, capital letters or lower case, part of another word or
standing alone . . . count it.
***
Remember that this is a bi-monthly drawing, so all entries received by
November 30, 2009, will be eligible to win. On December 1, 2009, the winners
will be randomly drawn from those who submitted the correct answer. The first 3
drawn with the correct answer will each win $100 worth of the Classic Casino
instant tickets and you’ll be well on your way to scratching off some winners.
There is no purchase necessary to win, but you must be 18 years of age.
PowerPick’s periodic drawings for Michigan Lottery scratch-off tickets clearly fall within
the definition of a “lottery.” These periodic drawings are not only “‘a drawing of lots,’” but are
also a “‘process that is . . . determined by chance . . . .’” FACE Trading, Inc, 270 Mich App at
666, quoting Random House Webster’s, supra. Moreover, these periodic drawings include all
three traditional elements of a lottery. With respect to the element of consideration, although the
periodic drawings are widely announced in PowerPick’s newsletter and are available at no
additional cost to the newsletter’s readers, they are clearly used to induce people to become
PowerPick customers or to remain PowerPick customers. In other words, the periodic drawings
for Michigan Lottery scratch-off tickets “unquestionably attracted others to [PowerPick] who
otherwise would not have [become PowerPick customers] and in this way [PowerPick] profited
thereby. This is a sufficient consideration.” United-Detroit Theaters, 280 Mich at 429; see also
Sproat-Temple Theatre, 276 Mich at 130-131. With respect to the element of chance, it is true
that some modicum of skill may be required for an individual to accurately count the
“Shamrocks hidden” within the newsletter or the number of times the word “pumpkin” occurs
within the text. However, despite the fact that an individual must first submit an accurate count
to participate, PowerPick ultimately awards the scratch-off tickets on the basis of a random
drawing. Accordingly, the drawings retain the essence of a game of chance, and “the element of
skill as compared with the element of chance is slight.” United-Detroit Theaters, 280 Mich at
429. PowerPick, itself, admits the third element—that a prize is awarded to the winners of the
random drawings. Lest there be any doubt that a scratch-off lottery ticket can constitute a prize,
we note that although an unscratched instant lottery ticket generally has “little or no actual
monetary worth,” it certainly can have a great deal of “potential value . . . .” See McDougal v
McDougal, 451 Mich 80, 82; 545 NW2d 357 (1996) (emphasis in original). This, we think, is all
that is required to constitute a prize. We conclude that PowerPick’s periodic random drawings
for Michigan Lottery scratch-off tickets are a “lottery” within the meaning of MCL 750.372.
The term “gift enterprise” has been used for more than 100 years in Michigan’s statutes,
see, e.g., McPhee, 139 Mich at 688-689; People v Reilly, 50 Mich 384, 387-388; 15 NW 520
(1883), and indeed appears to have acquired a particular meaning in the law, see MCL 8.3a.
Black’s Law Dictionary (7th ed) defines “gift enterprise” as, among other things, “[a] merchant’s
scheme to induce sales . . . by giving buyers tickets that carry a chance to win a prize.” As noted
-14-
previously, PowerPick’s MegaPools are announced as “a FREE bonus and . . . in addition to each
player’s PowerPool.” Each PowerPick customer is automatically entered in one of the
MegaPools for each Mega Millions drawing, as long as he or she is a participant in one of the
main PowerPool packages.
These MegaPools, like the periodic drawings for scratch-off tickets described previously,
are clearly used to induce people to become PowerPick customers or to remain PowerPick
customers. Each PowerPick customer is entered into one of the MegaPools as “a FREE bonus,”
thereby receiving shares in a pool of Mega Millions tickets at no additional cost. PowerPick’s
MegaPools plainly constitute “[a] merchant’s scheme to induce sales . . . by giving buyers tickets
that carry a chance to win a prize.” Black’s Law Dictionary (7th ed). Therefore, we conclude
that the MegaPools are a “gift enterprise” within the meaning of MCL 750.372.
