-: SJC-13416.
Anthony Gattineri v. Wynn MA, LLC.
(papers rustling)
(people shuffling)
-: Good morning, Chief Justice Budd, and fellow justices,
may it please the court,
Kelley Jordan-Price here on behalf of Anthony Gattineri,
and with me are my co-counsel,
Michael Connolly and J. LeBlanc.
As the court is well-aware,
before the court are two questions that have been certified
by the First Circuit to this court.
The first question,
being whether the San Diego agreement is unenforceable
because it violates the Massachusetts Gaming Statute,
specifically Section 21.
And the second question
is whether the San Diego agreement is unenforceable
because it violates public policy.
I'd like to describe what this case is actually all about.
Because the briefs raise a number of issues
that are somewhat irrelevant, we would submit.
This case is about
the enforceability of an agreement, a private agreement,
that was entered into between Wynn and Anthony Gattineri.
Importantly, for purposes of the certified questions
before the court, the court is to assume
that that San Diego agreement was validly formed.
The San Diego agreement was an arm's length agreement
between two private parties.
Under its terms, Anthony Gattineri,
agreed to sign a certification of ownership,
that Wynn needed in exchange for a promise from Wynn
to make Anthony Gattineri whole.
Anthony Gattineri was under absolutely no obligation
to sign that certification,
and actually had a number of reasons
to refrain from doing so, including the fact
that the Gaming Commission require criminal referrals
in connection with approving the Ninth Amendment,
and Anthony Gattineri had every reason
not to sign that certification.
The San Diego agreement was entered into six months
after the Ninth Amendment, to the option agreement
between Wynn and FBT was approved by the Gaming Commission.
The San Diego agreement does not alter or amend
that Ninth Amendment at all,
or in fact- -: Oh, well, but, I mean,
the big picture.
I understand it's a contract between two private parties.
But it's a contract related to an issue that's front
and center to the Gambling Commission, which is
whether their decision
not to allow someone they were worried about,
getting a, basically, a casino premium was permissible.
The license was granted
based on that issue, wasn't it?
We can't look at this out of context, right?
We have to look at it in the context which we're doing.
So, I just feel like you should confront 21,
and confront the public policy issues directly.
Kelley: I swear- -: 'Cause I don't think
you're gonna Kelley: Your Honor.
-: Avoid them.
-: So, with respect to Section 21,
and as I understand it, there's two issues.
There's 21-B and 21-C.
21-B talks about the transfer of an interest
under a gaming license.
One thing that I think is fairly remarkable, Your Honor,
is the Gaming Commission submitted
an amicus brief in this case.
There's an issue that they were completely silent on,
and that is whether or not
this San Diego agreement violated the Gaming Act.
I submitted to the court,
that if the Gaming Commission,
who is charged with the enforcement of that statute,
thought there was a statutory violation,
they would have discussed
in the brief. -: Can I ask you
to go back to that statute?
'Cause that was interesting, 21-B.
Why is this San Diego agreement
not a transfer of pecuniary interest under a gaming license?
-: Your Honor, it's not a transfer of any interest
under a gaming license for a number of reasons.
One, when the San Diego agreement was entered into,
there was no license at all.
So, there's no transfer of anything under a license.
With respect to
(papers rustling)
the language of 21-B,
it talks about it, and for good reason,
it talks about the transfer of an interest,
either the gaming license or an interest thereunder,
that needs to be approved by the Gaming Commission,
because the Gaming Commission needs to determine
whether the transferee of an interest
under a gaming license is suitable.
Justice Kafker: But I'm confused, though.
Sorry, I didn't mean to cut you off, Justice Wendlandt.
-: [Justice Wendlandt] No, go ahead,
Justice Kafker: So- -: [Justice Wendlandt] I think
you're gonna say what I'm gonna say.
-: Well, go ahead then.
(lawyers chuckling) -: [Justice Wendlandt] No.
-: So, I'm confused, though. (lawyer's voice drowns)
The payment,
Wynn gets a license.
Your client doesn't get paid until after the license.
There'll be no payment, right?
Unless there's a license, right?
So, I'm trying to understand,
I understand your timing point that 21 only deals
with some the licensing process,
but the payment itself is gonna occur
and only occur if Wynn gets the license, correct?
-: That's correct, Your Honor, but that's a timing issue.
-: It's not- Justice Kafker: Well but,
-: Transferring- -: But then isn't it,
as Justice Wendlandt was just talking about,
a transfer of a pecuniary interest
related to a gaming license.
