Astoria Entertainment, Inc. v. Edwards, CIV A 98-3359.
| Decision Date | 22 August 2001 |
| Docket Number | No. CIV A 98-3359.,CIV A 98-3359. |
| Parties | ASTORIA ENTERTAINMENT, INC. v. Edwin W. EDWARDS, Edward J. Debartolo, Jr., Debartolo Entertainment Louisiana Gaming, Inc., Hollywood Casino Corporation, Stephen Edwards, Andrew Martin, Cecil Brown, Bobby Johnson, Gregory Tarver, Robert Guidry, Treasure Chest Casino, L.L.C., Boyd Kenner, Inc., Louisiana Gaming Enterprises, Inc., Robert List, Hollywood Park, Inc., Sam Gilliam, Floyd Landry, Gia Kosmitis, Dr. Lewis James, Veronica Henry, and Barton Conradi |
| Court | U.S. District Court — Eastern District of Louisiana |
Henry L. Klein, Thomas J. Cortazzo, New Orleans, LA, for Plaintiff.
Lloyd Eades Hogue, New Orleans, LA, Aubrey B. Harwell, Jr., Nashville, TN Richard Terrell Simmons, Jr., Baton Rouge, LA, Karen Delcambre McCarthy, New Orleans, LA, Paul Slocomb West, Baton Rouge, LA, C. Lawrence Orlansky, New Orleans, LA, Joseph Nicholas Mole, New Orleans, LA, for Defendants.
ORDER AND REASONS
Before the Court are Motions to Dismiss filed by the following defendants: (1) Edwin W. Edwards and Andrew Martin (rec. doc. 97); (2) Edward J. DeBartolo, Jr. (rec.doc. 83); (3) Stephen Edwards (rec. doc. 89); (4) Robert Guidry (rec.doc. 88); (5) Louisiana Gaming Enterprises, Inc. ("LGE") and Boomtown, Inc. (collectively referred to as "Boomtown")(rec.doc. 85); (6) Crown Group, Inc. ("Crown") (rec.doc. 87); and (7) Boyd Kenner, Inc., Boyd Gaming Corporation, Boyd Louisiana, L.L.C. ("Boyd") (rec.doc. 107) against plaintiff Astoria Entertainment, Inc. ("Astoria").1 The motions were set for hearing on June 20, 2001 and the Court entertained oral argument on all motions on July 11, 2001. The Court has heard the arguments of counsel and has considered the pleadings, memoranda and relevant law and finds for the reasons that follow.
This litigation arises out of the riverboat gaming licensing process. Accordingly, a brief overview of the relevant gaming laws is a necessary backdrop to analyze plaintiff's allegations.
In 1991, the Louisiana Legislature enacted the Louisiana Riverboat Economic Development and Gaming Control Act ("the Act"), codified at Louisiana Revised Statutes 4:501-562. The law became effective July 18, 1991.2 The Act proscribed the licensing process for those seeking to operate riverboat gambling casinos. Section 525 of the Act limited the maximum number of licenses to fifteen, with 6 being the maximum number of licenses issued in any one parish.
Parts II and III of the Act created two separate and distinct bodies within the Department of Public Safety and Corrections and vested each with separate duties and responsibilities in furtherance of the Act's purposes.3 See State Through Dept. of Public Safety and Corrections v. Louisiana Riverboat Gaming Commission and Horseshoe Entertainment, 94-1872 (La.5/22/95), 655 So.2d 292. Louisiana Revised Statutes 4:515 created the Gaming Enforcement Division, which was vested with regulatory and enforcement powers. The other body was referred to as the Riverboat Gaming Commission ("The Commission"). The Commission was "a rule and policy making body ... appointed by the governor and confirmed by the Louisiana Senate." Id. Pursuant to La. R.S. 4:511 the Commission was to promulgate rules to provide for and determine riverboat routes, minimum levels of insurance to be maintained by licensees, specifications for design, appearance, accommodations and constructions of riverboats, and other qualifications. The Commission was also given oversight authority with the power to "hear and determine all appeals relative to the granting, suspension, revocation, condition, or renewal of all licenses, permits and applications." La. R.S. 4:511.
Under its rulemaking powers, the Commission required any prospective riverboat operator to apply to the Commission for a Certificate of Preliminary Approval ("CPA"). See La. Admin. Code 42:XIII.303.4 The first eight Certificates of Preliminary Approval were awarded in March of 1993. The second round, where the remaining seven certificates were awarded and from which most of the allegations in this litigation arise, took place on June 18, 1993. See Indictment at p. 3.
Astoria filed its original complaint on November 12, 1998. The Original One Count Complaint was premised solely on the defendants' alleged violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C.1961 et seq., and sought civil damages under section 1964 of the statute. Named as RICO defendants in the original complaint were: Edwin Edwards, Edward DeBartolo, Jr., DeBartolo Entertainment Louisiana Gaming, Inc., Hollywood Casino Corp., Stephen Edwards, Andrew Martin, Cecil Brown, Bobby Johnson, Gregory Tarver, Robert Guidry, Treasure Chest Casino, L.L.C., Boyd Kenner,Inc., Louisiana Gaming Enterprises, Inc., Robert List, Hollywood Park, Inc., Sam Gilliam, Floyd Landry, Gia Kosmitis, Dr. Lewis James, Veronica Henry, and Barton Conradi.
