However, as the complaint contains separate allegations of tortious
interference with each of the four agreements, with the appropriate
entity named as the party plaintiff, I agree that it was confusing to
adopt plaintiffs' use of the amalgamated term "Catskill" and in this
opinion I will take care to differentiate among the three plaintiffs. I
note, however, that the individual plaintiffs do not operate as
independently as Catskill Development now claims in the motion foe
reconsideration. In particular, I find disingenuous plaintiffs attempt to
characterize the land transfer as a separate transaction by an
indepentent entity (Catskill Development) whose post-closing involvement
in the casino would be tangential or non-existent.
The casino project was subject to extensive federal and state
regulatory oversight under the Indian Gaming Regulatory Act (IGRA),
codified at 25 U.S.C. § 2701 et seq. First, before a Tribe can
operate a gaming establishment on newly-acquired trust lands, the
Secretary of the Bureau of Indian Affairs (BIA) has to determine that "a
gaming establishment on the newly acquired trust lands would not in the
test interest of the Indian tribe and its members, and would not be
detrimental to the surrounding community," but only after obtaining the
concurrence of the Governor of the State in which the casino will be
built (in this case, New York's Governor Pataki). 25 U.S.C. § 2719
In addition to BIA approval, plaintiffs had to obtain approval of the
Management Agreement by the Chairman of the National Indian Gaming
Commission (NIGC). See 25 U.S.C. § 2705 (a)(4), 2710(d)(9), 2711.
Furthermore, plaintiffs and the Tribe could not install Class III games
such as electronic gaming terminals in the casino until the Tribe
re-negotiated, through Governor Pataki, its gaming compact with the
As set tint in detail in the May 14 opinion, plaintiffs were in the
process of obtaining' the necessary approvals when defendant convinced the
Tribe to deal only with it on any casino projects in New York State. At
the time defendant allegedly induced the Tribe to break with plaintiffs,
the Secretary of the BIA had determined that the project could proceed.
However, Governor Pataki had not yet concurred, and from documents
submitted by the plaintiffs it appears that he was not likely to give
this concurrence prior to successful renegotiation of the tribal-state
compact. Thus, the BIA had not yet agreed to accept the land in trust for
the Tribe, and the trust transfer had not yet occurred. Furthermore, the
NIGC had not yet approved the Management Agreement.
Plaintiffs filed claims for tortious infererence with contract,
tortious interference with prospective business relations, unfair
competition, and violations of New York's Donnelly Act. Defendant moved
to dismiss plaintiffs claim for tortious interference within contract on
the grounds that none of the agreements executed between plaintiffs and
the Tribe was a valid contract. Park Place argued that the lack of the
necessary governmental approvals rendered the various agreements void.
In the May 14 opinion, I held that the Management Agreement was void
under regulations passed pursuant to the IGRA which require that gaming
management contracts not approved by the National Indian Gaming
Commission (NIGC) are void and unenforceable. Catskill, 144 F. Supp.2d 215
(citing 25 C.F.R. § 533.7). See also 25 C.F.R. § 533.1 (stating
that Class II and III management contracts "shall become effective upon
approval by the Chairman [of the NIGC]").
As to the LPA, the Development and Construction Agreement, and the
Shared Facilities Agreement, I held that each of these was also void. I
found that each of these agreements were collateral to the Management
Agreement, under the definition of "collateral agreements" under provided
in 25 C.F.R. § 502.5. Under section 2711(a)(3 of the IGRA,
collateral agreements are considered management contracts. Thus, because
unapproved management contracts are void under C.F.R. §§ 533.1 and
533.7, I held that the collateral agreements were also void.*fn2 See
Catskill, 144 F. Supp.2d 215 (citing 25 U.S.C. § 2711 (a)(3) and
U.S. ex rel. Mosay v. Buffalo Bros. Mgmt., 20 F.3d 739, 743 (7th Cir.
1994) (explaining effect of IGRA on contracts with Indian tribes)).
Catskill Development now moves for reconsideration of the Court's
holding, albeit only with respect to the LPA.
