Local News

Friday, Jun 27 2014 11:48 AM

State supreme court to review Internet cafe cases

BY THEO DOUGLAS Californian staff writer tdouglas@bakersfield.com

Two appellate court decisions that unplugged Internet cafes in Kern County and Bakersfield this spring will be reviewed by the California Supreme Court.

In a decision late Wednesday, the state's highest court unanimously granted a petition for review of cases that began in Kern County Superior Court and were re-affirmed in March by the 5th District Court of Appeal in Fresno.

In the first March ruling, the appeal court found that sweepstakes or Internet cafes that sell Internet time offer "unlawful slot machine"-style gambling.

In the second, the appellate court ruled that Internet cafes that sell prepaid telephone cards also offer illegal gambling.

These findings pleased the Kern County District Attorney's office, but so did Wednesday's ruling -- to a certain extent.

"We've got mixed feelings about it. This is an opportunity to have that favorable ruling take on an even greater impact," said Kern County Deputy District Attorney Gregory Pulskamp.

He noted that until the Supreme Court rules in the case, "They haven't reversed anything, overruled anything, changed anything. For all we know, they're taking it up to endorse it."

Or not.

Los Angeles attorney John H. Weston represented appellants Kirnpal Grewal of A to Z Cafe and Phillip Walker of OZ Internet Cafe and Hub in one of the cases heard in March -- and was understandably disappointed back then.

On Friday, he and one of his clients were somewhat encouraged.

Weston said the Supreme Court's unanimous grant "obviously was indicative that they thought it was serious. Which at the very least recognizes the case has interest."

Walker agreed.

"That could be good, that could be bad. They saw something there they wanted to review," said Walker, now a business consultant who formed the Internet Cafe Association of California. "The beneficial thing to everyone is, it will finally be said and done. We got it to the highest court in the land."

The state's highest court is expected to take at least a year to receive briefs and hear oral arguments before rendering a decision.

By the time the case is done, Weston said much of the issue may be moot -- because he expects the legislature to approve an anti-Internet cafe bill from Assemblyman Rudy Salas, D-Bakersfield, that is now in committee.

"That's going to pass, and based on the legislation as it exists now, it will completely eliminate this sort of way of doing business," Weston said. "The issue's over so what remains then is this conflict of the courts ... ."

Like Pulskamp, Bakersfield City Attorney Ginny Gennaro emphasized the significance of a Supreme Court decision.

"It has a broader range of impact is the best way to put it, because now it applies to all cities in the state of California and potentially can be used outside the state of California," Gennaro said.

Calling the upcoming court battle a "righteous case both legally and in our efforts to protect the middle class," Pulskamp said companies that make equipment they license to Internet cafes -- businesses that are headquartered out-of-state or even in other countries -- are helping finance the other side.

"It's the industry behind the cafe owners. It's the makers of the software and the hardware that license these cafes to even operate" the programs, Pulskamp said. "You're talking about a multibillion-dollar industry, so are they going to fight this? Absolutely."

Walker said that shouldn't matter.

"Maybe they are but what's the big deal? That's the way it is in every big case. Someone has to put up the money," Walker said. "When it comes to defending yourself, I think money can come from anywhere as long as it's legal money."

Weston said out-of-state influences frequently visit California, with no lasting damage.

"I have no idea if that's even relevant," Weston said, pointing out Texas Gov. Rick Perry was recently seen here. "It's kind of a red herring."

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