Las Vegas Sands CEO Sheldon Adelson.
Las Vegas Sands Corp. and its Sands China Ltd. subsidiary have won a round in court in the hotly-litigated lawsuit filed by fired Sands China CEO Steven Jacobs.
The Nevada Supreme Court on Friday ordered Clark County District Judge Elizabeth Gonzalez to take another look at whether Macau casino operator Sands China, being based in China, is subject to being sued in Nevada.
The court also ordered that proceedings in Jacobs’ lawsuit against Las Vegas Sands and Sands China be put on hold until that matter is resolved.
Sands China has complained that because of Macau’s strict privacy laws, discovery in the case will be time-consuming and costly.
Friday’s ruling at least temporarily should put that process on hold.
Jacobs filed suit last year charging he was wrongfully fired for failing to go along with demands that he engage in improper activity.
The allegations – denied by Las Vegas Sands – are responsible for shareholder lawsuits and government and regulatory investigations of the casino giant in the United States and Hong Kong.
After the suit was filed, Sands China said it shouldn’t have been sued in Las Vegas because as an independent foreign corporation it’s not subject to Nevada law.
Attorneys for Jacobs, however, argued it’s common knowledge Sands China is controlled by Las Vegas Sands CEO Sheldon Adelson from Las Vegas and that Sands China executives and board members regularly did business in Las Vegas.
Gonzalez early on sided with Jacobs on that issue, citing Sands China’s "pervasive contacts" with Nevada, prompting Sands China to appeal to the Nevada Supreme Court and repeatedly – without success until Friday – argue that its portion of the lawsuit be stayed.
Friday’s ruling by the state Supreme Court is by no means the final ruling on the jurisdiction issue or the underlying lawsuit. Rather, it requires Gonzalez to hold an evidentiary hearing and then rule on whether the Macau casino operator can be hauled into Nevada courts.
That process is likely to take months.
"The District Court’s order … does not state that it has reviewed the matter on a limited basis to determine whether prima facie (presumed to be true) grounds for personal jurisdiction exist; it simply denies petitioner’s (Sands China’s) motion to dismiss, with no mention of a later determination after consideration of evidence, whether at a hearing before trial or at trial," the Supreme Court order says. "While the order refers to the District Court’s comments at oral argument on the motion, the transcript reflects only that the District Court concluded there were 'pervasive contacts' between petitioner (Sands China) and Nevada, without specifying any of those contacts."