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Chippewa casino lawsuit overview:Â
- Who: A Michigan state judge ordered a local tribe’s gambling authority to pay $88 million to casino investors JLLJ Development and Lansing Future Development II.
- Why: The judge ruled that the tribe owes investors for profits they could have made if the tribe’s plans for two casinos didn’t fall through, plus for a $9 million loan they gave to the project.
- Where: The Chippewa casino order was filed in a Michigan state court.
A Michigan state judge ordered a local tribe to pay $88 million to companies that invested in two casinos it did not build, ruling the tribe should not only pay back a $9 million loan for the project but also $75 million for the investors’ share of casino profits they would have received had the casinos been built.
In an order filed Jan. 3 in an Ingham County court, Judge Joyce Draganchuk says investors JLLJ Development and Lansing Future Development II are entitled to a default win against the Kewadin Casinos Gaming Authority, the gambling authority of the Sault Ste. Marie Tribe of Chippewa Indians.
Judge Draganchuk says in her opinion that the tribe ignored several court orders leading up to a bench trial on damages, including not participating in discovery and not submitting a trial brief or witness list.Â
Kewadin argued that Judge Draganchuk failed to establish jurisdiction over the sovereign tribe and that it did not have to provide discovery because it was immune from the state court’s orders.
However, Judge Draganchuk disagreed, as she handed the default win to the investors on claims of breach of contract and misrepresentation and ordered the $88 million penalty.
Casinos not built after U.S. Department of the Interior rejected trust plans
The tribe initially partnered with the investors to build two casinos. However, they were stalled after the U.S. Department of the Interior (DOI) rejected the tribe’s application to place the properties in trust, a required step for using the land for tribal gaming.Â
The DOI’s decision, which found the tribe did not cite a “proper purpose” for placing the lands into trust, is being challenged in D.C. federal court.
JLLJ Development and Lansing Future Development II sued the tribe for damages in 2021, stating that it broke promises to set up an oversight development committee and development coordinator to run the project and deceived them by saying the properties were guaranteed to be placed in trust.
Kewadin argued that their development agreements said claims could only be made against real revenues from the MIchigan casinos, barring the investors from recovering any damages.
However, Judge Draganchuk ruled not only that the tribe owed investors for their potential earnings from the projects, but also their potential interest-earned.
Last month, Par-A-Dice Hotel Casino and Boyd Gaming agreed to a $825,000 settlement to resolve claims that they violated biometric privacy law with video surveillance cameras.Â
What do you think of the judge’s ruling against the Chippewa tribe? Let us know in the comments!Â
The casino developers are represented by Andrew J. Broder of Payne Broder & Fossee PC and Michael H. Perry of Fraser Trebilcock Davis & Dunlap PC.
The Michigan casino lawsuit is JLLJ Development LLC et al. v. Kewadin Casinos Gaming Authority, Case No. 21-000189-CB, in the state of Michigan Circuit Court for the 30th Judicial Circuit, Ingham County.
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