On February 2, 1999, plaintiff voluntarily dismissed all defendants except Edwin Edwards, Edward DeBartolo, Stephen Edwards, Andrew Martin and Robert Guidry pursuant to Rule 41 of the Federal Rules of Civil Procedure (rec.doc. 29). On April 11, 1999, this matter was stayed pending the prosecution and conclusion of the criminal proceeding in the Middle District of Louisiana captioned United States v. Edwin Edwards, et al., Cr. No. 98-165B (see rec. doc. 55). The stay was lifted on February 23, 2001 (rec.doc.65), soon after the criminal convictions were returned and sentences imposed.
Astoria filed an amended complaint on March 6, 2001 (rec.doc. 68). In addition to the original RICO cause of action, the amended complaint asserts violations of the Sherman and Clayton Antitrust Acts (Count IV) against Edwin Edwards, Robert Guidry, and all defendants who received CPA's on June 18, 1993, as well as several causes of action under Louisiana state law. In addition to the new causes of action, plaintiff named several new defendants, some of whom were previously dismissed, and limited the RICO allegations to Edwin Edwards, Andrew Martin, and Stephen Edwards. Added as defendants for non-RICO causes of action were Boyd Kenner, Inc., Boyd Gaming Corp., Boyd Louisiana, L.L.C., Crown Group, Inc., Louisiana Gaming Enterprises, Inc., Boomtown, Inc., Hollywood Park, Inc., Players International, Inc., Metro Riverboat Associates, Inc., Hilton Hotel Corp., Park Place Entertainment Corp., and Coregis Insurance Company. The newly alleged state law claims are "Civil Conspiracy to Corrupt the Riverboat Gaming Licensing Process and to Eliminate Competition" (Count I), "Corruption of Riverboat Gaming Process" (Count II), "Violation of Louisiana Antitrust Laws" (Count V), "Violations of the Louisiana Unfair Trade Practices Act" (Count VI), and "Abuse of Privilege to Practice Law" (Count VII).
The focus of plaintiff's complaint is that it "would have received a Certificate of Preliminary Approval and ultimately a license in the absence of corruption." Amended Complaint at ¶ 6. Describing what it perceived to be the practical role of the Certificate of Preliminary Approval, plaintiff alleges that "[c]ompetitors for a license first needed to obtain a Certificate of Preliminary Approval before applying to the State Police and undergoing a "suitability" inquiry." Amended Complaint at ¶ 5. Astoria alleges that it did not receive a Certificate of Preliminary Approval ("CPA") at the June 18, 1993 Louisiana Gaming Commission meeting even though its officials were told the company was well qualified. According to plaintiff, the role of the CPA was critical as evidenced by the fact that "[i]n the awarding of the 15 licenses, no applicant for a license was considered in the absence of a Certificate of Preliminary Approval and all recipients of Certificates of Preliminary Approval received licenses." Amended Complaint at ¶ 5. It is Astoria's contention that "[i]n a competitive environment not affected by corruption and conspiratorial tampering, Astoria would have received a Certificate of Preliminary Approval and ultimately a license." Amended Complaint at ¶ 6. Astoria's Amended Complaint details facts with respect to only two potential berths: Kenner, Louisiana and Gretna, Louisiana.
The relevant events with respect to the Kenner berth are relatively few. See Amended Complaint at ¶ 7(a)-(j). Astoria initially entered the competition for a CPA for a riverboat to be named the "Cannes Burlee." At that time, the City of Kenner issued Requests for Proposals to potential riverboat operators seeking the Kenner berth. Astoria complied with the City's request and eventually received a letter of suitability from the City, while the eventual license recipient did not. According to the complaint, soon thereafter Robert Guidry began a pattern of making payments to politically connected persons. By March 30, 1993, Astoria's gaming operator, Argosy, decided to abandon the project based upon rumors that it heard "Bobby Guidry had the boat...locked up." Amended Complaint at ¶ 7 (i). Around the same time, Guidry directly told a principal of Astoria that he was guaranteed the license "by virtue of his close relationship with Edwin Edwards." Complaint at ¶ 31. Upon losing its gaming operator, Astoria immediately abandoned any effort to obtain a CPA for that location. From the face of the Complaint and Amended Complaint, it appears that Astoria terminated all activities in Kenner by the end of March 1993.5 Astoria alleges that its failure to compete for the Kenner CPA was caused by the conspiracy. Because of Guidry's connection with Edwards, Astoria turned its sights to a Gretna berth.
With respect to the Gretna Berth, Astoria's Complaint and Amended Complaint focus upon plaintiff's failure to receive one of six Certificates of Preliminary Approval that...
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