Raster v. Ameristar Casinos, Inc.

• Decision Date: 17 February 2009
• Docket Number: No. ED 91098.,No. ED 90984.,ED 90984.,ED 91098.
• Parties: Patricia M. RASTER, et al., Plaintiffs/Appellants, v. AMERISTAR CASINOS, INC., et al., Defendants/Respondents.
• Court: Missouri Court of Appeals

280 S.W.3d 120

Patricia M. RASTER, et al., Plaintiffs/Appellants, v. AMERISTAR CASINOS, INC., et al., Defendants/Respondents.

No. ED 90984.

No. ED 91098.

Missouri Court of Appeals, Eastern District, Division Two.

February 17, 2009.

Motion for Rehearing and/or Transfer to Supreme Court Denied April 6, 2009.

Application for Transfer Denied May 5, 2009.

Arthur G. Muegler, Jr., St. Louis, Louis J. Basso, Chesterfield, MO, for appellants.

David T. Hamilton, St. Charles, MO, for respondents.

LAWRENCE E. MOONEY, Judge.

The plaintiffs appeal the judgment of the trial court dismissing their two claims brought under the Missouri Merchandising Practices Act (MMPA) and their two breach-of-contract claims against the defendants Ameristar Casinos, Inc. and Ameristar Casino St. Charles Inc. The plaintiffs also appeal the trial court's ruling disqualifying the legal counsel for the plaintiffs. We reverse and remand.

Factual and Procedural Background

This dispute stems from the defendants' Star Award program. The plaintiffs are certain video-poker-machine players at the defendants' Ameristar Casino, located in St. Charles County, Missouri. As noted by the parties, to legally engage in casino gambling in Missouri, one must first obtain a "casino admission card" from the casino operator. The player must then exhibit this card to gain entrance onto the casino gambling floor. In Missouri, legalized casino gambling is not conducted with money or other negotiable currency. Section 313.817 RSMo 2000.¹ Rather, a player exchanges his cash for tokens or chips. Id. Once on the gambling floor, the player inserts his card into a gambling device, and then inserts his tokens or chips into the device. At the Ameristar Casino, a player desiring to enter the gambling floor must first register for Ameristar's Star Awards player's club program. Upon registration, the player receives a personal Star Awards membership card, which the player then presents to gain access to the casino floor.

Ameristar's Star Award program is a compensation program. A member inserts his membership card into slot or video-poker machines and receives points based on the volume of his play. The member may then redeem his earned points for cash back and other complimentary benefits. In addition to the points-based complimentary program, Ameristar also has a "food-comp" program, whereby the casino provides complimentary food coupons to certain members, upon request, if certain prerequisites are satisfied. There are four tiers of Star Awards membership — Red, Premier, Elite, and Star Club. The level of one's membership is based upon the number of points earned through the member's historic gambling activities at the casino during a six-month or twelve-month period of time. Each level of membership carries with it an increasing number of benefits, with the Star Club being the highest membership level.

The defendants changed their point and food-comp programs in 2006. These changes, and the alleged actions of the defendants associated with these changes, underlie the plaintiffs' complaints in their four-count petition, which consists of a MMPA and a breach-of-contract claim related to the point-based program, and a MMPA and a breach-of-contract claim related to the defendants' food-comp program.

As to the point-based program, the defendants acknowledge in their motion to dismiss that they restructured their point-award formulas for slot and video-poker machine play, effective August 2006. The plaintiffs note three particular changes. First, they note the defendants changed the number of points required to accrue cash back and other complimentary benefits. In particular, they allege the defendants moved the number of earned points from 125 points to 600 points for the accrual of $1.00 of earned cash back and other complimentary benefits. Secondly, the plaintiffs state the defendants changed the number of points needed to qualify for Star Club card status, from 20,000 to 40,000 points. And lastly, the plaintiffs charge the defendants secretly increased the number of flow-through dollars in video-poker machines necessary to earn one point for cash and food comps and card status determinations. In conjunction with these changes to the point-award formulas, the plaintiffs assert the defendants made the following representation:

Nothing really has changed ... Ameristar has changed the way it determines play points BUT after August 1, 2006 you will get four (4) times the number of points you would have gotten for the same dollar play as you had prior to August 1, 2006 ... therefore, if you play the same number of dollars you played to qualify for Star Club status prior to August 1, 2006, then you will also qualify for Star Club status after January 31, 2007 (when the current Star Club card expires) and you will also get the same cash-back comp as before the point change.

