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AYHAN HAKIMOGLU v. TRUMP TAJ MAHAL ASSOCS.

December 23, 1994

AYHAN HAKIMOGLU, Plaintiff,
v.
TRUMP TAJ MAHAL ASSOCIATES, TRUMP TAJ MAHAL, INC., THE TRUMP TAJ MAHAL CORPORATION and TM/GP CORPORATION, Defendants. and TRUMP TAJ MAHAL ASSOCIATES, Counterclaim Plaintiff, v. AYHAN HAKIMOGLU, Counterclaim Defendant.



The opinion of the court was delivered by: JEROME B. SIMANDLE

 SIMANDLE, District Judge:

 This matter comes before the court upon the motion of defendants for reconsideration of Parts II.C and II.D of this court's Opinion and Order filed March 31, 1994, in which we dismissed plaintiff's claim for failure to state a claim under New Jersey's common law doctrine of dram-shop liability. The underlying case is an action in tort to recoup gambling losses allegedly suffered by plaintiff in excess of $ 2,000,000 as a result of gambling in defendants' casino while visibly intoxicated. Plaintiff Ayhan Hakimoglu filed a complaint against defendants *fn1" alleging common law tort actions for negligence, intentional and malicious conduct, and unjust enrichment.

 Procedural History

 The Opinion and Order in this case on March 31, 1994 held, in pertinent part, that this court had subject matter jurisdiction over the claim asserted and that the New Jersey Casino Control Commission did not have exclusive jurisdiction over all actions arising out of casino gambling. We also predicted that the law of New Jersey would not recognize a common law cause of action under dram-shop liability on behalf of a casino patron seeking to recover gambling losses occurring after a casino served the patron alcohol while visibly intoxicated and yet permitted him to continue gambling.

 Subsequent to our March 31, 1994 Opinion and Order in this case, the Third Circuit handed down Greate Bay Hotel & Casino v. Tose, 34 F.3d 1227 (3d Cir. 1994). The Greate Bay court held that the Casino Control Commission was not vested with primary exclusive jurisdiction over such claims as the ones presented in both Greate Bay and the present action, and that courts had concurrent jurisdiction over such cases. Id. Within its Opinion, the Greate Bay court included the remark that, "while [it did] not make a ruling on the point, a reasonable argument can be made that a casino owes a common law duty to a patron to prevent him from gambling when it knows he is intoxicated." Greate Bay, 34 F.3d at 1232, n.7. (citing GNOC Corp. v. Aboud, 715 F. Supp. 644, 653 (D.N.J. 1989)). In light of these remarks, we invited supplemental briefing and oral argument to determine whether Greate Bay represented a change in the law such that we should reconsider our prediction that the New Jersey Supreme Court would not recognize a cause of action for plaintiff's claim under the common law doctrine of dram-shop liability. Having had the benefit of re-briefing and oral argument on this issue, we find that the Third Circuit's dicta in Greate Bay does not seek to predict New Jersey's common law and it does not alter the law of this case. We remain convinced that the New Jersey Supreme Court would not expand the common law doctrine of dram shop liability to include a cause of action for a plaintiff/gambler to recover gambling losses allegedly incurred when he was visibly and obviously intoxicated.

 Discussion

 We adopt the analysis set forth in our Opinion of March 31, 1994, in regard to the existence of a cause of action under the common law doctrine of dram-shop liability for the claims presented by plaintiff. For convenience sake, we set forth herein pertinent excerpts from that unpublished opinion and then analyze the effect, or non-effect, of the Third Circuit's decision in Greate Bay on this line of reasoning.

 I. Excerpts from the March 31, 1994 Opinion

 When considering a motion to dismiss for failure to state a claim upon which relief can be granted, the reviewing court must accept all well-pleaded allegations in the complaint as true and view them in the light most favorable to the plaintiff. See Rogin v. Bensalem Township, 616 F.2d 680, 685 (3d Cir. 1980), cert. denied, 450 U.S. 1029, 68 L. Ed. 2d 223, 101 S. Ct. 1737 (1981); see also Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974) (stating that allegations of a complaint should be favorably construed for the pleader). A court may not dismiss the complaint "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957).

 It is not necessary for the plaintiff to plead evidence, and it is not necessary to plead the facts that serve as the basis for the claim. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 446 (3d Cir. 1977). But "although the Federal Rules of Civil Procedure do not require a claimant to set forth an intricately detailed description of the asserted basis for relief, they do require that the pleadings give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Baldwin County Welcome Ctr. v. Brown, 466 U.S. 147, 149-50 n.3, 80 L. Ed. 2d 196, 104 S. Ct. 1723 (1984) (quoting Conley v. Gibson, 355 U.S. 41, 47, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957)).