Having determined that PowerPick’s periodic drawings for Michigan Lottery scratch-off
tickets constitute a “lottery” and that PowerPick’s MegaPools constitute a “gift enterprise,” we
turn to the question whether PowerPick violates the provisions of MCL 750.372 by conducting
and promoting these schemes. We conclude that it does.
It is unlawful in this state to “[s]et up or promote . . . any lottery or gift enterprise for
money” and to “[a]id, either by printing or writing, or in any way be concerned in the setting up,
managing, or drawing of a lottery or gift enterprise.” MCL 750.372(1)(a) and (c). PowerPick
violates these provisions through the operation of its periodic drawings for Michigan Lottery
scratch-off tickets and its MegaPools. First, both the periodic drawings for scratch-off tickets
and the MegaPools violate MCL 750.372(1)(a). We have already noted that these enterprises are
intended to entice people to become or to remain paying customers of PowerPick. Therefore, it
cannot be seriously disputed that they are “[s]et up or promote[d] . . . for money” within the
meaning of MCL 750.372(1)(a). Furthermore, both the periodic drawings for scratch-off tickets
and the MegaPools were devised and are operated by PowerPick. Accordingly, by “setting up”
and “managing” the periodic drawings for scratch-off tickets and the MegaPools, PowerPick
unquestionably violates MCL 750.372(1)(c) as well.4
4
We fully acknowledge that the prohibition of lotteries and gift enterprises contained in MCL
750.372(1) “does not apply to a lottery or gift enterprise conducted by a person as a promotional
activity that is clearly occasional and ancillary to the primary business of that person.” MCL
750.372(2). However, a lottery or gift enterprise is not a “promotional activity” within the
meaning of the statute if it “may be entered by purchasing a product or service for substantially
more than its fair market value.” Id. Because PowerPick’s customers pay “substantially more
than [the] fair market value” of the lottery tickets that PowerPick ultimately purchases, we
conclude that the periodic drawings for scratch-off tickets and the MegaPools are not a
“promotional activity.” Id. Accordingly, these enterprises are not exempt from the provisions of
MCL 750.372(1). MCL 750.372(2).
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4
As our Supreme Court observed forty years ago in Attorney General, ex rel Optometry
Bd of Examiners v Peterson, 381 Mich 445, 465-466; 164 NW2d 43 (1969):
At common law, acts in violation of law constitute a public nuisance.
Harm to the public is presumed to flow from the violation of a valid statute
enacted to preserve public health, safety and welfare. The attorney general, acting
on behalf of the people, is a proper party to bring an action to abate a public
nuisance or restrain unlawful acts which constitute a public nuisance.
PowerPick’s various gaming schemes violate the terms of MCL 432.27(1), MCL
750.301, MCL 750.304, MCL 750.306, and MCL 750.372. Michigan’s lottery and gambling
statutes were validly enacted to preserve the public safety, morals, and welfare. See Parkes v
Recorder’s Court Judge, 236 Mich 460, 466-467; 210 NW 492 (1926); see also Oakland Co
Prosecutor, 76 Mich App at 330. Indeed, “[t]he Legislature has the right to conclude that
gambling is injurious to the morals and welfare of the people and it is clearly within the scope of
the state police power to suppress gambling in all of its forms.” Id. at 326. Because
PowerPick’s business activities violate these validly enacted statutes, “[h]arm to the public is
presumed to flow” from PowerPick’s operations. Peterson, 381 Mich at 465. We conclude that
PowerPick’s business operations, taken as a whole, constitute a public nuisance. Id.
