In a new blast aimed at fired Macau casino executive Steven Jacobs, attorneys for a Las Vegas Sands Corp. subsidiary have asked the Nevada Supreme Court to require the dismissal of his lawsuit.
Attorneys for Sands China Ltd. on May 6 didn’t merely appeal a March 15 order by Clark County District Court Judge Elizabeth Gonzalez allowing Jacobs’ lawsuit against Las Vegas Sands and Sands China to move forward.
The Sands China attorneys filed a 44-page "petition for writ of mandamus, or in the alternative, writ of prohibition" against Gonzalez.
The petition asks the Nevada Supreme Court to order Gonzalez to "vacate and modify" her order denying the motions to dismiss; and to compel Gonzalez to dismiss Jacobs’ lawsuit on the grounds Gonzalez lacks jurisdiction over Sands China.
Jacobs, who was fired in July as CEO of Las Vegas Sands Corp.'s big gaming operations in China at Sands China, retaliated with a lawsuit in October claiming Las Vegas Sands Chairman and CEO Sheldon Adelson had ordered him to commit illegal acts and that Sands had failed to pay him promised stock options by wrongly asserting he was fired for cause.
During the March 15 hearing on the initial motions to dismiss, Sands China attorney Patricia Glaser said Nevada is not the appropriate forum to resolve the dispute since Sands China doesn’t do business in Nevada.
Las Vegas Sands’ attorney argued Jacobs had failed to sue his actual employer, Venetian Macau Ltd.
Gonzalez rejected all these arguments after Jacobs’ attorneys noted Jacobs was listed as a Las Vegas Sands executive in regulatory filings, that he received a W-2 tax statement from Las Vegas Sands and that Sands China has extensive contacts and relationships with its parent company in Las Vegas.
But Glaser and other attorneys argued in their Supreme Court petition against Gonzalez that she erred because Sands China has "no substantial or continuous and systematic contacts with the state of Nevada."
They said Sands China is merely a subsidiary – not an alter ego – of Las Vegas Sands.
Gonzalez found "there are pervasive contacts with the state of Nevada by activities done in Nevada by board members of Sands China," including Adelson.
But the attorneys for Sands China said in their Supreme Court petition that the actions of Adelson and Las Vegas Sands President and Chief Operating Officer Michael Leven, "who on occasion discharged their duties respectively as a member of and special adviser to Sands China’s board from their Las Vegas Sands offices in Nevada, cannot be considered in the jurisdictional analysis because there was no evidence of an 'alter ego' relationship between Las Vegas Sands and Sands China, or alternatively, a degree and type of control exercised by Las Vegas Sands or Sands China in excess of what would be expected from a 70 percent owner."
"If adopted by Nevada’s district courts, Judge Gonzalez’s ruling that Sands China is subject to general jurisdiction in Nevada will allow litigants such as foreign nationals or traveling businesspersons who have never set foot in the United States, let alone Nevada, to sue foreign corporations in Nevada’s state courts for any matter whatsoever, including for example a personal injury sustained in or a dispute over a bill from a hotel operated overseas by a foreign corporation, provided only that the foreign corporation is a subsidiary of a controlling parent corporation domiciled in Nevada," Sands China’s filing said. "The issues presented in this care are of critical importance to Nevada’s judiciary and Nevada’s businesses, including the increasing number of Nevada companies, like Las Vegas Sands, with foreign subsidiaries."
If Gonzalez’s order stands, "Nevada’s courts would be at risk to be inundated with lawsuits brought by every foreign litigant who has a claim against a foreign entity that is a corporate affiliate of a Nevada company," the petition said.
"A writ of mandamus is proper when there is no plain, speedy or adequate remedy in the ordinary course of law or when this court must correct an arbitrary or capricious abuse of discretion," the filing said. "The order denying Sands China’s motion is not immediately appealable. Therefore, Sands China’s only speedy recourse is through this petition."
The Nevada Supreme Court hasn’t indicated when it may consider the petition.
Las Vegas Sands and Sands China are contesting Jacobs’ lawsuit with substantial legal resources as Jacobs’ allegations of wrongdoing have prompted investigations in the United States and China as well as shareholder lawsuits.
Las Vegas Sands, in the meantime, has again asked Gonzalez to dismiss the suit and in the process hit Jacobs with a counterclaim saying he was fired for violations of company policy and that after he was fired he tried to extort money from the company by threatening to go public with damaging information unless he was paid.
Attorneys for Jacobs have not yet responded to the counterclaim.