DeQuattro v. Rhode Island Personnel Appeal Board

Decision Date24 July 2018
Docket NumberC. A. PC-2015-3438
PartiesLOUIS A. DEQUATTRO, JR. v. THE RHODE ISLAND PERSONNEL APPEAL BOARD and PAUL MCGREEVY, Individually and in his Official Capacity as the Former Director of the RHODE ISLAND DEPARTMENT OF BUSINESS REGULATION
CourtRhode Island Superior Court

For Plaintiff: Martin K. DeMagistris, Esq.

For Defendant: Jennifer Sanborn Sternick, Esq.; Steven B Merolla, Esq.

DECISION

TAFT-CARTER, J.

Appellant Louis A. DeQuattro, Jr. (Appellant or DeQuattro) appeals the August 31, 2015 decision of the Rhode Island Personnel Appeal Board (the Board or PAB) upholding the discipline imposed by the Department of Business Regulation (DBR) on DeQuattro. Jurisdiction is pursuant to G.L. 1956 § 42-35-15. For the reasons set forth in this Decision, the Court affirms the decision of the PAB.

I

Facts and Travel

A DeQuattro's Work History

DeQuattro an attorney and certified public accountant, began his career in state service in 1992 as an insurance examiner for the Department of Business Regulation (DBR), Insurance Division. (Decision 3; Hr'g Tr. 92:1-22, May 18, 2015.) Over the years, DeQuattro rose to the positions of Deputy Chief Legal Counsel for the Department of Administration and Associate Director and purchasing agent. (Decision 3.) At the time of the challenged disciplinary action, he served as Deputy Director of Legal Services at the DBR and "Executive Counsel." (Decision 3-4.) In these capacities, DeQuattro supervised the DBR's staff attorneys, managed legal work for the DBR, and addressed issues relating to gaming and banking (Decision 4; Hr'g Tr. 8-9, Apr. 16, 2015.) In addition to these duties, DeQuattro was a hearing officer in municipal liquor licensing disputes, the agency's public information officer, and the ethics officer for the DBR. (Decision 4; Hr'g Tr. 9:15-11:6, Apr. 16, 2015.) In addition to his work in state service, DeQuattro held the part-time position of North Providence Municipal Court Judge since July 2011. (Hr'g Tr. 179:14-22, May 18, 2015.)

In 2010, while employed as Associate Director and purchasing agent in the Department of Administration, DeQuattro received a letter of reprimand from Rosemary Booth Gallogly, the Director of the Department of Administration. (Decision 4.) The letter of reprimand admonished DeQuattro for "us[ing] poor judgment and violat[ing] purchasing procedures" when he considered an untimely filed contracting bid from H.V. Collins while acting in his capacity as a purchasing agent on November 25, 2008. (State's Ex. 11.) The letter was not included in DeQuattro's personnel file, but was kept in Human Resources records. (Hr'g Tr. 236:4-11, May 18, 2015 Hr'g Tr. 41:1-42:10, May 20, 2015.)

At all times relevant to this appeal, the DBR and the Division of Lotteries, Department of Revenue (Lottery) worked together to regulate the gaming industry in Rhode Island. (Hr'g Tr 51:11-52:10, Feb. 26, 2015.) Together, they jointly held "full operational control" of the regulation of the Twin River Casino (Twin River)[1] in Lincoln, Rhode Island. (Decision 2, citing § 42-61.2-2.1(c); Hr'g Tr. 7:4-13, Apr. 16, 2015.)[2] In order to ensure the State's investment in the casino remained within Rhode Island, Twin River was subject to a compliance agreement with the Lottery and the DBR. (Hr'g Tr. 54:17-55:14, Feb. 26, 2015.) The agreement set forth specific procedures and required disclosures regarding the transfer of assets or debts of Twin River. Id.

The Rhode Island State Police exercised oversight of Twin River through its Gaming Enforcement Unit. The unit is charged with "[c]onducting due diligence . . . and background investigations with respect to entities and individuals required to be licensed by the division and/or the department of business regulation." Sec. 42-61.3-1; Decision 2-3, citing State's Ex. 7 and Hr'g Tr., Apr. 7, 2015.

As a result of the regulatory interplay among the three government entities, DeQuattro frequently collaborated with the Lottery and the State Police to regulate Twin River. (Decision 2-3; Hr'g Tr. 53:9-21, Feb. 26, 2015.) He was the DBR's contact person for Lottery Director Gerald Aubin and Craig Eaton, chief legal officer at Twin River. (Decision 4; Hr'g Tr. 53:9-21, Feb. 26, 2015; Hr'g Tr. 14:10-22, Apr. 7, 2015.)