-: But that's not what,
the statute uses the term under a license.
Justice Kafker: Well, okay- -: So,
it's a timing (Kafker's voice drowns)
of payment- -: Transfer.
Isn't it a transfer of a pecuniary interest under a license?
'Cause at least Wynn has a license, and
Wynn is transferring the money to your client.
So, wouldn't Wynn be violating it
if your client weren't?
-: No, Your Honor,
because it's a transfer of money in exchange.
It's the consideration that was agreed upon
prior to the acquisition of the license.
So if that were any payment- -: But conditioned
on that acquisition.
So,
I will give you one third of $40 million
that the Gaming Commission says you can't have
if the Gaming Commission
doesn't know about this transfer and gives me a license.
-: But it's not.
-: Under the license?
-: It's not money generated by the license.
If that were the interpretation.
-: Okay, so your position is that the pecuniary,
the money needs to be generated by Wynn's Casino operation?
-: Yes, Your Honor, it has to be
either a transfer of the license,
or something that the license is used for.
And that makes sense because Anthony Gattineri
is not subject to a suitability analysis.
FBT was not subject to a suitability analysis.
If someone's gonna be the recipient
of something under- -: Well, Wynn's subject
to the suitability analysis, and Wynn (chuckling)
is hiding
arguably,
that this premium is gonna be paid,
that the Gambling Commission has decided cannot be paid
because it raises too big a danger
of organized crime being rewarded for the license, right?
The Gambling Commission's very explicit and transparent.
Whether it's permissible what they're doing
is that other case.
But they're very permit saying, look,
we're not giving a license
if someone with a felony conviction is going to profit
from the casino premium, not gonna happen.
We're not giving the license.
And then, your client and Wynn,
according to you, agree that despite what they say,
we're gonna get that premium,
we're just not gonna tell the Gambling Commission.
Right? Isn't that essentially the facts?
-: So Your Honor, the consideration
had nothing to do with the sale of the land,
it had to do with the furnishing of a certification
that Anthony Gattineri was not required to furnish at all.
So, it's not undermining.
-: I thought the Gambling Commission said,
"I want a certificate from all of these people,
including your client,
that there's," I can't remember, what's the certificate say?
-: The certificate requires
the individual owners of FPT to certify
that they're the sole recipients of the sale
of the land proceeds.
And Anthony signed that certificate.
And it doesn't violate the condition going to section 21-C,
because the condition said, you need to, you Wynn,
need to get those three certifications.
Anthony Gattineri had no obligation to furnish
the certification, and the condition did not say to Wynn,
you cannot pay for the certification.
This is not an increased payment for the sale of the land.
The land, if you go to the land evidence records,
it's still $35 million.
Anthony Gattineri- Justice Kafker: Oh, did he?
-: But he got his third of the $40 million premium
that the Commission said,
we're not gonna give you a license
if you're gonna pay that premium.
-: He negotiated.
-: [Justice Wendlandt] Of course!
-: What he thought was adequate consideration
for the furnishing of the license,
which included a whole host of things,
including the fact that he was being referred
for criminal investigation.
There were a number of reasons that went into
why that consideration was agreed upon.
-: I thought you say,
I thought your argument in federal court was,
it was specific enough because it related
directly to the premium.
-: That was how it was calculated to make him whole,
but a whole bunch of, it's a separate contract.
-: So, it wasn't just.
So, that's the measure of its value,
was the premium that they wanted not paid!
And that's why you say it's specific enough
to be a contract, right?
-: That was the consideration
that was agreed upon, and how that figure was factored in,
but a lot of different issues went into coming up
with that consideration,
but that is the number that was ultimately agreed upon.
And with respect to- -: So again, can you,
why don't you, you've got four minutes,
I'm sure you'll probably go over,
but address the public policy.
The Gambling Commission, again, transparent.
We do not want a premium paid to these people
we're concerned about.
We're not gonna give Wynn the license.
And if that's the case,
and then it's concealed from them
that that's exactly what is happening with your client.
So, isn't that a contract in violation of public policy,
particularly in an incredibly heavily-regulated world,
which is the gambling world?
-: Your Honor, I would submit, no,
there's no violation of public policy.
A public policy violation has to come from a statute,
it has to be within what the legislature
in the case law protects.
And here, there's nothing in the gaming statute that allows
the Gaming Commission to dictate what the consideration
is to be paid with respect to the seller,
for the sale of the land
on which the casino- -: But that was case
number one, right?
