Adelson v. Harris
| Decision Date | 19 December 2014 |
| Docket Number | Docket No. 13–4173–cv. |
| Citation | 774 F.3d 803 |
| Parties | Sheldon G. ADELSON, Plaintiff–Appellant, v. David A. HARRIS, Marc R. Stanley, and National Jewish Democratic Council, Defendants–Appellees. |
| Court | U.S. Court of Appeals — Second Circuit |
James R. Ferguson, Mayer Brown LLP, Chicago, IL (Michele L. Odorizzi, Demetrios G. Metropoulos, Mayer Brown LLP, Chicago, IL; Andrew L. Frey, Mayer Brown LLP, New York, N.Y.; L. Lin Wood and Jonathan D. Grunberg, Wood, Hernacki & Evans, LLC, Atlanta, GA, on the brief), for Plaintiff–Appellant.
Lee Levine (Seth D. Berlin, Gayle C. Sproul, Chad R. Bowman, Rachel F. Strom, on the brief), Levine Sullivan Koch & Schulz, LLP, New York, N.Y., for Defendants–Appellees.
Before: CALABRESI, RAGGI, and CHIN, Circuit Judges.
This case raises two significant and unresolved questions of Nevada statutory and common law. First, does a hyperlink to source material about judicial proceedings in an online petition suffice for purposes of applying the common law fair report privilege? Second, did Nevada's anti-strategic litigation against public participation (“anti-SLAPP”) statute, Nev.Rev.Stat. §§ 41.635 –41.670, as that statute was in effect prior to the most recent amendments in 2013, cover speech that seeks to influence an election but that is not addressed to a government agency? Because the issues are important, and the answers are unclear and may be determinative of the instant appeal, we reserve decision and certify these questions to the Nevada Supreme Court.
Plaintiff–Appellant Sheldon Adelson brought a defamation action against Defendants–Appellees National Jewish Democratic Council (“NJDC”), its Chair Marc Stanley, and its President and CEO David Harris (collectively, “appellees”) based on statements that they made in an online petition and press release. The United States District Court for the Southern District of New York (Oetken, J. ) dismissed Adelson's action under both Rule 12(b)(6) and the Nevada anti-SLAPP statute. See Adelson v. Harris, 973 F.Supp.2d 467 (S.D.N.Y. 2013). Adelson appeals from that dismissal.
Appellees' online statements were made in the context of the 2012 presidential election cycle. During that cycle, Adelson spent large sums of money to support Republican candidates, financially backing the presidential bids, first, of Speaker Newt Gingrich and, later, of Governor Mitt Romney. On July 3, 2012, NJDC posted on its website a petition to pressure Governor Romney to stop taking Adelson's money. On July 11, after being contacted by representatives of Adelson who denied certain allegations in the petition taken from other news sources, appellees removed the petition from the NJDC website. At the same time, appellees posted a press release, which, without repeating the allegations, stated that appellees stood by the petition's contents. Adelson demanded that appellees issue a retraction and apology. When they refused, he filed suit.
Behind the contested allegations lies a separate lawsuit in Nevada against Adelson and Las Vegas Sands Corporation (“LVSC”). LVSC, of which Adelson is Chairman and CEO, owns and operates casinos throughout the world, including, through its Chinese subsidiary, in Macau.
The Nevada suit was brought by a former executive of that subsidiary, Steven Jacobs, who was fired for cause in 2010. As part of the Nevada litigation, Jacobs filed a sworn declaration stating that, after he began efforts to eliminate loan sharks and prostitution from the Macau casino floor, “LVSC Senior Executives informed [him] that the prior prostitution strategy had been personally approved by Adelson.” J.A. at 30. On June 28, 2012 the Associated Press (“AP”) covered Jacobs's lawsuit, quoting this language, and reporting Adelson and LVSC's denial of any wrongdoing. See Ken Ritter, Ex–Sands Exec Alleges Prostitution in Macau Sites, Associated Press, June 28, 2012, available at http://bigstory. ap.org/article/ex-sands-exec-alleges-prostitution-macau-sites.
Following the AP coverage, appellees published their online petition. The petition urged readers to “Tell Romney to Reject Adelson's Dirty Money,” and featured a graphic underneath this headline with Adelson's face on the left, Governor Romney's on the right, and a rhetorical question in all capital letters in the middle: “IF ONE OF YOUR BIGGEST DONORS WAS ACCUSED OF PUTTING ‘FOREIGN MONEY’ FROM CHINA IN OUR ELECTIONS & REPORTEDLY APPROVED OF PROSTITUTION, WOULD YOU TAKE HIS MONEY?” J.A. at 26.
