Lac Vieux Desert Band of Lake Superior Chippewa Indians, a federally recognized… v. the City of Detroit, Michigan

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 05a0320n.06
Filed: April 28, 2005
Nos. 02-1893/02-1996/04-1618
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
LAC VIEUX DESERT BAND OF LAKE
SUPERIOR CHIPPEWA INDIANS, a federally
recognized Indian Tribe,
P l a i n t i f f - A p p e l l a n t / C r o s s -
Appellee/Appellee,
v.
THE CITY OF DETROIT, MICHIGAN; KWAME
KILPATRICK; MARY ANN MAHAFFEY;
KENNETH V. COCKEREL, JR.; SHEILA
COCKREL; BRENDA M. SCOTT; SHARON
McPHAIL; ALBERTA TINSLEY-TALABI;
ALONZO W. BATES; BARBARA ROSE
COLLINS; KAY EVERETT;
Defendants-Appellees,
ATWATER ENTERTAINMENT ASSOCIATES,
L.L.C.; GREEKTOWN CASINO, L.L.C.;
DETROIT ENTERTAINMENT, L.L.C.;
Intervenors-Appellees,
MGM GRAND DETROIT, L.L.C.,
I n t e r v e n o r - A p p e l l e e / C r o s s -
Appellant/Appellant,
and
MICHIGAN GAMING CONTROL BOARD,
Amicus Curiae.
ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR
THE WESTERN DISTRICT OF MICHIGAN
/

-- 1 of 7 --

No. 02-1893/02-1996/04-1618
Lac Vieux Desert Band of Lake Superior Chippewa Indians, et al. v. City of Detroit, et al.
Page 2
Before: MARTIN, MOORE and GIBBONS, Circuit Judges.
BOYCE F. MARTIN, JR., Circuit Judge. These consolidated cases have a long and complex
factual and procedural history that is extensively documented in two prior published opinions of this
Court. See Lac Vieux Desert Band of Lake Superior Chippewa Indians v. Mich. Gaming Control
Bd., 276 F.3d 876 (6th Cir. 2002) (Lac Vieux II); Lac Vieux Desert Band of Lake Superior Chippewa
Indians v. Mich. Gaming Control Bd., 172 F.3d 397 (6th Cir. 1999) (Lac Vieux I). Three appeals
are currently pending before us, each of which is fully briefed and ripe for adjudication. For the
following reasons, we AFFIRM the district court’s approval of the settlement agreement and consent
judgment in case number 04-1618, DISMISS the appeals in case numbers 02-1893 and 02-1996, and
DISSOLVE the previously-entered injunction pending appeal.
I.
The underlying dispute among the parties arose after the legalization of gambling in Detroit,
when the City enacted an ordinance establishing how it would issue three licenses for the operation
of new casinos. As we explained in Lac Vieux II, the ordinance “incorporated an advantage for two
companies that had been active in the movement to legalize the gambling in the first place . . . and
thereby penalized potential applicants who did not engage in it themselves.” 276 F.3d at 878. We
held the ordinance unconstitutional because it based the advantage on such political activity. Id.
The two companies that benefited from the preference—Atwater Entertainment Associates and
Greektown Casino—were awarded licenses. MGM Grand Detroit, L.L.C. was awarded the third
license, although it derived no direct benefit from the ordinance’s preference provision. Lac Vieux
chose not to participate in this licensing process and instead instituted legal action challenging the

-- 2 of 7 --

No. 02-1893/02-1996/04-1618
Lac Vieux Desert Band of Lake Superior Chippewa Indians, et al. v. City of Detroit, et al.
Page 3
constitutionality of the ordinance.
On remand, and pursuant to our decision in Lac Vieux II, the district court granted Lac
Vieux’s motion for partial summary judgment, declaring the ordinance unconstitutional. Lac Vieux
then filed a motion for further relief requesting a new selection process for all three casino
franchises. MGM filed a motion to intervene, recognizing the effect that Lac Vieux’s motion for
further relief might have on its interests. The district court permitted MGM to intervene. MGM
then filed a motion seeking an order declaring that the preference provisions found unconstitutional
by the Lac Vieux II panel were severable from the remainder of the Ordinance and that MGM’s
selection as a Detroit casino developer was valid. The district court denied Lac Vieux’s motion for
further relief and, accordingly, also denied MGM’s motion. Those rulings are the subject of two of
the three appeals currently pending before us: Lac Vieux’s appeal in case number 02-1893 and
MGM’s cross-appeal in case number 02-1996, respectively.
During the pendency of those two appeals, Lac Vieux entered into a settlement agreement
with Atwater, Greektown and an entity called Detroit Entertainment LLC, of which Atwater is now
a member. Under the terms of the settlement agreement, Lac Vieux agrees to dismiss its appeal with
prejudice in case number 02-1893 to the extent that it relates to Atwater, Greektown and Detroit
Entertainment. The parties also executed a consent judgment that includes language that protects
Atwater/Detroit Entertainment and Greektown from any new selection process that this Court may
order in Lac Vieux’s appeal in case number 02-1893. In exchange, Atwater/Detroit Entertainment
and Greektown agree to pay Lac Vieux $80 million upon approval of the settlement agreement and
consent judgment.

