Opinion

Alison Frankel

The Wall Street Journal wins a round against Sheldon Adelson

By Alison Frankel
June 5, 2013

Sheldon Adelson, the billionaire atop the Las Vegas Sands casino empire, must surely hold the unofficial U.S. record for appearances as a libel and defamation plaintiff. I’ve written before about Adelson’s quick trigger for libel claims, but he outdid himself this February when he sued Kate O’Keefe, a reporter for The Wall Street Journal in Hong Kong, over a December 2012 piece in which she and a co-author referred to him as “a scrappy, foul-mouthed billionaire from working-class Dorchester, Mass.” Adelson took exception to being described as “foul-mouthed,” but his underlying objection may have been to the premise of the article, which drew a contrast between Adelson and the equally abrasive but more polished former Sands China CEO Steven Jacobs, with whom Adelson has been engaged in litigation over the company’s casino operations in Macau. The Journal reporter whom Adelson sued in Hong Kong had previously written stories about Jacobs’s claim – asserted in legal filings in his Nevada wrongful termination action against the Sands – that Adelson had condoned a “prostitution strategy” at the Macau casino. Adelson, who subsequently sued Jacobs for defamation in Miami-Dade Circuit Court, seems to have regarded The Wall Street Journal as a favored recipient of leaks from his archenemy Jacobs.

But the casino magnate cannot pierce New York’s shield law for journalists in order to confirm those suspicions, according to a ruling last Friday by New York State Supreme Court Justice Donna Mills. Mills sued Kate O’Keefe, a reporter for The Wall Street Journalgranted a motion by the Journal’s lawyers at Davis Wright Tremaine to quash a third-party subpoena and deposition demand by Adelson in the Florida defamation litigation against Jacobs, finding that Adelson didn’t satisfy any of the three prongs of the test for overcoming the qualified reporters’ privilege. And according to the judge, even if Adelson were able to show that emails and phone records documenting contacts between Jacobs and the Journal were highly material and critical to his Florida case – the first two prongs of the test – he wouldn’t be able to show that there’s no alternative source for the information, since Adelson can get the material from Jacobs himself.

Mills’s ruling is good news for reporters because it’s “a classic example of the proper application of the New York shield law,” said Wall Street Journal counsel Laura Handman of Davis Wright. But it’s not the end of the paper’s Adelson problems. As Davis Wright asserted in a reply brief filed on March 15 in the New York quash litigation, the mogul and his lawyers at Olasov + Hollander and Coffey Burlington seem to expect that information from the Journal will aid Las Vegas Sands in its defense against Jacobs’s wrongful termination case in Nevada. Discovery in that suit has been stayed for a resolution of jurisdictional issues. In the meantime, Davis Wright contends, Adelson is trying to use the Florida defamation action and his Hong Kong suit against Journal reporter O’Keefe to obtain discovery.

Davis Wright asserts that both defamation suits are untenable, the Hong Kong case because it asserts a claim “so frivolous that it would not even pass the laugh      test if brought in a U.S. court,” and the Florida case because it’s based on revelations Jacobs made in a court filing that’s subject to the privilege for statements made in litigation. Nevertheless, the magistrate overseeing discovery in the Florida action has ruled that Adelson can obtain phone records of calls between Jacobs and journalists. In addition, Adelson has moved to depose O’Keefe, who is based in Hong Kong, under the Hague Convention.

The Journal’s lawyers believe that Adelson is engaged in “bullying and burdensome tactics designed to intimidate the press from writing about his multi-billion dollar casino empire.” But at least in New York, according to Judge Mills, there are limits.

I called Adelson counsel, David Olasov and Kendall Coffey, but didn’t hear back.

(Reporting by Alison Frankel)

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