Failed Casino Deal: Sault Tribe to Appeal $88M Lawsuit

By Michigan Advance

January 20, 2023


MICHIGAN—The Sault Ste. Marie Tribe of Chippewa Indians will appeal a recent casino-related court decision that could cost them $88 million, the tribe announced this week.

A Jan. 3 ruling by Ingham County Judge Joyce Draganchuk would award the large sum to two Michigan development companies that had partnered with the tribe to build casinos in Lansing and Romulus.

The proposed casinos have failed to materialize due to unsuccessful bids to gain approval from the U.S. Department of the Interior to bring the proposed casino land into trust. Such an action is required for a tribe to operate a casino outside of their reservation land.

“The Sault Tribe is deeply concerned with what it has discovered in reading the Court’s opinion,” Sault Tribe Chairman Austin Lowes said Monday. “Our board has met with our legal counsel and is hopeful a new direction will lead to a better outcome.”

The tribe’s gaming arm, Kewadin Casinos Gaming Authority, had partnered with JLLJ Development and Lansing Future Development II to bring the casinos to fruition. They were set to be located in Lansing and New Boston outside of Detroit.

Those companies gave $9 million to the tribe to set plans in motion. Now that the plans have fallen through—after a “long and torturous history,” Draganchuk wrote in her order—the plaintiffs are asking for $88 million back. That sum includes the initial investment along with lost profits for the casinos that were never built.

The investors filed the complaint in late March 2021. From the start, Kewadin has contested the state court’s jurisdiction over the sovereign tribe and has sought to dismiss the case entirely. But the court has previously ruled that the contracts included “clear, irrevocable waivers of sovereign immunity.”

The defendants’ counsel also missed a scheduling hearing in October 2021.

New counsel has been hired by the tribe, namely Daniel V. Barnett of Grewal Law PLLC for the remainder of this case. The tribe’s relationship with the Patterson Law Firm has been terminated.

“A lot of people [in the tribe] are upset,” Sault Tribe citizen Nathan Wright told the Advance Tuesday night. “ … There’s a lot of finger pointing going on.”

Wright said that, on top of difficulties securing the land in trust properly with the BIA, communication had broken down between previous tribal leaders and the investors over the last decade.

He hopes the amount the tribe owes will be less than $88 million by the final court judgement, but still expects the Sault Tribe to be fined “a couple millions of dollars for our lackadaisicalness.”

“I don’t think people realize the potential ramifications yet,” Wright said, “because everything is kind of up in the air right now, especially with the appeal.

“I would hope that we would win the appeal and have that amount really reduced, because we definitely could use the money for our tribal citizens, our services, our elders. None of us want to see that go. It would be extremely damaging to us,” he continued.

“If we were to pay that amount, it would be a disaster.”

The Sault Tribe now plans to file a motion for relief from the judgement, and further appeal to the Michigan Court of Appeals if necessary.

This story was republished from Michigan Advance pursuant to a Creative Commons license.


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