Vaughn v. MGM Resorts International, 082119 FED3, 19-2068

Docket Nº:19-2068
Opinion Judge:PER CURIAM.
Party Name:NAT VAUGHN, Appellant v. MGM RESORTS INTERNATIONAL, d/b/a Borgata Hotel Casino & Spa
Judge Panel:Before: CHAGARES, BIBAS, and GREENBERG, Circuit Judges
Case Date:August 21, 2019
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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NAT VAUGHN, Appellant

v.

MGM RESORTS INTERNATIONAL, d/b/a Borgata Hotel Casino & Spa

No. 19-2068

United States Court of Appeals, Third Circuit

August 21, 2019

NOT PRECEDENTIAL

Submitted Pursuant to Third Circuit LAR 34.1(a) August 21, 2019

On Appeal from the United States District Court for the District of New Jersey (D.C. Civil Action No. 1:17-cv-11460) District Judge: Honorable Noel L. Hillman

Before: CHAGARES, BIBAS, and GREENBERG, Circuit Judges

OPINION [*]

PER CURIAM.

Nat Vaughn was banned from Borgata Hotel, Casino & Spa ("Borgata") in Atlantic City, New Jersey. Borgata had taken issue with the way Vaughn was using slot machines in its casino; and it let Vaughn know so in a publicly available state court filing. In Vaughn's subsequently filed suit in federal court against Borgata and its parent company, MGM Resorts International ("MGM"; collectively, "Defendants"), he raised claims for defamation and improper exclusion from the casino. The District Court granted Defendants' motion to dismiss Vaughn's operative pleading under Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, we will affirm the District Court's judgment in part, vacate it in part, and remand the case for further proceedings.

I.

Vaughn is a resident of New York City.1 He was a longtime patron of Borgata's casino and a regular player of its slot machines. In addition to playing the slot machines, Vaughn used them to "consolidate casino payment gaming vouchers for conversion to U.S. currency." Compl. ¶ 19.

In October 2016, Vaughn received a letter from Borgata stating that, "effective immediately," it "no longer desires to accept your business as a customer at our property." Compl. Ex. F.2 The letter prompted Vaughn to file suit in New York state court.3 During the pendency of that action, a lawyer for Borgata told Vaughn over the phone "that his client 'did not like the way the Plaintiff play[ed] their slot machines devices [sic].'" Compl. ¶ 27. Borgata's lawyer then elaborated in a court filing: "The reason Plaintiff was excluded is because he was observed using slot machines to convert cash and payment vouchers into larger payment vouchers without actually playing the slot machines." Compl. Ex. A (incorporating by reference ECF 1 at 12-13).

According to Vaughn, it is not illegal to use slot machines in the manner described above, and Borgata's lawyer was in any event wrong to insinuate that Vaughn had been in the presence of slot machines but had not played at least one. Vaughn claimed specifically that the Borgata lawyer's state court filing suggested criminality on Vaughn's part and was thus defamatory. Vaughn also challenged Borgata's "issuance of an unjustified 'order of exclusion, '" Compl. ¶ 1, and sought readmittance as well as money damages and restoration of certain casino privileges.

Defendants moved under Rule 12(b)(6) to dismiss Vaughn's amended complaint for failure to state a claim. Defendants advanced four grounds in support of their motion: (1) there were no allegations that could support holding MGM vicariously liable for the actions of Borgata; (2) Vaughn failed to state a viable defamation claim because the subject statement-found in an "affirmation" by Borgata's lawyer-was indisputably true; (3) because the subject statement was made during litigation, it is absolutely privileged and not actionable; and (4) Vaughn alleged no viable basis to challenge his exclusion, because under New Jersey law Borgata has "the common law authority to exclude patrons for good cause," and Vaughn admittedly "engaged in transactions considered reportable under duties imposed by the [Bank Secrecy Act of 1970]."4

The District Court granted...

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