5
We also conclude that PowerPick’s office in Comstock Park and “the furniture, fixtures,
and contents” of that office constitute a nuisance as a matter of law. The Legislature has
declared that “[a]ny building, vehicle, boat, aircraft, or place used for the purpose
of . . . gambling” is an enjoinable nuisance. MCL 600.3801. Moreover, “the furniture, fixtures,
and contents of the building, vehicle, boat, aircraft, or place” are also declared to be an
enjoinable nuisance. Id. The Legislature has specifically authorized the Attorney General to
“maintain an action for equitable relief in the name of the state of Michigan . . . to abate said
nuisance and to perpetually enjoin any person, his servant, agent, or employee, who shall own,
lease, conduct or maintain such building, vehicle, boat, aircraft or place, from permitting or
suffering such building, vehicle, boat, or aircraft or place . . . , or any other building, vehicle,
boat, aircraft or place conducted or maintained by him to be used for [gambling].” MCL
600.3805.
It is first necessary to determine whether PowerPick’s operations constitute “gambling”
within the meaning of MCL 600.3801. We acknowledge that the word “gambling” is not
defined in MCL 600.3801. However, at common law, the definition “require[d] the presence of
three elements: (1) price or consideration, (2) chance, and (3) prize or reward.” Automatic
Music & Vending Corp v Liquor Control Comm, 426 Mich 452, 457; 396 NW2d 204 (1986).5
5
The Automatic Music & Vending Court actually construed the word “gaming” rather than the
word “gambling.” Automatic Music & Vending, 426 Mich at 457. However, the Court
(continued…)
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We have no trouble concluding that PowerPick engages in “gambling” within the meaning of
MCL 600.3801. We determined earlier that PowerPick’s PowerPool scheme is a variety of
“betting,” One Helix Game, 122 Mich App at 155, and that it is prohibited under MCL 750.301.
MCL 750.301, which prohibits betting on uncertain events, MCL 750.304, which prohibits
among other things “registering bets,” and MCL 750.306, which prohibits among other things
possessing “memoranda of . . . bet[s],” are all contained within Chapter 44 of the Penal Code,
MCL 750.301 et seq., which is entitled “Gambling.” The particular placement of these
provisions in the overall statutory scheme suggests that betting, registering bets, and keeping
memoranda of bets are all forms of “gambling.” See Tallman v Dep’t of Natural Resources, 421
Mich 585, 600; 365 NW2d 724 (1984). Moreover, our Supreme Court has recognized that it
would not be “an inaccurate or inappropriate use of language if all betting for money were to be
spoken of and considered as gaming or gambling.” People v Weithoff, 51 Mich 203, 210; 16 NW
442 (1883). We are persuaded that PowerPick’s betting scheme plainly constitutes a variety of
“gambling” within the meaning of MCL 600.3801.
We are similarly persuaded that PowerPick’s periodic drawings for Michigan Lottery
scratch-off tickets constitute “gambling” under MCL 600.3801. We previously concluded that
PowerPick’s periodic drawings for scratch-off tickets constitute a “lottery.” The common-law
elements of “gaming” or “gambling”—price or consideration, chance, and prize or reward,
Automatic Music & Vending, 426 Mich at 457—are remarkably similar to the common-law
elements of a “lottery”—consideration, prize, and chance, Rohan, 314 Mich at 344; Glover, 238
Mich at 219. Indeed, our Supreme Court has described a lottery as “‘a species of
gambling . . . .’” Rohan, 314 Mich at 344 (citation omitted); see also FACE Trading, Inc, 270
Mich App at 666 (observing that “‘[l]ottery’ is commonly defined as ‘a gambling game or
method’”). We conclude that PowerPick’s periodic drawings for scratch-off lottery tickets
constitute “gambling” within the meaning of MCL 600.3801.
