State Supreme Court reverses dismissal of defamation lawsuit against Adelson

CARSON CITY – The Nevada Supreme Court in a 4-3 ruling has reversed the dismissal of a defamation lawsuit brought against Las Vegas Sands Corp. Chairman Sheldon Adelson by a former top executive.

The defamation claim was added to a breach of employment lawsuit brought by Steve Jacobs, who served as head of the company’s Macau operations until he was let go in 2010.

Jacobs and his attorney said in the appeal that after a Clark County District Court denied motions to dismiss his employment lawsuit in 2011, Adelson defamed him in comments to the press by calling him a “delusional liar who was fired from his job ‘for cause.’ ”

Jacobs then added the defamation claim.

Adelson claimed that Nevada’s absolute privilege for judicial communications protected his communications with the media, and Clark County District Judge Elizabeth Gonzalez agreed, dismissing the defamation portion of the lawsuit. Jacobs then appealed to the Supreme Court, which heard the case in October of 2013.

But the Supreme Court, in the split ruling Friday, said communications made to the media in an extrajudicial setting are not absolutely privileged, at least when the media holds no more significant interest in the litigation than the general public. The case was sent back to District Court for further proceedings.

Justices James Hardesty, Michael Douglas, Nancy Saitta and Judge Michael Montero, serving in place of Justice Kristina Pickering, were the majority.

Justices Michael Cherry, Mark Gibbons and Ron Parraguirre dissented in the case, saying they would affirm the District Court decision to apply absolute privilege to Adelson’s statement and “would conclude that the privilege extends to statements made to the media.”

Neither Adelson or Las Vegas Sands would comment on the decision.

Attorneys for Jacobs could not immediately be reached for comment.

In the oral arguments to the court last year, Jacobs attorney Todd Bice said 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.”

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.

Adelson attorney Steve Morris said during the oral argument that Adelson’s statements were just a way to answer the allegations contained in Jacobs’ 2010 complaint, including a claim that Adelson wanted him to engage in criminal conduct.

Jacobs has alleged that Adelson wanted him to, among other demands, perform secret investigations regarding the business and financial affairs of various high-ranking members of the Macau government and “refrain from disclosing truthful and material information to the Board of Directors of Sands China.”

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, attorney and state Sen. 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.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Follow him on Twitter @seanw801.