The California Coalition Against Gambling Expansion filed a lawsuit Wednesday seeking an injunction to shut down the state's two-week-old Mega Millions multistate lotto.
The coalition will formally notified the California State Lottery of the action Wednesday, and then publicly announced it in a press release [see below], the group's attorneys from the Sacramento and Woodland Hills areas told Lottery Post.
The coalition, represented by Sacramento-area attorney Fred Jones and Woodland Hills business law attorney Nicholas Roxborough, made the announcement at a 10 a.m. news conference at the Capitol.
The lawsuit rose out of allegations that the 12-state game is unconstitutional because it operates beyond California and was approved without adequate public review.
The Governor's Office referred phone calls for reaction to the lottery, where a spokeswoman said the acting director, Chon Gutierrez, refused to "speculate" about the lawsuit until it was filed.
The lottery disclosed, however, that $16.5 million Mega Millions has hiked overall sales by about $9 million. But most of that — $7 million — came from players switching from California's ongoing Super Lotto Plus.
The coalition's lawsuit "requests the court immediately cease Mega Millions in California," Jones said. "Participation in the game clearly violates explicit provisions of the Lottery Act."
Voters made the act part of the state constitution in 1984.
The coalition wants voters to consider any Lottery Act changes even though the Legislature can alter the games on a two-thirds vote with the governor's concurrence. Gutierrez, a Schwarzenegger administration troubleshooter, launched the game June 22 with the approval of a policy-setting commission largely appointed by the Republican governor, who views it as a deficit-easing device.
In Mega Millions, players pay $1 to pick five numbers from 1 to 56, and one number from 1 to 46, to match those drawn twice weekly. Bets in California are pooled with the existing Mega Millions states of New York, Texas, Massachusetts, Michigan, Ohio, Maryland, Georgia, Illinois, New Jersey, Virginia, and Washington.
Mega Millions results and other information can be found on the web site, www.usamega.com.
California Citizens Sue Mega Millions Lottery
Full text of press release
A Petition for Writ of Mandate was filed late yesterday [Editor: Wednesday] afternoon in the Sacramento Superior Court, seeking an injunction to shut down the state's Mega Millions multi-state lottery game. The Petition challenges the California Lottery Commission's authority under Proposition 37, passed by the voters in 1984, and its unilateral decision to join the multi-state lottery game without obtaining the required legislative approval.
"This action has nothing to do with the policy merits of state-sponsored lotteries and everything to do with the funding of our education system and fundamental democratic procedures," explains Nicholas Roxborough, a partner of Los Angeles-based Roxborough, Pomerance & Nye LLP, one of the attorneys who filed the suit on behalf of the plaintiffs which include a teacher and citizen organizations concerned that the public and their elected representatives must be consulted before allowing interstate expansion of California's lottery. "We are challenging the notion that the California Lottery Commission, or for that matter, any administrative body of our state government, cannot unilaterally delegate key duties imposed on it through the initiative process, while at the same time trying to avoid its accountability to our elected representatives."
The lawsuit was filed as a last resort after an emergency legislative hearing on June 16 to delay the launch proved unsuccessful, with the Legislative Counsel's Office and the Attorney General's Office sticking to their conflicting legal positions. The Legislature's legal counsel has firmly and publicly opined that the Commission lacked the legal authority to join the Mega Millions lottery while the Attorney General's Office, upon the request of the Commission, issued two "informal" confidential advice letters concluding the Commission probably had the implied authority to do so.
"These 'informal' advice letters from the Attorney General's office rely upon an inappropriate stretch of Joint Powers authority granted to all state agencies," Roxborough explains. "Moreover, these letters were not the result of any public discussion or input, as they appear to be a private communication between the Commission and the Attorney General's Office."
The lawsuit is based on the premise that the California Lottery Commission never notified or sought the approval of the Legislature, nor considered going to the voters for explicit authority to join the Mega Millions lottery as originally required by Proposition 37. The plaintiffs allege the Commission intended to stifle public notice and debate by its lack of appropriate disclosure, evidenced by the fact that the Commission devoted only a single public hearing on the matter, after giving less than two business days notice on a Friday afternoon.
"With the exception of New Jersey, which has provided sweeping powers to their state lottery, all other eleven Mega Millions states have explicit statutes authorizing states to participate in multi-state lotteries," says Sacramento-based attorney Fred Jones who jointly filed the suit with Roxborough. "California should not be the exception. Our voters have the right to determine whether or not our participation in this multi-state venture serves the interests of California's education system and citizens."
Proponents of the California State Lottery Act of 1984 assured voters the lottery would be strictly limited to and administrated only by California; voters never contemplated they were authorizing a multi-state or international lottery, Jones explains. However, the contract signed by the Commission Director relinquishes key operational authority over California ticket revenues to out-of-state administrators and tickets are sold by vendors unlicensed and unregulated by California officials, in direct violation by the California Lottery Act.
"While Commission officials have assured that Prop 37's mandate to provide 34 cents of every dollar wagered to public education will be honored in the Mega Millions lottery, it will be impossible to enforce the strict financial accountability provision of Prop 37 in this multi-state venture," says Jones.
The benefit of the Mega Millions venture to increase education funding in California is also questioned by plaintiffs.
"We've already seen the Lottery Commission sponsor legislation to reduce Prop 37 guarantees to public education on several occasions in the past three years," says Antonio Mendoza, one of the plaintiffs named in the lawsuit. "And, the Commission Director has publicly stated that any savings in overhead expenses by transferring operational authority to other Mega Million states will not be passed onto schools."
"We hope this lawsuit will force the Commission to bring this issue into the public arena where it belongs," adds Jim Butler, executive director of the California Coalition Against Gambling Expansion, another plaintiff. "We would like California citizens to have the opportunity to vote on this issue and determine whether or not the Mega Millions lottery game will be in the state's best interests."
Roxborough, Pomerance & Nye LLP (RPN) is a Los Angeles-based law firm providing expert legal counsel and representation to the California business community. Established in 1995, the firm offers abroad range of legal services in all facets of civil litigation, with its primary focus on litigation, legislation and policy making issues involving insurance and business related concerns.
The law offices of Fred Jones are located in the Sacramento region, providing legal and public policy services to clients since 1998. The firm primarily focuses on civil litigation, estate planning and state legislative lobbying.