Pope County casino case hinges on meaning of ‘the’

Will Gulfside Casino get to keep its Pope County license? It depends on what the meaning of the word “the” is. Gulfside, which operates a casino in Gulfport, Miss., was awarded the license July 31, 2020, by the Racing Commission, which now is an appellant in the suit against Gulfside.

The Arkansas Supreme Court is being asked to decide how that word is defined, and a few others, in the case Cherokee Nation Businesses and Arkansas Racing Commission vs. Gulfside Casino Partnership. Final briefs were submitted Monday, Aug. 9. The Court has rejected oral arguments and comes back into session Sept. 9.

The dispute arises from actions taken soon after voters approved The Arkansas Casino Gaming Amendment, which requires the Racing Commission to issue licenses to Oaklawn Jockey Club in Hot Springs, Southland Racing Corporation in West Memphis, and to entities in Pope County and Jefferson County.

The Jefferson County facility, Saracen Casino Resort, is up and running. The Pope County location is stuck in litigation because of a dispute regarding a one-sentence letter written by then-Pope County Judge Jim Ed Gibson saying, “If a license is issued for a casino in Pope County Arkansas, I give my support for Gulfside Casino Partnership.”

That letter was written Dec. 21, which was 10 days before Gibson left office. Gulfside’s attorneys are arguing that it fulfilled a requirement in the amendment that applicants present a letter of support from the county judge where a casino will be located or a resolution of support from the quorum court.

That’s all that’s required, according to the brief submitted to the Arkansas Supreme Court by Gulfside’s lead attorney, Kenneth “Casey” Castleberry with the Batesville law firm of Murphy, Thompson, Arnold, Skinner & Castleberry.

The legal briefs trace the history that led up to the lawsuit. After voters approved the amendment, the Arkansas Racing Commission on Dec. 26, 2018, passed rules stating that letters of support and quorum court resolutions must be dated after the amendment’s effective date, which was Nov. 14. Gibson’s letter came after that date. Gulfside’s brief quotes the Racing Commission’s legal counsel saying Dec. 26, “There has been some question about what happens if somebody gets a letter after January 1 with the new administration. Under the rules, a letter dated after the effective date is valid as far as the Racing Commission is concerned.”

Then on Jan. 3, the Racing Commission’s legal counsel offered a new opinion saying letters of support should come from current elected officials. On Jan. 10, the commission approved a new amended rule to that effect. That March, legislators passed Act 371, which said the same thing.

The Racing Commission that May accepted casino gaming licenses for Pope and Jefferson counties. It accepted the Saracen application for Jefferson County, but rejected all five Pope County applications, saying they lacked the required letters of support. None included a letter from a current county judge, while Gulfside presented its letter from Gibson.

Gulfside appealed, arguing the rule and the law imposed qualifications not required by the amendment. When the Racing Commission rejected the appeal, Gulfside sued in Pulaski County Circuit Court, where Judge Tim Fox ruled in its favor. Fox said the rule and the law were unconstitutional and remanded the issue back to the commission to consider Gulfside’s application on the merits. In the meantime, Legends Resort & Casino, a subsidiary of Cherokee Nation Businesses, asked that its May 2019 application be accepted. It was.

The Racing Commission on June 18 heard presentations by Gulfside and Legends, with Gulfside scoring higher, 637-572. But one commissioner, Butch Rice, scored Gulfside much higher, 100-29, so the other commissioners disqualified his scores. When Chairman Alex Lieblong recused and withdrew his scores, Gulfside still led, 464-448. Legends appealed, but the Racing Commission denied it and awarded the license to Gulfside on July 31, 2020.

Then on Feb. 4, 2021, the Arkansas Supreme Court vacated Fox’s orders holding the rule and the act unconstitutional, remanding the case back to Fox. On May 21, he again ruled the rule and act unconstitutional.

The case still hinges on that original letter by Gibson and the question of what constitutes “the” county judge. The amendment says the Racing Commission “shall require all casino applicants … to submit either a letter of support from the county judge or a resolution from the quorum court in the county where the proposed casino is to be located.”

