SAN JOSE -- The long-running battle between Casino M8trix and San Jose regulators is back in court after the card room's owners filed lawsuits against the city alleging unreasonable and unfair treatment that blocked plans for gaming on the top floor of its eight-story tower and delayed its opening last summer by four months.
In complaints filed late Friday in both state and federal court, the Casino M8trix owners said Richard Teng, administrator of the police department's division of gaming control, "used his position of power and authority to carry out a campaign of harassment" against them and alleged he also has a substantial conflict of interest because he works as a private consultant for other casinos.
"Administrator Teng has carried out his unlawful activities while maintaining sustained and substantial conflicts of interest through his lucrative private consulting business, the details of which he has hidden from public scrutiny, in violation of the city of San Jose's code of ethics and the public trust," the complaints said.
City Attorney Rick Doyle said he could not comment because he hasn't had time to review the lawsuits.
Casino M8trix, which formerly operated as the Garden City Casino on Saratoga Avenue, last year moved into a $50 million modern building with an eight-story tower along Airport Parkway on a street renamed Matrix Boulevard. The M8trix owners -- Eric Swallow and Peter and Jeanine Lunardi -- said they had initially been led to believe they could open April 3. The casino opened Aug. 8.
It is not the first time Casino M8trix has gone to court over the delayed opening. Over the summer, the M8trix owners had lost a lawsuit in which they asked a judge to compel the city to issue permits they needed to open. City officials had accused the M8trix owners of foot-dragging on information requests. The judge ruled that while the process was understandably frustrating, the city had not abused its discretion in ensuring that police can effectively monitor the card room, one of two in San Jose.
The latest litigation was not unexpected. Casino M8trix had filed a claim for damages -- a prerequisite to filing a lawsuit -- in September seeking more than $10,000 in compensation over the delayed opening.
The M8trix owners also have complained about the Police Department's refusal to allow gambling on the top level in addition to the ground floor. Former Chief Chris Moore denied the card room's request last month after Teng argued it would be impossible for officers to make surprise inspections of gambling on the eighth floor if they had to first take an elevator and then walk past a receptionist and through a series of doors to observe the games. Also opposed was the M8trix' one-story rival, Bay 101 Casino.
The M8trix owners argue Teng and police give Bay 101 preferential treatment, and say the former administrator of the Police Department's division of gaming control is now a Bay 101 employee. The lawsuit claims that Bay 101 hired Dennis Faz, the former administrator, within months of his retirement in June 2011, "thereby courting and carrying the good favor of the division by rewarding one of its departing employees with a secure and comfortable post-retirement position."
The casino owners further argue that San Jose police are targeting M8trix customers by responding to 80 calls for service for parking violations or expired registrations. During the same time period at Bay 101, police responded to two such calls, according to the lawsuit.
The lawsuit includes copies of Teng's statements of economic interest, forms many public officials must file annually to disclose outside work or investments that might pose a legal conflict in carrying out their duties, indicating the gaming administrator has earned hundreds of thousands of dollars on the side as a private gaming consultant.
The forms don't list clients other than Teng himself, but the lawsuits allege he testified at an administrative hearing last year that his clients include racetracks and tribal casinos, which the lawsuit describes as potential "competitors."