B The 2013 Liquor Board Hearing

This appeal concerns two instances of misconduct. The first instance of misconduct concerns a 2013 Liquor Board hearing. On August 1, 2013, DeQuattro served as a hearing officer for the DBR in the matter of RMP Investment Group v. City of Providence, DBR No. 13LQ063, regarding the appeal of a grant of a liquor license to RMP Investment Group, LLC (RMP). (State's Ex. 5; Decision 7.) During the hearing, DeQuattro admitted into the record a letter from Dino Autiello, Vice President of the North Providence Town Council, advocating for the approval of the liquor license. (State's Ex. 5.) The letter was addressed to "Judge DeQuattro" and endorsed "the character, business acumen, and professionalism" of the applicants for the license, based on the letter writer's experience as a former employee of the applicants. (July 30, 2013 Letter from Dino Autiello, State's Ex. 5.) DeQuattro stated on the record that he had received the letter by mail and accepted the letter into the record without disclosing to the parties his position as a North Providence Municipal Judge. (RMP Investment Group v. City of Providence Hr'g Tr. 6:11-23, Aug. 1, 2013, State's Ex. 5.) On October 4, 2013, DeQuattro issued a recommendation that the DBR uphold the grant of a liquor license to RMP. (In the Matter of Liquor License Application of RMP Investment Group, LLC, Decision and Order, Oct. 4, 2013, State's Ex. 5.) DBR adopted the recommendation as its decision, dated October 7, 2013. Id.

The decision was appealed to the Superior Court. In the appeal, it was argued that DeQuattro had failed to disclose his employment as a Municipal Court Judge for North Providence. (State's Ex. 5.) On September 30, 2014, the DBR moved for remand of the RMP matter in part to address the issue of alleged bias resulting from DeQuattro's failure to disclose his professional relationship with Autiello. (State's Ex. 5; Findings of Fact, Decision ¶ 64.) The DBR personnel and legal team brought this issue to the attention of Paul McGreevy, the DBR Director, during the March 2015 investigation into the second instance of DeQuattro's misconduct. (Hr'g Tr. 17:18-18:5, Apr. 16, 2015.)

C Twin River and Fertitta

The second instance of misconduct concerns an issue involving Twin River. On February 13, 2014, while conducting a background investigation pursuant to § 42-61.3-1 Corporal Timothy Allen of the State Police met with Tilman Fertitta, CEO of Fertitta Entertainment, in Houston, Texas to discuss the investor's interest in increasing his investment in Twin River. (Hr'g Tr. 117:1-8, Apr. 7, 2015.) During the interview, Fertitta mentioned a 2012 conversation he had with John Taylor, Board Chairman of Twin River Management Group. Id. at 117:19-118:1. Fertitta stated that he had set up the 2012 meeting with Taylor because he was interested in acquiring Twin River Management Group. Id. at 123:5-8. According to Fertitta, Taylor told him that "Rhode Island was unlike anywhere else," and that he would have an issue with the regulators. Id. at 123:17-18. According to Allen's testimony, Fertitta "repeatedly stated" that he thought Taylor was "hiding behind the regulators" and was "upset" about the way the meeting went. Id. at 123:19-20, 125:8-9; Excerpt, Fertitta Inc. Background Investigation, Appellant's Ex. B.

Fifteen days later, on February 28, 2014, Lt. Flaherty told Aubin about his meeting with Fertitta and the comment Fertitta had made about his 2012 conversation with Taylor. (State's Ex. 3.) Lt. Flaherty advised Aubin he wished to contact the DBR to ask if they had knowledge of this potential purchase. Id.

On March 3, 2014, Lt. Flaherty contacted DeQuattro to schedule a meeting. (Hr'g Tr. 128:18-129:2, May 18, 2015.) At the meeting, Flaherty asked DeQuattro a number of questions concerning companies interested in purchasing Twin River and whether DeQuattro was aware of a company offering to purchase Twin River in late 2012. Id. at 130:12-131:24. Flaherty informed DeQuattro about Fertitta's offer and the ensuing conversation between Fertitta and Taylor. Id. DeQuattro gave Flaherty his thoughts on what Taylor might have meant. Id. at 132-33. During the conversation, Flaherty questioned DeQuattro concerning the compliance agreement and whether it required Twin River to disclose this offer. Id. at 136:1-16. DeQuattro concluded it would not. Id. at 136:1-22. Later that day, DeQuattro had separate conversations with McGreevy and Maria D'Alessandro. Id. at 134:10-23.

Lt Flaherty met with Aubin and Marilyn McConaghy, legal counsel for the Lottery. At that meeting, he cemented his conclusion that Twin River was not obligated to report the offer. (State's Ex. 3; Hr'g Tr. 75:1-22, Feb. 26, 2015.) Flaherty spoke with Aubin about the details of his conversation with DeQuattro. (State's Ex. 3.) Aubin told Flaherty that he planned to call a meeting with Taylor and other members of Twin River leadership because he was "very, very concerned" about Fertitta's comment and wanted to "determine what was said at the . . . meeting." (State's Ex. 3; Hr'g Tr. 76:2-3, Feb. 26, 2015.) Aubin was particularly "concerned" that a "potential purchaser" of the casino had indicated to the State Police that he was not going forward with a purchase because he believed "the regulators were preventing him from doing so." (Hr'g Tr. 76:2-16, Feb. 26, 2015.) Aubin emailed Taylor to set up a meeting for March 14, 2014, but did not advise Taylor of the reason for the meeting. (St...

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