Las Vegas Sun

March 29, 2024

Court rejects challenge to gaming authority

SAN FRANCISCO -- A federal appeals court refused Friday to reinstate a $6 million suit against Nevada officials by a former maker of gambling devices who gave up his license during an investigation of rigged slot machines.

Frank A. Romano said he was eventually cleared of wrongdoing and was unfairly denied return of his gaming license by the Nevada Gaming Commission.

But the 9th U.S. Circuit Court of Appeals said state agencies and officials had ironclad protection against damage suits for decisions to withhold gambling licenses.

With the power to determine who will be "players" in the lucrative industry, "these officials must be able to pursue disciplinary proceedings free from intimidation and harassment," said Judge Warren Ferguson in the 3-0 ruling.

"To deny them immunity would be to disservice the broader public interest in having people perform these functions without fear of having to personally defend their actions in civil damages lawsuits like the Romanos'."

Edward S. Coleman, lawyer for Romano and his wife, Maria, said he wasn't surprised, because the issue of legal immunity had always been the weakest part of their case. "I think we had a good legal argument" on the merits of the suit, which the court did not reach, he said.

Romano was a partner in American Coin Companies, which made and distributed gambling devices. The state Gaming Control Board began an investigation in 1989 into Romano and his partners, Rudolph and Rudolph M. Levecchia, based on evidence that more than 1,100 slot machines had been rigged not to pay jackpots.

The Lavecchias, blamed by the board for the rigging, left the state in 1989. Without admitting wrongdoing, Romano consented in 1990 to a $1 million fine, assessed against all three partners, and surrendered his license.

Romano and his wife filed for bankruptcy in 1992. Romano said a Gaming Control Board investigator testified during the bankruptcy proceeding that Romano knew nothing about the fraud, testimony reflected in the bankruptcy court's findings.

In 1997, he asked the Gaming Commission to return his license, but the commission refused, citing a law that requires request for rehearings to be filed within 10 days of an original order.

The Romanos then sued the state agencies, individual members and Attorney General Frankie Sue Del Papa, contending they had withheld evidence that would have cleared Romano and had enforced the law selectively. The appeals court upheld U.S. District Judge Howard McKibben's decision to dismiss the suit without a trial.

The court said the state agencies were protected by the Constitution's 11th Amendment, which forbids suits against states in federal court without their consent. The individuals were acting as judges or prosecutors and were therefore immune from damage suits, the court said.

archive