WEBVTT
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SJC-13416.
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Anthony Gattineri v. Wynn MA, LLC.
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(papers rustling)
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(people shuffling)
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Good morning, Chief Justice Budd, and fellow justices,
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may it please the court,
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Kelley Jordan-Price here on behalf of Anthony Gattineri,
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and with me are my co-counsel,
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Michael Connolly and J. LeBlanc.
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As the court is well-aware,
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before the court are two questions that have been certified
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by the First Circuit to this court.
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The first question,
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being whether the San Diego agreement is unenforceable
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because it violates the Massachusetts Gaming Statute,
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specifically Section 21.
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And the second question
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is whether the San Diego agreement is unenforceable
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because it violates public policy.
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I'd like to describe what this case is actually all about.
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Because the briefs raise a number of issues
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that are somewhat irrelevant, we would submit.
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This case is about
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the enforceability of an agreement, a private agreement,
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that was entered into between Wynn and Anthony Gattineri.
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Importantly, for purposes of the certified questions
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before the court, the court is to assume
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that that San Diego agreement was validly formed.
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The San Diego agreement was an arm's length agreement
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between two private parties.
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Under its terms, Anthony Gattineri,
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agreed to sign a certification of ownership,
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that Wynn needed in exchange for a promise from Wynn
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to make Anthony Gattineri whole.
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Anthony Gattineri was under absolutely no obligation
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to sign that certification,
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and actually had a number of reasons
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to refrain from doing so, including the fact
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that the Gaming Commission require criminal referrals
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in connection with approving the Ninth Amendment,
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and Anthony Gattineri had every reason
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not to sign that certification.
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The San Diego agreement was entered into six months
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after the Ninth Amendment, to the option agreement
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between Wynn and FBT was approved by the Gaming Commission.
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The San Diego agreement does not alter or amend
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that Ninth Amendment at all,
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or in fact-
Oh, well, but, I mean,
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the big picture.
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I understand it's a contract between two private parties.
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But it's a contract related to an issue that's front
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and center to the Gambling Commission, which is
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whether their decision
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not to allow someone they were worried about,
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getting a, basically, a casino premium was permissible.
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The license was granted
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based on that issue, wasn't it?
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We can't look at this out of context, right?
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We have to look at it in the context which we're doing.
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So, I just feel like you should confront 21,
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and confront the public policy issues directly.
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I swear-
'Cause I don't think
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you're gonna
Your Honor.
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Avoid them.
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So, with respect to Section 21,
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and as I understand it, there's two issues.
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There's 21-B and 21-C.
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21-B talks about the transfer of an interest
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under a gaming license.
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One thing that I think is fairly remarkable, Your Honor,
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is the Gaming Commission submitted
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an amicus brief in this case.
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There's an issue that they were completely silent on,
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and that is whether or not
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this San Diego agreement violated the Gaming Act.
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I submitted to the court,
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that if the Gaming Commission,
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who is charged with the enforcement of that statute,
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thought there was a statutory violation,
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they would have discussed
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in the brief.
Can I ask you
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to go back to that statute?
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'Cause that was interesting, 21-B.
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Why is this San Diego agreement
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not a transfer of pecuniary interest under a gaming license?
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Your Honor, it's not a transfer of any interest
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under a gaming license for a number of reasons.
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One, when the San Diego agreement was entered into,
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there was no license at all.
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So, there's no transfer of anything under a license.
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With respect to
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(papers rustling)
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the language of 21-B,
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it talks about it, and for good reason,
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it talks about the transfer of an interest,
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either the gaming license or an interest thereunder,
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that needs to be approved by the Gaming Commission,
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because the Gaming Commission needs to determine
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whether the transferee of an interest
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under a gaming license is suitable.
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But I'm confused, though.
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Sorry, I didn't mean to cut you off, Justice Wendlandt.
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[Justice Wendlandt] No, go ahead,
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So-
[Justice Wendlandt] I think
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you're gonna say what I'm gonna say.
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Well, go ahead then.
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(lawyers chuckling)
[Justice Wendlandt] No.
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So, I'm confused, though.
(lawyer's voice drowns)
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The payment,
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Wynn gets a license.
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Your client doesn't get paid until after the license.
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There'll be no payment, right?
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Unless there's a license, right?
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So, I'm trying to understand,
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I understand your timing point that 21 only deals
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with some the licensing process,
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but the payment itself is gonna occur
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and only occur if Wynn gets the license, correct?
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That's correct, Your Honor, but that's a timing issue.
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It's not-
Well but,
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Transferring-
But then isn't it,
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as Justice Wendlandt was just talking about,
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a transfer of a pecuniary interest
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related to a gaming license.
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But that's not what,
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the statute uses the term under a license.
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Well, okay-
So,
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it's a timing
(Kafker's voice drowns)
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of payment-
Transfer.
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Isn't it a transfer of a pecuniary interest under a license?
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'Cause at least Wynn has a license, and
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Wynn is transferring the money to your client.
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So, wouldn't Wynn be violating it
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if your client weren't?
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No, Your Honor,
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because it's a transfer of money in exchange.
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It's the consideration that was agreed upon
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prior to the acquisition of the license.
