MGM MIRAGE asks court to reject suit

David N. Goodman

Tuesday, May 11, 2004 | 8:59 a.m.

DETROIT -- Owners of the MGM Grand Detroit Casino are asking a federal appeals court to quickly dismiss an Indian tribe's lawsuit over the way that the city's three casino franchises were awarded.

Lawyers for the casino, owned by Las Vegas-based MGM MIRAGE, sent a motion for delivery today to the 6th U.S. Circuit Court of Appeals in Cincinnati seeking to be dismissed from the seven-year-old lawsuit by the Lac Vieux Desert Band of Lake Superior Chippewa Indians.

The 430-member Upper Peninsula tribe says Detroit's 1997 casino selection process was unfair, and it sued the three casinos and the city in 1997. The tribe operates its own casino in the Upper Peninsula village of Watersmeet.

Recently, the tribe reached a $94 million settlement with current and former owners of Greektown and MotorCity casinos. Participants said that agreement cleared the way for the appeals court to lift its order blocking the casinos from expanding at new, permanent locations that also are to feature hotels.

The expansion has been a key part of Detroit's development plans. Even with smaller, temporary sites, the casinos took in $1.13 billion in revenue last year.

The Lac Vieux tribe's main claim was that the city's selection rules gave unfair advantage to Greektown and MotorCity because their owners backed a 1996 ballot proposal to legalize casino gambling in the city.

But the Lac Vieux tribe also sued MGM Grand, which did not get special consideration in the process of awarding the three casino franchises.

Today's motion asks the appeals court to summarily dismiss the tribe's appeal of a 2002 Detroit U.S. District Judge Robert Homes Bell's ruling in MGM Grand's favor.

In its motion, MGM Grand said the appeals court's dismissal of the Lac Vieux tribe's claims against the company would have "the potential to simplify this case and to clarify issues for oral argument."

The rest of the case -- the tribe's claims against the MotorCity and Greektown casinos and the city -- essentially is resolved.

In an out-of-court deal, former Greektown Casino investors Ted Gatzaros and Jim Papas agreed to pay the tribe $15 million. On April 9, Bell approved a tentative deal in which Greektown and MotorCity would pay the tribe $39.5 million each.

Bell said then that the partial settlement lessened the Lac Vieux's claims against MGM Grand because the tribe already had received "substantial relief" from the other casino operators.

On Friday, MGM Grand appealed Bell's April 9 decision, mainly as a way to preserve the company's legal rights, said company spokesman Bob Berg. He said MGM officials have no desire to block the tribe's deals with the other casinos.

"They're certainly not trying to stand in the way of the settlement between Lac Vieux and the other two casinos," Berg said.

Lac Vieux lawyer Conly Schulte nonetheless criticized the appeal, calling it a "delay tactic."

"This appeal only puts off the inevitable and obstructs the city's planning and timing for permanent facilities and attendant hotels," Schulte said in a news release.