*1 United States Court of Appeals For the First Circuit
No. 22-1117
ANTHONY GATTINERI,
Plaintiff, Appellant,
v. WYNN MA, LLC; WYNN RESORTS LIMITED, Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. F. Dennis Saylor, IV, Chief U.S. District Judge] Before
Barron, Chief Judge,
Lynch and Gelpí, Circuit Judges.
Stephen F. Gordon, with whom Todd B. Gordon, Robert A. DiSorbo, Kevin A. Robinson, and The Gordon Law Firm LLP were on brief, for appellant.
Samuel M. Starr, with whom Caitlin A. Hill and Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. were on brief, for appellees.
February 20, 2024
*2
GELPÍ
,
Circuit Judge
. Appellant Anthony Gattineri
("Gattineri") brought this action against Appellees Wynn MA, LLC,
and Wynn Resorts, Limited (collectively, "Wynn"), alleging breach
of contract, common law fraud, and unfair and/or deceptive trade
practices in violation of Mass. Gen. Laws. ch. 93A, § 2(a). Wynn
moved for summary judgment, which the United States District Court
for the District of Massachusetts granted on all counts in favor
of Wynn. Gattineri appealed. Recognizing that Gattineri's claims
hinge on important questions of Massachusetts law and public
policy, we certified two questions to the Massachusetts Supreme
Judicial Court ("SJC"), see Gattineri v. Wynn MA, LLC,
I. BACKGROUND
A. Relevant Facts The facts are set out in our prior opinion, Gattineri, 63 F.4th, and in the SJC's opinion, Gattineri, 221 N.E.3d. We set forth in greater detail certain facts we find particularly relevant. The story begins with an Option Agreement for the purchase of a parcel of land (the "Parcel") in Everett and Boston, *3 Massachusetts, for the construction of the Encore Boston Harbor resort and casino, owned by Wynn. The Option Agreement, entered into in December 2012 between Encore and FBT Realty, LLC ("FBT"), of which Gattineri is a 46.69% owner, gave Encore the option to purchase the Parcel from FBT for $75 million. In January 2013, Encore filed an application with the Massachusetts Gaming Commission ("Commission") for a gaming license to operate a casino in Massachusetts, as required by state law. Thereafter, the Commission's Investigation and Enforcement Bureau ("IEB") conducted a suitability investigation of each applicant for the gaming license, including Encore and Wynn.
During the licensing process, the Commission had reason to become concerned about whether an organized crime figure, through Gattineri, was part of FBT's membership makeup at the time of the Option Agreement. In 2009 and 2010, Charles Lightbody ("Lightbody"), a convicted felon and associate of La Cosa Nostra, was one of the owners of record of FBT. FBT and Gattineri represented to the Commission that, at the time of the 2012 execution of the Option Agreement, FBT was owned only by Gattineri, Dustin DeNunzio, and Paul Lohnes. Yet, in December 2012, in a recorded prison phone call, Lightbody referenced his ownership interest or control of the Parcel and the need to conceal it from the Commission. And in July 2013, Gattineri had told the police *4 that he owed Lightbody "like, a million," and said, "If I don't pay him, he can take it away from me."
The Commission informed Wynn of its concerns about undisclosed interests in FBT so that Wynn could address them. In response to the Commission's concerns, in November 2013, Encore and FBT entered into a Ninth Amendment to the Option Agreement, reducing the purchase price for the Parcel to $35 million, a figure that reflected the fair market value of the Parcel assuming that it would not be used for gaming purposes. The Commission subsequently approved the Ninth Amendment. Such approval, however, was conditioned on the purchase price not exceeding $35 million and the requirement that the three publicly known members of FBT sign a certification stating that they were the exclusive recipients of the sale proceeds. As the SJC made clear, "Gattineri was [] a person of particular interest to the commission, as he not only was one of the three principals of FBT but had also bought out the convicted felon's ownership interest in FBT and still owed him money at the time of the investigation" into the possibility of concealed ownership interests by the convicted felon. Gattineri, 221 N.E.3d at 744. While DeNunzio and Lohnes signed the certificates, Gattineri repeatedly refused to do so unless he was given what he contended was his share of the price reduction required by the Commission.
The Commission also directed the IEB to deliver its files to the U.S. Attorney, the Attorney General of Massachusetts, and the district attorney for Suffolk County. As the SJC noted, Gattineri was indicted in federal court and arraigned on state court criminal proceedings. [1] Id. at 747.
