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Horvitz & Levy LLP represented Harrah’s Operating Company, Inc. and related entities in this California Court of Appeal case, in which the Court of Appeal reversed a $30 million judgment against Harrah’s in a business dispute arising out of failed negotiations between Caesars Entertainment and the plaintiff Pauma Indian tribe for Caesars to develop and manage a resort hotel and casino on Pauma’s reservation in northern San Diego County. 

The negotiations fell apart when Pauma began to make new demands on Caesars after the announcement that Caesars was merging with Harrah’s. Pauma’s new demands stemmed largely from the fact that Harrah’s operated a major competitor, the nearby Rincon hotel and casino. After the Pauma tribe chose to terminate negotiations with Caesars and to seek a new development partner, it sued Caesars, Harrah’s and related entities on numerous theories including market allocation (a violation of the Cartwright Act, California’s antitrust statute) and intentional interference with prospective economic advantage. The jury returned special verdicts for the defendants on almost all theories but found Harrah’s liable for intentional interference. It awarded $30 million in damages.

The Court of Appeal, Fourth District, Division One, reversed and remanded for a new trial in an unpublished opinion. The court ruled the jury’s special verdict imposing liability for intentional interference was fatally inconsistent with its finding of no liability on Pauma’s Cartwright Act claim, since market allocation in violation of the Cartwright Act was the sole theory of “independently wrongful conduct” Pauma asserted at trial in support of its claim of intentional interference with prospective economic advantage. The Court of Appeal also ruled in the defendants’ favor on Pauma’s cross-appeal, affirming the trial court’s rejection of Pauma’s promissory estoppel claim, by which the tribe had sought to recover $12 million in payments it had made to the State of California under an amended gaming compact.