 The Complaint alleges, and the court accepts for purposes of this Rule 12(b)(6) motion, that Mr. Hakimoglu was enticed to gamble at the defendants' Taj Mahal Casino on numerous occasions in 1992 and 1993. The Casino provides free alcohol to Mr. Hakimoglu in his hotel room and he is "continuously provided with complimentary 4-5 ounce gin martinis during the entire period he is gambling" (Complaint P 13), and the Casino continues to provide this stream of alcohol to plaintiff beyond the point when he is visibly and substantially intoxicated. (Complaint P 15.) Because defendants allowed plaintiff to continue gambling while visibly intoxicated including extending him additional credit by permitting him to draw markers against his credit account while intoxicated (Complaint PP 17-19), he allegedly sustained gambling losses in excess of $ 2,000,000 while visibly intoxicated. (Complaint PP 1, 24.)

 A. Predicting New Jersey's Law of Dram Shop Liability

 Our jurisdiction in this case is based upon diversity of citizenship. Consequently, under Erie R.R. Co. v. Tompkins, 304 U.S. 64, 82 L. Ed. 1188, 58 S. Ct. 817 (1938), we must apply the substantive law of the State of New Jersey. Where the New Jersey Supreme Court has not squarely addressed the issue at bar, the federal court sitting in diversity "must be governed by a prediction of how the state's highest court would decide were it confronted with the problem." McKenna v. Ortho Pharmaceutical Corp., 622 F.2d 657, 661 (3d Cir.), cert. denied, 449 U.S. 976, 66 L. Ed. 2d 237, 101 S. Ct. 387 (1980). The issue before this court is whether, applying dram-shop liability, the New Jersey Supreme Court would allow a dram-shop cause of action by a patron against a casino which served alcoholic beverages to the visibly intoxicated patron for the recovery of the patron's resulting gambling losses. *fn2"

 The fact that the New Jersey Supreme Court has not directly addressed the issue of expanding dram-shop tort liability to encompass a patron's claim against a casino for recovery of gambling losses makes this court's task more complex. However, the Third Circuit has indicated that in the absence of a pronouncement on the issue by the state's highest court, decisions by the intermediate appellate courts must be given serious consideration in ascertaining and applying state law. Robinson v. Jiffy Executive Limousine Co., 4 F.3d 237, 242 (3d Cir. 1993) (citing Aetna Casualty & Surety Co. v. Farrell, 855 F.2d 146, 148 (3d Cir. 1988)).

 
Decisions of state intermediate appellate courts which have not been reviewed by the highest court of the state, while not dispositive, are evidence of state law. See Commissioner v. Estate of Bosch, 387 U.S. 456, 464-65, 18 L. Ed. 2d 886, 87 S. Ct. 1776 (1967); West v. American Tel. and Tel. Co., 311 U.S. 223, 85 L. Ed. 139, 61 S. Ct. 179 (1940); Wisniewski v. Johns-Manville Corp., 759 F.2d 271, 273-74 (3d Cir. 1985). In Burke v. Maassen, we held that "in the absence of a clear pronouncement form the state's highest court, a federal court may consider the decisions of the state's intermediate appellate courts." 904 F.2d 178, 182 (3d Cir. 1990) (citing Erie Castings Co. v. Grinding Supply, Inc., 736 F.2d 99,100 (3d Cir. 1984)).

 Robinson, 4 F.3d at 242.

 Therefore, in determining the applicable case law, this court will look to the New Jersey lower and intermediate appellate courts for guidance in resolving the question before us. Although the New Jersey Supreme Court and lower courts have not directly addressed this issue, the United States District Court for the District of New Jersey has visited the issue on at least two previous occasions, as now discussed.

 B. Implication of the Cause of Action from the Casino Control Act

 In GNOC Corp. v. Aboud, 715 F. Supp. 644, 655 (D.N.J. 1989), the patron, Mr. Aboud, counterclaimed against the Golden Nugget Casino's claim to recover his debt for casino credits, alleging that the casino had intentionally gotten him intoxicated in order to induce him to gamble his money away. On a motion for summary judgment, Judge Mitchell H. Cohen noted that the critical issue concerning what type of duty the casino owed to an intoxicated patron had not been addressed by the New Jersey Supreme Court. Aboud, 715 F. Supp. 644, 652. However, Judge Cohen predicted that the New Jersey Supreme Court would imply, from provisions of the Casino Control Act, "superimposed on top of common law dram shop liability," that "a casino has a duty to refrain from knowingly permitting an invitee to gamble where that patron is obviously and visibly intoxicated and/or under the influence of a narcotic substance." Id. at 653, 655. *fn3"

 The plaintiff in the instant case rests his asserted cause of action on the duty established by the Aboud case, which in turn had been motivated by the above-cited provisions of dram-shop law and the Casino Control Act at N.J.S.A. § 5:12-103(g)(1) and N.J.A.C. 19:15-2.1(a).