1. Plaintiffs Motion For Reconsideration Is Granted
To prevail on a motion for reconsideration, the movant must demonstrate
"an intervening change of controlling law, the availability of new
evidence, or the need to correct a clear error or prevent manifest
injustice." See Doe v. New York City Dept. of Soc. Servs., 709 F.2d 782,
789 (2d Cir. 1983). The court's review is narrow and applies only to
already-considered issues; new arguments and issues are not to be
considered." See Morales v. Quintiles Transnational Corp.,
25 F. Supp.2d 369, 372 (S.D.N.Y. 1998). A motion for reconsideration "is
not a substitute for appeal and `may be granted only where the Court has
overlooked matters or controlling decisions which might have materially
influenced the earlier decision.'" See id. (citations omitted).
Plaintiff argues that I should not have deemed the LPA a "collateral
agreement" to the management contract. I will not revisit this holding.
The agreements at issue in this case were all closely related.*fn3
Provisions of each agreement either triggered or worked in conjunction
with provisions in the others. In addition, Catskill Development or one
of its affiliates was to
receive some form of compensation under each agreement, an arrangement
which defendant argues would have led the NIGC to consider the deal in
toto.*fn4 See Approved Management Contracts v. Consulting Agreements,
NIGC Bulletin No. 94-5, October 14, 1994 (noting in its guidelines that
in order to determine whether or not a particular contract or agreement
is a "management contract", the NIGC "must see the entire document
including any collateral agreements and referenced instruments").
Nonetheless, I am granting the motion for reconsideration. Having again
reviewed the relevant statute and the terms of plaintiffs agreements, I
conclude that my application of section 2711(a)(3) to the Management
Agreement and the other agreements in this case, whether collateral or
not, was in error.
Section 2711(a)(3) states:
For purposes of this chapter, any reference
to the management contract described
in paragraph (1) shall be considered
to include all collateral agreements
to such contract that relate to the gaming
25 U.S.C. § 2711 (a)(3). The phrase "management contracts described
in paragraph (1)" refers to section § 2711(a)(1), which applies only
to management contracts for the operation and management of Class II
gaming operations. As the Court now understands, the Management Agreement
in this lawsuit was explicitly amended in 1999 to provide that plaintiff
Mohawk Management would manage only Class III games in the casino.*fn5
The amended Management Agreement is explicit: Mohawk Management has no
responsibility for Class II games.
Collateral agreements are considered management contracts in the IGRA
only when they relate to Class II gaming. Therefore, sections 533.1 and
533.7 (the "voiding" regulations) do not apply to any of the agreements
that I deem to be "collateral" to the Management Agreement This includes
The portion of the IGRA which applies the provisions of section 2711 to
Class III management contracts does not change the above result Section
2710(d)(9) states in relevant part that the "Chairman's review and
approval of such [Class III] contract shall be governed by the provisions
of subsections (b), (c), (d), (f), (g), and (h) of section 2711 of this
title." 25 U.S.C. § 2710 (d)(9). Thus, while most of the subsections
of § 2711 apply to Class III contracts, § 2711(a) —
including § 2711(a)(3) — does not.
Defendant argues that Congress could not have intended to restrict the
application of section 533.7 to those agreements which are collateral to
Class II contracts. I disagree. Congress provides for different treatment
of Class II and Class III gaming in any number of places in the
IGRA.*fn6 In addition to subsection (a), subsections (e) and (i) of
section 2711 do not apply to Class III management contracts. There is no
basis from which I may imply, as defendant urges, that Congress "meant
to" subject contracts collateral to both Class II and Class III
management agreements to the "voiding" regulations of the statute. It is
not inconsistent to require that an agreement with a Tribe be subject to
NIGC review on the basis of its relationship to a Class III management
contract, and at the same time to place that same agreement outside the
province of a strict voiding provision.
For the reasons discussed above, plaintiff's motion for reconsideration
is granted., and upon reconsideration, I hold that the collateral
agreements, including the LPA, are not subject to the voiding provisions
of the IGRA. Accordingly, that portion of the opinion in which I held
that the collateral agreements were void under 2711(a)(3) is vacated.
