A Connecticut Supreme Court decision could enable the town of Ledyard to recover the millions of dollars in attorney’s fees it incurred while waging a years-long legal battle to collect personal property taxes on slot machines the Mashantucket Pequot Tribe leased for Foxwoods Resort Casino.
Officially released Wednesday, the unanimous decision reverses a state Appellate Court decision that had reversed an earlier Superior Court decision. Filed in 2008, the case stemmed from Ledyard’s claim that WMS Gaming Inc., a Chicago-based company, owed $18,251 in unpaid taxes on slot machines the company owned.
In 2006, the Mashantucket Pequots, who claimed the town had no authority to tax slot machines the tribe leased from another company and operated on sovereign land, filed a federal suit against the town. The tribe filed a second federal suit after the town sued WMS Gaming in state court.
In granting the town’s appeal in state Supreme Court, Chief Justice Richard Robinson asserts that WMS Gaming is liable for the attorney’s fees the town incurred in both the state and federal court actions. He writes that state law contains a provision “allowing trial courts to award to a municipality ‘reasonable attorney’s fees incurred by such municipality as a result of and directly related to such levy and sale, enforcement of lien or other collection proceedings.’ ”
“This statutory language is the focus of our analysis in this appeal,” Robinson writes.
Ledyard has incurred attorney’s fees of $1.8 million to $2 million, according to Lloyd Langhammer, the New London attorney who has represented the town in state court. He said a big chunk of the fees were earned by a Washington, D.C., lawfirm.
Langhammer said Thursday he would argue that under state statutes, the town is entitled to 18% interest on the fees, increasing the total amount the town likely will seek in reimbursement to as much as $5 million.
This week’s decision marked the second time the state Supreme Court has reversed the Appellate Court in the case. In 2018, the high court found the Appellate Court had prematurely dismissed WMS Gaming’s appeal of a 2016 Superior Court ruling that Ledyard was entitled to attorney’s fees. The Superior Court judge had directed the town to seek a hearing on the amount of the fees.
WMS filed an appeal of the ruling before such a hearing could take place, and the town sought dismissal of the appeal.
In 2012, a U.S. District Court judge ruled in favor of the tribe in its suit against the town but the 2nd U.S. Circuit Court of Appeals reversed the decision the following year.
“Now it goes back to trial court,” Langhammer said.
The sides will have to agree on how much the town is owed, which could involve more litigation, Langhammer said. WMS Gaming could contest the 18% interest and even the “billable hours” the town charged. All the while, the town could be incurring further fees for which WMS could be liable.
“You live by the sword, you die by the sword,” Langhammer said.
WMS Gaming’s delinquent $18,000 tax bill, which grew to more than $372,000 over several years, was paid off in 2014.
An attorney for Wiggin and Dana, a New Haven firm that represents WMS Gaming, did not immediately respond to messages seeking comment.