All that remains is to determine whether PowerPick “owns, leases, conducts, or
maintains” “[a]ny building, vehicle, boat, aircraft, or place used for the purpose of . . . gambling”
within the meaning of MCL 600.3801. We find that it does. It is undisputed that PowerPick
leases or otherwise maintains an office in Comstock Park from which its Michigan business
operations are carried out. PowerPick receives payments from PowerPool participants at its
Comstock Park office, and accordingly accepts bets there. See State, ex rel Washtenaw Co
Prosecuting Attorney v Western Union Tel Co, 336 Mich 84, 89; 57 NW2d 537 (1953). This is
confirmed by PowerPick’s own website, which directs potential PowerPick customers to “mail in
your order” to “4673 West River Drive NE, Comstock Park, MI 49321.” Moreover, PowerPick
unquestionably manages and promotes its periodic drawings for Michigan Lottery scratch-off
tickets from its Comstock Park office. Thus, even if PowerPick does not hold the actual
drawings at its office, it nonetheless promotes its lottery from that place. See People v Elliott, 74
Mich 264, 268; 41 NW 916 (1889). We conclude that PowerPick’s Comstock Park office is a
building or place “used for the purpose of . . . gambling” under MCL 600.3801. Accordingly,
(…continued)
explained that “the terms ‘gaming’ and ‘gambling’ are synonymous, [and] are used
interchangeably.” Id. at 457 n 1; see also People v Weithoff, 51 Mich 203, 210-211; 16 NW2d
442 (1883) (using the terms “gaming” and “gambling” interchangeably).
-17-
PowerPick’s Comstock Park office, as well as “the furniture, fixtures, and contents” of that
office, constitute an enjoinable nuisance. MCL 600.3801.
6
The Attorney General was entitled to judgment as a matter of law with respect to his
nuisance claim. Not only do PowerPick’s betting, lottery, and gift enterprise schemes constitute
an enjoinable public nuisance under the reasoning of Peterson, 381 Mich at 465,6 but
PowerPick’s Comstock Park office, as well as “the furniture, fixtures, and contents” of that
office, constitute an enjoinable nuisance under MCL 600.3801.
III
PowerPick raised several affirmative defenses to the Attorney General’s complaint.
Specifically, PowerPick contended that the Attorney General had failed to state a claim on which
relief could be granted. It further asserted that the complaint should have been dismissed under
the doctrines of equal protection, laches, and unclean hands. The Attorney General argues that
the circuit court erred by denying his motion for summary disposition of these affirmative
defenses pursuant to MCR 2.116(C)(9). We agree with the Attorney General.
A
The circuit court’s ruling on a motion for summary disposition is reviewed de novo.
Dressel, 468 Mich at 561. “Summary disposition under MCR 2.116(C)(9) is proper if a
defendant fails to plead a valid defense to a claim.” Dimondale v Grable, 240 Mich App 553,
564; 618 NW2d 23 (2000). The motion should be granted “[i]f the defenses are ‘“so clearly
untenable as a matter of law that no factual development could possibly deny plaintiff’s right to
recovery[.]”’” Id. (citations omitted).
B
We reject PowerPick’s assertion that the Attorney General failed to state a claim on
which relief could be granted. As noted previously, “[t]he attorney general, acting on behalf of
the people, is a proper party to bring an action to abate a public nuisance or restrain unlawful acts
which constitute a public nuisance.” Peterson, 381 Mich at 465-466; see also People ex rel
Oakland Co Prosecuting Attorney v Kevorkian, 210 Mich App 601, 607; 534 NW2d 172 (1995).
6
We fully acknowledge that several of the statutes violated by PowerPick, including MCL
750.301, MCL 750.304, MCL 750.306, and MCL 750.372, are criminal in nature and are
contained in the Penal Code, MCL 750.1 et seq. In general, equity will not enjoin the
commission of a crime because a chancellor has no criminal jurisdiction. United-Detroit
Theaters, 280 Mich at 429-430; see also Western Union Tel Co, 336 Mich at 90. However, when
criminal acts independently rise to the level of nuisances, “the jurisdiction of a court of equity
arises,” United-Detroit Theaters, 280 Mich at 430 (quotation marks and citations omitted), and
the acts may be enjoined, Western Union Tel Co, 336 Mich at 90.