 When a federal court is applying state law and there is persuasive evidence that the state law has undergone a change, the federal court is not bound by a previous decision if that decision reflected reliance on state law prior to its modification. See Robinson, 4 F.3d 237; Smith v. Calgon Carbon Corp., 917 F.2d 1338, 1343 (3d Cir. 1990). In the interim since the Aboud decision, the Appellate Division of the Superior Court of New Jersey held that the casino regulatory framework does not create an implied private cause of action for money damages based on a violation of the Casino Control Act. Miller v. Zoby, 250 N.J. Super. 568, 570, 595 A.2d 1104 (App. Div.), certif. denied, 127 N.J. 553 (1991) (patron's losses stemming from violation of credit provisions of Casino Control Act not actionable). "Absent such a manifestation of legislative purpose, we will not by implication judicially create a cause of action in the circumstances." Id. Thus, the Appellate Division of the New Jersey Superior Court has given guidance that the implication of a private cause of action from the Casino Control Act and regulations is improper in the absence of expressed legislative intent, undermining a major premise of the Aboud holding, supra.

 The District of New Jersey revisited the issue of the duty of a casino to its allegedly intoxicated patrons in Tose v. Greate Bay Hotel and Casino, 819 F. Supp. 1312 (D.N.J. 1993). In Tose, like Aboud, the casino brought an action against the patron to recover gambling debts, and the patron counterclaimed to recover millions of dollars of gambling losses incurred on multiple occasions while he was allegedly obviously and visibly intoxicated. Tose, 819 F. Supp. at 1314.

 In denying the casino's motion for summary judgment, Judge Joseph H. Rodriguez in Tose addressed the issues (a) whether the Casino Control Commission has exclusive jurisdiction over the power to order repayment of paid gaming losses, and (b) whether a claim sounding in common law negligence arises in favor of a patron whom the casino has knowingly permitted to gamble where the patron is obviously and visibly intoxicated. Greate Bay Hotel and Casino, Inc, v. Leonard H. Tose, Civil No. 91-600 (JHR) (Order filed May 11, 1992). Judge Rodriguez, in the decision later affirmed by the Third Circuit, found that the Casino Control Commission was not vested with exclusive jurisdiction in such matters. Id., aff'd, Greate Bay, supra, 34 F.3d 1227. Further, Judge Rodriguez found that plaintiff's cause of action arose in common law negligence against a tavern owner based on negligent sale of intoxicating liquor, citing Buckley v. Estate of Pirolo, 101 N.J. 68, 70, 500 A.2d 703 (1985). Id., slip op. at 4-5. Judge Rodriguez found that Aboud's precedent was unaffected by Miller v. Zoby, 250 N.J. Super. 568, 579, 595 A.2d 1104 (App. Div.), certif. denied, 127 N.J. 553 (1991) (declining to imply private right of action against a casino for violating credit regulations), because Aboud 's holding did not depend upon finding a violation of the Casino Control Act. Id., slip op. at 4-5. Thus, in the unpublished Opinion, Judge Rodriguez denied the casino's motion for summary judgment addressing the patron's counterclaim for refund of gambling losses.

 Judge Joseph E. Irenas in Tose, to whom the case was reassigned, was bound by the prior decision of Judge Rodriguez following Aboud as the law of the case, *fn4" but Judge Irenas expressed strong reservations about implying this tort cause of action from the casino regulatory scheme: "There is no direct regulation [in the Casino Control Act or regulations] barring the conduct which is alleged to create liability -- permitting an inebriated patron to gamble." Tose, 819 F. Supp. at 1317 n.8 (discussing GNOC Corp. v. Aboud, 715 F. Supp. 644 (D.N.J. 1989)).

 Upon consideration of Judge Irenas' reservations and the intervening Miller v. Zoby decision of the Appellate Division of the Superior Court of New Jersey, as well as the trend of recent restrictions upon the scope of New Jersey's law of dram shop liability, this court respectfully disagrees with Judge Cohen's prediction in 1989 and Judge Rodriguez's opinion in 1992 that the New Jersey Supreme Court would find that a tort cause of action for recovery of gambling losses by intoxicated patrons can be implied from common law dram shop liability or from the Casino Control Act and regulations promulgated by the Casino Control Commission. However, that issue is not squarely before this court and need not be decided here, to the extent that plaintiff does not ...


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