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So if that were any payment-
But conditioned
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on that acquisition.
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So,
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I will give you one third of $40 million
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that the Gaming Commission says you can't have
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if the Gaming Commission
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doesn't know about this transfer and gives me a license.
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But it's not.
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Under the license?
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It's not money generated by the license.
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If that were the interpretation.
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Okay, so your position is that the pecuniary,
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the money needs to be generated by Wynn's Casino operation?
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Yes, Your Honor, it has to be
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either a transfer of the license,
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or something that the license is used for.
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And that makes sense because Anthony Gattineri
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is not subject to a suitability analysis.
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FBT was not subject to a suitability analysis.
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If someone's gonna be the recipient
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of something under-
Well, Wynn's subject
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to the suitability analysis, and Wynn (chuckling)
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is hiding
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arguably,
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that this premium is gonna be paid,
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that the Gambling Commission has decided cannot be paid
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because it raises too big a danger
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of organized crime being rewarded for the license, right?
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The Gambling Commission's very explicit and transparent.
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Whether it's permissible what they're doing
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is that other case.
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But they're very permit saying, look,
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we're not giving a license
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if someone with a felony conviction is going to profit
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from the casino premium, not gonna happen.
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We're not giving the license.
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And then, your client and Wynn,
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according to you, agree that despite what they say,
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we're gonna get that premium,
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we're just not gonna tell the Gambling Commission.
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Right? Isn't that essentially the facts?
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So Your Honor, the consideration
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had nothing to do with the sale of the land,
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it had to do with the furnishing of a certification
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that Anthony Gattineri was not required to furnish at all.
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So, it's not undermining.
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I thought the Gambling Commission said,
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"I want a certificate from all of these people,
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including your client,
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that there's," I can't remember, what's the certificate say?
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The certificate requires
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the individual owners of FPT to certify
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that they're the sole recipients of the sale
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of the land proceeds.
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And Anthony signed that certificate.
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And it doesn't violate the condition going to section 21-C,
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because the condition said, you need to, you Wynn,
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need to get those three certifications.
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Anthony Gattineri had no obligation to furnish
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the certification, and the condition did not say to Wynn,
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you cannot pay for the certification.
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This is not an increased payment for the sale of the land.
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The land, if you go to the land evidence records,
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it's still $35 million.
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Anthony Gattineri-
Oh, did he?
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But he got his third of the $40 million premium
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that the Commission said,
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we're not gonna give you a license
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if you're gonna pay that premium.
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He negotiated.
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[Justice Wendlandt] Of course!
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What he thought was adequate consideration
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for the furnishing of the license,
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which included a whole host of things,
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including the fact that he was being referred
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for criminal investigation.
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There were a number of reasons that went into
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why that consideration was agreed upon.
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I thought you say,
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I thought your argument in federal court was,
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it was specific enough because it related
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directly to the premium.
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That was how it was calculated to make him whole,
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but a whole bunch of, it's a separate contract.
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So, it wasn't just.
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So, that's the measure of its value,
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was the premium that they wanted not paid!
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And that's why you say it's specific enough
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to be a contract, right?
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That was the consideration
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that was agreed upon, and how that figure was factored in,
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but a lot of different issues went into coming up
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with that consideration,
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but that is the number that was ultimately agreed upon.
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And with respect to-
So again, can you,
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why don't you, you've got four minutes,
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I'm sure you'll probably go over,
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but address the public policy.
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The Gambling Commission, again, transparent.
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We do not want a premium paid to these people
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we're concerned about.
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We're not gonna give Wynn the license.
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And if that's the case,
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and then it's concealed from them
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that that's exactly what is happening with your client.
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So, isn't that a contract in violation of public policy,
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particularly in an incredibly heavily-regulated world,
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which is the gambling world?
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Your Honor, I would submit, no,
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there's no violation of public policy.
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A public policy violation has to come from a statute,
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it has to be within what the legislature
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in the case law protects.
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And here, there's nothing in the gaming statute that allows
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the Gaming Commission to dictate what the consideration
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is to be paid with respect to the seller,
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for the sale of the land
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on which the casino-
But that was case
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number one, right?
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And maybe that's a taking, right?
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But we're now at case number two,
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isn't it a public policy problem for
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somebody to engage in this kind of self-help?
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And say, "Gaming Commission, you did a taking on me,
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and what I'm gonna do is go behind the scenes
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and get my fair share, make whole on
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what was taken from me by the government."
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00:12:30.330 --> 00:12:32.370
Your Honor, this was-
Why would
267
00:12:32.370 --> 00:12:34.530
we allow that?
268
00:12:34.530 --> 00:12:36.870
Anthony Gattineri was under no obligation
269
00:12:36.870 --> 00:12:38.310
to furnish the certification.
270
00:12:38.310 --> 00:12:40.350
He was not subject to the Gaming Act,
271
00:12:40.350 --> 00:12:43.110
he was not under any obligation to.
272
00:12:43.110 --> 00:12:46.200
So, the fact that he received consideration for furnishing
273
00:12:46.200 --> 00:12:49.860
the certification does not violate public policy.
274
00:12:49.860 --> 00:12:54.240
Even though the Commission said, we don't want you to,
275
00:12:54.240 --> 00:12:56.910
as a condition precedent for issuing the license.