And maybe that's a taking, right?
But we're now at case number two,
isn't it a public policy problem for
somebody to engage in this kind of self-help?
And say, "Gaming Commission, you did a taking on me,
and what I'm gonna do is go behind the scenes
and get my fair share, make whole on
what was taken from me by the government."
-: Your Honor, this was- -: Why would
we allow that?
-: Anthony Gattineri was under no obligation
to furnish the certification.
He was not subject to the Gaming Act,
he was not under any obligation to.
So, the fact that he received consideration for furnishing
the certification does not violate public policy.
-: Even though the Commission said, we don't want you to,
as a condition precedent for issuing the license.
-: The Commission, I would submit to the court,
did not have the power.
-: Right, and that's a taking problem,
that's why I said that's a case number one problem.
-: But if there's no statutory mechanism
for the Commission to control
the purchase price for the sale of the property,
if that's not something that's sanctioned by the statute,
then this agreement, which is one step removed from that,
Justice Kafker: No but- -: Can't violate
public policy either.
-: But the integrity of the people they're dealing with.
Because they're gonna be managing a gambling entity.
And we have historic concerns
about who runs a gambling facility.
And that's all over the statute, right?
The integrity of everyone they're dealing with,
Wynn in particular,
'cause Wynn has to sign this certificate, right?
And so, Wynn is potentially lying
if he's doing this too, right?
So, isn't the integrity issue, the public policy,
the integrity of the representations being made
to the Gambling Commission, the issue, right?
That's a public policy.
-: But the money, so from Wynn's perspective,
Wynn is not paying FPTA higher purchase price,
it's not undermining that condition of licensure.
It's not doing that,
and the other thing that's going on here as well is.
-: No.
Wynn has made representations that there's not gonna be
a gambling premium paid to people with felony convictions.
'Cause they are not gonna get the license if that happens.
And now, you're saying they lied
because they were paying your client a premium for that.
-: No, Your Honor, there's never been any felony conviction,
in fact, Charlie Lightbody and Anthony Gattineri,
and Dustin DeNunzio- -: So, they were acquitted,
and that's a big part of the second case.
But that's not what the Gambling Commission
was concerned about when they were giving out the license.
I understand your argument that 21
may only deal with post-licensing behavior.
And we're gonna ask your sister that stuff.
But the public policy deals
with the integrity of representations made
to the Gambling Commission
for the purposes of getting a license too, I would think.
-: Your Honor, and I know that's the other case,
but the Gaming Commission
accepted Wynn's proposal.
It's unclear whether or not,
I know this goes into the other case,
whether or not it was something that it was mandated to do,
but the Gaming Commission wouldn't have had the power to do,
to demand that the purchase price be 35 million.
And in terms of the public policy behind this, if.
-: The Gaming Commission could have the powers to unearth
who exactly they're dealing with, and find out
whether any of them
had criminal backgrounds.
That was well within their power.
They may not have exercised that power
properly in the first case,
but that was certainly well within their power to figure out
exactly who they were dealing with.
-: Correct, Your Honor, that was within their power,
but they didn't finish executing that power.
And they imposed, they give Wynn this windfall, so to speak,
in ostensibly, because they think they're suspicious
that there might be this hidden ownership interest.
But if the whole point behind here is we don't want
a convicted felon to profit from this transaction,
they didn't accomplish that goal
because the transfer of the property,
assuming there was a hidden ownership interest,
which has been disproven,
still would've given a convicted felon an interest
in the proceeds of the sale.
So, nothing about those conditions actually advanced
any type of public policy under the Gaming Act.
If I may, I think I have (chuckling) a few minutes left,
just, I'd like to address a few of Wynn's arguments.
And again, I just wanna stress
that the agreement had no impact
on the purchase price of the Everett property at all.
So in terms of the condition,
there's no violation of the condition
because the purchase price
was dictated by the Ninth Amendment, which never changed.
The payment was made in consideration of a certification.
Anthony Gattineri had no ability whatsoever to impact
that price for the purchase of the property.
He couldn't change that.
Even assuming that there could be
an argument that the San Diego agreement
violates the Commission's approval conditions,
these conditions themselves do not relate to or advance
any public policy embodied in the Gaming Act.
The public policy at issue here is ensuring
the public confidence
in the integrity of the gaming licensing process.
