Another attempt by the Shingle Springs Band of Miwok to block its former business partner Sharp Image Gaming Inc. from getting its chance at trial was denied Friday in federal court in Sacramento.

The tribe owns Red Hawk Casino, which it built a decade after unsuccessfully trying to get gaming going with Sharp Image.

The tribe’s federal suit sought to have Sharp Image’s state court suit dismissed on jurisdictional grounds, according to the judge’s ruling.
Sharp Image is seeking $107 million from the tribe in a civil suit filed in May 2007.
The action Friday leaves the owners of Red Hawk Casino few other options before facing trial date in February in a civil case in El Dorado County Superior Court.

Sharp Image, a Chatsworth-based video gaming company, had a contract with the Shingle Springs Band in 1996 to bankroll the development of a casino and to supply video machines for the operation.

Sharp Image built a concrete pad, raised a permanent 20,000-square-foot white tent and opened the 400-slot-machine casino for one day. Neighbors shut down the private neighborhood roads that were the only access to the casino.
Though the tent was only a few hundred feet from Highway 50, there was no access that allowed commercial traffic. The Crystal Mountain Casino never reopened. The lack of access roads shut down economic development on the Shingle Springs Rancheria for years.

The tribe later contracted with Minneapolis-based Lakes Entertainment Inc. to develop Red Hawk Casino. Together, Lakes and the tribe built a $200 million casino and parking garage and a $45 million interchange that takes traffic from Highway 50 right to the front door of the casino.

Sharp Image filed suit in May 2007 seeking the return of the $7 million it invested in Crystal Mountain and also to enforce its contract to supply machines to any casino. Sharp Image is seeking $100 million in damages.

The tribe’s attorneys say Sharp Image’s Gaming Machine Agreements, which were never submitted to federal authorities when Sharp Image opened Crystal Mountain, were submitted to the National Indian Gaming Commission three years ago, which considered them void for failing to comply with requirements.

Since Sharp Image filed its suit, the tribe’s attorneys have sought to have the case dismissed on the grounds that the company has no standing to sue a sovereign domestic nation, and that the suit should have been filed in federal court. The tribe’s attorneys lost the jurisdiction case in Superior Court and lost a string of appeals on the jurisdictional issues. The tribe’s attorneys lost another appeal in January in the Third District Court of Appeals. An attempt to petition the California Supreme Court was denied in March.

The tribe in June filed a motion in federal court to dismiss the suit based on the NIGC decision. On Oct. 15, U.S. District Judge Frank Damrell Jr. dismissed the tribe’s claims and closed the tribe’s federal suit.

“They have tried to get the case off track with various jurisdictional issues,” said Matt Jacobs, Sharp Image’s attorney and a partner in the Sacramento firm Stevens, O’Connell & Jacobs LLP. “We continue on along on the rails.”
The trial, set for Feb. 7, will look at the facts and merits of Sharp Image’s case, and not jurisdictional issues.

The tribe has said Sharp Image is seeking profits from a development it had no part in creating.