Nevada Supreme Court hears appeal by former Sands exec to reinstate defamation claim

After losing a bid to dismiss a wrongful termination lawsuit filed by a former top executive, Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson decided to issue a public answer to the charges raised in court papers and hearings.

“We have a substantial list of reasons why (former Sands China Ltd. president) Steve Jacobs was fired for cause and interestingly he has not refuted a single one of them,” Adelson said in a statement to the Wall Street Journal on March 15, 2011. “Instead, he has attempted to explain his termination by using outright lies and fabrications which seem to have their origins in delusion.”

On Wednesday, the Nevada Supreme Court heard the appeal by Jacobs’ attorneys to reinstate the defamation claim they filed against Adelson the day after the statement. Clark County District Judge Elizabeth Gonzalez dismissed this piece of the case on June 20, 2011, based on a special privilege given to statements outside the courtroom by people involved in a case.

Adelson attorney Steve Morris depicted the statement as just a way to answering the sharp allegations contained in Jacobs’ 2010 complaint that had attracted their own widespread publicity.

“Let’s remember who started this fight,” Morris said. Later, he added, “Why was it necessary for (Jacobs) to say, in advancing a breach of contract claim, Mr. Adelson is mercurial, he’s obstreperous, he is criminal because he wanted me to engage in criminal conduct with him and I declined.”

Morris counted 17 paragraphs in the Jacobs complaint that did not pertain to his contract but “hit the press the moment it was filed.”

In court papers, the Jacobs side wrote that “Adelson had a fit, and lashed out against Jacobs by defaming him in the press” after losing the bid for dismissal.

Further, said Jacobs attorney Todd Bice, Gonzales’ ruling incorrectly extended protection to “a public relations statement to the media (by Adelson), which was designed to attack and, we maintain, smear, Mr. Adelson’s opponent in the litigation.”

Jacobs had named the companies and not Adelson himself as defendants except for the defamation portion.

Bice said Jacobs had also prepared to back up at trial his allegations that Sands fired him partly because he refused to use “improper leverage” in several forms against top Macau government officials, where Sands has a huge investment. The main case is currently mired in trying to answer the procedural question of whether Sands Macau must answer to the jurisdiction of Nevada courts.

Letting someone of Adelson’s position say whatever he wants outside of court “would go a long way to undermining the integrity of the litigation process,” Bice argued.

But Justice Michael Cherry wondered if the long-standing rules about privilege now belonged in the category of quaint.

“To me … privilege was wonderful before we had 24/7 (news),” he said. “And now we have people on newscasts constantly. Sometimes we have to revise our thinking and our analytics in these cases to state what’s happening.”

The court also heard a procedural issue arising from the Jacobs case involving whether certain documents deemed confidential by Sands due to attorney/client privilege had to be turned over.

A former member of the Sands legal team, Justin Jones, had reviewed certain emails prior to taking the witness stand one year ago to remember the timing of certain events. This came during a hearing that resulted in sanctions against Sands for telling Gonzalez for a year that certain evidence could not be turned over because it was in Macau, only to later say that copies existed in Las Vegas.

The Supreme Court is not expected to rule for several weeks.

Contact reporter Tim O’Reiley at toreiley@reviewjournal.com or at 702-387-5290.