RECEIVEBIHLED NOV 2 7 2019 NEVADA GAMING COMMISSION LAS VEGAS, NEVADA NGC 19?03 STATE OF NEVADA BEFORE THE NEVADA GAMING COMMISSION NEVADA GAMING CONTROL BOARD, Complainant, NEVADA GAMING CONTROL vs. OPPOSITION TO STEPHEN ALAN MOTION TO DISMISS STEPHEN ALAN WYNN, BASED ON LACK OF SUBJECT MATTER JURISDICTION In his capacity as having been found suitable as Chief Executive Officer, Chairman of the Board, and shareholder and controlling shareholder of Resorts, Ltd.; Respondent. The State of Nevada, on relation of its Nevada Gaming Control Board (?Board?), by and through its counsel, oppose Stephen Alan Wynn?s Motion to Dismiss (?Motion?) for lack of subject matter jurisdiction. 1. Introduction Stephen Alan (?Wynn?) can no longer avoid scrutiny for his actions. in his Motion touts his ?45+ year tenure as a gaming licensee? Without the Board having ever brought disciplinary action against him. Br. at 4. Far from being blameless, thwarted discovery and investigation of his conduct through non-disclosure agreements and personal funds. cannot avoid the Nevada Gaming Commission?s (?Commission? or disciplinary power through his latest legal machination. This Commission has subject matter jurisdiction. Wynn?s Motion is procedurally ?awed. In a misguided effort to shift the burden of persuasion from to the Board, mistakenly styles his Motion as a motion to dismiss for lack of subject matter jurisdiction. Wynn?s Motion, properly considered, is a merits argument. challenges the applicability of disciplinary statutes and Page 1 of 13 regulations to him after he severed ties with Resorts. To accept Wynn?s erroneous premise would allow persons such as to frustrate this Commission?s subject matter jurisdiction by severing employment ties prior to revocation proceedings. The absurd result that would ?ow from such an interpretation evidences the vacuity of this argument. Even if Wynn?s Motion was procedurally proper (it is not), this Commission has subject matter jurisdiction. First, this Commission has subject matter jurisdiction to interpret Nevada Revised Statutes Chapter 463 (?Gaming Control Act?) and decide whether its provisions apply to (they do). Second, concedes this Commission would have subject matter jurisdiction to confirm a stipulation barring him from Nevada?s gaming industry. Br. 23:10-12. never explains why, if this Commission has subject matter jurisdiction to confirm a stipulation, this Commission would purportedly lack subject matter jurisdiction to revoke his suitability. Third, Wynn?s arguments render this Commission?s power to revoke a finding of suitability and its penalties a nullity. Persons such as could avoid the penalties of revocation, e.g. NRS 463.645, by jettisoning their current role with a licensee at any time of their choosing. II. Legal Standards filed a motion to dismiss for lack of subject matter jurisdiction. There are two types of this jurisdictional attack. First, a facial attack where the absence of subject matter jurisdiction is clear from a complaint?s allegation. Rosequist 0. Int ?l Ass ?n of Firefighters Local 1908, 118 Nev. 444, 448, 49 P.3d 651, 653 (2002), overruled on other grounds by Allstate Ins. Co. v. Thorpe, 123 Nev. 565, 573 n.22, 170 P.3d 989, 995 n.22 (2007). Second, a ?factual attack? where the tribunal takes evidence because the defendant disputes the truth of the jurisdictional facts. Morrison v. Beach City, LLC, 116 Nev. 34, 36-37, 991 P.2d 982, 983 (2000). Background A. Legal background Because attacks this Commission?s legal power over him, it is necessary to review the broad power Nevada?s legislature delegated to the Commission over gaming and Page 2 of 13 those persons related to Nevada?s gaming industry. The following sections of NRS Chapter 463 are relevant to this Commission?s review. Nevada?s legislature described the Vital role that gaming plays in our State?s economy and to the welfare of its citizens. NRS The legislature correctly recognized that the gaming industry?s continued growth in our state is dependent on public confidence in licensed gaming. NRS Public confidence is achieved through ?strict regulation? of, inter alia, persons ?related to the operation of licensed gaming NRS All places where gaming is conducted are to be ?assisted to protect the public health, safety, morals, good order and general welfare of the inhabitants of the NRS Keeping faith with the sovereign importance of gaming?s role in our State, Nevada?s legislature created this Commission and the Board. NRS ?463.022, 030. The Commission and the Board are to administer the provisions of the Nevada Gaming Control Act to protect the public interest consistent