Gattineri's arguments, including as to his Chapter 93A claim, purport to be based on the very actions Wynn took to respond to the Commission's concerns, including his dealings with the three prosecutors. Throughout these events, as detailed by the SJC, Wynn was under a continuing duty to provide assistance and information required by the Commission and to cooperate in any inquiry or investigation by the Commission. See id. at 750. On June 14, 2014, Gattineri met with Robert DeSalvio, Senior Vice President of Development of Wynn Resorts Development, LLC, in San Diego, California. Gattineri alleges that, at the meeting, the two orally agreed to the following: "If Anthony Gattineri signed the required certificate and Wynn obtained the casino license for a casino on the [Parcel], Wynn would make Anthony Gattineri whole" (an alleged contract we term the "San Diego Agreement"). Per Gattineri, "mak[ing him] whole" would involve Wynn paying him approximately $19 million, calculated as *6 Gattineri's proportional share of the $40 million purchase price reduction. The San Diego Agreement was neither put in writing nor communicated to the Commission. That same day, Gattineri signed the required certification.
In September 2014, the Commission granted Encore the gaming license. Encore subsequently purchased the Parcel for $35 million. Gattineri was not paid the additional $19 million.
B. Procedural History In June 2018, Gattineri filed this action against Wynn in the United States District Court for the District of Massachusetts, alleging (1) breach of contract, (2) common law fraud, and (3) unfair and/or deceptive trade practices in violation of Mass. Gen. Laws. ch. 93A, § 2(a). Wynn sought summary judgment, which the district court granted on all counts in favor of Wynn, concluding that (1) the San Diego Agreement is an "unenforceable illegal contract" under Mass. Gen. Laws ch. 23K; (2) an essential term of the San Diego Agreement −− the amount that Gattineri would be paid in exchange for his signature −− was too indefinite and uncertain to form a valid contract; (3) Gattineri's claimed reliance on Wynn's representations was too unreasonable, foreclosing a claim for common law fraud; and *7 (4) Gattineri's Chapter 93A claim was barred because it is "wholly derivative" of his breach of contract and common law fraud claims.
Gattineri appealed, requesting reversal based on an alleged taint caused by ex parte communication between the district court courtroom clerk and Wynn's counsel. Gattineri further argued that the district court erred in granting Wynn's motion for summary judgment because (1) the San Diego Agreement does not violate Mass. Gen. Laws ch. 23K; (2) even if the San Diego Agreement did violate Mass. Gen. Laws ch. 23K, it should still be enforced because the parties are not in pari delicto; (3) the terms of the San Diego Agreement are sufficiently definite and certain; (4) Gattineri's reliance on Wynn's alleged promise to make him whole was reasonable; and (5) Gattineri's Chapter 93A claim is not wholly derivative of his breach of contract and common law fraud claims.
In our earlier disposition of this appeal, we rejected Gattineri's improper ex parte communication claim and in pari delicto argument, and we concluded that there are genuine disputes of material facts related to Gattineri's breach of contract and common law fraud claims. Gattineri, 63 F.4th at 83. We then determined that the success of Gattineri's claims hinges on whether the San Diego Agreement is unenforceable as contrary to state law *8 and/or as a violation of public policy. Id. Thus, we certified the following two questions to the SJC:
1) Is the San Diego Agreement unenforceable because it violates Section 21 of the Gaming Act? [2]
2) If not, is the San Diego Agreement unenforceable for reasons of public policy of ensuring public confidence in the integrity of the gaming licensing process and in the strict oversight of all gaming establishments through a rigorous regulatory scheme?
Id. at 95.
On November 3, 2023, the SJC issued its opinion, see Gattineri, 221 N.E.3d. [3] The SJC held:
An agreement, concealed from the commission empowered to review and approve casino licenses, and inconsistent with the terms presented to, and approved by, the commission to address its concerns about the possible involvement of organized crime, is unenforceable as a violation of public policy.
Because we hold that the San Diego agreement is unenforceable for public policy reasons, we need not and do not answer the first question, regarding whether it also violates § 21 of the [G]aming [A]ct.
Id. at 752. We then ordered the parties to file supplemental briefs addressing the resolution of this appeal in light of the SJC's opinion. Applying the SJC's response and considering the *9 parties' supplemental briefs, we now address the merits of Gattineri's appeal.
II. DISCUSSION
A. Standard of Review "We review a district court's grant of summary judgment de novo[.]" Triangle Cayman Asset Co. v. LG & AC, Corp., 52 F.4th
24, 32 (1st Cir. 2022) (citations omitted). Summary judgment "is
appropriate only if 'there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.'"