This applies not only to the LPA, but the Development and Construction
Agreement and the Shared Facilities Agreement. However, there were
alternative grounds for voiding the other two agreements. The Shared
Facilities Agreement was deemed void for lack of a condition precedent
contained in the contract. See Catskill, 144 F. Supp.2d 215. See also n.
10 at infra, section 2. The Development and Construction Agreement was
deemed void under 25 U.S.C. § 81. See Catskill, 144 F. Supp.2d 215.
In a footnote, Catskill Development argues that this holding was in
error, due to a 1999 Amendment to section 81. There is, however, no need
for me to decide whether the original or the amended section 81 applies,
because it is now clear that the Development and Construction Agreement
is void under IGRA as a management contract: plaintiff now represents to
the Court that it was the position of the NIGC, expressed by letter dated
April 19, 2000, that both the Management Agreement and the Development and
Construction Agreement constituted "management contracts" for the
purposes of NIGC review.*fn7 (Pl. Mem. at 16.)
2. The LPA Is Not Invalid Absent Approval of The Trust Transfer
Defendant originally argued in its motion to dismiss that the LPA was
not valid because final BIA approval for the land-trust transfer,
required under 25 U.S.C. § 2719, was a condition precedent to the
validity of the contract.*fn8 Because I
found the LPA void as a collateral agreement to the Management
Agreement, I did not address this argument Defendant asks that I do so
A condition precedent is "an act or event, other than a lapse of time,
which, unless the condition is excused, must occur before a duty to
perform a promise in the agreement arises." Oppenheimer & Co., Inc. v.
Oppenheim, Appel, Dixon & Co., 86 N.Y.2d 685, 691, 636 N.Y.S.2d 734, 737,
660 N.E.2d 415 (1995) (citing Calamari & Perillo, Contracts § 11-2,
at 438 [3d ed.] and Restatement [Second] of Contracts § 224).
However, not every condition in a contract is precedent to the existence
of a valid, enforceable contract. See Matco Elec. Co., Inc. v. American
District Telegraph Co., Inc., 156 A.D.2d 840, 841, 549 N.Y.S.2d 843, 844
(3d Dep't 1989). As the court in Oppenheimer opined:
Most conditions precedent describe acts
or events which must occur before a
party is obligated to perform a promise
made pursuant to an existing contract, a
situation to be distinguished conceptually
from a condition precedent to the
formation or existence of the contract
itself. In the latter situation, no contract
arises `unless and until the condition
Oppenheimer, 86 N.Y.2d at 690, 636 N.Y.S.2d at 737, 660 N.E.2d 415 (citing
Calamari & Perillo at § 11-5, at 440). See also Matco Elec. Co. v.
American Dist. Tel. Co., 156 A.D.2d 840, 549 N.Y.S.2d 843 (3d Dept 1989)
The language of condition must be explicit. For example, the contract
in Oppenheimer a conditional letter agreement, contained more than one
provision that explicitly declared that, in the absence of certain
conditions, the agreement "shall be deemed null and void and of no
further force and effect," and neither party was to have "any rights
against nor obligations to the other." Oppenheimer, 86 N.Y.2d at 688, 636
N.Y.S.2d at 735-46, 660 N.E.2d 415. Another provision of the agreement
stated that the parties "agree not to execute and exchange the Sublease
unless and until . . . the conditions set forth in paragraph (c)
[requiring written consent] are timely satisfied." Id. The court held
that the letter agreement contained a condition precedent, because it
provided "in the clearest language that the parties did not intend to form
a contract `unless and until' defendant received written notice of the
prime landlord's consent on or before February 25, 1987." Id. at 695, 636
N.Y.S.2d at 740, 660 N.E.2d 415.
The LPA contains no such language. While Catskill Development's
obligation to "sell" the land and the Tribe's obligation to "purchase"
the land was contingent upon the United States' decision to accept the
land into trust, BIA approval was not a condition precedent to the
validity of the entire LPA.*fn9 The Agreement was fully
executed was binding on both parties. It contains provisions which
obligate the Tribe to use its best efforts to help obtain approval for
the trust-transfer. (See Carpinello Aff. at Ex. A at §§ 8.01, 8.02.)
