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GOTTLIEB v. TROPICANA HOTEL & CASINO

July 5, 2000

RENA GOTTLIEB, ET AL.
V.
TROPICANA HOTEL AND CASINO V. REDLAND INSURANCE CO., ET AL.



The opinion of the court was delivered by: Bartle, District Judge.

  MEMORANDUM

Plaintiffs Rena and Sheldon Gottlieb claim that they won $1 million at Tropicana Casino and Resort*fn1 ("Tropicana") in Atlantic City, New Jersey, and that defendant Tropicana won't pay. Tropicana denies that plaintiffs won the jackpot. Tropicana has brought a third party complaint against its insurer and two insurance brokers claiming that if it is liable to plaintiffs, the third party defendants are liable over to it based upon a prize indemnity insurance policy. Presently before the court is the motion of Tropicana for summary judgment on all counts of the complaint.

We may grant summary judgment only if there is no genuine issue of material fact and the moving party is entitled to summary judgment as a matter of law. See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). We review all evidence and make all reasonable inferences from the evidence in the light most favorable to the non-movant. See Wicker v. Consolidated Rail Corp., 142 F.3d 690, 696 (3d Cir.), cert. denied, 525 U.S. 1012, 119 S.Ct. 530, 142 L.Ed.2d 440 (1998).*fn2

The following facts are uncontested. During the summer of 1999, the Gottliebs, who are Pennsylvania residents, were vacationing at a rented apartment in Atlantic City, New Jersey. On July 24, 1999, after dinner with friends, the Gottliebs visited the Tropicana casino.

Tropicana, a New Jersey corporation that operates a gambling casino in Atlantic City, offers people membership in its "Diamond Club." In order to become a Diamond Club member, an individual must visit a promotional booth in the casino, obtain and fill out an application form, and show identification. There is no charge. The application form lists the individual's name, address, telephone number, and e-mail address, and the information provided is entered into the casino's computer database. Each member receives a Diamond Club card bearing a unique identification number. The member then presents or "swipes" the card in a machine each time he or she plays a game at the casino, and the casino obtains information about the member's gambling habits. The casino's marketing department then uses that information to tailor its promotions.

Ms. Gottlieb was, and had been for a number of years, a member of Tropicana's Diamond Club. Upon entering the casino on July 24, 1999, she immediately went to the Fun House Million Dollar Wheel Promotion ("Million Dollar Wheel") and waited in line for approximately five minutes before it was her turn to play. Diamond Club members were entitled to one free spin of the Million Dollar Wheel each day. As its name suggests, the promotion offered participants the chance to win a grand prize of $1 million. Ms. Gottlieb had played the game several times before. In both New Jersey and Pennsylvania, Tropicana had advertised the Million Dollar Wheel in newspapers, magazines, and with direct mailings, although there is no evidence that the Gottliebs saw any of the advertisements.

Not surprisingly, the parties do not agree as to everything that happened once Ms. Gottlieb started play. However, they do agree that she presented her Diamond Club card, a casino operator swiped it through the card reader, she pressed a button to activate the wheel, and the Million Dollar Wheel began spinning. Ms. Gottlieb contends that the wheel landed on the $1 million grand prize, but that when it did so, the casino attendant immediately swiped another card through the machine, reactivated the wheel, and then the wheel landed on a prize of two show tickets. Tropicana avers that the wheel simply landed on the lesser prize. The casino says the wheel never landed on $1 million, and the attendant never intervened and reactivated the wheel.

I.

Tropicana has moved for summary judgment on Count I of the complaint, a claim for breach of contract. According to Tropicana, it is well established under New Jersey law that participation in a promotion such as the Million Dollar Wheel cannot constitute consideration that would support the formation of an enforceable contract. On the other hand, plaintiff argues that the law of Pennsylvania applies where participation in a promotion such as the instant one is sufficient consideration to form a binding contract.

