Sahara Gaming v. CULINARY WKRS. UNION

• Decision Date: 27 August 1999
• Docket Number: No. 28555.,28555.
• Citation: 984 P.2d 164,115 Nev. 212
• Parties: SAHARA GAMING CORPORATION, a Nevada Corporation, and Sahara Mission Valley, Inc., a Nevada Corporation, Appellants, v. CULINARY WORKERS UNION LOCAL 226, Affiliated with Hotel Employees and Restaurant Employees International Union, AFL-CIO; and Hotel Employees and Restaurant Employees International Union AFL-CIO, Respondents.
• Court: Nevada Supreme Court

984 P.2d 164

115 Nev. 212

SAHARA GAMING CORPORATION, a Nevada Corporation, and Sahara Mission Valley, Inc., a Nevada Corporation, Appellants, v. CULINARY WORKERS UNION LOCAL 226, Affiliated with Hotel Employees and Restaurant Employees International Union, AFL-CIO; and Hotel Employees and Restaurant Employees International Union AFL-CIO, Respondents.

No. 28555.

Supreme Court of Nevada.

August 27, 1999.

Kirshman, Harris & Branton, Las Vegas, for Appellants.

McCracken, Stemerman, Bowen & Holsberry and Michael T. Anderson, Las Vegas; Thorndal, Backus, Armstrong & Balkenbush and Brian K. Terry, Las Vegas, for Respondents.

Before the Court En Banc.

OPINION

LEAVITT, J.

This is a defamation and interference with contract case arising out of a labor dispute between non-party subsidiaries of appellants Sahara Gaming Corporation (Sahara Gaming) and Sahara Mission Valley (Sahara Mission) (collectively Sahara), and respondents, a labor union and its affiliates (collectively, the Union).

At the time of the labor dispute, Sahara Gaming was negotiating a multi-million dollar contract with Players International concerning a land sales and management agreement. The Union became aware of the negotiations and sent a letter to Players International asking it not to enter into a contract with Sahara Gaming. The letter accurately quoted a portion of a complaint filed in Mississippi which alleged that Sahara Gaming had committed fraud in another casino deal. Sahara alleges the Union republished the allegations presented in the complaint with full knowledge the statements were false and with the intent to cause harm to Sahara. We must decide as a matter of law if a republication of a judicial proceeding constitutes an absolute privilege, when the statements are false or malicious and are republished with the intent to harm another. We hold the privilege is absolute.

Sahara Mission entered into a written agreement to sell real property to Players International for a sum in excess of $15,000,000.00. The agreement further provided Players International would pay Sahara Mission a management consulting fee of $2,900,000.00..In the letter to the Chairman and Chief Executive Officer of Players International the Union informed it that a "contentious labor dispute" existed between Sahara and the Union and that by "acquiring the Henderson property, Players is putting itself in the middle of this dispute." The letter further quoted from a complaint filed in a lawsuit in Mississippi involving Sahara and Treasure Bay Gaming & Resorts, Inc., wherein Sahara was being sued concerning a gaming management agreement, as follows:

The representations Lowden made to Miller¹ to induce Miller to proceed with Lowden's plan and transfer his assets to Treasure Bay were false. At the time Lowden made the representations, neither he nor Sahara intended to staff Treasure Bay's casinos with experienced managers or experienced marketing staff employed by Sahara. Nor did Lowden or Sahara intend to fulfill its duties as loyal agents in managing the Treasure Bay casinos. In addition, the budget projections Lowden and Sahara provided misrepresented the expenses Lowden and Sahara knew it would incur in opening the casinos.

Approximately two weeks after the letter was sent, Players International cancelled the management consulting agreement.

Sahara filed suit against the Union alleging that the Union republished Miller's statements in the complaint filed in the Mississippi action knowing they were false or with reckless disregard for the truth or falsity of the allegations. It further alleged the Union published the matter with "wrongful and willful intent to injure" Sahara. In addition Sahara filed claims for civil conspiracy, interference with contract, and interference with prospective economic advantage.