with Nevada policy. NRS The Board has ?full and absolute power? to recommend to the Commission that a ?nding of suitability be revoked. NRS This Commission ?has full and absolute power and authority? to revoke a finding of suitability. NRS The legislature?s definition of suitability has no nexus to the person?s temporal connection to a particular licensee. Nevada Revised Statute 463.170(4) explains, application to receive a license or be found suitable constitutes a request for a determination of the applicant?s general character, integrity, and ability to participate or engage in, or be associated with NRS Because suitability concerns not only the ?ability? to work in gaming, but also whether a person is of sufficient ?character? to ?be associated with gaming,? the Commission and the Board are tasked with continuing to observe the conduct of all licensees and persons having material direct or indirect involvement with a licensed gaming operation. NRS That suitability is broader than a person?s connection to a current licensee is patent from the language of NRS 463.645. That section, inter alia, prohibits gaming licensees, Page 3 of 13 after receiving written notice from the Commission, from paying or employing persons whose suitability has been revoked. NRS These sections can be enforced by the Board. There is no language in the Gaming Control Act that even hints that the Board?s investigatory and disciplinary powers are dependent on a person?s current nexus with a gaming licensee. The Board is empowered to investigate Whether there has been ?any violation of this the regulations adopted thereunder.? NRS The Board may then institute an action to recommend that the Commission discipline the person by revoking their suitability or issuing a fine. NRS A ?respondent? to the Board?s complaint means ?any licensee,? but it also includes ?other NRS ?463.0187. The Act does allow for the ?surrender? of a gaming license, but spells out mandatory procedures for the effective surrender of that license. A surrender is not effective until this Commission accepts it. NRS ?463.27 Even after surrender of a license, the former licensee remains liable for penalties, fines, fees, taxes, or interest due. Id. B. Factual background 1. Parties The Board is an administrative agency created by Chapter 463 of the NRS. Compl. at 118. is the former Chief Executive Officer, Chairman, and controlling shareholder of Resorts. Id. at 119. The Commission had issued findings of suitability regarding Wynn. Id. at 1W9 and 16. The Board through its complaint recommends that this Commission revoke Wynn?s findings of suitability and issue an appropriate fine against him. Id. at pg. 23. 2. Wynn?s factual background statement is irrelevant in his Motion confuses and con?ates two different types of motions. submits a statement of facts (Br. 4-12), but then makes exclusively legal arguments (Br. 14-24) about whether Nevada?s legislature gave this Commission express or implied power to entertain the Board?s disciplinary action against him. Mr. Campbell in his declaration Page 4 of 13 does nothing to challenge the subject matter jurisdiction of this Commission on a factual basis. Accordingly, Wynn?s Motion is a facial challenge. A reviewing tribunal views a facial attack the same way it reviews a motion to dismiss for failure to state a claim. Leite 0. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). In Nevada, dismissing a complaint is appropriate ?only if it appears beyond a doubt that [the plaintiff] could prove no set of facts, which, if true, would entitle [the plaintiff] to relief.? Buzz Stew, LLC v. City ofN. Las Vegas, 124 Nev. 224, 228, 181 P.3d 670, 672 (2008). While is correct that the Board bears the burden of demonstrating subject matter jurisdiction, this Commission must review Wynn?s Motion under the Buzz Stew standard. 3. repeatedly violated Resorts? policy Resorts mandated that all managers comport themselves professionally. Compl. at 1125. To that end, romantic relationships between supervisors and subordinate employees were strongly discouraged. Id. at 1124. Resorts? sexual harassment policy prohibited harassment, whether such conduct was intentional or unintentional. Id. at 1H7 . never bothered with the details of these policies. Id. at 1153. In disregard of these policies and the obvious power disparity between himself and subordinate employees, had multiple sexual encounters with subordinate employees. has conceded that he had ??multiple consensual relationships during his tenure at Id. at ?53 (quoting Wynn?s written statement to the Investigations and Enforcement Bureau of the Massachusetts Gaming Commission). Matthew Maddox, the CEO of Company, views Wynn?s behavior differently by saying, ?there were many Victims, and those Victims felt Id. at ??54 (quoting Adjudicatory Hearing Transcript Dated April 2, 2019, 2816-7). 