The Commission, as I said a few minutes ago,
ostensibly imposed those conditions on Wynn and FBT
because they were concerned that Charlie Lightbody
maintained some concealed interest in FBT,
and would therefore profit from the sale of the property.
But nothing about those conditions advances
the goal of ensuring public confidence
in the integrity of the gaming licensing process.
Even if Lightbody had a concealed interest in FBT,
which was disproven, he still would have profited
off of the Everett Property Sale.
So therefore, there's no public policy advanced
by that condition.
Potentially preventing a convicted
felon from- -: [Chief Justice Budd] Sorry.
-: Profiting too much, oh I'm sorry.
-: Yeah, no, it's just that we're several minutes over,
and it looks like the material you're going over now
may be in your brief?
-: Okay, thank you, Your Honor, I'll rest on our brief,
and we request that the court answer
the two certified questions with a resounding no, thank you.
(feet shuffling)
Participant: Okay.
Attorney Musgrave. (papers rustling)
(mic shuffling)
-: Good morning, and may it please the court.
Emily Musgrave on behalf of (indistinct) Wynn MA, LLC
and Wynn Resorts Limited, and with me
are my colleagues Tony Starr and Catherine Lombardo.
This case asked the court to decide for the first time
whether the Gaming Act will be enforced in the Commonwealth.
The legislature could not have been clearer
about the policy of this law.
It is about transparency of process, and has
a quote, unquote "paramount objective," of quote,
"ensuring public confidence in
the integrity of the gaming licensing process," end quote.
-: Well, that's the second part.
But can you go back to the first part for me?
I found persuasive, your sister's argument,
that there has to be an existing license
for purposes of at least 21-B and C.
Can you go through the math for me as to how that provision
could apply when the license was still extant?
-: Certainly, Your Honor.
One of the conditions of the alleged San Diego agreement,
and again, taking it as Gattineri alleges it,
which we don't concede,
was that Wynn would obtain the license.
So, the agreement did not spring into being
until the license would've been issued.
And at that point, it would have been a pecuniary payment
under a license.
-: But
the payment would be made before,
for the consideration for signing the certificate?
So ostensibly, then the certificate would be used
with the other FBT certificates,
and that would be used as part as Wynn's application,
and then ultimately, they get the license.
So, it's still downstream from actually getting the license?
-: No, Your Honor, there were certain explicit conditions,
and this is taken directly from Gattineri's complaint,
which is that Wynn needed to obtain the license,
Gattineri needed to be exonerated and so forth,
but an explicit condition was obtaining the license
before this agreement comes into being.
So, I don't agree that the payment
would've preceded the issuance of the license.
Justice Georges: Thank you.
-: Well, the license was a condition
precedent to the payment, is that what you're saying?
-: Obtaining the license, yes- -: Yeah, but
the agreement was executed?
-: The agreement to the extent, it was, and again,
we don't concede that,
but to the extent, the agreement was executed,
there would've been the meeting of the minds,
but the meeting of the minds
contemplated the issuance of the license
before the money would be paid.
-: Well, the one thing about 21 kind of cuts against that is,
it's all about transfers of license, right?
That's not really a transfer,
it's the initial granting of the license, right?
Because what they're, it seems like 21 is directed at,
okay, we agreed to give you the license,
you honest, good guy,
but you transfer it to somebody who makes us really nervous.
And they wanna really be informed.
Isn't most of 21 about transferring license?
-: I think 21-B also contemplates
a situation of that type of transfer, which is to say
after a license is issued.
But it doesn't preclude this situation,
which is to say in connection with the license,
and the reason I say that is because unlike the sections
that surround 21-B, which refer only to licensees,
21-B explicitly refers to any person, not just any licensee.
I also think, as the IEB suitability report demonstrates,
the Commission is established to be equally,
if not more concerned
with the transparency of pecuniary interest
under a gaming license
before it finds an applicant suitable.
So, that reading is more consistent with the statutory text
and the context in which it sits.
-: Why couldn't they just use the word you just used?
Applicant?
(papers rustling)
Instead of person?
Why couldn't they say applicant?
-: Well, because I don't think it's just limited
to the applicant.
And I think 21-B is designed
to preclude exactly this type of interference
with what is a heavily regulated process.
Not just by the applicant,
but by any person who is soliciting or inducing
even an applicant, to try to transfer
the interest under the license.
-: So, on the public policy part,
you don't spend any time on the other case,
but I think maybe we need to do a little time
on the other case.