276
00:12:56.910 --> 00:12:59.610
The Commission, I would submit to the court,
277
00:12:59.610 --> 00:13:00.857
did not have the power.
278
00:13:00.857 --> 00:13:02.520
Right, and that's a taking problem,
279
00:13:02.520 --> 00:13:05.190
that's why I said that's a case number one problem.
280
00:13:05.190 --> 00:13:08.370
But if there's no statutory mechanism
281
00:13:08.370 --> 00:13:12.210
for the Commission to control
282
00:13:12.210 --> 00:13:15.570
the purchase price for the sale of the property,
283
00:13:15.570 --> 00:13:20.010
if that's not something that's sanctioned by the statute,
284
00:13:20.010 --> 00:13:23.090
then this agreement, which is one step removed from that,
285
00:13:23.090 --> 00:13:24.090
No but-
Can't violate
286
00:13:24.090 --> 00:13:25.077
public policy either.
287
00:13:25.077 --> 00:13:28.860
But the integrity of the people they're dealing with.
288
00:13:28.860 --> 00:13:32.190
Because they're gonna be managing a gambling entity.
289
00:13:32.190 --> 00:13:34.440
And we have historic concerns
290
00:13:34.440 --> 00:13:38.223
about who runs a gambling facility.
291
00:13:39.180 --> 00:13:41.280
And that's all over the statute, right?
292
00:13:41.280 --> 00:13:44.220
The integrity of everyone they're dealing with,
293
00:13:44.220 --> 00:13:45.360
Wynn in particular,
294
00:13:45.360 --> 00:13:47.793
'cause Wynn has to sign this certificate, right?
295
00:13:49.890 --> 00:13:52.830
And so, Wynn is potentially lying
296
00:13:52.830 --> 00:13:56.160
if he's doing this too, right?
297
00:13:56.160 --> 00:14:00.780
So, isn't the integrity issue, the public policy,
298
00:14:00.780 --> 00:14:03.780
the integrity of the representations being made
299
00:14:03.780 --> 00:14:07.110
to the Gambling Commission, the issue, right?
300
00:14:07.110 --> 00:14:08.883
That's a public policy.
301
00:14:10.620 --> 00:14:13.380
But the money, so from Wynn's perspective,
302
00:14:13.380 --> 00:14:16.440
Wynn is not paying FPTA higher purchase price,
303
00:14:16.440 --> 00:14:20.010
it's not undermining that condition of licensure.
304
00:14:20.010 --> 00:14:20.970
It's not doing that,
305
00:14:20.970 --> 00:14:23.760
and the other thing that's going on here as well is.
306
00:14:23.760 --> 00:14:24.593
No.
307
00:14:24.593 --> 00:14:29.580
Wynn has made representations that there's not gonna be
308
00:14:29.580 --> 00:14:33.993
a gambling premium paid to people with felony convictions.
309
00:14:35.280 --> 00:14:38.253
'Cause they are not gonna get the license if that happens.
310
00:14:39.810 --> 00:14:43.110
And now, you're saying they lied
311
00:14:43.110 --> 00:14:47.733
because they were paying your client a premium for that.
312
00:14:48.660 --> 00:14:51.540
No, Your Honor, there's never been any felony conviction,
313
00:14:51.540 --> 00:14:54.030
in fact, Charlie Lightbody and Anthony Gattineri,
314
00:14:54.030 --> 00:14:55.865
and Dustin DeNunzio-
So, they were acquitted,
315
00:14:55.865 --> 00:14:58.643
and that's a big part of the second case.
316
00:14:58.643 --> 00:15:02.220
But that's not what the Gambling Commission
317
00:15:02.220 --> 00:15:04.920
was concerned about when they were giving out the license.
318
00:15:04.920 --> 00:15:07.440
I understand your argument that 21
319
00:15:07.440 --> 00:15:11.700
may only deal with post-licensing behavior.
320
00:15:11.700 --> 00:15:14.730
And we're gonna ask your sister that stuff.
321
00:15:14.730 --> 00:15:17.400
But the public policy deals
322
00:15:17.400 --> 00:15:21.150
with the integrity of representations made
323
00:15:21.150 --> 00:15:23.130
to the Gambling Commission
324
00:15:23.130 --> 00:15:26.823
for the purposes of getting a license too, I would think.
325
00:15:28.740 --> 00:15:31.500
Your Honor, and I know that's the other case,
326
00:15:31.500 --> 00:15:34.320
but the Gaming Commission
327
00:15:34.320 --> 00:15:37.350
accepted Wynn's proposal.
328
00:15:37.350 --> 00:15:38.880
It's unclear whether or not,
329
00:15:38.880 --> 00:15:40.230
I know this goes into the other case,
330
00:15:40.230 --> 00:15:42.990
whether or not it was something that it was mandated to do,
331
00:15:42.990 --> 00:15:46.350
but the Gaming Commission wouldn't have had the power to do,
332
00:15:46.350 --> 00:15:49.860
to demand that the purchase price be 35 million.
333
00:15:49.860 --> 00:15:54.679
And in terms of the public policy behind this, if.
