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Cordish sues Maryland Jockey Club for $600 million

William H. "Billy" Murphy Jr.

The Cordish Cos. filed a $600 million lawsuit Tuesday against the Maryland Jockey Club and the owners and trustees of an Indiana casino that Cordish built, charging that they conspired to prevent Cordish from building a casino in Anne Arundel County.

Cordish, headed by President David S. Cordish, is requesting $300 million in compensatory damages and $300 million in punitive damages.

The defamation and invasion of privacy suit also names Penn National Gaming Inc., MI Developments Inc. and MI Developments chairman Frank Stronach as defendants.

“This lawsuit is aimed at righting a terrible wrong,” said William H. “Billy” Murphy Jr., of The Murphy Firm. “They can’t besmirch the name of a group of companies and an honest man.”

Watch video from Murphy’s press conference

Murphy held a news conference at his Baltimore office to discuss the suit, along with Edward M. Buxbaum and Albert J. Mezzanotte Jr. from Whiteford, Taylor & Preston LLC and Robert J. Weltchek from Weltchek, Mallahan and Weltchek.

The lawsuit alleges that the Maryland Jockey Club, co-owned by MI Developments Inc. and Penn National, conspired with the owners of the Indiana Downs casino to tarnish Cordish’s reputation before last year’s casino location referendum in Anne Arundel County.

According to the suit, Indiana Downs agreed to retain Cordish subsidiary PPE Indiana to help develop and manage its casino, Indiana Live!, in 2007 for a portion of the facility’s revenues.

Ross J. Mangano, chairman of Indiana Live!, was named as a defendant in the lawsuit. The suit alleges Mangano leaked false information about Cordish’s role in the project because the casino did not want to pay Cordish more than $8 million in management fees.

The suit also alleges Mangano sent an e-mail June 21 to Jonathan Cordish, an officer of Cordish subsidiaries PPE Indiana and PPE Maryland, threatening PPE Indiana to abandon its effort to recover the management fees.

The suit said the following excerpt is from the e-mail:

“At this point, if it turns into a legal issue it will not be good for your management company, and it will distract from Indiana Live from doing day to day business, and I’m sure it would be positive event [sic] to the people of Anne Arundel, Maryland who oppose your casino, stating your management company is very inept and not good for the City from a gaming standpoint.”

Neither Mangano nor the casino’s trustees could not be reached for comment Tuesday.

The Cordish lawsuit contends that advertising funded by the Maryland Jockey Club created the impression that Cordish Cos. owned the Indiana facility and was losing money in its role with Indiana Live!.

Cordish broke ground on the Maryland Live! casino near Arundel Mills mall last month, but work on the temporary facility has been halted because of a new appeal. A challenge from a homeowners’ association near the site, which will house 4,570 slot machines, forced Anne Arundel County to stop work last Friday.

The association said in its appeal that Cordish did not properly address traffic issues around the casino with the county. The Maryland Jockey Club is not financing the homeowners’ association’s case, according to both sides.

But the jockey club did fund an effort to overturn the zoning Cordish needed to build its Maryland Live! casino. Cordish Cos. appealed to the Maryland Lottery Commission to fine the Maryland Jockey Club and Penn National for opposing slots at Arundel Mills, but the commission turned to Attorney General Douglas F. Gansler to decide the issue.

Gansler said in October Penn National and the jockey club were able to oppose slots at Arundel Mills.

Alan M. Rifkin, of Rifkin, Livingston, Levitan & Silver LLC, attorney for the Maryland Jockey Club, said Tuesday that the few allegations related to the club in the suit had already been litigated, and there was no basis to retry the same case. Rifkin said that if anything, the jockey club will file a counter claim for attorneys’ fees.

“Those allegations against the Maryland Jockey Club are the essence of a frivolous lawsuit,” Rifkin said. “This is really about a business relationship that went south in Indiana, and not Maryland. Perhaps the Cordish Cos. should have filed their lawsuit there.”

The Maryland Jockey Club released a statement Tuesday saying it is protected by free speech, and the case is “baseless and full of unsupported speculation and innuendo.”

“As it relates to the Maryland Jockey Club, Cordish Cos. has already lost that case once and we are confident they will lose again,” President Tom Chuckas said in the statement. “As to the Cordish Cos.’ business in Indiana, we have no idea what they are talking about.”

In response, Murphy said, “Law protects people who act properly, not people who lie and deliberately besmirch knowing it’s going to damage the reputation of those in the Cordish Cos.”

Defamation may be difficult for Cordish to prove, said Howard J. Schulman, an attorney with Schulman and Kaufman LLC.

Schulman, who is not involved in the case, said that principles of free speech and public debate will likely require the company to prove the defendants fabricated statements about the company.