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Seminole Hard Rock Hotel and Casino Tenants File Lawsuit Claiming
Tribe isn't Playing by its Own Rules

By Michael Vasquez, The Miami HeraldMcClatchy-Tribune Regional News

June 08, 2011--As slot machines beep and flash, and cards are dealt on the blackjack tables, a growing list of business tenants at the Seminole Tribe's Hollywood-area hotel and casino are saying management isn't playing by the rules.

"They are a law unto themselves, answerable to no one other than themselves, in their view," said Fort Lauderdale attorney Kenneth Whitman, who represents KnightTime Billiards -- the latest casino complex tenant to protest in court.

In a 78-page federal lawsuit filed last week, KnightTime seeks a $20 million judgment against the Seminole Tribe for "unethical, unlawful and reprehensible acts" that it alleges severely damaged KnightTime's profitability.

KnightTime is still operating, but two other tenants unhappy with the tribe -- 88's Dueling Pianos and Jazziz -- were ultimately evicted in court for falling behind on rent. A fourth tenant, Contour Day Spa, was removed with the help of casino security after the tribe insisted Contour did not have a valid lease. All four tenants date back to the Hard Rock's 2004 opening.

Attorney Adam Kurlander, who represents both 88's and Jazziz, said of the tribe: "When they had an opportunity to be difficult, they were difficult, and they have the upper hand."

Seminole Gaming CEO Jim Allen counters that the tribe has thousands of contractual relationships, and that the vast majority are handled smoothly and without complaint. With these particular tenants, Allen says, the tribe had justification for its actions.

In the case of KnightTime's chief operating officer, Scott Pendleton, Allen said Hard Rock guests had filed numerous complaints for "inappropriate conduct and behavior.'' Allen declined to elaborate.

About eight months ago, tribal police escorted Pendleton off the property and told him not to return. Since then, he's not been allowed to set foot in his business.

The banning of Pendleton is not KnightTime's only gripe. Other allegations in its lawsuit include:

-- To entice KnightTime to open back in 2004, casino management promised amenities such as a live band regularly performing outside the pool hall's entrance. That didn't happen. Instead, the Seminole Tribe would periodically stage events that cut off access to KnightTime, rather than steering patrons to it.

-- The tribe levied hefty fees not outlined in the lease. At one point, according to the suit, the Seminoles demanded KnightTime pay a $58,523 patio-usage fee. KnightTime refused to pay, citing its entitlement to patio space under the lease.

-- The Seminole Tribe conspired to put KnightTime out of business, at times employing tactics that were in direct violation of the pool hall's lease agreement. For example, the suit claims the Seminole Tribe reduced the amount of patio space that KnightTime could use to attract and serve bar patrons.

The Hard Rock's heavy pedestrian traffic on the weekends makes outdoor patio bars a prized commodity -- and KnightTime is not the only tenant to complain that outdoor space was withheld. Jim Layson, the owner of 88's Dueling Pianos, said casino management abruptly refused to let him occupy any outdoor space at all -- even after he'd done so for years. Layson said outdoor access was specifically granted in his lease, but it didn't matter.

Without his patio bar service, Layson wasn't making enough money to pay rent and his business was evicted several months ago.

Allen disputed that the tribe had reduced KnightTime's valuable patio access. "It is the same today as it was since day one," Allen said.

At 88's, Allen said the problem was not the use of outdoor space, but Layson attempting to install an outdoor bar without the necessary tribal permission and plumbing approvals. The piano bar was also starting to mimic a nightclub, Allen said, which management didn't want. "If he kept it as a piano bar, we would have been happy for him to stay," Allen said.

The owners of the spa and Dueling Pianos have pending lawsuits against the Seminoles and Jazziz is contemplating a suit.

In court battles, the Seminoles' legal status as a sovereign nation gets many lawsuits dismissed.

Attorney and professor Robert Batson, who teaches American Indian law at New York's Albany Law School, said those entering into contracts with a tribe can strengthen their legal hand by including specific language that calls for the tribe to waive sovereign immunity if disputes arise. Such waivers have held up in court, Batson said, while adding that tribes enter into many contracts and business deals that proceed trouble-free.

"Have good legal representation," Batson said. "Make sure that your attorney knows something about business dealings with tribes and tribal entities."

A sovereign-immunity waiver is not bulletproof. The Seminole Tribe has in the past argued in court that, even after agreeing to such a waiver, it was entitled to special legal status as a "protected class."

In the case of Contour Day Spa, the tribe argued in court that its waiver didn't apply because its lease with the spa wasn't valid. Contour owner Fanit Panofsky said the tribe told her, both verbally and in writing, that the lease had been fully executed. In truth, the federal government needed to sign off on the lease, and never did because it wanted some minor technical changes to the lease's wording.

For years, Panofsky said she operated her business, and paid her rent, under what she thought was an approved lease. When relations between Panofsky and the tribe deteriorated, Seminole representatives told her she didn't have a valid lease, and Contour was shut down.

In March, U.S. District Judge William Zloch dismissed a portion of Panofsky's lawsuit against the Seminoles. Zloch said it was Panofsky's responsibility to make sure the federal government had signed off on the lease. Because that federal approval never happened, nothing in the lease was binding, including the tribe's sovereign immunity waiver, Zloch found.

Panofsky "could have discovered that the lease had not been approved by contacting the secretary of the interior," Zloch wrote, "or even by asking defendant for some proof of the secretary's approval."

Panofsky's spa was replaced by another spa in the same location. Jazziz became Martorano's, an Italian restaurant. Layson's dueling piano bar has remained vacant since his eviction earlier this year.


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