## Facts

- South Carolina heavily regulated the video-poker industry through statutes, administrative enforcement, licensing, and judicial interpretation.
- A class of South Carolina video-poker players sued numerous video-poker operators, alleging violations of state video-poker laws and asserting federal civil RICO claims based on the same conduct.
- The dispute centered on a state statutory limit capping video-poker payouts at $125 per player per location per day.
- After removal to federal court due to the RICO claims, the federal district court certified interpretive questions to the South Carolina Supreme Court, which clarified the meaning of the payout cap under state law.
- Plaintiffs sought a preliminary injunction compelling operators to comply with state video-poker laws as construed by the state supreme court.
- Operators moved for abstention, arguing that federal adjudication and injunctive enforcement would interfere with South Carolina’s regulatory program for gambling.
- The district court denied abstention and issued a broad preliminary injunction directing industry compliance with state law.
- Operators appealed the denial of abstention and the scope of the injunction.

## Issues

1. Whether the federal court should abstain under Burford from exercising jurisdiction where the suit would interfere with South Carolina’s comprehensive regulation of video poker.
2. Whether the preliminary injunction improperly placed the federal court in a continuing supervisory role over enforcement of state gambling law.
3. Whether the presence of federal RICO claims prevents abstention when the federal claims depend on alleged violations of state regulatory law and can be adequately addressed in state forums.

## Decision

- The Fourth Circuit reversed the district court’s refusal to abstain.
- The court vacated the preliminary injunction.
- The case was remanded with instructions to abstain under Burford principles, requiring dismissal or stay of the federal action to allow resolution through state courts and regulatory processes.

## Legal Principles

- Burford abstention is appropriate when federal court involvement would disrupt a state’s efforts to maintain a coherent policy in an area of substantial public concern administered through a comprehensive regulatory structure.
- Federal courts should avoid issuing injunctive relief that effectively converts them into ongoing monitors of state regulatory compliance, particularly in politically sensitive fields such as gambling regulation.
- The existence of a federal cause of action, including civil RICO, does not bar abstention when the federal claims are closely tied to state-law regulatory questions and state tribunals provide an adequate vehicle to protect federal rights.
- Comity and federalism support deference to state administrative and judicial mechanisms when the state is actively interpreting, enforcing, and balancing competing policy objectives within its regulatory regime.

## Conclusion

The Fourth Circuit held that federal adjudication and broad injunctive enforcement of South Carolina video-poker laws would improperly interfere with the state’s comprehensive gambling regulatory program, so the federal court had to abstain under Burford and the preliminary injunction was vacated.


Johnson v. Collins Ent. Co., 199 F.3d 710 (4th Cir. 1999)