At first glance, a certain type of court matter sounds nearly exactly like the premise for a script. A Circle K in Scottsdale. Some customers purchase some lottery tickets but not all of them. The lawsuit claims that once one of the unpurchased tickets was found to be worth $12.8 million, the manager returned the following day, clocked out, took off his uniform, and discreetly paid ten dollars for the remaining stack. The ticket’s expiration date has been extended by 180 days by a court who was requested to determine who truly owns a nearly thirteen million dollar jackpot because, to put it simply, “we are nowhere near a decision.” The Arizona Lottery ticket lawsuit at the heart of this controversy has all the makings of a case that will likely be essential reading for years to come in retail law classrooms.
The facts are strangely specific, according to Circle K’s complaint. When a customer entered the company’s Scottsdale location at 56th Street and Bell Road, she requested a batch of tickets for The Pick, the main six-number game offered by the Arizona Lottery. Tickets totaling $85 were printed by the clerk at a cost of one dollar apiece. After then, the buyer decided to purchase just $60, leaving 25 tickets on the desk. On that particular day, none of the remaining tickets were sold to any other customers. The cashier put them away in accordance with what Circle K claims is typical store procedure. Whoever the consumer was, they had no idea that one of those abandoned tickets was going to make headlines when they stepped out into a Scottsdale afternoon.
According to the lawsuit, store manager Robert Gawlitza discovered that one of the unsold tickets had won the lottery the next day. The portion of the story that makes the case both ethically dubious and legally intriguing is what he allegedly did afterward. Gawlitza allegedly clocked out, removed his Circle K uniform, requested another employee to ring him up for the remaining 25 tickets at a total cost of $10, and then left with the winning ticket. Naturally, the court will ultimately have to determine whether the behavior detailed in the lawsuit actually occurred as Circle K claims. The complaint has not yet been served to Gawlitza. He is no longer employed by Circle K. He did not attend the court on Friday. His version of events has not yet been made public.
Contrary to what the celebrity-trial narrative might imply, Circle K’s legal theory is more intriguing. The company contends that overprinted lottery tickets that are not sold to customers remain the store’s property in accordance with Arizona Lottery regulations and the company’s own retailer agreements. According to that reasoning, once the initial customer left, Circle K was the only owner of the 25 remaining tickets. If that interpretation is accurate, the manager who purportedly purchased the tickets at face value the following day did so knowing that they were already worth millions, even though the retailer had a legitimate claim to the underlying value. Contract and fiduciary law regard such self-dealing seriously if it can be demonstrated.
There are significant problems. There may also be a legal interest in the initial customer, whose identity Circle K is still attempting to ascertain through bank documents requested from Bank of America. The legal question of whether the lottery tickets were “his” until they were sold to someone else or if they reverted to Circle K’s inventory the instant he denied them is legitimately unresolved if that customer bought them and left them on the store counter. One of the reasons for the 180-day extension is to allow Circle K time to locate and include the original customer, who is now identified in court documents as a Jane or John Doe.
The prize is effectively kept in escrow while the courts determine who is truly entitled to it as a result of the judge’s decision to grant a temporary restraining order, preventing the lottery ticket from expiring on May 23. According to Arizona Lottery regulations, the ticket would have expired without the extension, and the $12.8 million would have returned to the state. From the lottery commission’s point of view, that would have been the best possible conclusion, but from the point of view of everyone who would have been entitled to the money, it would have been the worst. The judge’s ruling, which is nearly usually the most rational course of action in situations like this one, keeps all alternatives open while the legal process proceeds.
Legal watchers outside of Arizona find the case intriguing because of its potential to set precedent. The issue of who owns an unsold but printed lottery ticket has been challenged in a number of states, with varying outcomes that have not resulted in a uniform national law. Retailers contend that tickets that are abandoned belong to them until they are sold to another consumer.
Advocates for consumers contend that the initial buyer has a legitimate expectation that an undistributed ticket cannot be discreetly seized by store employees who learn it is a winner. The Arizona case might result in a more precise regulation on how these kinds of issues should be settled, at least for that state. Unfinished discovery and untaken testimony will determine whether the court adopts Circle K’s interpretation of the case or the alternate reading.
