Jacobs v. Adelson

Decision Date07 August 2014
Docket NumberNo. 58740.,58740.
Citation130 Nev. Adv. Op. 44,325 P.3d 1282
PartiesSteven C. JACOBS, Appellant, v. Sheldon G. ADELSON, in his individual and Representative Capacities, Respondent.
CourtNevada Supreme Court

OPINION TEXT STARTS HERE

Pisanelli Bice, PLLC, and Todd L. Bice, Debra L. Spinelli, and Jarrod L. Rickard, Las Vegas, for Appellant.

Morris Law Group and Steve L. Morris and Ryan M. Lower, Las Vegas, for Respondent.

BEFORE THE COURT EN BANC.1

OPINION

By the Court, HARDESTY, J.:

Appellant sued respondent's companies for wrongful termination, making a number of allegations in the complaint against respondent personally. After respondent published a response to the allegations in the media, appellant sued him for defamation. The district court dismissed the defamation claim, concluding that respondent was protected from a defamation suit because his statements to the media were made in the context of a judicial action. Although statements made during the course of judicial proceedings are generally considered absolutely privileged and cannot form the basis of a defamation claim, we have yet to consider whether statements made to the media regarding ongoing or contemplated litigation are covered by this absolute privilege. We adopt the majority view that communications made to the media in an extrajudicial setting are not absolutely privileged, at least when the media holds no more significant interest in the litigation than the general public. Thus, we reverse the order of dismissal and remand this matter to the district court for further proceedings.

FACTS

Appellant Steven C. Jacobs filed a wrongful termination complaint against Las Vegas Sands Corporation (LVSC) and Sands China, Ltd. (Sands China). LVSC is the controlling shareholder of Sands China. Sheldon G. Adelson is the chief executive officer and majority shareholder of LVSC and Jacobs' former employer. Although Adelson was not originally named as a defendant, Jacobs' complaint alleged that Adelson demanded Jacobs to engage in “illegal” activities while working for LVSC operations in Macau. Jacobs further alleged that his refusal to carry out those “illegal” demands resulted in threats by Adelson and Jacobs' eventual termination. The complaint also contained numerous attacks against Adelson personally, asserting that he made “outrageous demands” and referring to him as “notoriously bellicose” and “mercurial.” It also attacked Adelson's behavior as “rude and obstreperous.”

LVSC and Sands China filed a motion to dismiss the complaint, which resulted in a hearing that received widespread media attention. After the hearing, the Wall Street Journal published an online article about the case. According to the article, Adelson provided an e-mail response that allegedly said:

While I have largely stayed silent on the matter to this point, the recycling of his allegations must be addressed.... 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 subsequently amended his complaint, adding a claim for defamation per se against Adelson, LVSC, and Sands China. The amended complaint alleged that the statements published in the Wall Street Journal were false and defamatory, unprivileged, published maliciously and known to be false or in reckless disregard of the truth, and necessarily injurious to Jacobs' professional reputation.

Adelson, LVSC, and Sands China all filed motions to dismiss Jacobs' defamation claim, arguing that the statements were absolutely privileged communications made in the course of judicial proceedings or, in the alternative, were protected by the conditional privilege of reply. After a hearing on the motion to dismiss, the district court determined that Adelson's response to the Wall Street Journal was an absolutely privileged communication relating to the litigation. Based on its ruling that Adelson's statements were absolutely privileged, the district court declined to consider Adelson's alternative argument that his statements were covered by the conditional privilege of reply. The district court thus granted the motion to dismiss and, because the dismissal resolved all claims against Adelson, certified its order as final under NRCP 54(b) for purposes of this appeal.

DISCUSSION

Standard of review

We rigorously review a district court order granting an NRCP 12(b)(5) motion to dismiss, accepting all of the plaintiffs factual allegations as true and drawing every reasonable inference in the plaintiff's favor to determine whether the allegations are sufficient to state a claim for relief. State ex rel. Johnson v. Reliant Energy, Inc., 128 Nev. ––––, ––––, 289 P.3d 1186, 1189 (2012). A complaint should be dismissed for failure to state a claim only “when it appears beyond a doubt that the plaintiff could prove no set of facts that would entitle him or her to relief.” Id. We review de novo the district court's legal conclusions. Buzz Stew, L.L.C. v. City of N. Las Vegas, 124 Nev. 224, 228, 181 P.3d 670, 672 (2008). We also review de novo the applicability of an absolute privilege. Cucinotta v. Deloitte & Touche, L.L.P., 129 Nev. ––––, ––––, 302 P.3d 1099, 1101 (2013). Whether a statement is sufficiently relevant to the judicial proceedings to fall within the absolute privilege is a question of law for the court. Circus Circus Hotels, Inc. v. Witherspoon, 99 Nev. 56, 62, 657 P.2d 101, 105 (1983).

