In the imposing wood-paneled courtroom seated on the grand marble dais, the nine justices were robed and ready. Clerk Blake Hawthorne called for all to rise, draw near and pay attention, for the honorable, the Supreme Court of Texas was now in session.
All eyes were on David Keltner, a top appellate advocate and former court of appeals justice, as he began his argument in the case with far-reaching consequences.
“I never thought I’d be in front of you discussing fuzzy animals, but here we are,” Keltner said.
He launched into discussion of a provision in the Texas Penal Code known as the “fuzzy animal” exception to the state’s constitutional prohibition on illegal lotteries. The operators of ever-proliferating game rooms that house “eight-liner” slot machines use the exception.
But instead of stuffed toys, the game room machines disperse tickets that can be used to play again or accumulated for prizes like an Xbox or plasma TVs, said Keltner, who is with Fort Worth’s Kelly, Hart & Hallman.
“Would all of the Chuck E. Cheese machines go away?” asked Justice Jeff Boyd.
Keltner represents the city of Fort Worth, which is defending its 2014 ordinances to control the location and characteristics of the game rooms, including limits on having games where alcohol is sold. The city says the establishments attract nefarious activities and damage neighborhoods.
Stephannie Lynn Rylie and other game room operators sued Fort Worth, arguing that local ordinances are preempted by the “comprehensive and uniform” state regulation required under chapter 2153 of the Texas Occupations Code. The trial court said that the Occupations Code does not completely preempt the ordinances but that specific provisions were in conflict.
On the central issue of whether the fuzzy animal exception violates the Texas Constitution, the trial court said it does not. But the Fort Worth-based 2nd Court of Appeals said that neither it nor the trial court had jurisdiction over that issue. The court of appeals agreed that the Occupations Code partially preempted the ordinances.
Game room operators say their prizes fall within the exception by being valued at no more than $5.
And so, last month the heavy burden of determining the legality of the fuzzy animal exception fell to the highest court in the land. And the justices were well aware what was at stake.
“Would all of the Chuck E. Cheese machines go away?” asked Justice Jeff Boyd. “Don’t they exist solely because of the fuzzy animal exception?”
Justice Paul Green also struggled with the dilemma. “Is one aimed at children and one aimed at adults?” he asked. “Whether the prizes are fuzzy animals or an Xbox, is that a distinction?”
Keltner held his ground, apparently willing to throw rug rats in Cowtown under the proverbial bus for the sake of cleaning up what he views as illegal gambling. Three attorneys general have all concluded that the size of the prize doesn’t matter, he said. “If it’s a lottery, it’s a lottery.”
Next it was Marcy Hogan Greer’s turn to make the case that the local ordinances are preempted. She focused the court on the Legislature’s decision in 1989 to add the words “uniform statewide” to the statute regulating skill or pleasure coin-operated machines.
Chief Justice Nathan Hecht asked whether eight-liners need a specific exception such as ones the Legislature has carved out for charitable bingo and sports raffles.
Greer said eight-liners are not pure games of chance but a contest between a player and a machine comparable to pinball.
Justice Jane Bland questioned the comparison. “A pinball game arguably involves some skill,” she said.
“Arguably,” said Greer. “But the same could be said of eight liners where you have to push the button at the right time.”
Bland, apparently not convinced, made a noise that sounded like “annnhhhh,” prompting chuckles in the courtroom.
Boyd said he couldn’t get his head around why the court of appeals thought the constitutionality of eight-liners wasn’t justiciable. “Can the ordinances be preempted by an unconstitutional statute?” he asked.
“I think it could be under the doctrine of constitutional avoidance,” said Greer of appellate boutique Alexander Dubose & Jefferson.
In his rebuttal, Keltner said Greer’s theory that eight-liners are not pure games of chance is not enough to tie them to the fuzzy animal exception. “Most of Chuck E Cheese machines have some sort of skill, even for a child. (Any parent who has even wasted quarters trying to manipulate a slippery claw to grab a stuffed puppy knows that truer words were never spoken.)
Keltner urged the court to decide the constitutional issue once and for all or at least send it back to the court of appeals for the first crack.
Watch the arguments in City of Fort Worth and City Manager David Cooke v. Stephannie Lynn Rylie, et al. here.