Below the graphic was text elaborating on the basis for the petition. That text contained, inter alia, a reference to “reports [that] Adelson ‘personally approved’ of prostitution in his Macau casinos.”Id. at 38. The quoted words “personally approved” were blue, underlined, and hyperlinked to the AP article.1 By appellees' own admission, the hyperlinked article was their sole source of this information. They conducted no independent investigation.
At the time appellees posted the petition, Adelson and LVSC had filed no reply in the Nevada litigation. By the time a reply denying Adelson's alleged approval of any prostitution strategy was filed, appellees had already removed the petition from the NJDC website.
In August 2012 Adelson brought suit in the Southern District of New York, although neither he nor appellees are domiciled in New York. He is a citizen of Nevada. Two appellees, NJDC and Harris, are citizens of the District of Columbia. The third, Stanley, is a citizen of Texas.
Appellees timely moved to dismiss pursuant to Rule 12(b)(6) and the District of Columbia's anti-SLAPP statute. In their papers supporting this motion, appellees noted the existence of similar statutes in New York, Nevada, and Texas, and indicated their likely intent to move for dismissal under the law of one of these other jurisdictions should the court determine that such law, rather than the District of Columbia's, applied.
In March 2013 the district court indicated its inclination to apply Nevada law and requested that the parties brief the application of the Nevada anti-SLAPP statute. Appellees then moved to dismiss under that statute, and Adelson moved for limited discovery on appellees' knowledge of falsity in order to oppose the motion. In its decision dismissing Adelson's suit under Rule 12(b)(6) and the Nevada statute, the district court extended nunc pro tunc the statutory time to file a Nevada anti- SLAPP motion, denied Adelson's motion for discovery, and awarded costs and fees as provided for by the Nevada statute.
We review de novo the district court's dismissal under Rule 12(b)(6), accepting all factual allegations in the complaint as true and drawing all reasonable inferences in Adelson's favor. McGugan v. Aldana–Bernier, 752 F.3d 224, 229 n. 2 (2d Cir.2014). We likewise review de novo all issues determined as a matter of law in connection with the district court's dismissal under the Nevada anti-SLAPP statute. Chandok v. Klessig, 632 F.3d 803, 812, 818–19 (2d Cir.2011) ; Lerner v. Fleet Bank, N.A., 459 F.3d 273, 283 (2d Cir.2006). The district court's finding of good cause to extend the time to file an anti-SLAPP motion is reviewed for abuse of discretion, see Meilleur v. Strong, 682 F.3d 56, 61 (2d Cir.2012), as is the district court's decision to deny Adelson's request for discovery, Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292, 300 (2d Cir.2003).
In our review of the Rule 12(b)(6) dismissal, a first question is whether Nevada law would deem appellees' petition not to be defamatory as a matter of law even in the absence of an applicable privilege. Having invited further briefing on this issue by the parties, we conclude that we cannot readily say that. While appellees' petition contained political speech that plainly falls under the protection of the First Amendment, it arguably went beyond such speech when it repeated factual allegations made by Jacobs in the course of his suit in Nevada. Absent an applicable privilege, then, a constitutional question may well arise as to whether First Amendment protection for political speech extends to the republication before us.
To be clear, we agree with the district court that, in a partisan petition like this, appellees' characterization of Adelson's money as “dirty” and “tainted” is the sort of rhetorical hyperbole and unfalsifiable opinion protected by the First Amendment.See Milkovich v. Lorain Journal Co., 497 U.S. 1, 20, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990) ; Flamm v. Am. Ass'n of Univ. Women, 201 F.3d 144, 150 (2d Cir.2000). Moreover, where, as here, the grounds of the opinion expressed by the speaker are fully disclosed, the opinion itself is normally held not to be actionable even under state defamation law. See, e.g., Lubin v. Kunin, 117 Nev. 107, 113, 17 P.3d 422 (2001) ; Restatement (Second) of Torts § 566 ().
In contrast, the statement that Adelson reportedly approved of prostitution asserts reasonably specific facts, republication of which may potentially be defamatory if unprivileged. See Flowers v. Carville, 310 F.3d 1118, 1128–29 (9th Cir.2002). Whether a finding of liability could be made despite the constitutional protections outlined in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), and its progeny is a question we leave to another day.
Indeed, because we are loath to decide a constitutional question in advance of the necessity of doing so, Spector Motor Serv. v. McLaughlin, 323 U.S. 101, 105, 65 S.Ct. 152, 89 L.Ed. 101 (1944) (...
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