334
00:15:54.679 --> 00:15:59.130
The Gaming Commission could have the powers to unearth
335
00:15:59.130 --> 00:16:02.730
who exactly they're dealing with, and find out
336
00:16:02.730 --> 00:16:04.600
whether any of them
337
00:16:06.510 --> 00:16:07.860
had criminal backgrounds.
338
00:16:07.860 --> 00:16:09.300
That was well within their power.
339
00:16:09.300 --> 00:16:11.010
They may not have exercised that power
340
00:16:11.010 --> 00:16:12.750
properly in the first case,
341
00:16:12.750 --> 00:16:16.230
but that was certainly well within their power to figure out
342
00:16:16.230 --> 00:16:18.390
exactly who they were dealing with.
343
00:16:18.390 --> 00:16:20.220
Correct, Your Honor, that was within their power,
344
00:16:20.220 --> 00:16:23.760
but they didn't finish executing that power.
345
00:16:23.760 --> 00:16:28.530
And they imposed, they give Wynn this windfall, so to speak,
346
00:16:28.530 --> 00:16:32.400
in ostensibly, because they think they're suspicious
347
00:16:32.400 --> 00:16:34.890
that there might be this hidden ownership interest.
348
00:16:34.890 --> 00:16:38.310
But if the whole point behind here is we don't want
349
00:16:38.310 --> 00:16:43.110
a convicted felon to profit from this transaction,
350
00:16:43.110 --> 00:16:44.670
they didn't accomplish that goal
351
00:16:44.670 --> 00:16:47.790
because the transfer of the property,
352
00:16:47.790 --> 00:16:49.590
assuming there was a hidden ownership interest,
353
00:16:49.590 --> 00:16:50.880
which has been disproven,
354
00:16:50.880 --> 00:16:54.840
still would've given a convicted felon an interest
355
00:16:54.840 --> 00:16:55.980
in the proceeds of the sale.
356
00:16:55.980 --> 00:17:00.980
So, nothing about those conditions actually advanced
357
00:17:01.140 --> 00:17:03.993
any type of public policy under the Gaming Act.
358
00:17:08.790 --> 00:17:11.760
If I may, I think I have (chuckling) a few minutes left,
359
00:17:11.760 --> 00:17:14.553
just, I'd like to address a few of Wynn's arguments.
360
00:17:15.930 --> 00:17:17.460
And again, I just wanna stress
361
00:17:17.460 --> 00:17:19.440
that the agreement had no impact
362
00:17:19.440 --> 00:17:21.900
on the purchase price of the Everett property at all.
363
00:17:21.900 --> 00:17:22.980
So in terms of the condition,
364
00:17:22.980 --> 00:17:25.260
there's no violation of the condition
365
00:17:25.260 --> 00:17:26.400
because the purchase price
366
00:17:26.400 --> 00:17:29.550
was dictated by the Ninth Amendment, which never changed.
367
00:17:29.550 --> 00:17:33.660
The payment was made in consideration of a certification.
368
00:17:33.660 --> 00:17:37.620
Anthony Gattineri had no ability whatsoever to impact
369
00:17:37.620 --> 00:17:39.960
that price for the purchase of the property.
370
00:17:39.960 --> 00:17:41.463
He couldn't change that.
371
00:17:43.410 --> 00:17:45.390
Even assuming that there could be
372
00:17:45.390 --> 00:17:47.460
an argument that the San Diego agreement
373
00:17:47.460 --> 00:17:50.160
violates the Commission's approval conditions,
374
00:17:50.160 --> 00:17:53.640
these conditions themselves do not relate to or advance
375
00:17:53.640 --> 00:17:56.820
any public policy embodied in the Gaming Act.
376
00:17:56.820 --> 00:17:59.040
The public policy at issue here is ensuring
377
00:17:59.040 --> 00:18:00.270
the public confidence
378
00:18:00.270 --> 00:18:03.570
in the integrity of the gaming licensing process.
379
00:18:03.570 --> 00:18:05.580
The Commission, as I said a few minutes ago,
380
00:18:05.580 --> 00:18:10.350
ostensibly imposed those conditions on Wynn and FBT
381
00:18:10.350 --> 00:18:13.290
because they were concerned that Charlie Lightbody
382
00:18:13.290 --> 00:18:16.380
maintained some concealed interest in FBT,
383
00:18:16.380 --> 00:18:19.410
and would therefore profit from the sale of the property.
384
00:18:19.410 --> 00:18:22.470
But nothing about those conditions advances
385
00:18:22.470 --> 00:18:24.990
the goal of ensuring public confidence
386
00:18:24.990 --> 00:18:28.230
in the integrity of the gaming licensing process.
387
00:18:28.230 --> 00:18:32.520
Even if Lightbody had a concealed interest in FBT,
388
00:18:32.520 --> 00:18:36.510
which was disproven, he still would have profited
389
00:18:36.510 --> 00:18:38.430
off of the Everett Property Sale.
390
00:18:38.430 --> 00:18:42.030
So therefore, there's no public policy advanced
391
00:18:42.030 --> 00:18:43.830
by that condition.
392
00:18:43.830 --> 00:18:45.660
Potentially preventing a convicted
393
00:18:45.660 --> 00:18:47.280
felon from-
[Chief Justice Budd] Sorry.
