Louisiana Food Fight!

Ex-CEO sues Pinnacle in legal battle over Louisiana casino resort
By Steve Green
Sun coverage

Dan Lee, former CEO of casino operator Pinnacle Entertainment Inc. of Las Vegas, hit Pinnacle with a counterclaim this week in their legal battle over Lee's proposed casino resort in Louisiana.

The legal dispute erupted last month when Pinnacle sued Lee claiming Lee violated his 2009 separation agreement by using confidential information and trying to recruit Pinnacle employees for Lee's proposed Mojito Pointe gaming resort in Lake Charles, La.

Mojito Pointe would be adjacent to what Lee calls Pinnacle's existing flagship casino property, L'Auberge. Mojito Pointe is proposed for the Sugarcane Bay casino site that Lee championed at Pinnacle -- a project Pinnacle canceled after Lee left the company.

Clark County District Court Judge Kathleen Delaney in November denied Pinnacle's motion for an injunction barring Lee from competing against Pinnacle. And last week, a state judge in Louisiana denied Pinnacle's motion that the Port of Lake Charles — which controls the casino sites — be blocked from working with Lee on Mojito Pointe.

Pinnacle is continuing its litigation with Lee and plans to take depositions from several witnesses.

Attorneys for Lee, in the meantime, this week filed an amended answer to the Nevada lawsuit and also filed a counterclaim against Pinnacle, charging the Las Vegas company has engaged in a "no-holds-barred attempt to obstruct Lee'' and his company Creative Casinos LLC from obtaining a gaming license in Louisiana.

Claiming "wholesale abuse of the legal process,'' attorneys for Lee said Pinnacle has launched a "conspiracy with others, including undertaking illegal and prohibited trade practices by attempting to secure agreements from others that they do not do business with Creative.''

Lee's attorneys said in the complaint that L'Auberge generates nearly 40 percent of Pinnacle's gross revenue and that "Pinnacle is desperate to block competition.''

Lee's attorneys said in the complaint that after Pinnacle canceled Sugarcane Bay, the port approached Lee about developing a casino on the Sugarcane Bay site.

The attorneys said that after Lee agreed to do so, and prior to presentations this week by Lee and competing casino developers before the Louisiana Gaming Control Board, Pinnacle tried to ``put a cloud over Creative and Lee on the eve of these presentations.''

The counterclaim alleges Pinnacle:

• Falsely claimed the port did not have legal authority to lease the property to Creative Casinos despite Pinnacle having admitted it defaulted on a lease for that site when it canceled Sugarcane Bay and surrendered the related gaming license for the site.

• Sued the port with a "false and frivolous claim that there had been no default with the ulterior purpose of seeking to delay and thwart Creative's ability to develop its desired project.''

• Sued Lee, falsely asserting Lee was subject to a covenant not to compete.

• Disseminated false information "for the purpose of attempting to disparage Creative's development proposals and discourage the state of Louisiana from issuing a license to Creative.''

• Had contact with suppliers and prospective business associates and made threats "for the purpose of securing agreements that they not provide support or services to Creative.''

Lee, represented by attorneys with the Las Vegas law firm Pisanelli Bice PLLC, asserts charges in the counterclaim of abuse of process, civil conspiracy and unfair and unlawful trade practices.

Pinnacle, represented by the Las Vegas law firm Littler Mendelson, has not yet responded to the counterclaim.

Pinnacle has said Lee, in his separation agreement, was allowed to compete — but that he had to compete fairly.

By providing inside information to the port about Pinnacle's Lake Charles operation and in the past contacting — or arranging for others to contact — Pinnacle employees, Lee violated the separation agreement, Pinnacle asserts.

The prohibition on contacting former employees, however, expired Nov. 7.