Opinion ID: 1226463
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: In 1988, Congress enacted the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. §§ 2701-2721 (2006), which provides a detailed regulatory framework for Indian gaming. [4] Congress's express purpose in passing IGRA was, inter alia, to promot[e] tribal economic development, self-sufficiency, and strong tribal governments, while simultaneously shield[ing tribes] from organized crime and other corrupting influences [and] ensur[ing] that... Indian tribe [s are] the primary beneficiar[ies] of ... gaming operation[s]. Id. § 2702. To conduct gaming, an Indian tribe must satisfy numerous prerequisites. As relevant to this case, the gaming must take place on Indian lands ... located within a State that permits such gaming. Id. § 27 10(b)(1)(A). IGRA generally prohibits gaming on lands that became Indian lands subsequent to IGRA's enactment in October 1988, unless the Governor of the relevant State concurs with a determination by the Secretary of the Interior that it would be in the best interest of the Indian tribe and its members, and would not be detrimental to the surrounding community. Id. § 2719(b)(1)(A). Moreover, IGRA provides for federal oversight of contracts between tribes and non-tribal entities regarding the management of tribal gaming operations. Id. § § 2710(d)(9), 2711(g). Tribes may enter into contracts for the management of these gaming operations only with the approval of the National Indian Gaming Commission (NIGC) Chairman. Id. § 2711(a)(1). [5] By regulation, unapproved management contracts are deemed void. 25 C.F.R. § 533.7 (2008).
In 1996, the Catskill Group entered into a series of contracts with the Tribe [6] for the purpose of building and operating a casino at a site adjacent to the Monticello Raceway. Three of those contracts are at issue here:  A Land Purchase Agreement (LPA) between the Tribe and Catskill, which, inter alia, provided for Catskill's transfer of 29 acres of land to the United States to be held in trust for the Tribe;  A Management Agreement (MA) between the Tribe and Mohawk, which, inter alia, detailed the duties and responsibilities of Mohawk, and the fees for its management services; and  A Development and Construction Agreement (DCA) between the Tribe and Monticello, which, inter alia, provided for the construction and development of the casino and surrounding lands. All of these agreements, in some manner, required the Tribe to use its best efforts and to cooperate with the Catskill Group in obtaining the requisite government approvals. [7] However, despite having spent millions of dollars, the Catskill Group still had not received all the necessary state and federal approvals by April 2000, and the NIGC had denied the Catskill Group's application several times. Although the United States Bureau of Indian Affairs (the BIA) had agreed to take the land at issue in trust for the Tribe, final approval was never provided because the New York Governor had not yet consented to the transfer, and the BIA had not made a final determination that the price ($10 million) to be paid by the Tribe for the land transfer did not exceed the land's fair market value. Meanwhile, in mid-1999, Park Place sought an introduction to the Tribe through Ivan Kaufman, CEO of Presidents Resorts Casino, Inc. (Presidents), and Gary Melius, a real-estate developer, each of whom had pre-existing relationships with the Tribe. According to the Catskill Group, Park Place falsely represented to Kaufman that it would reward his efforts of favorably introducing Park Place to the Tribe by buying out his substantial investment in, and taking over the management of, the Tribe's struggling Akwesasne casino. Park Place also allegedly offered to Melius millions of dollars for an introduction to the Tribe, to be paid upon Park Place's acquisition of the Akwesasne management contract or upon Park Place's securement of an agreement with the Tribe regarding gaming operations in the Catskills/Monticello area. However, after Kaufman and Melius introduced Park Place to the Tribe, Park Place allegedly disavowed the agreements it had reached with those individuals. [8] The Catskill Group alleges that during the ensuing negotiations between Park Place and the Tribe, Park Place misrepresented to the Tribe, inter alia, that the federal approval granted to Catskill to take land into trust for purposes of gaming was portable, and that a casino project on another site would be approved within four months. Finally, and as described further below, Park Place also allegedly concocted, participated in, and acquiesced in a scheme with Kaufman to place a financial squeeze on the Tribe by slowing the Akwesasne casino's payroll, with the hope and intent that the Tribe would turn to Park Place for a financial bailout. On April 14, 2000, the Tribe entered into a written agreement with Park Place, which set forth certain understandings reached between the parties: namely, that (1) Park Place would be the exclusive developer and manager of any Tribe casinos in New York (with certain exceptions not pertinent here); (2) Park Place and the Tribe would have a profit distribution of 70% to the Tribe and 30% to Park Place after the Tribe paid back Park Place for advances for the cost of development and construction; (3) Park Place would begin construction of a casino within 36 months unless otherwise agreed by the parties; (4) Park Place would pay the Tribe $3 million for use by the Tribe in it's [sic] discretion, and which shall be paid back to [Park Place] only in the event that the Tribe does not or is unable to enter into [certain] development, management and licensing agreements [with Park Place]; and (5) Park Place would indemnify the Tribe from litigation losses resulting from the Tribe's termination of its agreements with the Catskill Group. Shortly after Park Place and the Tribe entered into this agreement, the Tribe and the Catskill Group ceased discussions with respect to the Monticello Raceway project.
