Arneault, Rubino suit tossed

Arneault, Rubino suit tossed; case won't proceed against Erie's Scott, Ambrose, 24 others
By ED PALATTELLA, Erie Times-News

Ted Arneault and Gregory J. Rubino have failed in their attempt to use a federal lawsuit to clear their names in connection with the development of Presque Isle Downs & Casino.

U.S. District Judge Sean J. McLaughlin has dismissed the suit, which Arneault and Rubino filed a year ago against 26 defendants, including members of the Pennsylvania Gaming Control Board, Erie developer Nick Scott Sr. and Erie lawyer Leonard Ambrose.

The case centered on a now-lifted ban that the board imposed on Rubino in 2006. Arneault and Rubino claimed the defendants contributed to the imposition of the ban, which Arneault and Rubino said damaged their reputations in the gambling industry.

Arneault was the chief executive of the West Virginia-based MTR Gaming Group Inc. when it opened Presque Isle Downs in Summit Township in February 2007. Rubino, an Erie real estate agent and developer, was the main consultant on the project through his former company, Tecnica Development Corp.

McLaughlin, in an 80-page ruling issued late Wednesday, said Arneault, Rubino and their lawyer, John Mizner, had presented no viable civil-rights claims in their 147-page complaint.

McLaughlin also said some of the suit's claims violated the statute of limitations or had been made against defendants, such as the Gaming Control Board members, with quasi-judicial immunity.

"Neither Arneault nor Rubino has successfully pled an actionable constitutional deprivation," McLaughlin said.

McLaughlin ruled that, even if all the claims in the suit were true, "the law does not offer a remedy," said Ambrose's lawyer, William Pietragallo, of Pittsburgh.

"We felt confident from the beginning," he said. "But we are pleased with the judge's decision."

The defendants also included MTR Gaming Group and several of its former and current officials.

"We are certainly pleased with the court's dismissal of this entire lawsuit, which we have always maintained had no legal merit," Nick Rodriguez-Cayro, MTR's vice president, secretary and general counsel, said in a statement.

The Gaming Control Board is "pleased with the outcome," a spokesman said.

Mizner, the lawyer for Arneault and Rubino, said he is considering appealing to the 3rd Circuit Court of Appeals, based in Philadelphia, or filing three of the dismissed counts in Erie County Court, which McLaughlin said was the proper venue for those three counts.

He unconditionally dismissed the other seven counts.

"This case is factually complicated and involves complex issues of constitutional law," Mizner said. "It is clear that Judge McLaughlin put a tremendous amount of thought and effort into his 80-page opinion."

When the Gaming Control Board banned Rubino, in 2006, Rubino's Tecnica Development received a $4.2 million buyout from MTR. Rubino claimed the board denied his due-process rights by never telling him the reasons for the ban.

Mizner said the ban, though the board lifted it in August, still hurt Rubino, 60, who owns Passport Realty LLC in Erie.

Mizner said Arneault, because of his association with Rubino, was also hurt by the ban. And, he said in the suit, Arneault's reputation suffered when Gaming Control Board officials recommended in January 2010 that Arneault's gaming license not be renewed because of concerns about his character.

After a five-day hearing at which Arneault argued his case for a license, other board officials dropped that recommendation, allowing Arneault to get his license renewed in November 2010.

Arneault, who left MTR as chief executive at age 61 in 2008, now is associated with a prospective harness racing track and casino in New Castle.

Ambrose was a defendant in the federal suit because he presented information to gaming investigators about Rubino. He said he did so under subpoena.

Rubino was the main prosecution witness in the public-corruption trial of former Erie Mayor Rick Filippi, whom Ambrose represented and who was acquitted in 2006. Ambrose also represented Scott, the developer, in an unrelated suit that involved Rubino.

Ambrose's lawyer, Pietragallo, had said Arneault and Rubino's federal suit was a vendetta against Ambrose and the other defendants.

McLaughlin in his ruling did not focus on motivations, but on legal requirements for the suit. He agreed with the defendants that a gaming license is a privilege, not a constitutionally protected right.

He said Arneault's hearing before gaming officials -- after which the Gaming Control Board renewed Arneault's license -- "was adequate to vindicate his reputational interests."

Rubino has not returned to the gambling industry, despite the Gaming Control Board's lifting of the ban. To get a gaming license, he still would have to apply and undergo a review by gaming investigators.

Mizner said Rubino does not intend to apply for a license in light of his prior dealings with the Gaming Control Board.

"It is highly unlikely that any gaming companies would have any interest in doing business with Mr. Rubino because of what the government and others have done to him," Mizner said.