US-based gaming machine supplier Sharp Image Gaming has been awarded $30.4m by a California court following a contract dispute with a tribal casino operator.
The jury at an El Dorado County court found in favour of Sharp Image Gaming, the original vendor of gaming machines to the Shingle Springs Band of Miwok Indians, for the tribe’s breach of two contracts.
It found that the tribe had breached an equipment lease agreement, first entered into in 1997, under which Sharp Image was to be the exclusive supplier of gaming machines to the tribe, by contracting with its current casino manager, Lakes Entertainment, to, among other things, supply those same machines. The jury also specifically found that the tribe breached this agreement in bad faith. The jury awarded Sharp Image $20.4m for this breach.
The jury also found that the tribe had breached a promissory note, also entered into in 1997, for money that Sharp Image had advanced the tribe to help it get its gaming operation going. The jury found that the tribe breached this agreement in bad faith as well. The jury awarded Sharp Image $10m for this breach.
The tribe will now also have to pay Sharp Image’s legal costs.
“This is a victory not just for Sharp Image, but for small companies doing business with Indian tribes throughout California,” said Chris Anderson, president of Sharp Image.
According to Sharp Image’s legal representative, DLA Piper, the tribe tried to defend the lawsuit by improperly procuring an opinion from the National Indian Gaming Commission that Sharp Image’s contracts were invalid.
“In defending against our claims,” continued Anderson, “the tribe and its lawyers invented 37 technical, legalistic defences that had never been issues between the parties, including sovereign immunity and the improper NIGC decision, attempting to bury us in litigation costs. Thankfully, the judge and jury saw through it all and we had enough resources to carry on the fight. Many small businesses would not have the resources to survive similar tribal onslaughts."
