Barden Detroit Casino, L.L.C. v. City of Detroit
| Decision Date | 22 July 1999 |
| Docket Number | No. 99-CV-72655.,99-CV-72655. |
| Parties | BARDEN DETROIT CASINO, L.L.C., a Michigan Limited Liability Company, Plaintiff, v. The CITY OF DETROIT, The Detroit City Council, Dennis W. Archer, Gilbert Hill, MaryAnn Mahaffey, Clyde Cleveland, Kenneth Cockrel, Jr., Sheila Cockrel, Kay Everett, Nicholas Hood, III, Brenda M. Scott, Alberta Tinsley-Talabi, The Michigan Gaming Control Board, Thomas Denomme, Paula Blanchard, Rich Davis, Geraldine Ford, and Michael Stacey, Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Robert M. Carson, Birmingham, MI, for plaintiff.
Morley Witus, Detroit, MI, Eric J. Eggan, E. Lansing, MI, for defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW REGARDING PLAINTIFF'S MOTION FOR INJUNCTIVE RELIEF AND DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT
On May 25, 1999, Plaintiff, Barden Detroit Casino, L.L.C. ("BDC") initiated the instant lawsuit against the above-captioned State and Detroit Defendants challenging, inter alia, the constitutionality of the Casino Development Competitive Selection Process, Detroit City Code § 18-13-1, et seq. (the "Ordinance"), and the Michigan Gaming Control and Revenue Act, M.C.L.A. § 432.201, et seq. (the "Act"), which govern the selection and licensing of casino developers in the City of Detroit, respectively. In particular, BDC — which lost out in its bid to become one of three casino operators in Detroit to Detroit Entertainment, L.L.C. ("Atwater"),1 Greektown Casino, L.L.C. ("Greektown"), and MGM Grand Detroit, L.L.C. ("MGM") — asserts that both the Ordinance and the Act award unconstitutional preferences to developers, particularly Atwater and Greektown, who lead the drive to bring casino gaming to Detroit.
The case is presently before the Court on BDC's May 25, 1999 Motion for Preliminary Injunction, predicated on First Amendment, equal protection, and substantive due process challenges to the Act and the Ordinance enumerated in counts I - VI of its Verified Complaint for Damages and for Injunctive Relief.2 In light of the Sixth Circuit's recent holding in Lac Vieux Desert Band of Lake Superior Chippewa Indians v. Michigan Gaming Control Board, 172 F.3d 397 (6th Cir.1999), finding that the Ordinance implicates core First Amendment rights and is, therefore, subject to strict scrutiny, BDC argues it can establish the requisite likelihood of success on the merits of its constitutional claims against the Detroit Defendants. As explained in greater detail, infra, BDC also asserts that the Act violates the Constitution both on its face and as applied.
In response, the Detroit Defendants concede the unconstitutionality of the Ordinance for the purposes of the instant motion only,3 opting instead to rely on the following three threshold, and potentially dispositive, defenses: (1) a Consent and Release executed by Don Barden on behalf of BDC; (2) the equitable doctrine of laches; and (3) BDC's alleged inability to establish injury-in-fact. The Detroit Defendants further assert that even if the Court reaches the substance of BDC's constitutional challenges to the Ordinance, the balance of equities and the public interest militate strongly against any injunctive relief. With respect to the Act, the State Defendants assert that no "case or controversy" exists because the 1997 amendments to the statute render the state preference inoperative.
The Court met with the parties in chambers on June 17, 1999 and held a hearing at which it heard oral argument and took evidence with respect to the issues raised by BDC's Motion for Preliminary Injunction on June 28, 1999.4 Without objection from the parties, and with the sole caveat that the Detroit Defendants expressly reserved the right, if necessary, to defend the constitutionality of the Ordinance at a later stage of the proceedings, the Court ordered the trial of this case, with respect to the final merits of BDC's request for injunctive relief, advanced and consolidated with the hearing on Plaintiff's Motion for Preliminary Injunction pursuant to Fed.R.Civ.P. 65(a)(2). Having heard the oral arguments of counsel and the testimony of witnesses at the June 28, 1999 hearing, and having reviewed the briefs, deposition transcripts, and other supporting documents submitted by the parties, the Court makes the following findings of fact and conclusions of law. To the extent that any findings of fact constitute conclusions of law, they are adopted as such. To the extent that any conclusions of law constitute findings of fact, they are so adopted.