Id. (quoting Fed. R. Civ. P. 56(a)) (citing Modeski v. Summit
Retail Sols., Inc.,
B. Breach of Contract and Common Law Fraud
Neither party disputes that the legality of the San Diego
Agreement is dispositive of Gattineri's breach of contract and
common law fraud claims. The SJC has now opined that the San Diego
Agreement is unenforceable on public policy grounds. See
Gattineri, 221 N.E.3d at 744. In reaching this conclusion, the
SJC "recognized that the legalization and regulation of gambling
are among the Legislature's core police powers, given the risks
associated with gambling operations." Id. at 748 (first citing
Abdow v. Att'y Gen.,
As the SJC observed, the Gaming Act directs the
Commission to "assure . . . that there shall be no material
involvement directly or indirectly with . . . a gaming operation
or the ownership thereof, by unqualified, disqualified or
unsuitable persons or by persons whose operations are conducted in
a manner not conforming with [the Gaming Act]." Mass. Gen. Laws.
ch. 23K, § 4(9); Gattineri,
These requirements, "designed to develop a thorough understanding of the applicants and their associates to ensure the integrity of the gambling license and operation," Gattineri, 221 N.E.3d at 750, are pertinent to Gattineri's Chapter 93A claim.
The SJC determined that "Gattineri's interest in the property and the price he would receive for it were therefore well within the regulatory powers of the commission." Id. at 750. Because of that, "any additional contract involving Gattineri's compensation should have been presented to the commission by Wynn or Gattineri himself." Id. Accordingly, the SJC concluded that "the enforcement of any contracts concealed from the commission and compensating Gattineri for his interest in the property would be a violation of public policy." Id.
The SJC further determined that "[s]ecret deals in
violation of the public terms and conditions required for gaming
licensure are unenforceable violations of public policy," for
"[t]hey place in grave doubt the integrity of the public process
for awarding the license, and thereby defeat the public's
confidence in that process." Id. at 751 (first citing Mass. Gen.
Laws ch. 23K § 1(1); then citing Abdow,
Because the alleged San Diego Agreement violates public policy, Gattineri's breach of contract and common law fraud claims cannot move forward. Accordingly, we affirm the district court's entry of summary judgment as to these claims on the grounds provided by the SJC.
C. Chapter 93A
We next turn to whether Gattineri's claim that Wynn
violated Chapter 93A of the Massachusetts General Laws survives
after the SJC's decision. The district court granted summary
judgment in favor of Wynn as to this claim on the ground that "the
Chapter 93A claim derives entirely from the same set of facts" as
Gattineri's breach of contract and common law fraud claims. In
our earlier disposition of this appeal, we explained that "because
whether the alleged contract is unenforceable affects [Gattineri's
*13
Chapter 93A claim], we [would] await the SJC's answer to our
[certified] questions before addressing it in full." Gattineri,
Gattineri contends that the SJC's opinion does not dispose of his Chapter 93A claim. Specifically, Gattineri argues that his Chapter 93A claim is not wholly derivative of his breach of contract and common law fraud claims and does not turn on whether the San Diego Agreement is an enforceable contract. Not so. The Chapter 93A claim is derivative, as the district court correctly held, and is not a plausible ground for relief in light of the SJC's opinion. Indeed, the Chapter 93A claim seeks the same amount of damages as his claim for damages for his breach of contract claim, trebled as provided for by Chapter 93A. And it describes a course of conduct by the defendants identical to that supporting the breach of contract and common law fraud claims, all described in the SJC's decision.
Chapter 93A of the Massachusetts General Laws prohibits
"unfair or deceptive acts or practices in the conduct of any trade
or commerce." Mass. Gen. Laws. ch. 93A, § 2(a). Such a claim
"requires a showing of conduct that (1) falls within 'the penumbra
of some common-law, statutory, or other established concept of
unfairness'; (2) is 'immoral, unethical, oppressive, or
unscrupulous'; and (3) causes 'substantial injury to [consumers or
other businesspersons].'" Jasty v. Wright Med. Tech., Inc., 528
*14
F.3d 28, 37 (1st Cir. 2008) (alteration in original) (quoting Serpa
Corp. v. McWane, Inc.,
The SJC has clearly articulated the standard that if a
Chapter 93A claim is "derivative of" other claims which fail as a
matter of law, the Chapter 93A claim "must also fail." See Park
Drive Towing, Inc. v. City of Revere, 809 N.E.2d 1045, 1050-51
(Mass. 2004). Applying that principle in Park Drive Towing, the
SJC affirmed the dismissal of a Chapter 93A claim, reasoning that
it was derivative of a breach of contract claim in that it
"allege[d] 'unfair and deceptive conduct surrounding the breach of
contract.'" Id. at 1049-51. Because the claim for breach of
contract failed, as "no enforceable contract existed" between the
parties, so did the Chapter 93A claim. Id. Similarly, and by
analogy, the SJC held in Iannacchino v. Ford Motor Co., 888 N.E.2d
879 (Mass. 2008) that dismissal of the plaintiffs' Chapter 93A
claim, which had failed to properly allege that vehicles sold by
the defendants did not comply with relevant federal safety
standards, also "warrant[ed] dismissal of the[ir] breach of
implied warranty [of merchantability] claim." Id. at 889. That
was so because the claims were "based on the same economic theory
of injury and the same set of alleged facts," such that they were
"interconnected" and "factually and legally intertwined." Id.;
see Lily Transp. Corp. v. Royal Institutional Servs., Inc., 832
N.E.2d 666, 686 (Mass. App. Ct. 2005) (Laurence, J., concurring in
*15
part and dissenting in part) (stating that when a Chapter 93A claim
is "based solely on an underlying but meritless claim for
common − law fraud," the Chapter 93A claim "is itself without
merit"); Priv. Lending & Purchasing, Inc. v. First Am. Title Ins.
