CHICAGO (jGLi) – United States District Court Judge Larry R. Hicks of Las Vegas, Nevada on Aug. 21 ordered Japanese billionaire Kazuo Okada to pay the lawyers of Stephen Wynn, chairman of the board of Wynn Resorts, Limited, for “removing” the case filed against Okada by Wynn from the 8th Judicial District, Clark County District Court for the State of Nevada to the U.S. District Court.
In an order based on a copy obtained by this reporter Monday (Sept. 4), Judge Hicks asked defendant Okada to pay Wynn’s lawyers $148,583 and remanded the case back to the Clark County District.
In his ruling granting Wynn’s motion for attorney’s fees, Judge Hicks “reviewed the documents and pleadings on file in this matter and finds that Wynn’s request for $148.583.00 is reasonable based on the questions presented, the number of documents required for review, the length of the motions, the number of hours worked, and the quality of counsel.”
Okada’s Aruze and Universal Entertainment Corp. “removed the underlying complaint to federal court on the basis of federal question jurisdiction,” saying Wynn’s “complaint involved a resolution of a substantial federal question, namely the scope and interpretation of the Foreign Corrupt Practices Act of 1977.”
In response, Wynn filed a motion to remand, which after a hearing on the motion, the court granted, along with Wynn’s lawyers’ request seeking “attorney’s fees related to the motion to remand.”
Wynn contended that “an award for attorney’s fees on remand is appropriate because defendants did not have a reasonable basis to remove the state law complaint to federal court.”
For its part, Okada argued “attorney’s fees should not be awarded because they had an objectively reasonable basis for removal, namely that the underlying conduct for the complaint is that (when) defendant Kazuo Okada engaged in unlawful activities with foreign government officials at Wynn properties in violation of the FCPA (a federal law),” a U.S. federal court could exercise jurisdiction over the case.
WYNN’S COMPLAINT DO NOT IMPLICATE SIGNIFICANT FEDERAL ISSUE
After the federal court heard oral argument last June 21, 2012, it “found that Wynn’s complaint only alleged state law claims that were ‘not dependent upon whether or not, in fact, the Federal Corrupt Practices Act was violated,’” and that Wynn’s claims, “in fact, do not implicate a significant federal issue.”
The court added, “‘a federal question [was] not clear in any respect,’ and [t]hus, based on the findings of the court at the hearing and the moving documents in this matter, the court finds that removing defendants did not have an objectively reasonable basis to remove this action to federal court. Therefore, the court finds that an award of attorney’s fees on remand is appropriate.”
In determining the reasonableness of a request for attorney’s fees, the court considered several factors including: (1) the reputation and skill of counsel; (2) the financial terms of the client fee arrangement; (3) the nature and extent of work performed and results obtained; and (4) awards in similar cases.”
Saying that they had filed a notice to the court “declining to sever its counterclaims, and instead expressing their intent to file a separate federal securities action,” Okada’s lawyers left the Court with “no remaining issues before the court concerning remand” and remanded the action “to state court in its entirety.”
Instead of filing his counterclaim before the Clark District court after Wynn sued him there, Okada filed his counterclaim before the U.S. District court, removing the case to the federal court, demanding from Wynn to “produce certain books and records” of Wynn Resorts, Limited, where Okada has a majority 19.66% ownership stakes.
CONFLICT OF INTEREST?
Okada filed the counterclaim against Wynn after Wynn removed Okada from Wynn Resorts board and stripped him of his ownership stakes from Wynn Resorts although Mr. Okada holds the biggest stocks – a majority 19.66% ownership stakes – as Wynn’s alleged retaliation against Okada for committing conflict of interest when Okada started to build a casino resorts in the Philippines that would rival Wynn’s Resorts and Casino in nearby Macau.
Mr. Okada, who said he has the blessings of Mr. Wynn to build the casino in the Philippines, even invited and showed to Mr. Wynn the casino property in the Philippines. The pictures of Mr. Wynn’s and Mr. Okada’s trip to the Philippines were submitted as part of the exhibit. Mr. Okada is building a multi-billion dollar casino resorts in the reclaimed area of Manila Bay abutting Ninoy Aquino International Airport.
Mr. Wynn started the process of removing Mr. Okada from Wynn Resorts, using the report of former Director of the Federal Bureau of Investigation Louis J. Freeh, who deposed Mr. Okada in Tokyo, Japan, that Mr. Okada bribed Filipino gaming officials by as much as US$110,636 so he can be under the good graces of the Philippine government while he is building the 30-hectare (74-acre) US$2.3-billion Manila bay casino resort in violation of the U.S. Foreign Corrupt Practices Act and the Wynn Resorts’ Code of Conduct and other policies.
At the same time, Wynn and the board “redeemed” Okada’s Aruze, USA Inc.’s 24 million shares with Wynn Resorts at 30 percent discount by issuing a 10-year $1.9 billion promissory note in redemption shares that mature on Feb. 18, 2022, bearing an interest of 2% per annum. Okada, however, is likely going to get back the 30 percent discount as there is no such discount provided for by Wynn Resorts Articles of Incorporation.
In a petition for writ of mandamus, provided this reporter by Mr. Okada’s lawyer Paul R. Hejmanowski, Mr. Okada said as a director and biggest stockholder of Wynn Resorts, he (Okada) has “an irrefutable right to review the books and records of the Company. Yet, despite several written demands, Wynn Resorts insists on keeping its books and records hidden from its Director’s scrutiny.”
Mr. Okada said in October 2000, his Universal’s U.S. subsidiary, Aruze, USA, Inc., a Nevada company he indirectly controls, invested $260-million in the predecessor organization to Wynn Resorts. In April 2002, Aruze USA invested an additional $120-milion in the predecessor organization of Wynn Resorts at the request of Stephen A. Wynn, chair and chief executive officer, including a $30-million to develop the casino project in Macau Special Administrative Region of the People’s Republic of China. (firstname.lastname@example.org)
Photo Credit: Tomohiro Ohsumi/Bloomberg