-18-
A review of the pleadings reveals that the Attorney General properly pleaded and supported his
allegations of nuisance and unlawful gambling. PowerPick’s claim in this regard must fail.
C
PowerPick also argued that the Attorney General’s complaint should have been dismissed
on the basis of the constitutional guarantee of equal protection. In particular, PowerPick asserted
that it has been treated differently than similarly situated entities, which were allowed to
continue operating in Michigan and had not been sued by the Attorney General. We disagree.
PowerPick has failed to show that any other similarly situated entities are operating in Michigan.
As explained earlier, whereas a typical office lottery club uses all the money contributed by its
members to purchase commonly held lottery tickets, PowerPick admits that it uses only 51
percent of the money that it collects from its customers to buy lottery tickets. PowerPick has not
demonstrated the existence of any other Michigan entity that charges its customers an amount
substantially in excess of the face value of the lottery tickets purchased in this manner.
Accordingly, PowerPick has failed to show that it has been treated differently than any other
similarly situated entity. People v Mouradian, 110 Mich App 815, 822; 314 NW2d 494 (1981).
“‘[E]qual protection does not require the same treatment be given those that are not similarly
situated.’” Champion v Secretary of State, 281 Mich App 307, 325; 761 NW2d 747 (2008),
quoting Alspaugh v Comm on Law Enforcement Standards, 246 Mich App 547, 555; 634 NW2d
161 (2001).
D
We similarly reject PowerPick’s assertion that the Attorney General’s complaint should
have been dismissed on the basis of laches. Laches is an affirmative defense based primarily on
circumstances that render it inequitable to grant relief to a dilatory plaintiff. Yankee Springs Twp
v Fox, 264 Mich App 604, 611; 692 NW2d 728 (2004). The doctrine of laches is triggered by
the plaintiff’s failure to do something that should have been done under the circumstances or
failure to claim or enforce a right at the proper time. Schmude Oil Co v Omar Operating Co, 184
Mich App 574, 583; 458 NW2d 659 (1990). “The doctrine of laches is founded upon long
inaction to assert a right, attended by such intermediate change of conditions as renders it
inequitable to enforce the right.” Angeloff v Smith, 254 Mich 99, 101; 235 NW 823 (1931). But
“[i]t has long been held that the mere lapse of time will not, in itself, constitute laches.” Dep’t of
Treasury v Campbell, 107 Mich App 561, 570; 309 NW2d 668 (1981). “The defense, to be
raised properly, must be accompanied by a finding that the delay caused some prejudice to the
party asserting laches and that it would be inequitable to ignore the prejudice so created.” Id.
The defendant bears the burden of proving this resultant prejudice. Yankee Springs Twp, 264
Mich App at 612.
As the Attorney General correctly points out, the early rule was that the government was
“‘exempt from the consequences of its laches . . . .’” Detroit v 19675 Hasse, 258 Mich App 438,
445; 671 NW2d 150 (2003), quoting Guaranty Trust Co v United States, 304 US 126, 132; 58 S
Ct 785; 82 L Ed 1224 (1938); see also Chippewa Co Bd of Supervisors v Bennett, 185 Mich 544,
564-565; 152 NW 229 (1915). However, this ancient rule has apparently been abrogated in
Michigan, at least in part. See Royal Oak Twp v School Dist No 7, 322 Mich 397, 402-403; 33
NW2d 908 (1948). At least one panel of this Court has cited the Royal Oak Twp decision for the
-19-
proposition that “laches should . . . be . . . available to an individual responding to a government
initiated action.” Dep’t of Treasury, 107 Mich App at 570.
Nevertheless, even if laches may be asserted against a governmental entity, we conclude
that the equitable defense of laches was unavailable to PowerPick because PowerPick acted with
unclean hands. Laches is an equitable doctrine. Baerlin v Gulf Refining Co, 356 Mich 532, 535;
96 NW2d 806 (1959); Eberhard v Harper-Grace Hospitals, 179 Mich App 24, 35; 445 NW2d
469 (1989). It is well settled that one who seeks equitable relief must do so with clean hands.