Co.,
This court too has applied Massachusetts law and found
that a Chapter 93A claim that is derivative of other failed claims
must be dismissed. See FAMM Steel, Inc. v. Sovereign Bank, 571
F.3d 93, 108 (1st Cir. 2009) (holding that where Chapter 93A claim
"is based wholly on [] common-law claims" and those "underlying
claims fail," the Chapter 93A claim also fails); see also Whitman
& Co., Inc. v. Longview Partners (Guernsey) Ltd., No.
14 − cv − 12047 − ADB,
Gattineri contends that we should read his "[Chapter]
93A claim [as being] broader than just Wynn's 'breach' of the San
Diego Agreement or the facts underlying the [common law] fraud
claim." This argument likewise fails. In his breach of contract
claim, Gattineri alleges that "Wynn has refused to honor its
contract, the San Diego Agreement, with [him] and intends to keep
for itself the already received benefits of its contract with
[him]." In his common law fraud claim, Gattineri alleges that
"Wynn instructed Mr. DeSalvio to fly to San Diego to meet with []
Gattineri and authorized him to offer anything necessary and to
make any agreement necessary to obtain [] Gattineri's signature,"
and that "Wynn never had any intention of honoring any agreement
that was reached with [] Gattineri." And, "[b]ecause the Chapter
93A claim centers on the same alleged misconduct [as the breach of
contract and common law fraud claims], it is merely derivative of
[such claims]." 4MVR, LLC v. Hill, No. 12-cv-10674, 2015 WL
3884054, at *8 (D. Mass. June 24, 2015); see also Lily Transp.
*17
Corp., 832 N.E.2d at 686 (Laurence, J., concurring in part and
dissenting in part); FAMM Steel,
Indeed, Gattineri himself has admitted in the summary judgment filings that his Chapter 93A claim is based upon Wynn's alleged interference with the San Diego Agreement. Wynn put into the summary judgment record, without objection from Gattineri, that in April 2018 Gattineri sent a demand letter to Wynn demanding that "Wynn respond to its violation of Chapter 93A by meeting its obligations under [the San Diego Agreement]." [4] In the letter, Gattineri alleged that "Wynn ha[d] failed and refused to pay or otherwise provide value of $18,676,000 to [him] and unfairly and/or deceptively continue[d] to withhold $18,676,000 from him." Notably, Gattineri stated that "[i]t has become obvious that, in a demonstrably unfair and/or deceptive trade practice, Wynn intends to keep for itself the already received benefits of [the San Diego Agreement] . . . but does not intend to live up to its obligations under [such agreement]." Importantly, Gattineri has done nothing to contest or refute this admission from his demand *18 letter that his Chapter 93A claim is in fact based upon Wynn's interference with the San Diego Agreement.
As Gattineri concedes, his breach of contract and common
law fraud claims fail in light of the SJC's opinion. Consequently,
Gattineri "has no reasonable expectation of proving a violation of
[Chapter] 93A." Macoviak, 667 N.E.2d at 904. In other words,
because of the unenforceability of the San Diego Agreement by
reason of public policy, "it is clear that [Gattineri cannot]
show[] the conduct complained of [in his Chapter 93A claim] fell
within any common-law, statutory, or other established concept of
unfairness." FAMM Steel, Inc.,
Thus, because Gattineri's Chapter 93A claim is
"derivative of [his] breach of contract" and fraud claims, "in
that it alleges 'unfair and deceptive conduct surrounding the
breach of contract,' . . . this claim must also fail." See Park
Drive Towing, Inc.,
III. CONCLUSION
For the foregoing reasons, we affirm . Each party will bear its own costs.
Notes
[1] After the events which led to this suit, Gattineri was acquitted of the federal charges and the state charges were dismissed.
[2] Mass. Gen. Laws. ch. 23K, § 21.
[3] We thank the SJC for its prompt answers to our certified questions.
[4] Under Section 9 of Chapter 93A, a plaintiff must send the
prospective defendant a demand letter "identifying the claimant
and reasonably describing the unfair or deceptive act or practice
relied upon and the injury suffered." Mass. Gen. Laws ch. 93A,
§ 9(3). If, however, the Chapter 93A claim arises under Section 11
instead of Section 9, "a demand letter is not required." Rhodes
v. Ocwen Loan Servicing, LLC,