Court rules Las Vegas newspaper dispute must go to arbitration

CARSON CITY — The Nevada Supreme Court on Thursday ordered arbitration in the dispute between the Las Vegas Review-Journal and the Las Vegas Sun over the newspaper’s joint operating agreement.

In a 5-0 ruling justices reversed a lower court judge and sided with the RJ, which favored arbitration to decide how much each newspaper should bear of its own costs.

“By disputing whether each newspaper should bear its own editorial costs, the Sun is essentially disputing the amounts owed to it under the JOA and therefore the dispute falls within the scope of JOA’s arbitration provision,” the court said. “Furthermore, because this dispute is relatively simple and closely related to the subject of accounting, it is reasonable that the parties to the agreement intended it to be arbitrated.”

Justices Ron Parriguirre and Kristina Pickering recused themselves from the case.

“We are deeply appreciative and pleased that the Supreme Court confirmed that when sophisticated parties, represented by competent counsel, contract to resolve contract disputes by arbitration, their agreement to arbitrate will be enforced,” RJ lawyer Steve Morris said in an email late Thursday.

Sun attorney Leif Reid, also in an email, said, “Though we’d hoped to have the court’s guidance on legal issues to focus the arbitration in advance, we strongly believe the result will be the same. The Review-Journal will be required to properly account for all of its obligations under the JOA.”

The RJ and Sun entered into a JOA in 1989 to produce and distribute both newspapers. The RJ was then owned by Donrey of Nevada Inc. It is currently owned by News + Media Capital Group, a limited liability corporation owned by the family of Las Vegas Sands Corp. chairman and CEO Sheldon Adelson.

The original JOA required the RJ to pay the Sun a portion of operating profits. That agreement was amended in 2005 to require each newspaper to bear its own editorial costs and to establish a formula for calculating how much the RJ would pay the Sun.

In March 2015, the Sun, owned by Brian Greenspun’s Greenspun Media Group, sued the RJ over those calculations. Clark County District Judge Elizabeth Gonzales denied a motion by the RJ to compel arbitration but stayed the proceedings pending an appeal to the high court.

Thursday’s ruling sends that case back to District Court.

Contact Sandra Chereb at schereb@reviewjournal.com or 775-461-3821. Find @SandraChereb on Twitter.