Catskill, Mohawk, and Monticello (i.e., the Catskill Group) commenced suit in November 2000 alleging, inter alia, that Park Place tortiously interfered with the Catskill Group's contractual relations with the Tribe (Count I, or the interference with contract claim). In the alternative, the Catskill Group alleged that Park Place had tortiously interfered with its business relationships with the Tribe (Count II, or the interference with business relations claim). [9] Upon Park Place's motion, the district court dismissed Count I on the grounds that none of the contracts at issue was enforceable in the absence of NIGC approval. Catskill Dev., LLC v. Park Place Entm't Corp., 144 F.Supp.2d 215, 232-34 (S.D.N.Y.2001) ( Catskill I ). The district court, however, permitted Count II to proceed on the ground that there was a question of fact regarding whether the Catskill Group's losses stemmed directly from Park Place's actions. Id. at 238-39. The Catskill Group moved for reconsideration, arguing, inter alia, that one of the contracts at issuethe LPA in particularwas enforceable without NIGC approval. The district court agreed and reinstated the interference with contract claim with respect to the LPA only. Catskill Dev., LLC v. Park Place Entm't Corp., 154 F.Supp.2d 696, 703-05 (S.D.N.Y.2001) ( Catskill II ). Park Place then moved the district court for reconsideration of that decision. While its reconsideration motion was pending, Park Place also moved for summary judgment on the remaining claims for tortious interference with business relations. The district court granted Park Place's motion for summary judgment, thus disposing of the entire case. Catskill Dev., LLC v. Park Place Entm't Corp., 217 F.Supp.2d 423, 446 (S.D.N.Y.2002) ( Catskill II ). With respect to Count I, the court held (as it had originally held in Catskill I, but for different reasons) that the LPA was void without NIGC approval. Id. at 433. With respect to Count II, the court dismissed the interference with business relations claim on the grounds that the Catskill Group (1) offered no evidence that Park Place used wrongful means to induce the Tribe to terminate its relationship with the Catskill Group, and (2) could not meet its burden of showing that Park Place caused the Catskill Group any harm in light of the many speculative regulatory contingencies. Id. at 435-46. While the Catskill Group's appeal from that decision was pending, it moved in the district court pursuant to Federal Rule of Civil Procedure 60(b)(3) to vacate the judgment based on the Catskill Group's discovery of six audio tapes relevant to the interference with business relations claim that had not been produced during the discovery period. The district court held that Park Place's failure to disclose the tapes was the apparent product of mistake or misunderstanding, but nevertheless constituted misconduct for purposes of Rule 60(b) reopening. Catskill Dev., LLC v. Park Place Entm't Corp., 286 F.Supp.2d 309, 315 (S.D.N.Y.2003) ( Catskill IV ). The court granted the Catskill Group thirty days to conduct further discovery with respect to the matters raised in the tapes. Id. at 321. Shortly thereafter, in January 2004, the members of the Catskill Group assigned all of their right, title and interest in . . . any and all [its] claims . . . against Park Place to a trust (the Litigation Trust). See Declaration of Trust of Catskill Litigation Trust, § 2.1. [10] The Litigation Trust was then added as a plaintiff to the case. After further briefing following the close of the additional discovery period, the district court held that the Catskill Group still had failed to produce any evidence of wrongful means for purposes of the interference with business relations claim, and reaffirmed its grant of summary judgment in favor of Park Place. Catskill Dev., LLC v. Park Place Entm't Corp., 345 F.Supp.2d 360, 368 (S.D.N.Y.2004) ( Catskill V ). The Catskill Group, now joined by the Litigation Trust, reinstated its earlier appeal. On appeal, a jurisdictional defect was revealed for the first time: two of the original plaintiffs, Catskill and Mohawk, were not completely diverse from Park Place. Absent complete diversity, federal jurisdiction did not exist under 28 U.S.C. § 1332. We thus remanded the case to the district court to address, inter alia: (1) whether Park Place and Monticello were completely diverse for jurisdictional purposes at the time the action was commenced; and (2) whether dismissal of Catskill (the signatory to the LPA) and Mohawk (the signatory to the MA) from the case would result in undue prejudice to Monticello (the signatory of the DCA) or Park Place. [11] Catskill Litig. Trust v. Park Place Entm't Corp., 169 Fed. App'x 658, 660-61 (2d Cir.2006). Upon the parties' stipulation, the district court signed an order, pursuant to Federal Rule of Civil Procedure 21, dismissing from the original action all but Monticello and Park Place, which the district court determined were completely diverse at the time the original complaint was filed. [12] Subsequently, the trustees of the Litigation Trust filed a new complaint against Park Place, and the district court consolidated the new and original actions under Federal Rule of Civil Procedure 42(a). Debary v. Harrah's Operating Co., 465 F.Supp.2d 250, 260 (S.D.N.Y.2006) ( Catskill VI ). After six district court opinions and two prior appeals, the case now returns to us for a third time.