So (sighs) if it wasn't proper
to force this discount,
does that present some problems for you? (stammers)
I'm gonna, Mr. Gattineri says, "I deserve this premium.
You guys are shafting me out of that.
You're taking my property unconstitutionally."
Does that change the public policy analysis
if it's problematic what the Gambling Commission did?
-: No, that case is completely unrelated.
Whatever the Commission did,
whatever the Commission's actions were,
has no impact on the propriety of Gattineri resorting to
this kind of self-help secret side deal
designed to circumvent its process.
-: Meaning, he should have sued you like the other,
like instead of doing the side deal
where he gets his money in a hidden way,
he should have done
what the other members of this group did, which is sue you.
Sue the Gambling Commission.
Emily: Well, I don't- -: That was
his proper way of getting paid,
if it were improper to discount the amount.
-: I don't represent the Gaming Commission,
and I don't intend to invite any lawsuits either.
Justice Kafker: Okay, that's right.
-: But I would say that- -: I keep forgetting
you're Wynn, not the. (Emily chuckling)
Although you're involved in that lawsuit too,
from what I understand
'cause they're blaming you for having done it.
-: Yes, Your Honor.
But the point I think remains here was that, yes,
there are multiple pathways that would be open
to Mr. Gattineri to challenge
the Commission's actions, if that's what he sought to do.
But our point is that the Commission,
for purposes of this case, could have done anything.
They could have said that Wynn needs to put the CITGO sign
on top of its casino.
And if Mr. Gattineri were unhappy with that,
it still wouldn't have been proper for him
to execute a secret side deal and tell no one about it,
including the Commission- -: The problem is
the secrecy of the deal more than the substance of the deal.
-: Well, I think it's both, Your Honor.
It's the secrecy of the deal, and it's the substance
which goes directly to when the Commission
approved the Ninth Amendment,
it did so with certain conditions,
and the substance of this deal goes right to those.
I do wanna come back to the court's point,
I think Your Honor said, "To force the discount."
And since we are talking about the other case,
I wanted to come back
to that point- Justice Kafker: Hmm.
-: So, just to be clear about what happened,
under the original option agreement,
there was a purchase price of 75 million,
with an undetermined amount of environmental remediation
that needed to take place.
Under the Ninth Amendment, that allocation shifted.
So, the purchase price
was 35- -: Yeah, but
again, the purchase,
the Gambling Commissions express, their express,
they say, "We're not gonna allow
this casino premium," right?
Forget, I understand the environmental may change
the amount of money we're talking about.
But there's an express refusal
to allow, they wanted
to make sure there was no possibility of this.
And I'm focused on that
because they may be running away, but the premium
is associated with the number.
There's a clear connection.
What he wants to get paid relates to the premium,
at least according to the federal case.
'Cause that's how they set the number.
So again, I understand the public policy concerns about
lack of transparency, but I find the other part of it
becomes a little more problematic.
And I don't think you can just say, okay,
it's really an environmental discount.
Emily: Well- -: 'Cause it's not just
really an environmental discount,
it's a don't pay these guys 'cause we wanna make sure
none of these people, including the plaintiff,
gets a premium.
-: But Your Honor, I wouldn't say
it's an environmental discount.
And when the environmental remediation
was shifted over to Wynn, by way of the Ninth Amendment,
which is the agreement the parties agreed to,
and that the Commission then approved.
So, I wanna also, to be clear,
that didn't come from the Commission.
This isn't in the record, but in the parallel litigation,
Wynn recently served in interrogatory responses
totaling the approximate amount, (clears throat)
excuse me, of environmental remediation
that had to be accomplished. -: And you're not gonna say
the whole $30 million is environmental, are you?
-: I'm not gonna say that, Your Honor,
I'm going to say it approximates $83 million,
which is so substantial in fact, that it dwarfs the original
purchase price of 75 million.
So, that's why I say that when we look only at
those two numbers, the 75 and the 35, that's misleading.
I do come back though to the fundamental premise
that none of that has anything to do
with Mr. Gattineri's agreement,
because whatever the Commission did,
he ought to have challenged it in a lawful way,
and not by means of self-help in a secret side deal.
-: Is Mr. Gattineri still part of FBT?
-: I don't know the status of that, Your Honor,
I did see that appended to the amicus brief of FBT,
was that there was ongoing litigation
among those members also.
-: [Justice Wendlandt] Thank you.
(papers rustling)
Okay, looks like we're all set
if you are. (papers rustling)
-: If the court has no further questions,
I'll rest on my briefs.