The core of the lawsuit filed in August by Borgata in Nevada federal court against Atlantic City rival Ocean Resort Casino and two key casino executives is based on whether the executives violated employment contracts and improperly provided Ocean with proprietary trade secrets.
But for now, at least, that issue has been sidelined by dueling charges of impropriety made by the law firms representing each casino.
Last week, powerful Philadelphia-based law firm Blank Rome — which represents Ocean — augmented its claim that Jackson Lewis, Borgata’s counsel, be disqualified.
The charge is based on the fact that Jackson Lewis, itself a powerful law firm with hundreds of attorneys, has both Borgata and Blank Rome — its adversary in this case — as ongoing clients, so it thereby “violated the duty of loyalty” to Blank Rome in participating in the lawsuit.
Borgata already had sought to oust Blank Rome from the case because of allegedly unethical conduct — as claimed by Jackson Lewis — in contacting a high-ranking Borgata employee in mid-September without Borgata’s permission.
“The basis of Blank Rome’s Motion is very simple and straightforward: Jackson Lewis has moved to disqualify and seeks other sanctions against its client, Blank Rome, in its representation of another client, and is therefore taking a directly adverse position to its client,” an attorney for Blank Rome stated in a 14-page filing early last week. “This is not, as Jackson Lewis would have this Court believe, a ‘no harm, no foul’ situation. To the contrary, Jackson Lewis committed a foul, and Blank Rome has been significantly harmed as a result.”
Attorneys for Jackson Lewis have told the court that its work for Blank Rome was minimal — just “a handful of visa applications, one or two a year.” But the volume of work does not erase an obligation for Jackson Lewis to seek permission to serve as an adversary in another case, according to Blank Rome.
The late-night phone call
Borgata, meanwhile, through attorneys at Jackson Lewis, has revived its charges against Blank Rome attorney Leigh Ann Buziak that she improperly contacted Borgata marketing executive Jason Lyons.
During the so-called “insidious” Sept. 15 phone call at 10 p.m. on the night before a court hearing, Buziak sought and received an immediate declaration from Lyons that he recalled a meeting in which defendant William Callahan, now a high-ranking Ocean executive, received permission from Borgata officials to retain a cellphone that is now at the heart of the lawsuit.
On Sept. 30, U.S. Magistrate Judge Brenda Weksler denied Borgata’s motion — but left open the door for Borgata to provide supplemental evidence that Lyons qualifies under Nevada law as a “managing speaking agent.”
Such a status would appear to make it improper for an attorney in a lawsuit against that agent’s company to contact them without permission.
“[T]he Court is troubled by defense counsel contacting Mr. Lyons,” Weksler wrote. “He is an executive of an opposing party, and a purely factual analysis of the issue suggests this contact was impermissible. However, the Court is required to not just look at the facts, but also to apply Nevada law.”
Borgata’s chief friend to “whales”
Lyons — who for the most part took on Callahan’s previous duties — is one of Borgata’s highest-ranking marketing executives, Borgata attorneys said, with all sorts of authority including:
- being responsible for the use by clients of Borgata’s corporate jet;
- having the authority to discount up to $250,000 in gambling debts by clients;
- a right to provide complimentary airfare for well-heeled customers costing up to $10,000.
“Defense counsel clearly violated the rules of professional conduct. The prejudice of their conduct — an attempt to drive a wedge between Lyons and Borgata by advising Lyons that his personal interests diverged from Borgata’s — is extraordinary,” a Borgata attorney wrote in a recent filing. “They should be disqualified.”
Borgata also objects to Buziak’s alleged advice to Lyons that he might need his own attorney in the case — and that Buziak induced a professional colleague to contact Lyons, who then retained that attorney.
The sworn declaration by Lyons about the cellphone should be removed from evidence, according to Borgata attorneys, because of the way in which it was obtained. Lyons also contacted Buziak the next morning to revise his statement, according to Borgata, but he never received a return phone call.
“Here, a sophisticated casino marketing executive, who is nonetheless unsophisticated in legal matters, was told by an opposing lawyer that he may need a lawyer because, in the opposing counsel’s view, the executive’s conduct could call his loyalty into question,” the attorneys added.
In its initial August filing of the suit, Borgata alleged that Ocean hired away five Borgata executives in a bid to strengthen its share of the Atlantic City casino market among the city’s biggest gamblers.
Callahan and Kelly Ashman Burke, who are named in the suit as defendants, are alleged to have signed binding “no-compete” contracts with Borgata to prevent them from providing trade secrets to a new employer.