394
00:18:47.280 --> 00:18:49.080
Profiting too much, oh I'm sorry.
395
00:18:49.080 --> 00:18:51.630
Yeah, no, it's just that we're several minutes over,
396
00:18:51.630 --> 00:18:55.530
and it looks like the material you're going over now
397
00:18:55.530 --> 00:18:56.760
may be in your brief?
398
00:18:56.760 --> 00:18:58.770
Okay, thank you, Your Honor, I'll rest on our brief,
399
00:18:58.770 --> 00:19:01.620
and we request that the court answer
400
00:19:01.620 --> 00:19:04.683
the two certified questions with a resounding no, thank you.
401
00:19:07.263 --> 00:19:08.096
(feet shuffling)
402
00:19:08.096 --> 00:19:08.929
Okay.
403
00:19:08.929 --> 00:19:12.193
Attorney Musgrave.
(papers rustling)
404
00:19:13.992 --> 00:19:16.659
(mic shuffling)
405
00:19:18.360 --> 00:19:19.890
Good morning, and may it please the court.
406
00:19:19.890 --> 00:19:23.100
Emily Musgrave on behalf of (indistinct) Wynn MA, LLC
407
00:19:23.100 --> 00:19:25.080
and Wynn Resorts Limited, and with me
408
00:19:25.080 --> 00:19:27.680
are my colleagues Tony Starr and Catherine Lombardo.
409
00:19:28.590 --> 00:19:31.410
This case asked the court to decide for the first time
410
00:19:31.410 --> 00:19:34.710
whether the Gaming Act will be enforced in the Commonwealth.
411
00:19:34.710 --> 00:19:36.930
The legislature could not have been clearer
412
00:19:36.930 --> 00:19:38.940
about the policy of this law.
413
00:19:38.940 --> 00:19:41.850
It is about transparency of process, and has
414
00:19:41.850 --> 00:19:45.397
a quote, unquote "paramount objective," of quote,
415
00:19:45.397 --> 00:19:47.280
"ensuring public confidence in
416
00:19:47.280 --> 00:19:50.080
the integrity of the gaming licensing process," end quote.
417
00:19:50.080 --> 00:19:51.533
Well, that's the second part.
418
00:19:51.533 --> 00:19:53.883
But can you go back to the first part for me?
419
00:19:55.710 --> 00:19:58.740
I found persuasive, your sister's argument,
420
00:19:58.740 --> 00:20:01.140
that there has to be an existing license
421
00:20:01.140 --> 00:20:04.320
for purposes of at least 21-B and C.
422
00:20:04.320 --> 00:20:08.580
Can you go through the math for me as to how that provision
423
00:20:08.580 --> 00:20:13.170
could apply when the license was still extant?
424
00:20:13.170 --> 00:20:14.400
Certainly, Your Honor.
425
00:20:14.400 --> 00:20:17.460
One of the conditions of the alleged San Diego agreement,
426
00:20:17.460 --> 00:20:19.530
and again, taking it as Gattineri alleges it,
427
00:20:19.530 --> 00:20:20.820
which we don't concede,
428
00:20:20.820 --> 00:20:22.680
was that Wynn would obtain the license.
429
00:20:22.680 --> 00:20:25.500
So, the agreement did not spring into being
430
00:20:25.500 --> 00:20:27.030
until the license would've been issued.
431
00:20:27.030 --> 00:20:30.570
And at that point, it would have been a pecuniary payment
432
00:20:30.570 --> 00:20:32.130
under a license.
433
00:20:32.130 --> 00:20:32.963
But
434
00:20:34.800 --> 00:20:36.810
the payment would be made before,
435
00:20:36.810 --> 00:20:39.900
for the consideration for signing the certificate?
436
00:20:39.900 --> 00:20:42.180
So ostensibly, then the certificate would be used
437
00:20:42.180 --> 00:20:44.460
with the other FBT certificates,
438
00:20:44.460 --> 00:20:47.250
and that would be used as part as Wynn's application,
439
00:20:47.250 --> 00:20:48.870
and then ultimately, they get the license.
440
00:20:48.870 --> 00:20:53.790
So, it's still downstream from actually getting the license?
441
00:20:53.790 --> 00:20:56.850
No, Your Honor, there were certain explicit conditions,
442
00:20:56.850 --> 00:21:00.450
and this is taken directly from Gattineri's complaint,
443
00:21:00.450 --> 00:21:03.180
which is that Wynn needed to obtain the license,
444
00:21:03.180 --> 00:21:06.390
Gattineri needed to be exonerated and so forth,
445
00:21:06.390 --> 00:21:10.350
but an explicit condition was obtaining the license
446
00:21:10.350 --> 00:21:12.240
before this agreement comes into being.
447
00:21:12.240 --> 00:21:13.860
So, I don't agree that the payment
448
00:21:13.860 --> 00:21:16.198
would've preceded the issuance of the license.
449
00:21:16.198 --> 00:21:17.031
Thank you.
450
00:21:17.031 --> 00:21:19.350
Well, the license was a condition
451
00:21:19.350 --> 00:21:22.000
precedent to the payment, is that what you're saying?
