A Chicago federal judge has said no dice to a legal malpractice action brought against a Michigan-based law firm by the Illinois developers of an Oklahoma casino, dismissing the lawsuit because the developers ultimately beat an attorney general’s complaint the developers alleged was brought because of bad legal advice.
The malpractice suit was filed Sept. 6, 2013, in Chicago federal court by MCZ Development and Sheffield Development Partners, both of Illinois, and Nevada-based Golden Canyon Partners, as well as by Florence Development Partners, of Oklahoma.
The defendants were lawyer Dennis J. Whittlesey and his firm, Dickinson Wright. Whittlesey is based in Washington, D.C. and his firm’s main office is in Detroit, with branch offices in several states. The firm employs about 400 lawyers. The suit was brought in Chicago federal district court because Whittlesey purportedly provided legal services to the developers in northern Illinois beginning Dec. 1, 2009.
Whittlesey advised plaintiffs during their preparations to develop the proposed Red Clay Casino on an American Indian reservation in Broken Arrow, Okla., in affiliation with the Kialegee Tribal Town. According to plaintiffs, Whittlesey assured them there were no legal roadblocks in their path, even though the proper federal agencies had not yet signed off on the project. Specifically, the lawyer allegedly told them that “even a legal challenge in court would not result in an injunction being entered during the course of litigation.”
In accordance with Whittlesey’s alleged advice, the developers proceeded with plans to build the gambling establishment.
However, the Oklahoma Attorney General’s Office lodged a complaint Feb. 8, 2012, in federal district court in Oklahoma, seeking an injunction because the requisite tribal jurisdiction for the pending casino was allegedly not in place. A preliminary injunction was issued five months later, spurring the developers to appeal to the U.S. Tenth Circuit Court of Appeals. The court of appeals ordered the state complaint be dismissed and the injunction lifted. Oklahoma asked the U.S. Supreme Court to consider the issue, but that body declined. The injunction was in effect more than three years.
The developers claimed they lost money they had sunk into the project before the injunction, as well as expenses incurred in fighting the state suit. They blamed Whittlesey and his firm for bum advice, filing their malpractice suit while the injunction was in place. Defendants responded with a motion to dismiss in May 2015, which U.S. District Judge Sharon Johnson Coleman addressed in a Nov. 12 ruling in Chicago.
Defendants maintained the developers had no case, because they ultimately defeated the suit brought by Oklahoma. Coleman agreed, citing a 1986 Illinois Third District Appellate Court opinion that said, “No malpractice exists unless counsel’s negligence has resulted in the loss of an underlying cause of action, or the loss of a meritorious defense if the attorney was defending in the underlying suit.”
Double damning the developers’ case was the question of tribal jurisdiction. The developers alleged Whittlesey steered them wrong on the issue, but the judge asserted, as the jurisdiction question has not been settled by law, so Whittlesey cannot be found to have committed malpractice in the matter.
At any rate, Coleman concluded the developers’ claims are at “best premature and their damages are speculative.”
In line with this position, Coleman pointed to a 2009 Illinois First District Appellate Court determination that a “cause of action for legal malpractice will not accrue prior to the entry of an adverse judgment, settlement or dismissal of the underlying action.”
Chicago law firms are representing the parties: Asperger Associates for the developers, and Jenner & Block for Whittlesey and Dickinson Wright.