CASINO v RUSTON - DAY TWO - AFTERNOON SESSION - STEVE FABRE

Tuesday May 18, 2010 1:30 pm courtroom 2A Judge Fred Cuthbertson

Please note:
No written or audio recording available. Transcript only on appeal. I have done my best but hard to keep up so post may not contain all testimony/arguments but I believe I have captured major points of interest.

This takes a lot of time be patient. Judge's decision may come before I can finish testimony. Judge very precise on issues both sides. Each side says they have the law on their side but Judge Cuthbertson makes the final determination.

Attorneys:
Joan Mell for plaintiff Steve Fabre. (m)
David Britton for defendant Town of Ruston. (b)

WITNESS Steven Fabre, owner Point defiance Cafe and Casino sworn in
m- Briefly tell the court about yourself.
Fabre (f)-
Also own Cassidys Pub.
Bought Showboat and converted to Casino.
Attended Curtis HS, Degree in Communications University of Washington.
Working with public officials active politically.
Flannigan, Darnielle, county council and
Ruston Mayor Wheeler
No other law issues.
Freedom of Information in Ruston to clear name.
Ruston Connection monthly newsletter free, Issue resolved itself March 2008.
m-In 2008 Ruston enforcing gambling act?
f-Had employee stealing promotion chips. Gambling commission was closed.
f-Called Officer Lawless Ruston PD and Police chief Reese.
f-Respnse was sorry Steve turning over to gambling commission.
m-What were gambling taxes for?
f-To enforce gambling act.
f-Had to keep up with rules/regulations else strict penalties.
f-Had 14 tables license $24 thousand dollars per year.
m-Municipalities association with other owners at gambling commission meetings?
f-President Gambling Association of owners.
m-You had graduated rate in Ruston?
f-Worked with Mayor Wheeler decided best.
m-Gambling Commission requires 6 month forecast of earnings.
f-first six months broke even. Seventy thousand exempt. More I made more I paid.
m-Beneficial to you graduated rate?
f-Yes stayed open employed 100s of people put to work, good for Ruston.
m-Rely on graduated rate?
f-Yes, no talk of temporary.
m-Never any indication graduated rate temporary?
f-Absolutely not.
m-Rate to 12 percent with Ruston because of enforcement costs?
f-No.
m-More than needed?
f-Ruston police never enforced gambling act.
m-Use your surveillance tapes for gambling act?
f-No. Ruston police did use for other purposes.
f-Previously police said casino less of an impact than Showboat tavern.
m-Plaintiff exhibit (pl exh) 76 Picture photograph of Pont Defiance Cafe and Casino?
f-Parking lot facing east to Everding's property with light pole.
m-Any contact Bob Everding?
f-Yes, complained light was bothering his wife. Left instructions to lower light, very expensive, next upgrade.
m-When were you notified of 20 percent tax increase?
f-Yes, Mr. Wheeler notified me next May 5 council meeting.
m-Enter exh 76.
j-Admitted without objection.
f- Attended May 5 council meeting ready to testify.
m-What happened?
f-Nothing talked about. Article in The News Tribune they were reacting to that. Council members would look bad cost me $9 thousand dollars per month close me down dozens lose jobs.
m-Did you contribute to Ruston community? Were you a benefit to town?
f-Good clientele based on previous owner. My clientele older reserved more mature.
m-Issue never brought up may 5? Next?
f-June 23 study session in front of town hall. Went to study session.
m-Who was at study session?
f- Council and two other people. I was not allowed to speak.
m-Any problems. Any council person ask you to speak? Were you provided opportunity to speak?
f-No. Dan Albertson spoke. Said we were white elephant and needed to end it now. Didn't look at tax rate, State of Washington tax rate 1.4 percent and didn't look at ban moratorium.
m-Any discussion other than twenty percent?
f-No.
m-Any discussion about RCW 946 113 Gambling Act enforcement? Next meeting?
f-Did not attend July 7 meeting not listening to me. Huson, Albertson, Hunt never responded.