452
00:21:23.263 --> 00:21:24.159
Obtaining the license, yes-
Yeah, but
453
00:21:24.159 --> 00:21:26.370
the agreement was executed?
454
00:21:26.370 --> 00:21:28.380
The agreement to the extent, it was, and again,
455
00:21:28.380 --> 00:21:29.220
we don't concede that,
456
00:21:29.220 --> 00:21:31.500
but to the extent, the agreement was executed,
457
00:21:31.500 --> 00:21:32.880
there would've been the meeting of the minds,
458
00:21:32.880 --> 00:21:33.750
but the meeting of the minds
459
00:21:33.750 --> 00:21:36.060
contemplated the issuance of the license
460
00:21:36.060 --> 00:21:38.520
before the money would be paid.
461
00:21:38.520 --> 00:21:41.790
Well, the one thing about 21 kind of cuts against that is,
462
00:21:41.790 --> 00:21:44.223
it's all about transfers of license, right?
463
00:21:45.120 --> 00:21:46.740
That's not really a transfer,
464
00:21:46.740 --> 00:21:50.040
it's the initial granting of the license, right?
465
00:21:50.040 --> 00:21:54.570
Because what they're, it seems like 21 is directed at,
466
00:21:54.570 --> 00:21:57.360
okay, we agreed to give you the license,
467
00:21:57.360 --> 00:21:59.070
you honest, good guy,
468
00:21:59.070 --> 00:22:02.160
but you transfer it to somebody who makes us really nervous.
469
00:22:02.160 --> 00:22:04.110
And they wanna really be informed.
470
00:22:04.110 --> 00:22:07.170
Isn't most of 21 about transferring license?
471
00:22:07.170 --> 00:22:09.960
I think 21-B also contemplates
472
00:22:09.960 --> 00:22:12.660
a situation of that type of transfer, which is to say
473
00:22:12.660 --> 00:22:14.340
after a license is issued.
474
00:22:14.340 --> 00:22:17.100
But it doesn't preclude this situation,
475
00:22:17.100 --> 00:22:18.870
which is to say in connection with the license,
476
00:22:18.870 --> 00:22:22.200
and the reason I say that is because unlike the sections
477
00:22:22.200 --> 00:22:25.440
that surround 21-B, which refer only to licensees,
478
00:22:25.440 --> 00:22:29.790
21-B explicitly refers to any person, not just any licensee.
479
00:22:29.790 --> 00:22:33.300
I also think, as the IEB suitability report demonstrates,
480
00:22:33.300 --> 00:22:35.880
the Commission is established to be equally,
481
00:22:35.880 --> 00:22:37.140
if not more concerned
482
00:22:37.140 --> 00:22:39.090
with the transparency of pecuniary interest
483
00:22:39.090 --> 00:22:40.620
under a gaming license
484
00:22:40.620 --> 00:22:43.050
before it finds an applicant suitable.
485
00:22:43.050 --> 00:22:46.170
So, that reading is more consistent with the statutory text
486
00:22:46.170 --> 00:22:47.610
and the context in which it sits.
487
00:22:47.610 --> 00:22:49.830
Why couldn't they just use the word you just used?
488
00:22:49.830 --> 00:22:51.073
Applicant?
489
00:22:51.073 --> 00:22:52.890
(papers rustling)
490
00:22:52.890 --> 00:22:53.723
Instead of person?
491
00:22:53.723 --> 00:22:55.890
Why couldn't they say applicant?
492
00:22:55.890 --> 00:22:57.330
Well, because I don't think it's just limited
493
00:22:57.330 --> 00:22:58.410
to the applicant.
494
00:22:58.410 --> 00:23:00.030
And I think 21-B is designed
495
00:23:00.030 --> 00:23:02.550
to preclude exactly this type of interference
496
00:23:02.550 --> 00:23:05.220
with what is a heavily regulated process.
497
00:23:05.220 --> 00:23:06.720
Not just by the applicant,
498
00:23:06.720 --> 00:23:09.720
but by any person who is soliciting or inducing
499
00:23:09.720 --> 00:23:12.360
even an applicant, to try to transfer
500
00:23:12.360 --> 00:23:13.910
the interest under the license.
501
00:23:15.690 --> 00:23:18.480
So, on the public policy part,
502
00:23:18.480 --> 00:23:20.820
you don't spend any time on the other case,
503
00:23:20.820 --> 00:23:22.830
but I think maybe we need to do a little time
504
00:23:22.830 --> 00:23:23.790
on the other case.
505
00:23:23.790 --> 00:23:27.730
So (sighs) if it wasn't proper
506
00:23:28.590 --> 00:23:30.723
to force this discount,
507
00:23:31.980 --> 00:23:36.183
does that present some problems for you? (stammers)
508
00:23:39.300 --> 00:23:43.710
I'm gonna, Mr. Gattineri says, "I deserve this premium.
509
00:23:43.710 --> 00:23:46.860
You guys are shafting me out of that.
510
00:23:46.860 --> 00:23:49.737
You're taking my property unconstitutionally."
511
00:23:53.400 --> 00:23:55.800
Does that change the public policy analysis
512
00:23:55.800 --> 00:23:59.280
if it's problematic what the Gambling Commission did?