Preliminarily, the Court observes that this litigation presents very close and finely-nuanced legal and factual questions of great complexity, novelty, and controversy that are of the highest import to the residents of the greater Detroit Metropolitan Region and the State of Michigan. The Court recognizes that because of the need for an expeditious resolution of this matter, all parties — and particularly their counsel — have worked with commendable diligence to prepare and present these issues to the Court for timely resolution. For this prodigious effort, the Court expresses its appreciation and endeavors in this decision to set forth its findings of fact and conclusions of law, and the analysis underlying each, as comprehensively as possible.
Plaintiff, BDC, is a Detroit-based Michigan limited liability company, formed to engage in the development and operation of a casino gaming establishment in the City of Detroit. Don H. Barden resides in the City of Detroit and serves as the Chairman and President of BDC.5 Throughout the casino selection process, the law firm of Dykema Gossett, P.L.L.C., represented BDC.
For the purposes of this decision, the "Detroit Defendants" consist of the City of Detroit, Detroit Mayor Dennis W. Archer (the "Mayor"), the Detroit City Council, and the currently elected members of the Detroit City Council: Gilbert Hill, Maryann Mahaffey, Clyde Cleveland, Kenneth Cockrel, Jr., Sheila Cockrel, Kay Everett, Nicholas Hood III, Brenda Scott, and Alberta Tinsley-Talabi.
Defendant Michigan Gaming Control Board (the "Board") is an agency of Michigan Government, M.C.L.A. § 432.204(1), established and organized pursuant to the Michigan Gaming Control and Revenue Act. The Board possesses the authority and duties enumerated in the Act, and all other powers necessary and proper to fully and effectively administer the Act for the purposes of licensing, regulating, and enforcing the system of casino gaming established under the Act. M.C.L.A. § 432.204(1). Defendants Thomas Denomme, Paula Blanchard, Rich Davis, Geraldine Ford, and Michael Stacey constitute the currently serving members of the Board. For the purposes of this decision, the Court collectively refers to the Board and its individual members as the
On November 5, 1996, the state electorate approved Proposal E, a state ballot initiative legalizing casino gaming in the State of Michigan. In order to codify this successful referendum, the State Legislature passed, and the Governor signed into law, the Michigan Gaming Control and Revenue Act, M.C.L.A. § 432.201, et seq. The Act established the Michigan Gaming Control Board as the body authorized to issue licenses to operate casinos in Michigan, and effectively limited casino development to the City of Detroit by restricting gaming to cities: (1) with a population of at least 800,000 at the time a license is issued; (2) located within 100 miles of any other state or country in which gaming was permitted on December 5, 1996; and (3) where a majority of voters have expressed approval of casino gaming in the city. M.C.L.A. § 432.202(l).6
Although Proposal E, as it appeared on the November 5, 1996 ballot, made no mention of preferences for any class of license applicants,7 the Act's licensing procedures in their original form, exempted certain preferred developers from the competitive bidding process and granted a tie-breaking preference to applicants that supported a city-wide ballot initiative in favor of casino gaming:
(a) The board shall issue a license to operate a casino to an applicant upon a determination by the board that the applicant is eligible for a casino license. The board shall find that an applicant is eligible for a casino license if all of the following criteria are met:
(1) prior to the date of application: (i) the applicant or its affiliates or affiliated companies was the initiator of any casino gaming proposal submitted for voter approval in the city in which the casino will be located and the voters approved the proposal; or (ii) the applicant was selected by the city pursuant to a competitive bidding process.
* * * * * *
(b) No more than three (3) licenses shall be issued by the board in any city. In the event that more than three (3) applicants meet the criteria provided for in Section 6(a) of this Act, licenses shall first be issued to applicants which submitted any casino gaming proposal for voter approval prior to January 1, 1995, in the city in which the casino will be located and the voters approved the proposal.
M.C.L.A. § 432.206 (1996) (amended 1997).
Effective July 17, 1997, the Act was amended to eliminate the provision previously codified at § 432.206(a) exempting preferred developers from the competitive bidding process. While the Amended Act retained the tie-breaking preference at § 432.206(3), the viability of this preference was called into doubt by the addition of a new subsection, § 432.206(2), which effectively limits a city to submitting no more than 3 certified development agreements to the Board at one time. As amended, § 432.206 now reads, in pertinent part:
(1) The...
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