McCluskey v Winisky, 373 Mich 315, 321; 129 NW2d 400 (1964); Berar Enterprises, Inc v
Harmon, 101 Mich App 216, 231; 300 NW2d 519 (1980). A party with unclean hands may not
assert the equitable defense of laches. Attorney General v Thomas Solvent Co, 146 Mich App
55, 66; 380 NW2d 53 (1985). Our Supreme Court has observed that a party who has “acted in
violation of the law” is not “before a court of equity with clean hands,” and is therefore “not in
position to ask for any remedy in a court of equity.” Farrar v Lonsby Lumber & Coal Co, 149
Mich 118, 121; 112 NW 726 (1907). Indeed, as stated in Society of Good Neighbors v Mayor of
Detroit, 324 Mich 22, 28; 36 NW2d 308 (1949), a court of equity “will not lend its aid . . . to
assist law violators.” PowerPick’s various gambling schemes violate the terms of MCL
432.27(1), MCL 750.301, MCL 750.304, MCL 750.306, and MCL 750.372, and PowerPick has
thus acted with unclean hands. Farrar, 149 Mich at 121. As a consequence, it may not assert
the equitable defense of laches. Thomas Solvent, 146 Mich App at 66.
E
For the same reason, PowerPick was not entitled to assert the equitable defense of
unclean hands. A defendant with unclean hands may not defend on the ground that the plaintiff
has unclean hands as well. To permit a defendant with unclean hands to defend on such a
ground would contravene the ancient rule that “[h]e who hath committed iniquity shall not have
equity . . . .” Society of Good Neighbors, 324 Mich at 28; see also McCredie v Buxton, 31 Mich
383, 388 (1875).
F
PowerPick’s affirmative defenses fail as a matter of law. The circuit court should have
granted the Attorney General’s motion for summary disposition of the affirmative defenses under
MCR 2.116(C)(9). Dimondale, 240 Mich App at 564.
IV
In ruling on the motion for summary disposition, the circuit court did not address the
Attorney General’s claim that PowerPick’s operations violated the MCPA. In general, we will
not address an issue on appeal that was not considered and decided below. Polkton Charter Twp
v Pellegrom, 265 Mich App 88, 95; 693 NW2d 170 (2005); People v Hall, 158 Mich App 194,
199; 404 NW2d 219 (1987). Lest there be any confusion on the matter, we wish to make clear
that PowerPick’s operations constituted an enjoinable nuisance for the reasons stated above,
irrespective of whether PowerPick’s business practices also violated the MCPA. However,
because the Attorney General sought civil fines, costs, and other specific relief under the MCPA,
see MCL 445.905(1); MCL 445.905(4), we direct the circuit court to consider and address the
Attorney General’s MCPA claim on remand.
-20-
V
We have concluded that PowerPick’s operations and office constitute an enjoinable
nuisance and that PowerPick failed to plead and assert any valid affirmative defenses. Therefore,
the circuit court erred by denying the Attorney General’s motion for summary disposition with
respect to his nuisance claim. There remained no genuine issue of material fact that would have
precluded the grant of summary disposition on this issue, and the Attorney General was entitled
to judgment as a matter of law. On remand, the circuit court shall enter judgment in favor of the
Attorney General with respect to his nuisance claim. This shall include the entry of any order
that may be necessary to abate the nuisance and to enjoin PowerPick’s continuing operations.
In contrast, the circuit court did not consider or address the Attorney General’s MCPA
claim. The circuit court shall consider this claim on remand.
Reversed and remanded for further proceedings consistent with this opinion. We do not
retain jurisdiction. No costs under MCR 7.219, a public question having been involved.
/s/ Kathleen Jansen
/s/ Jane E. Markey
-21-
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