513
00:23:59.280 --> 00:24:01.770
No, that case is completely unrelated.
514
00:24:01.770 --> 00:24:04.020
Whatever the Commission did,
515
00:24:04.020 --> 00:24:06.000
whatever the Commission's actions were,
516
00:24:06.000 --> 00:24:09.720
has no impact on the propriety of Gattineri resorting to
517
00:24:09.720 --> 00:24:12.210
this kind of self-help secret side deal
518
00:24:12.210 --> 00:24:13.980
designed to circumvent its process.
519
00:24:13.980 --> 00:24:17.145
Meaning, he should have sued you like the other,
520
00:24:17.145 --> 00:24:19.830
like instead of doing the side deal
521
00:24:19.830 --> 00:24:23.430
where he gets his money in a hidden way,
522
00:24:23.430 --> 00:24:24.330
he should have done
523
00:24:24.330 --> 00:24:28.230
what the other members of this group did, which is sue you.
524
00:24:28.230 --> 00:24:30.210
Sue the Gambling Commission.
525
00:24:30.210 --> 00:24:31.080
Well, I don't-
That was
526
00:24:31.080 --> 00:24:33.720
his proper way of getting paid,
527
00:24:33.720 --> 00:24:38.043
if it were improper to discount the amount.
528
00:24:39.270 --> 00:24:41.752
I don't represent the Gaming Commission,
529
00:24:41.752 --> 00:24:44.115
and I don't intend to invite any lawsuits either.
530
00:24:44.115 --> 00:24:44.948
Okay, that's right.
531
00:24:44.948 --> 00:24:45.781
But I would say that-
I keep forgetting
532
00:24:45.781 --> 00:24:47.430
you're Wynn, not the.
(Emily chuckling)
533
00:24:47.430 --> 00:24:49.500
Although you're involved in that lawsuit too,
534
00:24:49.500 --> 00:24:50.460
from what I understand
535
00:24:50.460 --> 00:24:53.250
'cause they're blaming you for having done it.
536
00:24:53.250 --> 00:24:54.090
Yes, Your Honor.
537
00:24:54.090 --> 00:24:57.210
But the point I think remains here was that, yes,
538
00:24:57.210 --> 00:24:58.980
there are multiple pathways that would be open
539
00:24:58.980 --> 00:25:00.540
to Mr. Gattineri to challenge
540
00:25:00.540 --> 00:25:03.150
the Commission's actions, if that's what he sought to do.
541
00:25:03.150 --> 00:25:05.340
But our point is that the Commission,
542
00:25:05.340 --> 00:25:08.190
for purposes of this case, could have done anything.
543
00:25:08.190 --> 00:25:11.010
They could have said that Wynn needs to put the CITGO sign
544
00:25:11.010 --> 00:25:12.030
on top of its casino.
545
00:25:12.030 --> 00:25:14.250
And if Mr. Gattineri were unhappy with that,
546
00:25:14.250 --> 00:25:16.530
it still wouldn't have been proper for him
547
00:25:16.530 --> 00:25:19.290
to execute a secret side deal and tell no one about it,
548
00:25:19.290 --> 00:25:20.400
including the Commission-
The problem is
549
00:25:20.400 --> 00:25:24.360
the secrecy of the deal more than the substance of the deal.
550
00:25:24.360 --> 00:25:25.410
Well, I think it's both, Your Honor.
551
00:25:25.410 --> 00:25:27.480
It's the secrecy of the deal, and it's the substance
552
00:25:27.480 --> 00:25:29.790
which goes directly to when the Commission
553
00:25:29.790 --> 00:25:31.320
approved the Ninth Amendment,
554
00:25:31.320 --> 00:25:32.820
it did so with certain conditions,
555
00:25:32.820 --> 00:25:34.920
and the substance of this deal goes right to those.
556
00:25:34.920 --> 00:25:36.930
I do wanna come back to the court's point,
557
00:25:36.930 --> 00:25:38.880
I think Your Honor said, "To force the discount."
558
00:25:38.880 --> 00:25:40.560
And since we are talking about the other case,
559
00:25:40.560 --> 00:25:41.580
I wanted to come back
560
00:25:41.580 --> 00:25:43.020
to that point-
Hmm.
561
00:25:43.020 --> 00:25:45.480
So, just to be clear about what happened,
562
00:25:45.480 --> 00:25:47.400
under the original option agreement,
563
00:25:47.400 --> 00:25:49.620
there was a purchase price of 75 million,
564
00:25:49.620 --> 00:25:52.950
with an undetermined amount of environmental remediation
565
00:25:52.950 --> 00:25:54.300
that needed to take place.
566
00:25:54.300 --> 00:25:57.420
Under the Ninth Amendment, that allocation shifted.
567
00:25:57.420 --> 00:25:58.350
So, the purchase price
568
00:25:58.350 --> 00:25:59.370
was 35-
Yeah, but
569
00:25:59.370 --> 00:26:01.863
again, the purchase,
570
00:26:02.880 --> 00:26:06.330
the Gambling Commissions express, their express,
571
00:26:06.330 --> 00:26:08.100
they say, "We're not gonna allow
572
00:26:08.100 --> 00:26:10.290
this casino premium," right?