f-Gathered information for decision investors et al involved.
f-Pierce County alsways got a return call, always start a dialogue. Response from Pierce County and the State of Washington very good.
m-Council cooperative in Ruston?
f-Albertson picked up phone told me to write a letter. Dialogue none.
m-any attend July 7 council meeting?
f-Sent investors, employees to meeting. They would not listen to me. They were losing jobs and investment.
m-Up to 20 percent OK if graduated rate?
f-Twenty percent is highest anywhere. Lakewood down Fife down to 4 percent.
m-Why decrease rate?
f-To keep businesses open.
CROSS EXAMINATION David Britton (b)
b-Employed literally hundreds of people?
f-We literally put hundreds of people to work first several years.
b-Review complaint to refresh memory. Turn to page 8 of complaint does your signature appear? By signing you verify allegations to be true?
f-Yes.
b-Turn to page 6 read over. You say tax increase not valid as no input by Cafe. On April 4 and July 2 you sent letter to town council mayor and attached partnership returns?
f-Assumed input would be public input.
b-Letter is not input?
f-Letter is input.
b-Familiar with letter?
f-Have not read in a long time since I wrote them.
Provides letter to Steve Fabre Pl exh 49. And when you say in second paragraph tax increase will force foreclosure and cost tax revenue of $40 thousand dollars?
m-Objection. Letter communication without reading.
J-Sustained.
b-Read whole letter.
f-OK.
b-did you write Town of Ruston not putting you out of business- Hip Hop club. Telling council not putting you out of business open Hip Hop club?
f-Hired entertainment promoter. Had Hip Hop on weekends. Was now class F using small area. Put in stage, promotion included Hip Hop.
b-Approach witness Pl exh 50 (David reads Pl exh 50). All right in that letter you stated tax increase was 700 percent?
f-Was 667 percent rounded to 700 percent.
b-Doesn't increase depend on council?
f-Had not seen July 7 only seen 20 percent. Rate was changed at meeting I did not know. My actual tax was two percent and highest paid was three percent. Actual increase was 1,000 percent.
b-Documentation call to all?
f-Talked to Albertson, Hunt and Hedrick. Hunt picked phone up but got no return calls.
b-Bob Everding came over?
f-Yes. Bob very cooperative came over several times.
b-Did increase happen because you were suing town?
f-No. Signed complaint against Ruston Connection.
b-Complaint not strictly accurate?
f-Different interpretation, asked to appear before council.
b-You attended study session May 5 and council meeting July23?
m-Objection. Credibility.
j-Sustained.
b-You did have time to communicate with council have meeting with mayor- non voting?
Judge-Did you have comment on amended ordinance?
f-No.
b-Would you object to 20 percent reduced to 12 percent?
f-Pretty sure I would have objected.
b-Pl exh 50 letter stating if gambling tax only gambling would be pull tabs?
f-Originally pull tabs would increase final did not. New ordinance July 7 did not have increase on pull tabs.
b-Did not close poker?
f-Planned on closing but kept open had free tournaments. Poker kept open to employ people.
b-Mayor Hopkins say take out card tables?
f-No he did not.
b-Did you lease tables pay operators salary of $125 dollars per week? Did you lose $18 thousand dollars customer wins? Did you lose $9 thousand customer wins?
f-Yes.
b-Did gambling tax close tables?
f-Business extremely volatile had bad second quarter. Came back in third quarter to 26 percent average.
b-Losses were smaller?
f-Losing annually not monthly, losses getting smaller.
b-Casino closed August to December 2008?
f-House bank part of casino closed. Lions share of business yes.
b-Did I depose you in my office in 2006?
m-Objection. no question.
judge-Overruled. Inconsistent statement.
b-Try again. You only told me card room?
f-House banked card room.
b-Closed August to December...
Judge-Enter deposition in evidence. Not sure of line of questioning.
m-Include page and line cross reference.