The absolute privilege

Nevada has long recognized the existence of an absolute privilege for defamatory statements made during the course of judicial and quasi-judicial proceedings. See, e.g., Clark Cnty. Sch. Dist. v. Virtual Educ. Software, Inc. (VESI), 125 Nev. 374, 382, 213 P.3d 496, 502 (2009); Fink v. Oshins, 118 Nev. 428, 432–33, 49 P.3d 640, 643–44 (2002); Circus Circus Hotels, 99 Nev. at 60, 657 P.2d at 104. This privilege, which acts as a complete bar to defamation claims based on privileged statements, recognizes that [c]ertain communications, although defamatory, should not serve as a basis for liability in a defamation action and are entitled to an absolute privilege because ‘the public interest in having people speak freely outweighs the risk that individuals will occasionally abuse the privilege by making false and malicious statements.’ Cucinotta, 129 Nev. at ––––, 302 P.3d at 1101 (quoting Circus Circus Hotels, 99 Nev. at 61, 657 P.2d at 104);see also Hampe v. Foote, 118 Nev. 405, 409, 47 P.3d 438, 440 (2002), overruled on other grounds by Buzz Stew, L.L.C., 124 Nev. at 228 n. 6, 181 P.3d at 672 n. 6. An absolute privilege constitutes “an immunity, which protects against even the threat that a court or jury will inquire into a communication.” Hampe, 118 Nev. at 409, 47 P.3d at 440.

In order for the absolute privilege to apply to defamatory statements made in the context of a judicial or quasi-judicial proceeding, (1) a judicial proceeding must be contemplated in good faith and under serious consideration, and (2) the communication must be related to the litigation.” VESI, 125 Nev. at 383, 213 P.3d at 503. Therefore, the privilege applies to communications made by either an attorney or a nonattorney that are related to ongoing litigation or future litigation contemplated in good faith. Id. When the communications are made in this type of litigation setting and are in some way pertinent to the subject of the controversy, the absolute privilege protects them even when the motives behind them are malicious and they are made with knowledge of the communications' falsity. Id. at 382, 213 P.3d at 502;Circus Circus Hotels, 99 Nev. at 60, 657 P.2d at 104. But we have also recognized that [a]n attorney's statements to someone who is not directly involved with the actual or anticipated judicial proceeding will be covered by the absolute privilege only if the recipient of the communication is ‘significantly interested’ in the proceeding.” Fink, 118 Nev. at 436, 49 P.3d at 645–46 (quoting Andrews v. Elliot, 109 N.C.App. 271, 426 S.E.2d 430, 433 (1993)).

Here, even though Adelson's statements mentioned ongoing litigation, Jacobs argues that the district court improperly applied the absolute privilege because the statements were made outside of the judicial proceedings to disinterested persons, including the media and the press, and are thus unrelated to the litigation. Jacobs avers that the press lacks any legal interest in the outcome of this case and has no functional ties to his claims or Adelson's defenses. Adelson, in contrast, contends that the district court properly dismissed Jacobs' defamation claim because his statements are absolutely privileged since they were made during the course of this judicial proceeding and were directly related to the subject of this lawsuit—Jacobs' claim for wrongful termination. Adelson also argues that statements made to the media should be included in the scope of Nevada's absolute privilege rule. Because we decline Adelson's invitation to treat the media as “significantly interested” in the litigation, we agree with Jacobs' assessment that absolute privilege does not apply here.

Application of the absolute privilege in the media context

This court has not previously addressed whether the absolute privilege applies when the media is the recipient of the statement. We have, however, recognized that communications are not sufficiently related to judicial proceedings when they are made to someone without an interest in the outcome. See Fink, 118 Nev. at 436, 49 P.3d at 645–46.

The majority of states have determined that the absolute privilege does not apply when the communications are made to the media.2 ‘Communications made to newspapers and during press conferences have been almost universally found to be excluded from the protection of absolute privilege.’ Med....

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