Las Vegas Sands CEO Sheldon Adelson.
A state judge today dismissed a defamation claim filed by fired casino executive Steven Jacobs against Las Vegas Sands Corp. and CEO and Chairman Sheldon Adelson.
Clark County District Court Judge Elizabeth Gonzalez said Adelson was protected by the litigation privilege when in March he said Jacobs had been lying and was fired for cause as CEO of Macau gaming giant Sands China Ltd., a Las Vegas Sands subsidiary.
Sands China, however, lost a round in court Thursday when the Las Vegas judge refused to immediately dismiss Jacobs' breach of contract claim against Sands China. This claim involves stock options Jacobs says he’s been wrongly deprived of.
Gonzalez said she will consider that issue later on a motion for summary judgment.
The rulings mean that Jacobs' suit alleging wrongful firing will continue, at least for now, against Las Vegas Sands and Sands China.
One of Jacobs’ attorneys, Donald Campbell of the Las Vegas law firm Campbell & Williams, argued Adelson’s comments in March about Jacobs were "extra judicial" and went far beyond commenting on issues in the lawsuit -- and Campbell said after a hearing Thursday he’d appeal the defamation ruling to the Nevada Supreme Court.
Campbell disputed charges by Steve Morris, a Las Vegas attorney for Adelson with the law firm Morris Peterson, that the defamation claim was merely "ornamental" to the main lawsuit alleging wrongful firing.
"It’s not merely ornamental. It’s his life," Campbell said of Jacobs. "He’s an executive who has been termed as being 'fired for cause.' We’ve cited cases where that’s defamatory."
But Morris said Adelson was responding to allegations in Jacobs’ lawsuit alleging "criminal misconduct'' by Adelson and that Adelson was "rude, obstreperous and mercurial."
"The statement he made was by invitation of Mr. Jacobs," Morris said.
Gonzalez cited case law from the Nevada Supreme Court that statements like those made by Adelson about Jacobs and his lawsuit are not subject to defamation claims.
"It’s absolutely privileged as it relates to litigation," Gonzalez said.
Campbell asked Gonzalez to take "judicial notice'' or keep in mind that Adelson "has a long and rich'' history of filing defamation lawsuits of his own against companies and individuals he believes have defamed him or his company -- something Gonzalez, without explanation, declined to do.
The statement at issue was provided to the Wall Street Journal on March 15 after a hearing that day in the courtroom of Gonzalez attracted worldwide attention. The case is of great interest in the gaming industry and in Macau because Sands China is a major gaming operator and because of allegations in the lawsuit about the company's efforts to distance itself from triad organized crime groups and suspect casino junket operators. In fact, Morris said Thursday, a Google search of "Steven Jacobs and Sheldon Adelson'' yields 90,000 hits.
During the March 15 hearing, Gonzalez denied the initial motions by Las Vegas Sands and Sands China that Jacobs’ lawsuit be dismissed.
"While I have largely stayed silent on the matter to this point, the recycling of his allegations must be addressed," Adelson said in the statement published by the Wall Street Journal. "We have a substantial list of reasons why Steve Jacobs was fired for cause and interestingly he has not refuted a single one of them. Instead, he has attempted to explain his termination by using outright lies and fabrications which seem to have their origins in delusion."
Jacobs’ lawsuit, charging he was wrongfully fired last year and then wrongly denied severance pay and stock options, is believed to be responsible for investigations of Las Vegas Sands’ compliance with an anti-bribery law by U.S. regulators and is definitely behind recent lawsuits filed by disgruntled Las Vegas Sands shareholders.
Jacobs claims he was fired after clashes with Adelson, including disputes over allegedly "improper and illegal demands" made by Adelson involving allegedly improper exertion of influence with Macau government officials.
Las Vegas Sands disputes this and says Jacobs was fired for violations of company policy and working on unauthorized deals. In a counterclaim against Jacobs, Las Vegas Sands also accuses him of being slow to distance the company from a triad figure and of extortion for threatening to go public with damaging information unless he was paid after his firing -- charges denied by Jacobs.