4. thwarted Resorts and Board?s discovery of his behavior through payment of significant sums and non- disclosure agreements Resorts? policy was to investigate allegations of harassment in the workplace. Id. at 1122-23. Resorts was to obtain statements from affected parties, preserve Page 5 of 13 ?30049019me evidence, determine the potential for risk occurrence, protect the employees affected, complete an investigation, and determine the allegation?s merits. Id. Repeatedly, interrupted this process to prevent discovery of the merits of serious allegations. frustrated anyone?s ability to discover the merits of the allegations against him. A Resorts manicurist made serious allegations that engaged in unwelcome sexual conduct toward her. Id. at 1196. privately settled her dispute for $7.5 million and mandated that the manicurist sign a confidentiality and non-disclosure agreement. Id. at ?l97. A Resorts cocktail server made serious allegations of harassment against him. Id. at 110. scotched discovery of the merits of these allegations by privately paying $975,000 and requiring the cocktail server to sign a confidentiality and non-disclosure agreement. Id. at Other Resorts employees have made serious allegations of unwelcome sexual conduct by Wynn, as is evidenced by multiple demand letters sent by their attorneys. Id. at Again, resolved these disputes through confidentiality agreements with non-disclosure clauses. Id. at 1T42. 5. impeded the Board?s investigation of these serious allegations by refusing to appear and testify The Board went straight to the source, Wynn, to investigate these serious allegations and the ensuing payments of over $8 million (amounts stated are only those known that are of public record). Id. at 1143. The Board sent a notice to- appear at an investigative hearing to address the allegations. Id. Rather, than comply with the Board?s investigation, sought to dictate the terms of his participation to serve his own personal interests. This is patent from reviewing Mr. Campbell?s letter of September 5, 2018. See Br., Campbell Declaration, Ex. 8. Wynn?s refusal to participate in the investigative hearing was a violation of NGC Regulation 5.070, which made his participation compulsory. Rather than appear and give testimony, offered to respond to written inquiriesWynn?s rationale was inimical to the public interest because it was devoted to his self-interest: Page 6 of 13 Despite this indisputable state of affairs [Wynn?s alleged claim he is ?no longer a bona-fide licensee?], Mr. desires to cooperate with Nevada regulators in any reasonable manner which does not compromise his ongoing efforts to vindicate his good name. Id. never explains in his counsel?s letter Why Wynn?s goal to vindicate a personal goal trumps the Board?s legal duty to investigate matters affecting its statutory duties. See NRS IV. Legal Argument A. Wynn?s Motion is procedurally improper styles his Motion as one challenging subject matter jurisdiction. is wrong. argues that the statute permitting the Board to recommend to this Commission that findings of suitability be revoked no longer applies to him since he jettisoned his interest in Resorts. Br. 2:9?13. Properly considered, is making a merits argument. Subject matter jurisdiction refers to a tribunal?s power to decide an issue. Union Pacific R. Co. v. Locomotive Engineers, 558 U.S. 67, 81 (2009). Whether a court lacks subject matter jurisdiction ?can be raised by the parties at any time, or sua sponte by a court of review, and cannot be conferred by the parties.? Swan v. Swan, 106 Nev. 464, 469, 796 P.2d 221, 224 (1990). In other words, a reviewing tribunal when considering subject matter jurisdiction must review the text of the relevant provisions. Landreth v. Malik, 127 Nev. 175, 179-80, 251 P.3d 163, 166 (2011). None of the legislative and regulatory sections cited by relate to the jurisdictional power of this Commission in the disciplinary context. obfuscates the jurisdictional question in his Motion by relying on the definition of suitability, as it relates to the qualifications a person must demonstrate in their application for a determination of a finding of suitability. Br. at 17-19 (citing NRS 463.1405(1) and Nev. Gaming Comm?n. Reg. ?4.030). The important point that ignores is that nothing in NRS 463.1405(1) mandates that the Board stop its investigation immediately when the subject of its investigation ceases employment