Florida Legal Bills Mount In Gambling Dispute

April 29, 2016

Florida has paid more than $260,000 to private law firms in gambling lawsuits involving the Seminole Tribe of Florida, with the likelihood of hundreds of thousands of dollars more on the horizon.

The Seminoles and the state are fighting over the tribe’s “exclusive” right to operate banked card games, including blackjack, at five of the tribe’s seven casinos. The $260,000 tab for taxpayers started building shortly before two dueling lawsuits were filed by the Seminoles and the state in October and does not include legal bills that likely will pile up before the consolidated cases go to trial.

The state Department of Business and Professional Regulation has hired two law firms to work with agency attorneys on the case, overseen in Tallahassee by U.S. District Judge Robert L. Hinkle. A trial, originally slated for this summer, was recently postponed until October, at the request of both sides.

The agency, which oversees gambling, in August hired Detroit-based Dickinson Wright, a law firm with offices throughout the country, including in Nevada and Washington, D.C., to represent the state “in the mediation required” between the Seminoles and Florida regarding a 2010 agreement, called a “compact,” at the heart of the dispute.

The state has agreed to pay three of the firm’s lawyers — Robert Stocker, Dennis Whittlesey and Jonathan Secrest — $350 an hour, as well as paying hourly rates of between $195 and $275 for three other lawyers. State regulators originally agreed to pay the firm $45,000 for legal work, but the contract, amended several times, now totals $250,000. As of this week, the agency had paid Dickinson Wright $217,876.61, according to documents provided to The News Service of Florida.

In December, gambling regulators hired Bush Ross, a law firm based in Tampa, to also advise the agency on the compact. The agency initially agreed to pay the firm $50,000, but the amended contract is now worth $100,000. Under the contract, the state agreed to pay lawyers J. Carter Andersen and Anne-Leigh Gaylord Moe $300 an hour, other lawyers $200 an hour, and an hourly rate of $100 for work done by paralegals. Thus far, the state has paid $43,118.83 to the firm.

According to court documents, much of the legal wrangling in the case has involved where the dispute would be heard. The two sides still have to go through a time-consuming information “discovery” process, and the Seminoles have just started taking depositions. Motions for summary judgment have not yet been filed, meaning the state is likely on the hook for a much bigger legal tab in the months to come, especially if the case goes to trial in October, as scheduled.

Since 2010, the Seminoles have had exclusive rights to offer the banked card games. In exchange, the tribe promised to pay the state a minimum of $1 billion over five years, an amount which it has exceeded. But the agreement regarding the cards — part of a larger, 20-year deal — expired on July 31. The terms of the compact gave the Seminoles a 90-day “grace period” after the agreement expired to continue operating the banked card games.

But, after mediation — brokered by a lawyer whose past clients included Mick Jagger and Leona Helmsley — failed, the tribe filed a lawsuit against the state, alleging that Florida officials had failed to negotiate in “good faith” on a new deal.

The lawsuit also alleges that the state breached the compact by allowing pari-mutuel facilities to offer what are known as “player-banked” card games in which “the bank” is another player instead of “the house.” The tribe contends that allowing such games violated its rights to exclusivity in operating banked card games, which typically involve players betting against the house instead of each other.

Less than a week after the tribe filed its lawsuit, the state filed a separate suit in Tampa seeking to stop the banked card games at Seminole casinos.

The Indian Gaming Regulatory Act requires states to negotiate in good faith with tribes seeking gambling authority. Florida argued that the federal law only requires states to negotiate initial compacts but not to renegotiate deals when they expire.

“The contention is plainly wrong,” Hinkle wrote in January, rejecting Attorney General Pam Bondi’s request that the tribe’s lawsuit be dismissed. At the time, Hinkle also consolidated the tribe’s lawsuit and the state’s lawsuit in federal court in Tallahassee.

Gov. Rick Scott and tribal leader James Billie in December signed a proposed 20-year compact in which the tribe pledged to pay the state $3 billion over seven years in exchange for being able to add craps and roulette to its casino operations. Lawmakers failed to approve the proposed deal, however, during the legislative session that ended in March.

by Dara Kam, The News Service of Florida

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Written by William Reynolds · Filed Under News