Kewadin Casinos Gaming Authority ordered to pay $88 million to Lansing Investors.

January 5, 2023.    The information the Sault Tribe of Chippewa Indians would not release to the Sault Tribe Guardian Reporters in January of 2022 or this summer about the Lansing Casino Project has been published by a law journal for all to see with extra details shared by the Winners Attorneys to the law journal adding a clear bias towards the tribe demonstrated in the on-line post.  However even with the bias this is still more than our tribe has provided to the members to date in this matter. The matter we are referring to is the Michigan Court Case JLLJ Development LLC et al. v. Kewadin Casinos Gaming Authority, case no. 21-000189-CB, in the state of Michigan Circuit Court for the 30th Judicial Circuit, Ingham County.  

It seems the Legal Department for the Tribe's behavior was both arrogant and unprofessional. So much so that the the Judge retaliated against our Gaming Authority with a 88 million dollar judgment. It appears the Tribe's Legal Strategy in this matter was to disrespect and ignore the courts authority claiming the state court has no authority to rule on this matter even though they lost their rights to do so when a federal lawsuit the tribe filed against Judge Draganchuk over her refusal to dismiss the case was rejected under the Rooker-Feldman doctrine that bars federal courts from reviewing state courts' decisions.

The ruling states that the Kewadin Gaming Authority must pay $88 million to investors over the tribe's failed plans to build two casinos in Lansing and Romulus. 

In the Court Order, Ingham County Judge Joyce Draganchuk said investors were entitled to a default win on breach of contract and misrepresentation claims after Kewadin Casinos Gaming Authority ignored several court orders leading up to a bench trial on damages.

Kewadin, the gambling authority of the Sault Ste. Marie Tribe of Chippewa Indians, was held in contempt for failing to participate in discovery and was not permitted to call witnesses during the trial because the tribe did not submit a trial brief or witness list.

The tribal gambling authority argued that Judge Draganchuk had failed to establish jurisdiction over the sovereign tribe and the tribe did not have to provide discovery because it was immune from the state court's orders. 

Judge Draganchuk said the investors, JLLJ Development and Lansing Future Development II, successfully proved they were entitled to recoup nearly $9 million in money they loaned for the project and $75 million for the share of casino profits they would have received had the Casinos been built, plus interest. 

JLLJ Development and Lansing Future Development II said the tribe had broken promises to set up an oversight development committee and development coordinator to run the project and had also deceived the investors by telling them the land was guaranteed to be placed in trust.   

Kewadin had argued at trial that a limited-recourse provision in the development agreements, which said claims could only be made against the revenues from the casinos, barred the investors from recovering any damages.

But Judge Draganchuk pointed to the intent of the contract "as a whole," including other provisions that permitted the investors to seek remedies if Kewadin defaulted on its payments, to conclude that the investors had a right to recoup the loans.

"It would be absurd to conclude that the very purpose that all these parties came together for could be thwarted by Kewadin and all parties would just walk away with Kewadin retaining all the funds," Judge Draganchuk wrote.

Kewadin was prohibited from calling witnesses during the trial "for the simple reason" that Kewadin never filed a witness list, the judge said.

In the ruling the judge stated that it appeared to have been intentional and not neglectful because Kewadin never requested leave to file a late witness list and never put forth any excuse or justification whatsoever for its failure to file the witness list," Judge Draganchuk wrote.

The judge also detailed other court orders that were ignored as Kewadin maintained it had sovereign immunity from the suit and claimed the judge had never ruled on the issue of subject-matter jurisdiction.

The state court judge, in response to an early motion to dismiss in the case, had ruled Kewadin did not have sovereign immunity due to "clear" waivers of immunity in the contract documents, which Kewadin had argued only applied to federal court. According to the order, Judge Draganchuk dismissed a second motion to dismiss for lack of subject-matter jurisdiction, saying she considered it an untimely motion for reconsideration of her first order.

The next step will be determining how much Kewadin will have to pay to cover the investors' attorneys fees.  No information has been released regarding the tribe plans to challenge this ruling.     

Kewadin Casinos Gaming Authority is represented by Jeffrey S. Rasmussen, Frances C. Bassett and Jeremy Patterson of Patterson Earnhart Real Bird & Wilson LLP. 

Members are starting to ask if it is time for new attorneys. 

Other Members are organizing to recall Board Members.  

The lack of integrity in this entire business deal is obvious to many.  

Where is the 9 million dollars the investors provided?   

We are better than this.   Our children deserve better than this.  

We do expect this judgement will be appealed.      

Information was in part provided by reporters Caleb Symons, Joyce Hanson with Editing by Alex Hubbard.