Jenner & Block

Hospitality and Gaming

Jenner & Block brings a rich variety of litigation experience to clients in the hospitality and gaming industries.  We have represented many of the leading companies in the industry on some of the most significant and complex cases over the past decade.  Our experience includes representation of operators in owner-operator disputes, franchise litigation, intellectual property litigation, hotel development-related litigation, bankruptcy litigation and class actions.  We have litigated on behalf of hospitality clients in state and federal courts, domestic and international arbitrations, bankruptcy court, and in multiple appellate courts.  Our litigators include fellows of the American College of Trial Lawyers and are highly-ranked by Chambers USA for their work in Leisure and Hospitality.

We also regularly provide regulatory and other counseling to individuals and companies involved in the hospitality and gaming industries.  We offer particular experience in compliance with respect to privacy and data security, the Foreign Corrupt Practices Act, and the Bank Secrecy Act.  Likewise, we counsel numerous clients regarding insurance coverage, employee benefits, and tax issues.  We also have substantial experience leading internal investigations, advising clients before state gaming commissions, and representing clients in licensing and grand jury investigations.

In addition to our substantial litigation and investigations experience, our real estate practice provides transactional counseling with respect to sale and refinancing of lodging properties.  Our lawyers have extensive experience handling workouts and restructuring, leasing, acquisitions and dispositions, development and construction, debt finance and private equity, corporate and institutional real estate services and real estate securities.  Jenner & Block has been listed among the leading firms for real estate in the Chambers USA Client Guide every year since 2004.

Representative Engagements

Owner-Operator Litigation

  • Miller Global Properties LLC v. Marriott International Inc., et al.: Defended Marriott International against various tort and breach of contract claims involving the development of the 1,000-room JW Marriott San Antonio Hill Country Resort and Spa.  After the project experienced cost overruns, the owner filed suit alleging, among other things, that Marriott provided fraudulent budget estimates before transferring development responsibility for the resort to the plaintiff.  The owner sought $200 million in damages.  The Texas court granted summary judgment on the majority of the owner’s tort claims, and two days before the start of the trial on the remaining counts, the owner voluntarily dismissed the case in order to appeal the earlier summary judgment rulings.  In December 2013, the lower court’s grant of summary judgment was affirmed by the Texas Court of Appeals.  In May 2014, the Texas Supreme Court denied the owner’s petition, thereby delivering Marriott a total victory in the case.

  • GHM (South Beach) LLC v. Setai Owners LLC et al.: Represented GHM, a Singapore-based hotel management company, in litigation with the owner of the Setai Hotel in Miami, Florida.  After the owner staged a midnight takeover, GHM contacted us to provide representation in connection with an International Chamber of Commerce (ICC) arbitration to establish their damages resulting from a hostile takeover as well as a state court action raising tort claims not subject to arbitration.  Following the ICC arbitration, the panel denied all of the owner’s claims and awarded GHM damages and costs in excess of $10 million.

  • M Waikiki LLC v. Marriott Hotel Services, Inc.: Represented Marriott in litigation over The Waikiki EDITION hotel in Hawaii.  The owner of the hotel filed suit in New York state court alleging that Marriott defaulted on its obligations to manage the hotel and develop a chain of EDITION-brand hotels.  The complaint sought monetary damages and a declaration that owner could terminate the management agreement for default.  Several months after filing suit, the owner forcibly evicted Marriott from the hotel in a midnight raid.  With days, Marriott obtained a TRO returning Marriott to possession of the property – the first of its kind issued in a US court.  In response, owner filed for bankruptcy in Hawaii in order to stay the enforcement of the TRO.  The owner claimed the right to reject the management agreement under bankruptcy law, and Marriott filed a claim for breach of the contract.  After a four-day hearing in bankruptcy court, the court estimated Marriott’s claim at $21 million, and the case settled shortly thereafter.

