A Native American tribe that runs a casino resort in upstate New York can pursue class arbitration in its antitrust case against two suppliers of automatic card shufflers, an arbitrator has ruled.
Mohawk Gaming Enterprises LLC, doing business as Akwesasne Mohawk Casino Resort, is suing Scientific Games Corp. and Bally Technologies Inc., which sell gambling equipment, on behalf of a putative class claiming that the suppliers monopolized the market for shuffling devices.
The sole issue decided in the American Arbitration Association ruling Tuesday was whether the arbitration clause of a license and lease agreement that Mohawk signed for the gambling supplies allows the plaintiff to move ahead on behalf of a class under the tribunal's rules.
Arbitrator John Wilkinson said the language of the clause allows class arbitration, taking into account the case law of three key U.S. Supreme Court decisions related to the issue. The high court rulings are Stolt-Nielsen SA v. Animalfeeds International Corp., Oxford Health Plans LLC v. Sutter, and Lamps Plus Inc. v. Varela, all of which the arbitrator noted have set the "ground rules" for interpreting the clause in Mohawk's agreement.
The arbitrator said the disputed clause is "far broader" than either AAA's standard arbitration clause or the cases cited by the respondents in seeking to deny class arbitration. He also cited a lack of limiting language in the Mohawk clause.
Arbitrators have "consistently held that an arbitration clause which does not specifically mention class arbitration but contains significantly broader language than the AAA clause is sufficiently inclusive" to allow for it, the decision says.
An attorney for the Mohawk Tribe told Law360 in a statement that the decision was a big win given the high court holdings on arbitrability.
"This ruling shows that, even under current Supreme Court jurisprudence, there remains a viable path forward to class arbitration," said the attorney, Manuel John Dominquez of Cohen Milstein. "This is important because, without the benefits of scale provided by class arbitration, many claims could never be brought."
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The proposed class alleged that Scientific Games and Bally Technologies violated the Sherman Act, claiming they "achieved market dominance by fraudulently procuring patents and by repeatedly and illegally using those patents as the basis for sham claims of patent infringement against potential competitors and new entrants," according to the AAA ruling.
According to Mohawk, "this practice left respondents free to set inflated prices without concern of being undercut by others or losing market share."
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Mohawk Gaming is represented by Michael Eisenkraft, Manuel J. Dominguez, Robert A. Braun and Leonardo Chingcuanco of Cohen Milstein Sellers & Toll PLLC, Michael Steifman and Fran Rudich of Steifman LLP and Joseph Goldberg, David A. Freedman and Vincent J. Ward of Freedman Boyd Hollander Goldberg Urias & Ward PA.
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