The U.S. Supreme Court on June 25 ended the long legal nightmare of the Shingle Springs Band of Miwok Indians of California. It ruled conclusively that Sharp Image Gaming was not entitled to damages in a breach of contract suit against the tribe because the contract itself was never legal.
In 1996 Sharp partnered with the tribe to open a modest casino on the rancheria. It was really a white tent more than a casino and it closed quickly because the reservation was not served by any public roads.
A decade later the tribe was more successful. This time it partnered with Lakes Entertainment Inc. and the result was the $200 million Red Hawk Casino, which was served by a $45 million freeway interchange.
Sharp sued to get back the $7 million it had advanced the tribe for the first casino and to enforce its original contract to supply slot machine. In total Sharp sought about $100 million.
It did well at first, winning a $30.5 million judgment. Then last fall the California Court of Appeal for the Third District ruled that the contract was unenforceable because it had never been approved by the National Indian Gaming Commission, as required by federal law. It ruled that the case should never have gone to trial.
Sharp Image Gaming appealed the ruling to the Supreme Court, which refused to hear the petition, effectively ending the legal contest in the tribe’s favor.
Tribal Chairman Regina Cuellar issued this statement: “The tribe feels completely vindicated in what has been a very long, difficult and expensive battle and it came at a very difficult time — when we were in the process of building our gaming facility. This case never should have gone to trial, based on defenses we raised at the outset. But justice has finally prevailed, and we are happy to move forward.”
The tribe is now seeking to recover $7 million in legal fees and costs.