It is a clear example of a contract where the parties' performance is
conditioned on the governmental approvals, rather than one where the
agreement itself is so conditioned. See Buffardi v. Parillo,
168 A.D.2d 812, 813, 563 N.Y.S.2d 948, 950 (3d Dept 1990).
The cases cited by defendant do not require any other conclusion. The
contract at issue in Cauff, Lippman & Co. v. Apogee Finance Group, Inc.,
807 F. Supp. 1007 (S.D.N.Y. 1992), included a condition requiring KLM
Supervisory Board approval for the transaction. Id. at 1017. The court
nevertheless found, based on the language in the contract, that the
parties intended to form a valid contract. The contract stated that it
"constitute[s] a binding agreement between [Cauff, Lippmand] and [Apogee]
with respect to this transaction Id. at 1020. The Court held that "[s]uch
language strongly suggests that the parties intended to form a binding
contract obligating each party to negotiate in good faith to finalize all
remaining terms in a manner consistent with the agreed upon terms. . . .
The inclusion [of] the . . . . condition precedent is not inconsistent
with an intention to enter into a binding contract." Id.
In Office of the Comptroller General of Republic of Bolivia on Behalf
of Bolivian Air Force v. Int'l Promotions & Ventures, Ltd.,
618 F. Supp. 202, 207 (S.D.N.Y. 1985), the court held that failure to
obtain a government license for the object of the contract rendered the
contract void. Again, however, this conclusion was based on the language
of the contract, which explicitly conditioned validity on procuring the
license. It stated that "[t]he present contract will become effective
once the following requirements ha[ve] been complied with," and listed as
one of the requirements the following: "Four. — The transfer
license of the goods, object of the present contract, ha[s] been
[obtained] by `THE SELLER' [defendant] in the United States of America,
within the maximum deadline of thirty (30) days, computed from the time
the present document was subscribed [i.e. September 30, 1981]." Id. at
204. Again, no such language in the LPA conditions the validity of
effectiveness of the contract on BIA approval.
Thus, upon reconsideration, defendant's motion to dismiss plaintiffs
claim for tortious interference with the LPA is denied.
3. Catskill Development's Request To Review The Dismissal of The Claim
For Tortious Interference With The Gaming Management Agreement Is
In yet another footnote, Catskill Development also seeks to reargue the
motion to dismiss the claim for tortious interference with the Management
Agreement. Plaintiff Mohawk Management is the only plaintiff who was a
party to the Management Agreement, and as such is the only party who could
recover for tortious interference with this Agreement. Mohawk Management
did not move for reconsideration of this holding. So I am constrained to
ignore Catskill Development's suggestion that I reopen the matter.
Furthermore, even if the request for reconsideration were properly
Court, I would not change my conclusion that the Management Agreement is
void for lack of NIGC approval. Plaintiff argues that the provisions in
IGRA which operate to void unapproved management contracts were intended
for the protection of tribes, and as a matter of equity. should not be
used to benefit a wrongdoer by shielding it from liability for its own
hand. In support, plaintiff cites Tri-Milennium Corp. v. Jena Bond of
Choctaw Indians, 725 So.2d 533 (La.App. 1998). In that case, the court
denied the Tribe's defense of no cause of action and enjoined the Tribe
from negotiating a casino proJect with any other parties. Id. at 535. The
court allowed plaintiffs' claims to proceed in spite of the fact that the
contract between plaintiffs and the Tribe may have void under section 81
or the IGRA. What Catskill Development fails to note, however, is that
the court in Tri-Millennium found that plaintiffs had stated causes of
action for conversion, unjust enrichment and fraud, and could therefore
proceed with their request for injunctive relief despite the fact that
they did not have a claim for breach of contract. Id. at 537-35.
Tri-Millennium therefore has no applicability to this case.
For the reasons discussed above, plaintiffs motion for reconsideration
is granted, and defendant's motion to dismiss the claim for tortious
interference with the Land Purchase Agreement is denied. Portions of the
May 14 opinion are vacated as discussed above.