Sands China Ltd. hit with sanctions for witholding documents

District Judge Elizabeth Gonzalez has ordered hefty sanctions against Las Vegas Sands subsidiary Sands China Ltd. for improperly withholding documents in an ongoing wrongful termination lawsuit.

In an order filed Friday, Gonzalez told the attorneys to surrender the documents, pay $250,000 to various legal charities and cover significant court costs incurred by plaintiff Steven Jacobs, the former president of Sands Macau. She previously ruled that failure to turn over the documents violated Jacobs’ rights.

Jacobs’ lawyer, Todd Bice, said the judge was trying to “level the playing field” by handing down the penalties.

“We’ll see whether or not they want to change their course of conduct,” he said.

In what Bice called one of the more significant sanctions, the judge also restricted Sands China Ltd. from calling any of its own witnesses during a hearing on jurisdiction.

“We are disappointed in the court’s decision and do not believe it is supported by the evidence,” Ron Reese, a spokesman for Las Vegas Sands Corp., wrote in an email in response to the 41-page ruling. “Sands China intends to seek review from a higher court.”

Gonzalez had previously ruled that Sands China violated her September 2012 order in the case by redacting the documents. The subsidiary’s “ongoing noncompliance is incompatible with and undermines the search for truth,” Gonzalez wrote Friday, calling the company’s lack of transparency “highly problematic.”

Jacobs sued Las Vegas Sands Corp. and Sands China in 2010 for breach of contract related to his termination and had asked the defendants to turn over about 100,000 emails and other documents. He sought the emails and documents to show that decisions made in Las Vegas controlled Sands China on many subjects. Included in the list was the allegation that Las Vegas Sands Chairman and CEO Sheldon Adelson had personally approved a “prostitution strategy” for Macau, which Adelson and the company deny.

In a 2012 order, Gonzalez ruled that neither defendant could raise the Macau Personal Data Protection Act as an objection to disclosure of any documents.

She made the ruling after learning that “significant amounts of data from Macau related to Jacobs was transported to the United States” and reviewed by in-house counsel for Las Vegas Sands and outside counsel. The judge also determined that the transferred data were relevant to the ongoing question of whether the Nevada court has jurisdiction over Sands China.

The defendants concealed the existence of the transferred data from the court until June 2012, according to the judge’s order, which required the defendants to make a $25,000 contribution to the Legal Aid Center of Southern Nevada.

“One of the principal sanctions this court imposed for the mis­representations and lack of candor continues to be ignored by SCL,” the judge wrote in Friday’s decision.

In handing down the additional penalties, Gonzalez cited the lack of effect of the previous sanction. Gonzalez also ordered the defendants to cover Jacobs’ legal bills for nine “needless” hearings that involved issues related to the Macau Personal Data Protection Act.

The judge ruled in March 2013 that Sands China had violated her previous order by redacting documents based on the Macau law. She scheduled a hearing that started last month to determine whether the company’s disobedience was willful and whether the plaintiff’s case has been prejudiced by the violation.

According to the same document, Sands China spent $2.4 million on procedures related to the document redaction.

Jacobs’ lawyers have argued that Sands China should face “substantial evidentiary and monetary sanctions.”

“Sands China’s failure to introduce the best and strongest evidence available entitles this court to presume that the missing witnesses and evidence would be adverse to Sands China,” they wrote in a recent brief.

Jacobs’ lawyers further argued that “substantial evidentiary and monetary sanctions” are needed to preserve the integrity of the court’s orders and the judicial system.

Contact reporter David Ferrara at dferrara@reviewjournal.com or 702-380-1039. Find him on Twitter: @randompoker

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