-- 3 of 7 --

No. 02-1893/02-1996/04-1618
Lac Vieux Desert Band of Lake Superior Chippewa Indians, et al. v. City of Detroit, et al.
Page 4
The district court indicated its willingness to approve the settlement agreement and consent
judgment pursuant to the procedures in First National Bank v. Hirsch, 535 F.2d 343 (6th Cir. 1976).
The settling parties then submitted to this Court a motion for approval of their settlement agreement
and consent judgment or, alternatively, for remand to the district court for that purpose. We
remanded the matter for consideration of the settlement issues and their impact on MGM. On
remand, the district court issued an order approving the settlement agreement and consent judgment
and specifically holding that the arrangement “represents a fair and reasonable settlement, . . . is in
the public interest and . . . does not prejudice MGM.” MGM’s appeal of that ruling, which is
docketed as case number 04-1618, is the third of the three appeals currently pending before us.
II.
In case number 04-1618, MGM argues that the district court erred in approving the
settlement agreement and consent judgment in several ways: first, in approving language in the
consent judgment that MGM claims purports to curtail this Court’s equity jurisdiction; second, in
requiring MGM to prove that the consent judgment causes it legal prejudice, rather than some lower
standard of harm; and third, assuming that the legal prejudice standard does apply, in concluding
that MGM has failed to satisfy that standard. We review the district court’s approval of a settlement
agreement and consent judgment for abuse of discretion. See Tenn. Ass’n of Health Maint. Orgs.,
Inc. v. Grier, 262 F.3d 559, 564 (6th Cir. 2001); Therma-Scan, Inc. v. Thermoscan, Inc., 217 F.3d
414, 419 (6th Cir. 2000).
The language in the consent judgment that MGM finds objectionable is contained in the
following two paragraphs:

-- 4 of 7 --

No. 02-1893/02-1996/04-1618
Lac Vieux Desert Band of Lake Superior Chippewa Indians, et al. v. City of Detroit, et al.
Page 5
It is further ORDERED that Detroit Entertainment and Greektown are hereby
authorized to continue operating their casinos pursuant to their current respective
Development Agreements unaffected by the remaining parties to this litigation
continuing to pursue their respective claims and appeals and unaffected by the
resolution of those claims or appeals.
It is further ORDERED that Detroit Entertainment and Greektown may
continue to operate their respective casinos pursuant to their current respective
Development Agreements without satisfying any additional material requirements
relating to or arising as a consequence of the Pending Litigation or participating in
a new casino development competitive selection process or its equivalent.
According to MGM, these paragraphs effectively limit the manner in which this Court may
adjudicate the claims at issue in Lac Vieux’s appeal in case number 02-1893—namely, whether the
City should be ordered to conduct a new selection process and, if so, to which franchise(s) such
process should apply. MGM argues that if in case number 04-1618 we approve the settlement
agreement and consent judgment, then we cannot in case number 02-1893 order a new selection
process that includes all three franchises; pursuant to the terms of the consent judgment, MGM fears,
any new selection process that we might order would apply only to MGM’s franchise, a result that
MGM finds particularly inequitable in light of the fact that it never benefitted directly from the
unconstitutional preference in the first place.
We avoid the dangers that MGM points out, however, by adjudicating all three pending
appeals simultaneously. Indeed, MGM recognizes as much. In its brief, MGM states that “[t]his
Court may approve the Consent Judgment upon a finding that the Court cannot thereafter grant any
additional equitable relief that would further remedy [Lac Vieux’s] constitutional injury.” Such a
result, MGM concedes, would “assure that [Lac Vieux] will receive $80 million to compensate it
for the violation of its constitutional rights” and would “also avoid prejudicing MGM.” This is

-- 5 of 7 --

No. 02-1893/02-1996/04-1618
Lac Vieux Desert Band of Lake Superior Chippewa Indians, et al. v. City of Detroit, et al.
Page 6
1Given our dismissal of Lac Vieux’s appeal in case number 02-1893, MGM’s cross-appeal
in case number 02-1996 is also dismissed.
precisely the result that we have reached. Accordingly, MGM’s primary objection to the two
paragraphs in the consent judgment no longer applies and, given MGM’s concession that such a
result would cause it no harm, we need not determine whether the district court erred in evaluating
MGM’s objections to the consent judgment under the legal prejudice standard.
Based upon our thorough review of the record and the parties’ arguments, we find no abuse
of discretion in the district court’s approval of the settlement agreement and consent judgment and
we therefore affirm that judgment. Given our conclusion in that regard, Lac Vieux’s appeal in case
number 02-1893 must be dismissed. In that appeal, Lac Vieux requests additional relief in the form
of a new selection process for all three franchises, which are currently held by Atwater/Detroit
Entertainment, Greektown and MGM, respectively. This request directly conflicts with the
provision of the consent judgment that expressly relieves Atwater/Detroit Entertainment and
Greektown of any obligation to “participat[e] in a new casino development competitive selection
process or its equivalent.” In light of the consent judgment, we cannot grant the relief that Lac
Vieux seeks in its appeal in case number 02-1893. Nor do we believe that a new selection process
is warranted solely for the franchise currently held by MGM. Not only would such a result be
particularly inequitable to MGM, it cannot even be deemed a remedy for the constitutional violation
that occurred in this case, as the new selection process would not encompass the very two franchises
that were awarded pursuant to the unconstitutional ordinance. Accordingly, Lac Vieux’s appeal is
hereby dismissed. 1

-- 6 of 7 --

No. 02-1893/02-1996/04-1618
Lac Vieux Desert Band of Lake Superior Chippewa Indians, et al. v. City of Detroit, et al.
Page 7
III.
In summary, the district court’s approval of the settlement agreement and consent judgment
is AFFIRMED and the remaining appeals are DISMISSED. Additionally, as there are no longer any
appeals pending in these consolidated cases, the injunction pending appeal is hereby DISSOLVED.

-- 7 of 7 --