Las Vegas Sun

March 28, 2024

Gamblers strike out in suits tied to Las Vegas casino markers

With the Super Bowl comes plenty of betting on the game — and the annual reminders about gambling responsibly.

Two little-noticed court decisions, from 2010 and this year, illustrate the potential consequences of gamblers getting in too deep. The cases involve two men who were arrested on charges of failing to pay back Las Vegas gambling markers.

In an Arizona case last year, U.S. District Judge David Bury in Tucson rejected claims by John E. Trammell that he was wrongfully fired as an executive at Raytheon Missile Systems because of his disability: major depression, which in Trammell’s case manifested itself as compulsive gambling.

Trammell’s 2008 lawsuit alleged his firing was in violation of the federal Americans With Disabilities Act and the Arizona Civil Rights Act.

But Bury found Trammell had disclosed to Raytheon only that he had a gambling problem, not depression.

“The court is persuaded by defendant’s argument that the plaintiff was not terminated because of his disability, because Raytheon did not know he suffered from depression until after the termination,” Bury wrote in his ruling.

“Congress expressly excluded compulsive gambling, along with various sexual disorders, kleptomania, pyromania, and psychoactive substance use disorders resulting from current drug use, from the ADA’s definition of disability,” Bury noted in his ruling.

As related in lawsuit filings, Trammell was hired in 2001 to manage Raytheon’s field office in Honolulu, and in 2006 relocated to Raytheon Missile Systems in Tucson. As a contractor to the U.S. Defense Department, Raytheon required Trammell to maintain a secret security clearance because of his exposure to sensitive information.

In 2005, while stationed in Honolulu, he ran up a $30,000 gambling debt from Boyd Gaming Corp.’s now-demolished Stardust hotel-casino on the Las Vegas Strip — a debt he could not immediately repay.

After he was involved in a traffic accident that killed two people on Interstate 10 near Tucson in 2007, police arrested Trammell because of an outstanding warrant from Nevada on a larceny charge related to the Stardust gambling markers. Trammell after was later freed and paid off the markers, records show.

In Las Vegas, markers are considered to be check-like negotiable instruments that — if dishonored by a bank — can bring criminal bad-check charges.

After informing supervisors of his arrest and problems with gambling, as well as financial problems related to the delay in selling his home in Hawaii, Trammell was fired.

Raytheon argued Trammell’s “gambling issues and complete lack of candor with respect to same violated Raytheon’s clearly articulated and well-known reporting procedures, and demonstrated that he could not hold a security-sensitive position in which trust is a fundamental job requirement.”

Despite the prevalence of casinos and neighborhood slot machine gambling in Nevada, the Nevada Equal Rights Commission in recent memory hasn’t dealt with any complaints from people who claimed to be fired because of their gambling addiction, commission Administrator Shelley Chinchilla said in an interview this week.

“I don’t know of any” such cases, she said.

The state Equal Rights Commission, along with the federal Equal Employment Opportunity Commission, investigates workplace discrimination complaints.

Efforts in the psychiatric community to make compulsive gambling an official diagnosable disorder could prompt further discussions about extending workplace protections to problem gamblers, Chinchilla said.

“There is substantive research that supports the position that pathological gambling and substance use disorders are very similar in the way they affect the brain and neurological reward system. Both are related to poor impulse control and the brain’s system of reward and aggression,” Dr. Charles O’Brien, chair of the Substance-Related Disorders Work Group at the American Psychiatric Association, said in a 2010 announcement that the APA was considering gambling as a new diagnostic category of behavioral addiction.

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The second court case involving an arrest over Las Vegas gambling markers involves Ryan C. Nash of Seattle, who is suing the Las Vegas Hard Rock hotel-casino and the Clark County District Attorney’s Bad Check Diversion Unit.

Attorneys for Nash charged in a May 2010 complaint in his personal bankruptcy case that he was wrongfully arrested and suffered emotional distress over $12,500 in dishonored gambling markers owed to the Las Vegas Hard Rock.

Attorneys for Nash said that in 2007 and 2008 he frequently traveled to Las Vegas to play blackjack and occasionally poker at the Hard Rock and the MGM Grand. He was a professional gambler in 2008 and also owed $20,000 to Mandalay Bay when he filed for bankruptcy, records show.

