The losing streak for Napa Valley Casino in its court battle against the City of American Canyon continued Friday when Napa Superior Court Judge Mark S. Boessenecker denied pretrial motions to dismiss the criminal case.
Defense attorney Steven Disharoon argued the complaint for non-payment of the city’s card room admission tax should be dismissed because the tax was vague and discriminatory. Napa Valley Casino has been fighting $2-per-visitor tax since it was passed by American Canyon voters in 2010.
Disharoon said the wording of the tax law would obligate those who didn’t come to gamble — vendors and independent contractors for example — to pay as well. The attorney pointed out that according to the ordinance he would be obligated to pay the tax to visit his clients, Napa Valley Casino owners Brian Altizer, his wife Von Huang and their partner Keith Miller, at their place of business. The ordinance specifically excludes officials on government business and card room employees from paying the tax.
When asked by the judge how many people enter the card room who don’t gamble, Disharoon said he didn’t know.
The tax was targeted at one business, Disharoon said, and part of a “long history” of discrimination against the card room. He said the city was selective in choosing examples of taxes paid by other Bay Area card rooms, unfairly comparing the revenue generated from Napa Valley Casino to larger establishments.
Disharoon offered that the administrative hearing in November, 2011 — a month after the city filed the complaint — on whether or not to revoke the card room’s business license was part of that discriminatory pattern, calling it an implied threat and “a spectacle.” That hearing forced the card room to modify its business license with the city slightly to match information on file with the state.
The defense continued to insist the tax violates the Constitution and usurps the state’s right to control gambling, arguments it has made repeatedly.
The tax is a First Amendment violation, Disharoon argued, a restriction on freedom of assembly and the right to move freely from one place to another. Asked by Boessenecker to cite other such card room laws for comparison, Disharoon said he couldn’t find another example.
“I have not found another ordinance like this in the entire country,” Disharoon said. Most card rooms in California are taxed a flat rate based on the number of gaming tables.
Boessenecker questioned whether uniqueness means the tax is illegal.
“Does that necessarily mean it violates the Constitution?” the judge asked. Perhaps, he said, the city has simply come up with a smart way to generate revenue.
William Ross, attorney for the city, repeated arguments the court has previously affirmed, that state gambling laws clearly uphold the city’s right to implement a tax — any tax — on card rooms. Ross compared the admission tax to the transient occupancy tax, a tax levied on hotel rooms, which has been deemed legal by the courts.
As for who was a patron of the card room and who wasn’t, Ross said the definition was self-evident to any reasonable person.
Near the conclusion of the hearing, Disharoon bristled at Ross’ characterization of the business as “just a card room.”
“We’re talking about people: employees, family members,” Disharoon said.
After hearing both sides, the judge denied the defense motions, saying the defense had not persuaded him the tax ordinance was too vague. As for discrimination, that is a difficult argument to prove, the judge said, “among the most difficult in criminal law.”
The case is scheduled to go to trial March 11.