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Friday, February 04, 2000
Copyright © Las Vegas Review-Journal
Attorney general recommends settlement of Culinary suit
By Sean Whaley
Donrey Capital Bureau
CARSON CITY -- A lawsuit brought by the Culinary union against the attorney general's office over a Depression-era Nevada law that makes it a crime to say disparaging things about a bank's financial condition is being recommended for settlement.
The settlement would keep the law on the books.
The attorney general's office, which lost a ruling in the 9th U.S. Circuit Court of Appeals in December, is recommending the settlement to end the litigation with Culinary Local 226.
"The attorney general's office recommends a negotiated settlement to this case for the union's attorneys' fees of $30,267.77 in lieu of a costly appeal to the Supreme Court of the United States which has little chance of success," a report to the Board of Examiners says.
The board, which is made up of Gov. Kenny Guinn, Attorney General Frankie Sue Del Papa and Secretary of State Dean Heller, will consider the settlement at its meeting Tuesday.
Del Papa invoked the banking law in 1996 after Culinary Union workers started passing out handbills in Las Vegas saying the Commercial Bank of Nevada was losing money. One of the bank's directors, then-state Sen. Sue Lowden, was also an owner of the Santa Fe hotel-casino, which had a dispute with the union.
Del Papa's office sent a letter to the union saying the handbill violated the law, which makes it a crime to "willfully and maliciously" make or circulate a "statement, rumor or suggestion ... derogatory to the financial condition" of any Nevada bank.
The union filed a complaint against the attorney general's office, saying the law was an unconstitutional violation of its First Amendment rights.
The attorney general's office won a dismissal of the union's complaint in U.S. District Court but the appeals panel said the union was entitled to challenge the law after it was threatened with prosecution.
The statements in the union handbill were found to be true by the appeals court. The court's 2-1 decision determined only that the union had the right to sue, and did not decide the constitutional free speech issue.
Solicitor General Mark Ghan said Thursday that if the settlement is approved, the state's banking law will remain on the books. The statute was originally adopted to help prevent panic and runs on banks during the Depression.
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