b-Page 36 line 7 you accurately said, did say casino closed?
f-Yes. Casino equals house banked.
b-You did file B&O (Business and Occupation) tax during that period. Some gambling tax revenue. Gambling tax fatal to business? How much more in gambling tax at 20 percent?
f-Opinion on 2007 $80 thousand dollars per month.
b-Why not 2008?
f-2007 was last full year.
b-Revenue down 2008?
f-In first quarter. July up 60 percent over June. Lot of fluctuations especially in second quarter.
f-Gambling commission raised betting limit to $200 dollars.
b-Had been losing money before town increased tax.
>2005 net loss $262 thousand.
>2006 net loss $347 thousand.
Those kind of losses didn't close casino?
f-No.
b-Put you out of business?
f-No Tacoma closed gambling in 2005 willing to wait to get ten percent of Tacoma business. Then Tacoma stayed open another year due to court case.
b-Gambling closed in Tacoma 2006?
f-Yes.
b-Did not make money?
f-Business going much better.
b-2007 net loss. 2008 net loss closed house bank?
Judge-Where are you going with this?
b-Have you paid higher tax rate? You set your own rate?
f-Worked with mayor/council.
b-Never lost $9.7 million on casino?
f-No.
b-How do you know Kim Wheeler?
f-Mayor of Ruston.
b-Did you employ Kim Wheeler?
f-Yes as interface with workers at Point Ruston.
b-How long?
f-Months.
b-Did Kim Wheeler have job title? How much did he make?
f-$12-$13 dollars hour. Worked 2-3 months 2006 or 2007.
b-Donate to Wheeler's campaign?
f-Yes. Raised money for him.
m-Rate increase was partially unfavorable to you?
m-Call back Karen Pickett for testimony on study session.
Judge-Transcript and recording?
m-Disc has entire session gambling portion much smaller.
b-Prefer whole tape listened to.
m-Whole meeting 50 minutes.
b-No objection if authenticated.
m-Call Karen Pickett. (k)
k-sworn in apologizes for wearing jeans.
m-You attended June 23 study session did you record?
k-Yes I did.
m-Plaintiff exhibit 77 do you recognize?
k-Yes I do.
m-A true and correct information on Ruston study session June 23?
m-Move to offer into exhibit 77. No objection.
m-Your honor listen to.
Judge-excuse Karen Pickett.
b-No further witnesses.
j-15 minute break. Closing statements 15 minutes each and rebuttal.
m-Secret to playing this?
Clerk- Play on my player I have speakers.
Judge-How long is portion on gambling?
j-Play relevant portion of study session tape.
m-Pl exh 77 for record.
Tape-Delay cannot start tape.
m-Sound not able to be heard.
Judge-No need to transcribe. Would need to download software to my computer.
m-Willing to do closing now.
j-How long closing statements?
m-15 minutes.
b-30 minutes.
Judge-Forgo playing it, been testimony about what was discussed.
m-June 23 study session no public comment.
j-Try on Miss Mendes computer (bailiff).
m-Go to 1836 can hear now.
Judge-Ready, back on record play relevant portion of exhibit 77 tape of gambling tax discussion by council.
Voice of Dan Albertson heard: Raise Gambling tax. Look at gambling tax and other areas. Is lower here than other states. Why are we so low? Most ridiculous, absurd I have ever heard. What are revenues and expenses and how to bridge the gap. Question is gambling tax an appropriate thing to look at, irresponsible. Find sources of revenue. Virtually every other jurisdiction does, astounds me. Does it have an ordinance number? Looking at every item. Looking at it 2 out of 3, need to do, call Department of Revenue.
(Very brief seven minutes)
m-Done with gambling tax portion.
Judge-Did you listen to this Mr. Britton?
b-Just now.
j-BREAK. Talk to staff.
3:30 pm Judge-
Will not rush through closing. Resume at 10:30 am tomorrow. Arguments to sum up. Not a problem I hope.
m-Need to clear calendar.
b-Already cleared for trial.

Comment: All witness testimony finished only closing arguments left. ps They took quite longer than estimates.
First Joan Mell attorney for plaintiff Steve Fabre, Point Defiance Cafe and Casino.

Next David Britton for defendant Town of Ruston.
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