In a diversity action such as this one, we apply the choice of law rules of the forum state, in this case Pennsylvania, in determining which state's substantive law will be applied. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Shuder v. McDonald's Corp., 859 F.2d 266, 269 (3d Cir. 1988). Under Pennsylvania law, we must determine whether any conflict between the laws of the relevant states is a false conflict. See LeJeune v. Bliss-Salem, Inc., 85 F.3d 1069, 1071 (3d Cir. 1996); Cipolla v. Shaposka, 439 Pa. 563, 267 A.2d 854, 855-56 (1970). If the conflict is real, we proceed to determine which forum has the greater interest, considering the qualitative contacts of the states, the parties and the controversy. See LeJeune, 85 F.3d at 1071; Cipolla, 267 A.2d at 856. Pennsylvania law requires us to apply the law of the state having the most significant relationship with the parties and the incident. See Griffith v. United Air Lines, Inc., 416 Pa. 1, 203 A.2d 796, 801, 805-06 (1964). Before beginning any conflicts of law analyses, however, we must first determine whether there is any conflict between the laws of the two jurisdictions.

Under both Pennsylvania and New Jersey law, adequate consideration is necessary in order to form an enforceable contract. See Continental Bank of Pennsylvania v. Barclay Riding Academy, Inc., 93 N.J. 153, 459 A.2d 1163, 1171 (1983); Stelmack v. Glen Alden Coal Co., 339 Pa. 410, 413-14, 14 A.2d 127 (1940). Consideration is a bargained for exchange, and it may take the form of either a detriment to the promisee or a benefit to the promisor. See Continental Bank, 459 A.2d at 1172; Stelmack, 339 Pa. at 414, 14 A.2d at 128.

In support of its contention that New Jersey law holds that no valid consideration exists when a person participates in a promotion, Tropicana cites only one case, a 1985 unpublished transcript of a ruling of the Superior Court of New Jersey. There, the Resorts International Hotel, Inc., a licensed casino operator in New Jersey, sued the New Jersey Division of Gaming Enforcement seeking a declaratory judgment that three promotions it was conducting, a gin rummy tournament and two stock market games, did not violate New Jersey law. See Resorts Int'l Hotel, Inc. v. New Jersey Div. of Gaming Enforcement, No. L39436-85, slip op. (N.J.Super. Ct. Law Div., Atlantic Co. Oct. 25, 1985). The question before the court was whether "something of value" passed from the player to the casino, making the promotions illegal gambling in violation of New Jersey law.*fn3 The court did not determine whether a contract had been formed. It did observe, however, that in the past the presence of only "minute consideration" made a promotion illegal gambling under New Jersey law. Id. at 11. Over time, though, the scope of "something of value" had been restricted and "strictly defined." Id. at 12. In other words, "something of value" requires more than the minimum consideration that would support the formation of a contract. The court concluded that nothing "of value" had passed from player to casino in the course of the three promotions. Id. at 13. It did not decide, as Tropicana contends, that participation in a promotion cannot constitute adequate consideration for a contract.

We find the decision of the New Jersey Supreme Court in Lucky Calendar Co. v. Cohen, 19 N.J. 399, 117 A.2d 487 (1955), op. adhered to on reh'g, 20 N.J. 451, 120 A.2d 107 (1956), to be on point. There, an advertising company brought a declaratory judgment action against the Camden County prosecutor, seeking a determination that its promotional advertisement campaign for Acme Super Markets did not violate New Jersey's Lottery Act. The centerpiece of the campaign was a calendar that had Acme coupons bordering it, which was distributed by mass mailings. See Lucky Calendar, 117 A.2d at 489-90. The calendar contained an explanation of the "Lucky Calendar Prize Contest." Entrants had the opportunity to win prizes in monthly drawings. All they had to do to enter was tear the entry form off of the calendar, enter a name, address, and phone number, and have the form deposited in a box at any Acme store. There was no charge, and they were not required to be present for the drawing. See id. at 490.

The question in Lucky Calendar was whether there had been consideration for participation in the drawings. The Supreme Court of New Jersey noted that, assuming consideration was required in order for something to qualify as an illegal lottery under the Lottery Act, it need only be the minimum ...


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