with the gaming licensee, let alone forfeit its power to Page 7 of 13 discipline for conduct that occurred during the time that person had a connection with the gaming licensee. This Commission should construe NRS 463.1405(1) in harmony with NRS 463.310(2) to avoid absurd results. Nevada Power Co. v. Haggerty, 115 Nev. 353, 364, 989 P.2d 870, 877 (1999). The Nevada legislature?s relevant provision that authorizes the Board to bring the current complaint reads as follows: 2. If, after any investigation the Board is satis?ed that: A license, registration, finding of suitability, preliminary finding of suitability, pari?mutuel license or prior approval by the Commission of any transaction for which the approval was required or permitted under the provisions of this chapter or chapter 462, 464 or 466 of NRS should be limited, conditioned, suspended or revoked; or A person or entity which is licensed, registered, found suitable or found preliminarily suitable pursuant to this chapter or chapter 464 of NRS or which previously obtained approval for any act or transaction for which Commission approval was required or permitted under the provisions of this chapter or chapter 464 of NRS should be fined, the Board shall initiate a hearing before the Commission by filing a complaint with the Commission in accordance with NRS 463.312 and transmit therewith a summary of evidence in its possession bearing on the matter and the transcript of testimony at any investigative hearing conducted by or on behalf of the Board. NRS Like section 1405(1), nothing in this statute even hints that a person?s current relationship with a gaming licensee is a jurisdictional prerequisite for a disciplinary proceeding. The statute does not use the word ?jurisdiction.? The statute also permits the Board to conduct an investigation, but does not limit that investigation to a specified length of time. The statute also does not hamstring the investigation by limiting it to employment status, which the Board would have no way of knowing absent the subject or his employer?s act of self-reporting. That Wynn?s argument is a disguised merits argument is further shown by examining the nature of the argument he is making in light of edifying case law. wants to add the words ?current employee, manager, or director?s,? to the phrase ?finding Page 8 of 13 of suitability? in NRS to create a subject matter jurisdiction problem that does not exist. The statute contains no such limitation. argues a current connection to the gaming licensee upon which he applied for a suitability determination must be established to make the Gaming Control Act?s disciplinary statutes applicable to him. Whether the Gaming Control Act applies to him now that he severed that connection with Resorts is a merits question. Argaugh v. Corp, 546 US. 500, 511 (2006) (quoting 2 J. Moore et a1., Moore's Federal Practice p. 12?361 (3d ed.2005)). (?Subject matter jurisdiction in federal-question cases is sometimes erroneously con?ated with a plaintiffs need and ability to prove the defendant bound by the federal law asserted as the predicate for relief?a merits?related determination?) Wynn, in fact, has conceded in his brief that this Commission has subject matter jurisdiction by referencing settlement discussions and the proposed stipulation. A tribunal can look to the parties? settlement discussions to determine its own subject matter jurisdiction. Cohn v. Petsmart, Inc, 281 F.3d 837, 840 (9th Cir. 2002). writes in his Motion that ?the parties could have entered a stipulation or contract to that effect Without the taxpayer expense associated with this disciplinary proceeding. Such an agreement would be enforceable under Nevada law.? Br. 23:11-13. fails to explain how this Commission would have subject matter jurisdiction to approve such a stipulation if the legal theory he presses in his current Motion is correct (it is not). B. This Commission has subject matter jurisdiction That this Commission has subject matter jurisdiction is the only logical interpretation of the Gaming Control Act. Nevada Revised Statute emphasizes that the gaming industry is vitally important and that persons must be strictly regulated. While in his brief emphasizes his commercial importance to the State (Br. 429-18), ignores that the legislature also mandated that this Commission be concerned with the ?general welfare of [our state?s] inhabitants.? NRS disregarded his own company?s policies regarding harassment, personal relationships with subordinates, and investigation protocol relating to such incidents. Page 9 of 13 has paid over $8 million in settlement payment in matters where