  • Rose Hall Resort, L.P. v. The Ritz-Carlton Company of Jamaica, Limited: Represented Ritz-Carlton in successfully resisting claims by the owner of The Ritz-Carlton, Rose Hall, Jamaica, that Ritz-Carlton defaulted on its obligations to properly manage the hotel.  In July 2009, the plaintiff filed a demand for arbitration under AAA ICDR rules seeking $145 million in damages and a declaration that plaintiff was entitled to terminate for default its management agreement with Ritz-Carlton.  In September 2009 the plaintiff purported to terminate the agreement, and sought injunctive relief in three separate courts to evict Ritz-Carlton from the hotel.  We successfully had each injunctive relief request dismissed or stayed pending the outcome of the arbitration.  In April 2011, following an eight-day trial, the arbitral tribunal issued its ruling finding in favor of Ritz-Carlton and awarding fees to Ritz-Carlton in the amount of $2.75 million.  All of the injunctive relief requests were subsequently dismissed.

  • RC/PB Inc. v. The Ritz-Carlton Hotel Company LLC et al.: Represented Ritz-Carlton and Marriott in litigation brought by owner in Florida state court.  The owner’s complaint alleged breach of the hotel management agreement, breach of fiduciary duties, and fraud and misrepresentation and sought $100 million in damages.  We successfully obtained summary judgment on the owner’s tort claims, including its claims for breach of fiduciary duties, fraud, and misrepresentation.  We also filed a counterclaim against the owner for breach of the hotel management agreement.  The case settled on favorable terms in January 2015.

Franchise Litigation

  • 31525 W 12 Mile Rd MI LLC v. Marriott International, Inc.: Represented Marriott in litigation in Michigan state court brought by owner of mortgage on Marriott Courtyard hotel.  We successfully fought two separate efforts by the owner to obtain emergency injunctive relief that would have required the Company to maintain the hotel as a Courtyard by Marriott and barred Marriott from ending its franchise relationship.  We then obtained an order granting Marriott’s motion to dismiss with prejudice, which was not appealed.

Class actions

  • McIntyre, et al. v. Marriott International, Inc., et al.: Represented Marriott in a nation-wide class action complaint filed by purchasers of timeshare properties from Marriott.  The complaint alleged that Marriott had violated the federal Real Estate Settlement Procedures Act of 1974, along with several common law causes of action, by failing to disclose the Marriott entities’ retention of a portion of certain title insurance premiums.  The federal District Court for the District of New Jersey dismissed the complaint on Marriott’s motion and subsequently denied plaintiffs’ motion for reconsideration as well as their motion for leave to amend the complaint.

  • Schittino v. Marriott International, Inc.: Representing Marriott in a putative consumer class action concerning the sale of Kobe beef products at Marriott hotels throughout the United States.  The putative class is alleging claims including breach of contract, fraud, and violation of Illinois’ consumer fraud statute.

Other Litigation

  • Lislewood Corporation v. AT&T Corporation: We represent Marriott in a case concerning a hotel in Illinois.  The plaintiff, Lislewood, seeks more than $13 million in damages from defendant AT&T based on AT&T's alleged failure to adequately repair and maintain a hotel property that AT&T leased from Lislewood.  Marriott sub-leased the hotel property from AT&T.  On January 8, 2014, AT&T filed a third party complaint against Marriott for breach of contract and contractual indemnification.  The case subsequently settled on favorable terms.
  • Marriott International: We successfully defended Marriott in a breach-of-contract action concerning the terms of the Marriott rewards program.

  • Ameranth v. Marriott Int’l, Inc.: A number of joint defendants, including Marriott, are pursuing review of patents asserted against the defendants in the United States Patent Office, while the district court litigation is stayed.  The Patent Office issued Final Written Decisions invalidating asserted claims of two of the three patents asserted against Marriott under a Covered Business Method Review procedure.  The Patent Office held that the claims are directed at the basic abstract idea of generating menus with software and there is no inventive concept to the claims at issue.  Amaranth is now appealing this decision to the Federal Circuit, while the litigation remains stayed.
  • Vail Resorts, Inc.: We represented the Arrabelle at Vail Square in an insurance coverage action arising out of construction-related property damage at a hotel/condominium complex.
  • The US Supreme Court agreed with and cited an amicus brief filed by the firm on behalf of the U.S. Chamber of Commerce, the world's largest business organization, representing the interests of more than 3 million businesses of all sizes, in its recent decision in City of Los Angeles v. Naranjibhai Patel, et al.  The case concerns the constitutionality of a section of the Los Angeles Municipal Code that requires hotel operators to record and keep specific information about their guests on the premises for a ninety-day period and to make those records available to “any officer of the Los Angeles Police Department for inspection” on demand.  In a 5-4 opinion on June 22, 2015, the Court held that the section is facially unconstitutional because it fails to provide the operators with an opportunity for pre-compliance review.

