Net Connection Hayward, LLC v. City of Hayward

Filing 30

ORDER re: Supplemental Briefing and Report. Signed by Judge Samuel Conti on May 2, 2013. (sclc2, COURT STAFF) (Filed on 5/2/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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United States District Court

For the Northern District of California

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NET CONNECTION HAYWARD, LLC,
Plaintiff,

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v.
CITY OF HAYWARD,
Defendant.

) Case No. C 13-1212 SC
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) ORDER RE: SUPPLEMENTAL BRIEFING
) AND REPORT
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On March 26, 2013, the Court granted Plaintiff Net Connection

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Hayward, LLC's ("Plaintiff") motion for a temporary restraining

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order against the City of Hayward ("Defendant").

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agreed to extend the terms of the temporary restraining order until

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the Court's ruling on the preliminary injunction.

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("Stipulation").

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evidentiary hearing regarding the preliminary injunction, at which

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the Court heard testimony from both parties.

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The parties

ECF No. 21

On April 30 and May 1, 2013, the Court held an

At that hearing, the Court told the parties that it would

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defer ruling on the preliminary injunction until the parties have

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submitted their briefs on that issue.

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the following questions as components of the usual preliminary

Those briefs are to answer

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injunction analysis.

Plaintiff is also ordered to submit a

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supplemental report, detailed in a separate section below.

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fairness to Defendant, and since the contents of this report will

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be relevant to the questions the Court poses below, Plaintiff

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should submit this report alongside its opening brief.

Out of

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A.

Plaintiff's Supplemental Report

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Having read and considered the analytical report from Nick

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Farley & Associates, Pl.'s Ex. 4 (the "Analysis"), as well as all

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other relevant testimony and evidence, the Court finds that some

United States District Court

For the Northern District of California

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aspects of the sweepstakes software's operation are still unclear.

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Plaintiff shall submit a report explaining the following issues.

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There is no length limitation on this report, but Plaintiff should

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take care to ensure that the report is accurate, understandable,

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and not needlessly intricate.

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The Analysis explains that the sweepstakes software "utilizes

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finite pools containing sweepstakes game pieces with assigned prize

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values," and that each pool is placed in one of four "predetermined

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'shuffles'" before being made available for play.

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Further, the Analysis indicates that "[t]here is a separate pool

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for each game style and associated play levels."

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Further, there are four different "game styles" -- twenty-five line

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games, scatter games, twenty-line games, and sixteen-line games --

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and thirty-two finite pools.

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Analysis at 3.

Id. at 3-4.

Id. at 4, 5-6, 7-8.

Plaintiff's report should provide discrete definitions of

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"pool" and "play level," as well as a description of the

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"shuffling" process.

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type of algorithm the shuffling process employs.

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the Analysis's plain statement that "shuffles are utilized in a

The latter description should include the

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Moreover, given

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round robin fashion," Analysis at 8, Plaintiff's report should

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describe this "round robin" process as it is used in the

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sweepstakes software.
In this context, Plaintiff must explain what process governs

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the selection of a pool for a given play level when a user plays

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one of the games.

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walkthrough of what the pool selection, shuffling, and result

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selection process looks like from the software perspective whenever

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a user plays a particular game.

In detail, the report should provide a

For example, if a user plays a

United States District Court

For the Northern District of California

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sixteen-line game, progressively engaging the game at a different

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play level, Plaintiff's report should explain how the software is

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calculating what result will ultimately be shown to the user.
For games that include a "Progressive Jackpot," see Analysis

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at 6, Plaintiff's report should explain how the Progressive Jackpot

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is calculated, selected, and paid.
Plaintiff's report should explain how results selection occurs

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when several players are playing the same or multiple games at the

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same time.

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happens if two or more users are simultaneously playing the same

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game at the same play level and (presumably) drawing from the same

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pool.

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For example, Plaintiff's report should describe what

Based on the above issues, Plaintiff's report should also

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include any additional information that Plaintiff thinks is

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relevant to clarifying the Court's understanding of the sweepstakes

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software's operation.

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B.

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The parties' briefs must answer the following questions in

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Questions

detail, supported by case law and evidence from the record.

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Based on California case law interpreting the gaming statutes

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at issue in this case, including Trinkle v. California State

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Lottery, 105 Cal. App. 4th 1401 (Cal. Ct. App. 2003), People ex

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rel. Lockyer v. Pacific Gaming Technologies, 82 Cal. App. 4th 699

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(Cal. Ct. App. 2000), and Trinkle v. Stroh, 60 Cal. App. 4th 771

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(Cal. Ct. App. 1997), how should the operation of Plaintiff's

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sweepstakes software be characterized?

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of chance, or a game of skill?

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Is it predominately a game

How do the "pools" and "play levels" described in the parties'

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For the Northern District of California

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witnesses' testimony and the Report affect a sweepstakes entrant's

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"chance" to win?

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game styles and play levels introduce an "element of hazard or

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chance or other outcome of operation unpredictable by [the user or

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sweepstakes entrant" -- even if the "finite pools" are arranged in

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advance and include predictable odds?

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330b(d).

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Cal. Pen. Code §§ 319, 330a, 330b, is the aspect of "chance" in a

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gaming device relative to the user's subjective experience of the

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game, or is it, as suggested in Trinkle v. California State

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Lottery, something to be analyzed according to the machine's

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operation in itself?

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that the statutory language as quoted in that case has apparently

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changed slightly since 2003.)

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Do the multiple "shuffles," pools, and different

See Cal. Pen. Code §

Given the lottery and slot machine statutes' language,

105 Cal. App. 4th at 1411.

(Keep in mind

Supposing that the sweepstakes software that Plaintiff uses is

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not illegal under California law (no matter how close to the line

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it gets), is Defendant's retroactive emergency ordinance lawful?

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On the other hand, even if Plaintiff's sweepstakes software is not

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legal, was Defendant's enactment and renewal of its emergency

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ordinance nevertheless unlawful or impermissible under the

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Constitution or the City of Hayward's zoning laws and regulations?

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C.

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Within ten (10) days of this Order's signature date, Plaintiff

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must submit the report, as described above, simultaneously with its

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opening brief.

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pages.

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of Plaintiff's brief to submit its opposition brief, also limited

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to twenty-five (25) pages.

United States District Court

For the Northern District of California

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Logistics

This brief must be no longer than twenty-five (25)

Defendant will then have ten (10) days from the filing date

After that, Plaintiff will have five

(5) days to submit a reply brief, limited to fifteen (15) pages.

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IT IS SO ORDERED.

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Dated: May 2, 2013

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UNITED STATES DISTRICT JUDGE

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