573
00:26:10.290 --> 00:26:12.540
Forget, I understand the environmental may change
574
00:26:12.540 --> 00:26:14.880
the amount of money we're talking about.
575
00:26:14.880 --> 00:26:18.420
But there's an express refusal
576
00:26:18.420 --> 00:26:20.220
to allow, they wanted
577
00:26:20.220 --> 00:26:22.743
to make sure there was no possibility of this.
578
00:26:24.390 --> 00:26:26.760
And I'm focused on that
579
00:26:26.760 --> 00:26:30.810
because they may be running away, but the premium
580
00:26:30.810 --> 00:26:34.020
is associated with the number.
581
00:26:34.020 --> 00:26:35.403
There's a clear connection.
582
00:26:37.290 --> 00:26:41.940
What he wants to get paid relates to the premium,
583
00:26:41.940 --> 00:26:44.550
at least according to the federal case.
584
00:26:44.550 --> 00:26:46.450
'Cause that's how they set the number.
585
00:26:47.370 --> 00:26:52.050
So again, I understand the public policy concerns about
586
00:26:52.050 --> 00:26:55.830
lack of transparency, but I find the other part of it
587
00:26:55.830 --> 00:26:58.530
becomes a little more problematic.
588
00:26:58.530 --> 00:27:01.050
And I don't think you can just say, okay,
589
00:27:01.050 --> 00:27:03.760
it's really an environmental discount.
590
00:27:03.760 --> 00:27:04.593
Well-
'Cause it's not just
591
00:27:04.593 --> 00:27:05.550
really an environmental discount,
592
00:27:05.550 --> 00:27:09.330
it's a don't pay these guys 'cause we wanna make sure
593
00:27:09.330 --> 00:27:12.840
none of these people, including the plaintiff,
594
00:27:12.840 --> 00:27:14.073
gets a premium.
595
00:27:15.352 --> 00:27:16.440
But Your Honor, I wouldn't say
596
00:27:16.440 --> 00:27:18.030
it's an environmental discount.
597
00:27:18.030 --> 00:27:20.040
And when the environmental remediation
598
00:27:20.040 --> 00:27:22.620
was shifted over to Wynn, by way of the Ninth Amendment,
599
00:27:22.620 --> 00:27:24.270
which is the agreement the parties agreed to,
600
00:27:24.270 --> 00:27:25.770
and that the Commission then approved.
601
00:27:25.770 --> 00:27:26.603
So, I wanna also, to be clear,
602
00:27:26.603 --> 00:27:29.070
that didn't come from the Commission.
603
00:27:29.070 --> 00:27:32.130
This isn't in the record, but in the parallel litigation,
604
00:27:32.130 --> 00:27:34.860
Wynn recently served in interrogatory responses
605
00:27:34.860 --> 00:27:36.810
totaling the approximate amount, (clears throat)
606
00:27:36.810 --> 00:27:38.550
excuse me, of environmental remediation
607
00:27:38.550 --> 00:27:40.921
that had to be accomplished.
And you're not gonna say
608
00:27:40.921 --> 00:27:43.380
the whole $30 million is environmental, are you?
609
00:27:43.380 --> 00:27:44.550
I'm not gonna say that, Your Honor,
610
00:27:44.550 --> 00:27:47.370
I'm going to say it approximates $83 million,
611
00:27:47.370 --> 00:27:50.910
which is so substantial in fact, that it dwarfs the original
612
00:27:50.910 --> 00:27:52.650
purchase price of 75 million.
613
00:27:52.650 --> 00:27:54.900
So, that's why I say that when we look only at
614
00:27:54.900 --> 00:27:58.980
those two numbers, the 75 and the 35, that's misleading.
615
00:27:58.980 --> 00:28:02.010
I do come back though to the fundamental premise
616
00:28:02.010 --> 00:28:03.360
that none of that has anything to do
617
00:28:03.360 --> 00:28:04.800
with Mr. Gattineri's agreement,
618
00:28:04.800 --> 00:28:06.570
because whatever the Commission did,
619
00:28:06.570 --> 00:28:09.390
he ought to have challenged it in a lawful way,
620
00:28:09.390 --> 00:28:11.990
and not by means of self-help in a secret side deal.
621
00:28:13.140 --> 00:28:16.803
Is Mr. Gattineri still part of FBT?
622
00:28:17.790 --> 00:28:19.320
I don't know the status of that, Your Honor,
623
00:28:19.320 --> 00:28:24.320
I did see that appended to the amicus brief of FBT,
624
00:28:24.330 --> 00:28:25.860
was that there was ongoing litigation
625
00:28:25.860 --> 00:28:27.183
among those members also.
626
00:28:28.032 --> 00:28:29.093
[Justice Wendlandt] Thank you.
627
00:28:29.093 --> 00:28:32.189
(papers rustling)
628
00:28:32.189 --> 00:28:33.990
Okay, looks like we're all set
629
00:28:33.990 --> 00:28:34.823
if you are.
(papers rustling)
630
00:28:34.823 --> 00:28:36.000
If the court has no further questions,
631
00:28:36.000 --> 00:28:37.150
I'll rest on my briefs.