subordinate employees have made serious allegations of improper workplace conduct involving unwelcome sexual conduct. has disregarded his obligation to cooperate with the Board?s investigation by refusing to provide testimony at an investigative hearing in deference to his personal interests in private litigation. asks this Commission to disregard these allegations, which must be taken as true for purposes of the Motion, on the wildly incorrect premise that this Commission lacks subject matter jurisdiction because he severed his relationship with Resorts. See Buzz Stew, 124 Nev. at 228, 181 P.3d at 672. An administrative agency only has those powers delegated to it by the legislature, Andrews 0. Nevada State Bd. of Cosmetology, 86 Nev. 207, 208, 467 P.2d 96 (1970). However, it is equally true that Nevada?s Supreme Court has interpreted subject matter jurisdiction to include agency power by implication to guard against an illogical restriction that would unnaturally prohibit the agency from ordering compliance with authority conferred by the legislature. CCSD v. Clark Cty. Classroom Teachers Ass?n, 115 Nev. 98, 103, 977 P.2d 1008, 1011 (1999). This Commission has subject matter jurisdiction. The legislature empowered the Board to investigate violations of the Gaming Control Act. NRS The legislature demanded that the Board observe the conduct of persons who have received a finding of suitability. NRS The legislature granted the Board ?full and absolute power? to recommend a revocation of a finding of suitability. NRS The legislature granted this Commission ?full and absolute power? to revoke a finding of suitability. NRS These provisions give this Commission the power to discipline persons such as for conduct that occurred while they were a person found suitable to have a connection with a gaming licensee. No section of the Gaming Control Act or its implementing regulations is to the contrary. Wynn?s citation to various sections of the Gaming Control Act and its regulations to argue that suitability only exists while that person is involved with a licensee is not Page 10 of 13 persuasive. never explains how the legislature?s express delegations of power to investigate, review, and then recommend discipline could logically function if a person such as could unilaterally eviscerate the Board?s power to review his conduct and recommend discipline to this Commission by severing ties with a licensee. See 2. g. Cross v. Co. State Bd. of Dental Examiners, 552 P.2d 38, 41 (C010. Ct. App. 1976) (dentist could not divest disciplinary board of subject matter jurisdiction by surrendering his license). seems to argue that he can unilaterally cut-off this Commission?s subject matter jurisdiction by leaving Resorts, but no section of the Gaming Control Act supports his premise. Indeed, an analogous provision is to the contrary a licensee?s surrender of his license is only effective when the Commission accepts it. cannot plausibly argue that the Board asserts ?lifetime? jurisdiction over him. It is not. Even accepting Wynn?s absurd premise, the timeliness of processing a particular issue is not a concern of subject matter jurisdiction. Arguments about timeliness have nothing to do with subject matter jurisdiction, unless the legislature makes it so. Zipes 0. Trans World Airlines, Inc., 455 US. 385, 393 (1982). If truly believes that the Board waited too long to bring its complaint for disciplinary action, then he can assert legal or equitable defenses. Nev. Gaming Comm?n. Reg. Page 11 of 13 V. Conclusion Wynn?s Motion lacks procedural and substantive merit. This Commission should deny Wynn?s Motion in its entirety. DATED this 27th day of November, 2019. Submitted by: AARON D. Attorney General? By: 7 Kyl/e George (NV Bar No." 13489) First Assistant Attorney General Steve Shevorski (NV Bar No. 8256) Chief Litigation Counsel Craig NeWby (NV Bar No. 8591) Deputy Solicitor General Michael P. Somps (NV Bar No. 6507) Senior Deputy Attorney General Edward L. Magaw (NV Bar No. 9111) Senior Deputy Attorney General Page 12 of 13 CERTIFICATE OF SERVICE I hereby certify that I am an employee of the Office of the Attorney General, State of Nevada, and that on November 27, 2019, I served the foregoing document by e-mailing and sending via United States Mail, first-class postage pre?p aid, a true and correct copy thereof, addressed to the following: Donald J. Campbell, Esq. J. Colby Williams, Esq. Campbell Williams 700 South Seventh Street Las Vegas, Nevada 89101 dic@cwlawlv.com icw@cwlawlv.com Attorneys for Respondent Stephen A. Victoria Campbell An employee of the office of the Nevada Attorney General Page 13 of 13