Sheldon Adelson and the fine art of libel litigation

August 9, 2012

When it comes to making good on threats to sue his detractors for libel, Las Vegas gaming mogul Sheldon Adelson puts his money where his mouth is. And given that he has $24.9 billion as of the last accounting by Forbes, the Republican money man can afford to have a very big mouth. On Tuesday, his lawyers at Wood, Hernacki & Evans and Olasov & Hollander filed a complaint in federal court in Manhattan against the Jewish Democratic Council, seeking $60 million, based on assertions that the group libeled Adelson when it repeated unfounded claims that he abetted prostitution at his resort in Macau.

Adelson’s complaint said the only source of that allegation is a disgruntled former employee with whom the mogul is also engaged in multifaceted litigation — including a libel suit Adelson brought against the former employee, Steven Jacobs, in state court in Miami. (Kendell Coffey of Coffey & Wright filed that one in July, according to court records.) In between the two recent libel suits, Adelson counsel Lewis Clayton of Paul, Weiss, Rifkind, Wharton & Garrison wrote a threatening letter about the prostitution allegations (as well as claims Adelson has ties to the Chinese mafia) to the Democratic Congressional Campaign Committee, which soon thereafter issued an abject apology to Adelson.

Are you beginning to see a pattern? Libel suits are a relative rarity, even by rich celebrities. Adelson, on the other hand, brought at least three previous libel cases before the recent crop, always using top firms or celebrity lawyers like Kendall Coffey and Lin Wood to hunt down his alleged defamers.

In 2005, for instance, Adelson sued a British gaming workers union and its top official for calling him, among other things, “perhaps the most vilified man in Nevada.” At the same time, he sued London’s Associated Newspapers for a related, but much more detailed, article in the Daily Mail. According to a July 2011 ruling by the High Court of Justice in London, the newspaper apologized to Adelson and settled its case in 2008; the court tossed the union case for lack of prosecution by Adelson, who was represented by Harbottle & Lewis (of News Corp fame).

Two other libel actions by Adelson didn’t go particularly well for the casino king. In 2005 he sued Las Vegas newspaper columnist John Smith over his depiction of Adelson in a book called Sharks in the Desert. The case was being litigated in state court in Los Angeles but ended up in federal bankruptcy court in Las Vegas after Smith declared bankruptcy, asserting that he could not afford to defend the suit in California. Smith’s publisher, Barricade Books, was also sued for libel and also entered bankruptcy. In 2008 the publisher agreed to a judgment of libeling Adelson, according to a filing by Adelson’s lawyers at Duane Morris and Lavely Singer. Adelson said he was satisfied with the judgment against Barricade and offered to drop the case against Smith, but Smith said he wouldn’t settle unless Adelson paid his defense costs. Over Adelson’s protests, U.S. Bankruptcy Judge Bryce Markell eventually entered an order that dismissed the suit against Smith with prejudice and directed Adelson to pay some of Smith’s costs. (Adelson lost his appeal.)

In 2006 Adelson sued an Israeli businessman and onetime business colleague for spreading false rumors that Adelson had taken advantage of his blindness. (The libel suit, in which Adelson was represented by Duane Morris and the firm now known as SNR Denton, followed an unsuccessful extortion case Adelson brought against the Israeli.) After a trial in 2009, a federal jury in Las Vegas exonerated the Israeli defendant, in a verdict affirmed by the 9th Circuit Court of Appeals.

The losses don’t really matter, though. The goal of Adelson’s libel campaign appears to be to inspire fear, and I doubt that a story like Smith’s — which ended with a victory of sorts against Adelson, but only after years of litigation and declaration of bankruptcy — is especially reassuring to Adelson’s libel targets. Adelson spokesman Ron Reese didn’t return my calls and didn’t send me a requested copy of the Miami complaint against Steven Cohen, which is not on an electronic docket. But when the Democratic Congressional Campaign Committee apologized to Adelson, Reese told Politico that Adelson’s threatened libel suit “should serve notice to those who would attempt to smear Mr. Adelson by repeating the false and inflammatory statements of a fired employee — that this is a very slippery slope.” Unspoken, but clearly implied, is that at the bottom of the slippery slope is a process server ready and waiting to slap Adelson critics with a libel complaint.

Lewis Clayton of Paul Weiss — which is described as regular outside counsel to Adelson’s Las Vegas Sands in emails uncovered by Politico — declined to comment on his firm’s relationship with Adelson. None of Adelson’s other lawyers returned my calls.

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