Gaming

In our gaming industry practice, we counsel individuals and companies involved in various aspects of the gaming industry in a wide array of forums.  Our gaming practice includes representation in a wide array of litigation contexts, including bankruptcy, intellectual property, insurance coverage, and complex commercial litigation.  We also represent clients before regulatory authorities, including the Illinois Gaming Board.  Representative engagements include the following:

  • Caesar’s Entertainment Corporation: We have provided advice and counsel on multiple matters: counseled Caesars on a matter within the jurisdiction of the NY joint commission; assisting with an internal review of the Total Rewards Program; counseling with regard to a licensing application before the Massachusetts Gaming Commission; representing the client in a licensing investigation; and representing the client in a grand jury investigation concerning the Bank Secrecy Act.

  • Caesar’s Entertainment Corporation: We are representing Caesars Entertainment Corporation in connection with the high-profile bankruptcy proceedings of its subsidiary Caesars Entertainment Operating Company, pending in Chicago.  We are acting as local counsel with respect to many aspects of the bankruptcy proceedings and as lead counsel with respect to several discreet matters relating to the bankruptcy proceedings.

  • Harrah’s Jazz Company & JCC Holding Co.: Represented Harrah’s Jazz Company and JCC Holding Co., the owners of the land-based “Harrah’s” casino in downtown New Orleans, in their respective reorganization proceedings.  Our efforts permitted completion of construction and the opening of the casino.  Over five years, we successfully negotiated and confirmed plans of reorganization involving modified capital structures and renegotiated contracts with the State of Louisiana, the City of New Orleans and other key parties in interest.  This representation involved numerous bankruptcy adversary proceedings, contested matters and state court litigation, including litigation with the City of New Orleans, the Louisiana Gaming Control Board and members of the state legislature.  The matters also involved several appeals from litigated matters, including appeals to the Fifth Circuit Court of Appeals and the Louisiana Supreme Court.

  • Trustee of Emerald Casino: Represented the trustee of Emerald Casino in federal bankruptcy court, including in an adversary proceeding brought against certain former directors and officers of Emerald Casino to recover more than $500 million.

  • Legends Gaming, LLC: Represented Legends Gaming, LLC in its Chapter 11 bankruptcy and exit financing, consisting of $162 million first lien and $75 million second lien financings, with a successful cram-down on the second lien lender class and preservation of equity ownership upon emergence.

  • WMS Gaming Inc.: Represented WMS Gaming Inc., a manufacturer of slot machines, video lottery terminals and other gaming software, in insurance coverage litigation seeking coverage for business interruption losses stemming from Hurricane Katrina.
  • Bally Manufacturing Corp.: Represented Bally Manufacturing Corporation in patent infringement litigation concerning software that determined the probability of certain payoffs from gaming machines.

  • GE Capital Inc.: Represented GE Capital in New York and Nevada contract and fraud cases involving the purchase of rental payment streams and the residual value of leased gaming equipment.

Transactional Counseling

We assist in different transactions involving hotel properties, demonstrating that clients call on our transactional knowledge when it comes to hotel and resort property transactions:

  • American Hotel Income Properties REIT (local counsel for the acquisition and financing of two Illinois properties.  The loan allocation for the properties was about $6,500,000)

  • Key West, FL sale of hotel portfolio: We represent the developer in the redevelopment and sale of four hotels and adjacent commercial property valued at approximately $200 million.

  • Represented seller of the Paramont Hotel in Manhattan (Times Square, $189 million) and the refinance of the Chicago Hard Rock Hotel ($69 million).