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Appeal promised after Davenport wins lawsuit over casino deal consulting expenses

The City of Davenport won a lawsuit over $387,000 worth of bills it racked up in its quest to own Rhythm City Casino, but the other side is vowing to appeal th...
rhythm city

The City of Davenport won a lawsuit over $387,000 worth of  bills it racked up in its quest to own Rhythm City Casino, but the other side is vowing to appeal the decision.

The action was filed by Davenport chiropractor Dr. Allen Diercks, and Davenport resident Patricia Lane, in Scott County District Court in mid-2013. The city paid accounting firm Deloitte & Touche for analysis leading up to a failed bid to purchase Rhythm City Casino.  The lawsuit complained the contract with Deloitte & Touche was signed without city council approval, and that responses to requests for information about the analysis – made under the Freedom of Information Act – were ignored incomplete.

Related:   Lawsuit filed over Davenport taxpayers’ right to know

The case went to trial in early February 2015.   During his testimony, Davenport Mayor Bill Gluba admitted the council did not approve the contracts before they were signed.

The defense argued the contract was signed after the council gave approval to aggressively pursue a casino deal.  When the project fell through, and no complete report was available, the city then tried to recoup some of the money spent by trying to get developer Rodney Blackwell to buy the audit report according to testimony from Davenport Mayor Bill Gluba.

Diercks and Lane asked the court to declare the contract void between the city and Deloitte & Touche, because state law prohibits a city from owning and operating a for-profit business in Iowa and because the state law prohibited the city from buying, owning or operating a private for-profit gambling business. The court denied those complaints, saying the city would only be a landlord, and not the actual operator, if they bought the casino.

READ IT HERE:  Ruling in the case of Diercks and Lane vs Davenport

Diercks did not get the raw report information requested from Deloitte & Touche, but the city said they never received it, either.   Attorneys confirmed it was common practice for CPA firms to refuse to release such incomplete reports, even when payment was required. Ultimately, Deloitte & Touche was paid $387,500 for a report they did not produce because, they said, it was only about 75% complete.

They did get boxes of documents from the city, and more billing statement information after they subpoenaed it from Deloitte & Touche; but the court ruled the documents were just voided billing statements, or items that the city didn’t have or that were not available to them.

“(The FOIA law) is not a cat and mouse game of ‘gotcha’ where the mere discovery of any document, no matter how
insignificant its content may be, gives rise to a claim for damages and attorney fees,” the court ruling said.  The court ruled the city made a “good faith effort” to comply with the FOIA requests from Diercks and Lane, saying, “The failure to produce a few records, one of which is so heavily redacted as to be useless in providing the public with meaningful information as to the City’s decision making processes, is excusable where the failure to produce is founded upon the City’s good faith efforts to obtain and produce the requested documents which efforts were rebuffed by DeLoitte.”

In addition to losing their complaint, Diercks and Lane were assessed the costs of taking the action to court.  Attorney Mike Meloy said they will definitely appeal the ruling to the Iowa Supreme Court.

“We believe that the Iowa Supreme Court will find that the City of Davenport did not comply with the Iowa Open Records law and produce the public records that the Plaintiffs had a legal right to inspect and copy,” Meloy said.