In Legends’ legal brief, Dustin McDaniel of the Little Rock law firm McDaniel, Wolff & Benca, argued that Gibson was not the Pope County judge when Gulfside submitted its application in May 2019. The amendment’s framers included the provision so local elected officials would have a say over the casino applicants, he wrote. “The” is a definite article that describes a specific individual, as opposed to the indefinite articles “a” and “an.” Otherwise, a county judge’s letter could be used to support an applicant 50 years after he or she has left office, he wrote.

In its brief, Gulfside argued that the question has been settled. Gibson was the elected county judge after the law went into effect, and he gave his support to Gulfside.

“Nowhere in Amendment 100 does it require the letter of support to come from the county judge in office at the time the application is submitted. It is just not there,” the brief says.

Gulfside argued the Constitution describes qualifications that can’t be altered by rule or statute. If the framers of Amendment 100 had meant to require letters from the county judge at the time of the application, they would have explicitly done so.

Senior Assistant Attorney General KaTina Hodge-Guest argued in her brief on behalf of the Racing Commission that statutes, rules and regulations carry a strong presumption of constitutionality. She noted that Amendment 100 specifically grants the Racing Commission and the General Assembly the authority to promulgate rules – in fact, the Racing Commission had 120 days to do so. Gibson’s letter came before those were done.

“Prior to May 1, 2019, Gulfside was interested, hopeful, and perhaps anticipating. It was not, however, an ‘applicant,’” she wrote.

Gulfside’s brief notes that CNB also sought – unsuccessfully – a letter from Gibson. In an affidavit, Gibson wrote that he “exercised extensive due diligence” in investigating Gulfside, including receiving endorsements from Gulfport community members, and secured a commitment from Gulfside to invest $150 million in the initial phase of the project.

In an interview with River Valley Now published Dec. 31, 2018, he was asked if his letter was meant to be “the” letter of support.

“No, it wasn’t. … I wanted to be proactive and I’ve been told that this ordinance is not binding,” he said. In a signed affidavit dated May 15, 2019, however, Gibson reiterated his support for Gulfside and said he did intend his Dec. 21, 2018 letter to be “a letter of support.”

The current county judge, Ben Cross, wrote a letter in support of Cherokee Nation Businesses. He negotiated a $38.8 million economic development plan along with $2 million in annual payments to county charitable organizations.

He has filed an amicus curiae brief in support of Cherokee Nation Businesses. In it, Clay McCall of the McCall Law Firm argued the letters of support and quorum court resolutions were the only means of local control included in the amendment for Pope and Jefferson counties.

“The circuit court’s interpretation improperly allows a former county judge to control a county in perpetuity, long after the judge is out of office, long after the voters who selected him constitute the populace, and long after the judge is answerable to the voters,” McCall wrote.

The brief is also signed by the county judges of Garland, Jefferson, Miller, Lincoln, Crittenden, Logan and Johnson counties. Gulfside has 10 days to respond.

Both sides await the Supreme Court’s ruling, and both sides are preparing to build a casino, although there are four other court cases ongoing. Castleberry said in response to a question that Gulfside will proceed with construction of its $254 million casino resort if it wins the Supreme Court case.

The Russellville Planning Commission Aug. 5 approved Gulfside’s development proposal by a vote of 7-1. Gulfside’s plans include the main casino complex and an annexation building that could operate as a temporary casino location while the main facility is being built. Saracen also built a temporary casino while it constructed its permanent structure in Jefferson County.

Speaking before the Russellville Planning Commission, Castleberry acknowledged that Russellville’s license does not say if it can operate a temporary facility. The Racing Commission has said Gulfside would have to come back and ask for a license for such a facility, “and we’ve agreed to that,” he said. He said the annex could be used as a second gaming floor or convention space after the main facility is built. At this point, building the annex is an option, he said in response to a question from Talk Business & Politics.

Hodge-Guest wrote in a letter to Russellville Mayor Richard Harris that a request to expedite the case has been presented to the Arkansas Supreme Court.

“While we cannot predict how or when the Arkansas Supreme Court will decide the issues, it is this office’s hope that these matters will be decided sooner rather than later,” she wrote.