Federal judge dismisses lawsuit against Morongo

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SACRAMENTO, Calif. - A federal court dismissed a lawsuit against the
Morongo Band of Mission Indians by one of its vendors June 14, reasoning
that it was not in the court's jurisdiction to rule on such a case.

The N9NE Group, operators of upscale dining establishments and nightclubs,
filed the lawsuit after abruptly closing up shop at Morongo a few weeks ago
because of a lease dispute. The N9NE Steak House and four other venues were
among the centerpieces of the expanded Casino Morongo, an hour's drive east
of Los Angeles.

"Our only statement is that we were disappointed by the decision," said
N9NE spokesman Charlie Sipkins.

During a gala opening event last December that featured the state's top
politicians as well as entertainers Jay Leno and Carlos Santana, the N9NE
Group's restaurants were heavily touted in the tribe's public relations
literature.

However, relations between N9NE and Morongo recently soured. The tribe
claimed that N9NE had asked out of their 10-year lease and N9NE claimed
that they were merely in discussions with the tribe about the lease and
were surprised when the lease was terminated at the beginning of June.

One source close to the Morongo tribe said that almost immediately after
the four N9NE-operated businesses at the casino shut their doors, work
crews replaced signs and removed any trace of the N9NE logo from those
establishments. The N9NE establishments include a N9NE steak-house as well
as a nightclub bar and a gift shop that operate under other names.

At least two of the establishments have re-opened and are now operated by
the tribe. N9NE officials claimed that in so doing the tribe was using
their property, including food and liquor.

Press reports indicated that Riverside, Calif. federal judge Virginia
Phillips essentially suggested the two parties find another form of dispute
resolution.

Gaming consultant Michael Lombardi, who works for the Augustine Band of
Mission Indians, said the next step in such matters is to follow the
protocol for dispute resolution. The tribal-state compacts have a specific
clause for dispute resolution with vendors.

Lombardi said that deals such as the initial agreement with N9NE and
Morongo typically contain specific language for dispute resolution with a
mediator. If that fails, said Lombardi, state court is also an option.

N9NE spokesman Sipkins confirmed that "there are some arbitration clauses
in the lease," however he did not elaborate on what they might be.

The reasons for the lease dispute are still murky. N9NE co-owner Michael
Morton told The Wall Street Journal in March that the restaurant had not
done as well as expected according to a statement reprinted in the Palm
Springs Desert Sun.

However, when they filed suit they claimed that the tribe provided a
hostile environment.

"Which was it?" questioned Lombardi, who said he had been to the restaurant
a number of times and heard it was doing well and making money.

N9NE continues to operate venues in Chicago, Dallas and Las Vegas.