State Supreme Court reverses judgment in Sands case

The Nevada Supreme Court vacated a multimillion-dollar judgment that a Clark County jury ordered Las Vegas Sands Corp. to pay a Hong Kong businessman following a 29-day trial in 2008.

The case was sent back to the District Court for a retrial. Legal sources who read the 18-page unpublished order, filed Thursday in Carson City and signed by all seven justices, thought the court, which left intact most of the trial's evidence, hinted that the sides should work toward a settlement.

A spokesman for the Nevada Supreme Court said an unpublished order cannot be regarded as precedent and cannot be cited as case law.

Justices said Clark County District Judge Michelle Leavitt erred in several rulings during the trial in May 2008, which arose over a dispute as to how much Hong Kong businessman Richard Suen helped Las Vegas Sands earn a lucrative gaming license in Macau almost a decade ago.

Following testimony from several dozen witnesses, including Las Vegas Sands Chairman Sheldon Adelson and former company President Bill Weidner, a jury said the casino company had to pay Suen $43.8 million, which rose to more than $60 million because of interest.

Attorney Sam Lionel, who represented Las Vegas Sands, said the order reversed the jury's award "100 percent."

Suen's Los Angeles-based attorney, John O'Malley, said he was disappointed by the ruling. However, he thought a retrial would lead to a similar verdict.

Las Vegas Sands spokesman Ron Reese said the company's attorneys were still "thoroughly reviewing the details, but obviously the company is very pleased with the results. If there was a new trial, we would vigorously defend our position as we did before."

Adelson, who at the time was considered the third richest person in America, spent a day on the witness stand during the trial. Weidner spent parts of six days testifying in the case.

The Supreme Court heard nearly an hour of arguments from attorneys representing Las Vegas Sands and Suen on Sept. 2 in Carson City before taking the matter under advisement.

Suen sought compensation from Las Vegas Sands after he arranged a series of meetings in Beijing in July 2001 between company executives and members of the Chinese government. Suen contended the meetings paved the way for Las Vegas Sands to earn a Macau gaming license.

In its decision, the Supreme Court said the judge erred on matters concerning both Suen and Las Vegas Sands. According to the order, the judge erred when she didn't allow Suen's attorneys to offer evidence of a contract between Suen and Las Vegas Sands, promising the businessman would be paid $5 million and 2 percent of the casino revenues.

During trial testimony it was revealed that Weidner made the offer to Suen if he was successful "in delivering the license." Leavitt did not let the jury view evidence of Suen accepting the offer .

"We can now go back and try the contract case," O'Malley said. "Those claims are very strong, and the damages would be as large or even larger than the previous verdict. We look forward to retrying this case and having our day in court on the contract claim."

The court also ruled the judge shouldn't have allowed a statement made by Weidner offered into evidence. In a deposition, Weidner related a conversation between former Las Vegas Sands executive Brad Stone and Macau casino magnate Stanley Ho, who reportedly congratulated the company on winning the license even though it had not been awarded. The statement was deemed to be hearsay.

"Although this statement contained layers of hearsay, the district court admitted it during trial as a prior inconsistent statement," the justices wrote.

The court said the judge should have instructed the jury on the presumptions of governmental regularity.

Much of the evidence presented at the trial covered whether government officials in Beijing and Macau, a Special Administrative Region of China, influenced the decision to award Las Vegas a concession to operate a casino.

The trial revealed the inner workings of how Las Vegas Sands won a shared gaming concession and included the testimony of current and former Macau government officials. The trial also brought to light Adelson's connections in Washington, D.C., and claims Las Vegas Sands used those relationships to scuttle congressional protests about China's efforts to host the 2008 Summer Olympic Games.

"We conclude that (the hearsay) error, combined with the district court's errors in refusing to instruct the jury on the presumptions of governmental regularity and in granting summary judgement on the breach of contract cause of action ... warrants reversal," the justices wrote.

During arguments in front of the Supreme Court, Las Vegas Sands attorney David Frederick said there was no evidence during the trial that Suen's actions had anything to do with Las Vegas Sands winning the gaming license.

The company currently operates three casinos in Macau, including the 3,000-room Venetian Macau and Sands Macau. Las Vegas Sands recently restarted construction on four hotel-casinos on the Cotai Strip region of Macau after a two-year delay.

Since the trial ended, Las Vegas Sands' holdings in Macau have become more important to the company's financial health. In the recently completed third quarter, Las Vegas Sands' Macau properties and a $5.7 billion hotel-casino that opened in Singapore in April, accounted for 85 percent of the company's $1.91 billion in net revenues.

The makeup of Las Vegas Sands has changed dramatically since the case was first tried. In November 2008, the company avoided a bankruptcy by restructuring its debt, which forced Adelson to reduce his ownership stake by some 20 percent. However, the collapsing credit markets forced the company to halt construction on Cotai.

Weidner was fired as president in March 2009 and replaced by Michael Leven. Also, the legal team that handled the trial for Las Vegas Sands was dismissed and replaced with new lawyers for the appeal.

A second trial over how Las Vegas Sands obtained its Macau gaming license was averted in June 2009.

The company paid three men who claimed they assisted the company in the process $42.5 million to drop their lawsuit.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.