MTR Gaming Group Inc., parent company of Mountaineer Casino, Racetrack and Resort, may be required to pay a fine of more than $120,000 after the West Virginia Supreme Court of Appeals upheld an earlier contempt of court ruling arising from a back-and-forth legal battle between the company and its former chief executive.
The high court ruled Tuesday that now-retired Circuit Judge Arthur Recht was within his power to fine the the company $500 per day for filing a federal lawsuit against former CEO Ted Arneault, in violation of a 2010 settlement that stated any dispute stemming from that agreement should be heard in Hancock County Circuit Court.
Recht imposed the daily fine beginning Jan. 25, 2012, to continue until MTR dismissed the offending counts in the federal lawsuit, filed in the Western District Court of Pennsylvania.
The company never did so voluntarily, but a judge threw the counts out on Sept. 27 - a 247-day span that would result in a total fine of $123,500.
MTR officials did not respond to a request for comment Wednesday.
The company's suit against Arneault, filed in September 2011, alleged he breached the settlement by making disparaging statements about the company and violating a non-disclosure agreement; becoming part owner of a Pittsburgh company MTR claimed is one of its direct competitors; and that he, too, filed a federal suit against MTR in Pennsylvania in defiance of the venue agreement.
Arneault, represented by Weirton attorney Dan Guida and Wheeling attorney Robert Fitzsimmons, claimed in April 2011 that MTR attempted to block his efforts to renew his Pennsylvania gaming license and damaged his reputation in the industry. Recht ruled, however, that Arneault's suit did not arise from the 2010 settlement while MTR's did, a finding with which the Supreme Court agreed in its Tuesday order.
Arneault left MTR in 2008 after 13 years with the company.
The 2010 settlement at issue in the contempt of court ruling stemmed from a lawsuit in which Arneault claimed, among other things, that MTR reneged on an obligation to pay $150,000 in insurance premiums until he reached age 65.
The corporation reportedly paid him $1.6 million to settle the matter, according to a Securities and Exchange Commission filing.
In return, Arneault agreed not to work for any gaming company within 150 miles of any MTR property, including Mountaineer and Presque Isle Downs & Casino in Erie, Pa.