The plaintiffs maintain the defendants made this representation when they knew it would take at least two to four times the number of flow-through video-poker machine dollars to earn one point when compared to the video-poker point-earning system in existence prior to August 1, 2006.

The plaintiffs brought suit, contending that the defendants' actions violated the MMPA and constituted a breach of contract. For their MMPA claim, the plaintiffs alleged that the defendants' representation regarding the changes in the point-award formulas, and the defendants' failure to timely and adequately disclose its falsity, was an "unlawful practice" within the meaning and scope of the MMPA. The plaintiffs further alleged that they purchased the defendants' gambling entertainment service by inserting "cash" (in the form of tokens) into the casino's video-poker machines, and that they suffered an ascertainable loss of money and property — namely the dollar value of "lost" cash-back comps and Star Awards club card status, and the benefits associated therewith — as a result of the defendants' unlawful acts and practices. For their breach-of-contract claim, the plaintiffs alleged that they accepted the defendants' cash-back, food-comp, and point-determination offer by gambling at the casino. They further alleged the defendants breached the contract, causing the plaintiffs to suffer damages in the form of the value of "lost" cash-back comp awards and lost Star Awards club card status.

As to the food-comp program, the plaintiffs state that the defendants changed this program in March of 2006. Prior to this time, according to the plaintiffs, the casino determined food comps based on the number of points earned by a member through the member's gambling play during his last five visits to the casino — the "last-five-visit rule." The casino required members to redeem their food-comp awards via food purchases at the casino restaurant within a stated period of time — usually seven days. If a member did not redeem the food comps, the comps lapsed and became void. The plaintiffs maintain that in March of 2006, the defendants represented that they had a new food-comp program, under which the casino would "bank" and accumulate food-comp awards. The plaintiffs assert that the defendants thereby discouraged them from redeeming the full dollar value of earned food comps by representing to them that "we now have a food comp bank program ... you will not lose your earned food comps if you don't take all your earned food comp now because we no longer have the `last five visit' rule ... just take what you need today and save the rest." According to the plaintiffs, the defendants terminated their new system and reinstituted their old food-comp program in June of 2006.

Plaintiffs brought suit, contending that the Casino's actions violated the MMPA and constituted a breach of contract. For their MMPA claim, the plaintiffs alleged that the defendants' new food-comp program, their representations related to that program, and their failure to fairly disclose the falsity of the representations, constituted an "unlawful practice" by the defendants within the meaning and scope of the MMPA. The plaintiffs further alleged that they purchased the defendants' gambling entertainment service by inserting money into video-poker and reel slot machines. And by electing to bank food comps, they allege they suffered an ascertainable loss of money and property — namely the dollar value of the lost "banked" food comps — as a result of the defendants' unlawful practices. For their breach-of-contract claim, the plaintiffs averred that they accepted the defendants' new food-comp offer by gambling at the casino and "banking" food comps rather than redeeming all earned food comps. The plaintiffs maintained that the defendants breached the contract, causing the plaintiffs to suffer damages in the form of the value of "lost" food-comp awards.

The defendants filed a motion to dismiss the plaintiffs' petition for failure to state a claim upon which relief could be granted, setting forth multiple grounds for dismissal. As to the plaintiffs' MMPA claims, the defendants asserted that the plaintiffs had failed to state a claim, and therefore the counts should be dismissed, because the plaintiffs did not "purchase" or "lease" any "merchandise," nor suffer an "ascertainable loss," all essential elements of a claim under the MMPA. The defendants additionally argued that there could be no actionable false representation or promise because they had expressly reserved their right to terminate or make changes to the program at any time. As to the plaintiffs' breach-of-contract claims, the defendants contended that the plaintiffs had failed to state a claim, and therefore the counts should be dismissed, because there was no contract between the plaintiffs and defendants. And further, even if there was a contract, the defendants asserted that the counts should nevertheless be dismissed because the plaintiffs had not alleged facts establishing a breach on the part of the...