Nash said in his complaint he suffered gambling losses of more than $165,000 in 2008 and because of these losses, he couldn’t cover the debt to the Hard Rock.

The lawsuit says that in March 2009 Clark County prosecutors sent Nash a letter advising him a criminal complaint had been filed against him and that a warrant had been issued for his arrest because of his failure to make restitution arrangements with the Hard Rock.

After Nash filed for Chapter 7 bankruptcy in August 2009 in Seattle, neither Clark County nor the Hard Rock objected to the discharge — or extinguishment — of the debt to the Hard Rock, the lawsuit says.

Nevertheless, in March 2010 he was arrested on the warrant and jailed overnight at the Canadian border in Whatcom County, Wash., after trying to return to the United States from a trip to Canada.

The lawsuit accuses Clark County and the Hard Rock of violating an injunction against the collection of Nash’s discharged debts that went into effect in January 2010.

The complaint sought a declaration that collection activities after January 2010 violated the discharge injunction, an injunction preventing further collection actions, and sanctions against Clark County and the Hard Rock for “intentional violations” of the discharge injunction.

“I have never been convicted of a crime in this matter. I am not aware of any restitution being ordered by a court. As far as I know, other than the complaint being filed and the warrant being issued, no other actions were taken pursuant to criminal prosecution prior to the my bankruptcy filing,” Nash said in a court filing.

“My unexpected arrest and subsequent arraignment have caused me emotional and physical distress. I have suffered shame, humiliation and anxiety, among other symptoms,” he said in the filing.

Attorneys for Nash said in court papers they contacted the Clark County district attorneys office and the Hard Rock and officials at both told Nash’s attorneys “they didn’t care” about the bankruptcy and that the debt to the Hard Rock needed to be paid or the criminal prosecution would proceed.

Eventually, an arrangement was reached in which Nash would pay off the debt at the rate of $500 per month, court records show.

Nevertheless, attorneys for Nash continued with their bankruptcy court lawsuit against Clark County and the Hard Rock, charging they are using the threat of criminal prosecution to get the Hard Rock paid for a debt that has been extinguished. Besides this being unfair to Nash, it’s unfair to his other creditors that saw their claims against Nash extinguished, the attorneys argued.

“The primary goal of the ‘prosecution’ of Mr. Nash is to get Hard Rock paid back. Such conduct is not excusable under the pretext of pursuing criminal charges against the debtor,” Nash’s attorneys argued in court papers.

Nash lost his case on Jan. 7, when Bankruptcy Judge Marc Barreca in Seattle ruled against him without Clark County or the Hard Rock ever answering the lawsuit against them.

Barreca cited as precedent a bankruptcy case that involved a criminal prosecution in Los Angeles County of a debtor for failing to pay child support. The bankruptcy didn’t stay, or halt, the criminal prosecution in that case, he said.

“Even though I’m quite sympathetic to his (Nash’s) plight and I was very touched by the testimony about the arrest and I am not pointing figures or chastising the debtor in any way, I don’t think it’s a situation under current 9th Circuit (U.S. Court of Appeals) law where the debtor is afforded any relief against Clark County or the Hard Rock,” Barreca said during a hearing on Nash’s case.

“There was nothing improper from a bankruptcy perspective about the continuing prosecution and therefore the arrest afterwards,” Barreca said. “The fact the underlying debt was discharged is irrelevant in a criminal action.”

The Hard Rock can’t be faulted for, after Nash’s bankruptcy, continuing to work with the Clark County prosecutor’s office to get its debt paid, the judge said.

“They legally don’t control the prosecutor’s office,” he said.

And Clark County “in pursuing its prosecutorial discretion and proceeding with that or agreeing with a deferred payment plan is not affected by the bankruptcy in doing so.”

Barreca, nevertheless, reiterated that the debt to the Hard Rock was discharged — though he’ll have to pay it off to avoid the criminal bad-check penalties.

Attorneys for Nash — Camille Nightingale and Christina Latta Henry at Seattle Debt Law LLC — said there’s a big difference between a criminal prosecution to collect child support and one to collect gambling debts.

On Wednesday, they appealed Barreca’s ruling.

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