Shingle Springs Band of Miwok Indians Victorious in Multimillion-Dollar Lawsuit

SHINGLE SPRINGS, Calif., Sept. 15, 2017 -- Today, the California Court of Appeal for the Third District issued a long-awaited opinion in the case of Sharp Image Gaming v. Shingle Springs Band of Miwok Indians, giving a complete victory to the Tribe in litigation that spanned a decade.  From the time the case was filed in El Dorado Superior Court in 2007, the Tribe has maintained it had no contractual obligation to Sharp Image Gaming for the company’s failed attempt to build a casino in the 1990s, and the state court should have immediately dismissed the case.  Offering a complete vindication of the Tribe’s legal arguments, the Court of Appeal ruled that the case should never have proceeded to trial and that the Tribe owed Sharp Image nothing. 

“I always believed the Tribe was in the right,” said Nicholas Fonseca, Chairman of the federally recognized Shingle Springs Band of Miwok Indians, whose reservation is in El Dorado County, and which owns and operates the Red Hawk Casino.  “I’m glad the Tribe had the perseverance to stay the course.  This is a victory for all tribes in California.”

At trial, Sharp Image sought approximately $300 million in damages on two contracts, but the jury rejected that claim, awarding instead just under $30 million.  However, by the time the matter was decided by the Court of Appeal, the claimed damages amounted to approximately $49 million, representing the award plus interest, accrued with the passage of time.

In ruling for the Tribe, the Court of Appeal found that the contracts were illegal, and thus unenforceable, under federal law.  Specifically, the Court ruled that one contract was a "management" contract under the Indian Gaming Regulatory Act, and the second was interrelated and so "collateral" to the management contract.  Because neither was approved by the federal agency charged with regulating Indian gaming, as the federal law requires, neither could be enforced by Sharp Image.  The Tribe had raised this defense at the outset of the litigation, but the trial court declined to reach the issue, which the Court of Appeal found to be erroneous.

In addition to ruling for the Tribe on the merits, and reversing the jury award to Sharp Image, the Court of Appeal ordered Sharp Image to reimburse the Tribe for the costs it incurred to pursue the appeal.

The opinion will be published as citable California appellate precedent, and the Tribe will next consider whether to pursue recovery of the legal fees it incurred against Sharp Image. 

-Shingle Springs Band of Miwok Indians-

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