Union filed for summary judgment on the defamation and civil conspiracy claims; the district judge granted the motion and ordered summary judgment be entered on the two claims. The district judge reasoned as to the defamation claim that the letter accurately quoted the allegations contained in the Mississippi complaint in that it was a "fair and true recital" and "any person has a right to make a fair recital about a court case." As to the civil conspiracy claim, the court reasoned that it was derivative of the defamation claim and also granted summary judgment in favor of the Union on that cause of action. Subsequently, the district judge granted summary judgment in favor of the Union on the interference with contract and interference with prospective economic advantage claims on the ground that they, too, were derivative of the defamation claim.²

The purpose of summary judgment "is to avoid a needless trial when an appropriate showing is made in advance that there is no genuine issue of fact to be tried, and the movant is entitled to judgment as a matter of law." Coray v. Hom, 80 Nev. 39, 40-41, 389 P.2d 76, 77 (1964). "In determining whether summary judgment is proper, the nonmoving party is entitled to have the evidence and all reasonable inferences accepted as true." Wiltsie v. Baby Grand Corp., 105 Nev. 291, 292, 774 P.2d 432, 433 (1989) (citing Johnson v. Steel, Incorporated, 100 Nev. 181, 183, 678 P.2d 676, 677 (1984). "Orders granting summary judgment are reviewed de novo." Bulbman, Inc. v. Nevada Bell, 108 Nev. 105, 110, 825 P.2d 588, 591 (1992) (citing Tore, Ltd. v. Church, 105 Nev. 183, 185, 772 P.2d 1281, 1282 (1989)). There is no factual dispute here that the Union's letter was a fair and accurate report of the complaint in the Mississippi litigation; instead, Sahara is asserting that the report was made with malice and with intent to harm.

The law has long recognized a special privilege of absolute immunity from defamation given to the news media and the general public to report newsworthy events in judicial proceedings. Although the courts are open to the public, not everyone can attend hearings. The news media acts as an agent of the people to inform the public what transpires in the courtroom and to ensure the fairness of the proceedings. In exchange for this absolute privilege, comes the requirement and responsibility that the report be fair, accurate, and impartial. Opinions must be left to the editorial pages or editorial segments of television broadcasts.

Although the privilege is usually directed toward the news media and others engaged in reporting news to the public, it is not limited to republication by these publishers, but extends to any person who makes a republication of a judicial proceeding from material that is available to the general public. See Restatement (Second) of Torts § 611 cmt. c (1977). Here, the complaint was readily available for public inspection as a pleading in a judicial proceeding.

This court first set forth the rule prior to the turn of the century when it stated in Thompson v. Powning, 15 Nev. 195, 203 (1880), the following:

A fair and impartial account of the proceedings in a court of justice is, as a general rule, a justifiable publication. Proprietors of newspapers are not to be punished for publishing a fair, full, and true report of judicial proceedings, except upon actual proof or [sic] malice in making the report. The reason for this rule is, that the public have [sic] a right to know what takes place in a court of justice, and unless the proceedings are of an immoral, blasphemous, or indecent character, or accompanied with defamatory observations or comments, the publication is privileged.

(Citations omitted).

This early ruling seems to grant only a conditional privilege; if the report is made with actual malice or accompanied with defamatory opinions, the privilege is abused and lost. However, this court later established a new absolute privilege rule. The court held that defamatory matter published from a judicial proceeding is absolutely privileged "provided the answers of the witness are relevant and pertinent to the subject of inquiry, whether or not they are false or malicious." Nickovich v. Mollart, Et Al., 51 Nev. 306, 313, 274 P. 809, 810 (1929) (emphasis added). The court later extended the absolute privilege to quasi-judicial proceedings saying, "By granting an absolute privilege to statements made before a quasi-judicial body, the right of individuals to express their views freely upon the subject under consideration is protected." Knox v. Dick, 99 Nev. 514, 518, 665 P.2d 267, 270 (1983).

This court reaffirmed the absolute privilege rule in Circus Circus Hotels v. Witherspoon, 99 Nev. 56, 60, 657 P.2d 101, 104 (1983), wherein we stated:

[There] is [a] long-standing common law rule that communications uttered or published in the course of judicial proceedings are absolutely privileged so long as they are in some way pertinent to the subject of controversy. The absolute privilege precludes liability even where the defamatory statements are published with knowledge of their falsity and personal ill will toward the plaintiff.

(citations omitted) (referring to NRS 612.265(7)³ in which the rule has been codified as to communications from an employer as to the Employment Security Division pursuant to Chapter 612). This court further explained as follows: "The policy underlying the privilege is that in certain situations the public interest in having people speak freely outweighs the risk that individuals will occasionally abuse the privilege by making false and malicious statements." Id. at 61, 657 P.2d at 104 (citing Ducosin v. Mott, 292 Or. 764, 642 P.2d 1168, 1170-71 (1982); see Knox, 99 Nev. at 517-18,

665 P.2d at 270. This court further stated, "On the basis of this policy, the absolute privilege attached to judicial proceedings has been extended to quasi-judicial proceedings before executive officers, boards, and commissions, including proceedings in which the administrative body is considering an employee's claim for unemployment compensation." Id. at 61, 657 P.2d at...