Summary
This Superior Court decision rules on further motions for summary judgment in a dispute over the sale of land for the Encore Boston Harbor casino. The court grants summary judgment to the Massachusetts Gaming Commission on FBT Everett Realty’s regulatory taking claim, holding that only final agency action can trigger such liability and finding no adverse economic impact attributable to the Commission. Conversely, the court denies summary judgment regarding FBT’s fraud and unfair trade practice claims against Wynn MA, LLC, citing material factual disputes over whether gaming commission staff coerced the price reduction.
Topics
Practice areas
Questions Presented
- Whether the Massachusetts Gaming Commission's conduct constituted a compensable regulatory taking under the Fifth and Fourteenth Amendments and article 10 of the Massachusetts Declaration of Rights.
- Whether the Commission's alleged pressure through Investigations and Enforcement Bureau staff could constitute governmental action for regulatory-taking purposes when the Commission itself took no final action before the price reduction.
- Whether Wynn was entitled to summary judgment on FBT's intentional fraud claim based on alleged misrepresentations about the Investigations and Enforcement Bureau's position.
- Whether FBT's alleged reliance and damages were too speculative to support its fraud claim at summary judgment.
- Whether FBT's G.L. c. 93A, § 11 claim survived because the fraud claim survived.
- Whether the Commission's unjust-enrichment claim against Wynn remained viable after the Commission obtained summary judgment on FBT's regulatory-taking claim.
- Whether the original option agreement remained operative, subject to supplying a reasonable environmental-cost cap, if the amended agreement was voidable for fraud.
Holdings
- The Commission was entitled to summary judgment because only final action by the responsible governmental entity can support a regulatory-taking claim, and the Commission undisputedly took no final or preliminary action compelling Wynn to reduce the purchase price before FBT agreed to the reduction.
- Even assuming IEB staff pressured Wynn to eliminate the casino premium, all three Penn Central factors weighed heavily against finding that the Commission effected a regulatory taking.
- Wynn was not entitled to summary judgment on FBT's fraud claim because the evidence would permit a factfinder to conclude that Wynn falsely represented that IEB staff required elimination of the casino premium, that FBT reasonably relied on the representation, and that FBT suffered damages.
- FBT's alleged reliance was not unreasonable as a matter of law, and its damages were not too speculative to defeat summary judgment.
- Wynn was not entitled to summary judgment on FBT's claim under G.L. c. 93A, § 11, because the fraud claim survived and the alleged fraud could also support the Chapter 93A claim.
- Wynn was entitled to summary judgment on the Commission's related unjust-enrichment claim because the Commission's liability to FBT was eliminated.
- The original option agreement was not automatically terminated merely because the parties failed to agree on an environmental-cost-sharing cap; the failure gave either party a right to terminate, which Wynn did not exercise.
Key quotations
“The IEB did not, and could not, impose any such requirement on Wynn. The Commission never made a final and authoritative decision that it would not approve Wynn’s contract with FBT unless the negotiated purchase price were reduced by $40 million.” (14-15)
“Since the Commission did nothing to coerce Wynn and did nothing that caused FBT to suffer economic loss, this factor weighs heavily against finding that there was a regulatory taking.” (17)
“Fraud or deceit ‘may be perpetrated by an implied as well as by an express representation.’” (22)
Factual background
FBT owned contaminated land in Everett and entered an option agreement allowing Wynn to purchase it for $75 million if Wynn obtained a casino license. During the Massachusetts Gaming Commission's suitability investigation, Investigations and Enforcement Bureau staff raised concerns that a convicted felon had concealed an ownership interest in FBT and allegedly conveyed to Wynn concerns about FBT receiving a casino-related premium. Wynn pressured FBT to amend the option agreement, reducing the price to $35 million and capping FBT's environmental liability; the Commission later approved the amendment and awarded Wynn a casino license. The Commission itself did not discuss or act on the amendment until after FBT and Wynn had agreed to the price reduction.
Procedural history
FBT originally sued the Massachusetts Gaming Commission over the alleged forced reduction of the purchase price for Everett property sold to Wynn. The Superior Court dismissed several claims and initially granted the Commission summary judgment on the regulatory-taking claim. The Supreme Judicial Court affirmed in part, reversed the summary judgment ruling insofar as the court had not considered the character and economic impact of the alleged governmental action, and remanded for further discovery and proceedings. After remand, FBT asserted fraud and Chapter 93A claims against Wynn, and the parties filed the present motions.
Remand instructions
No remand was ordered by this decision. FBT's fraud and Chapter 93A claims against Wynn proceed toward trial; the court directed the parties to file a joint pretrial memorandum by February 14, 2025, and set a final pretrial conference for February 27, 2025.