Las Vegas Sands Corp. v. Eighth Judicial Dist. Court of State

• Decision Date: 07 August 2014
• Docket Number: No. 62944.,62944.
• Citation: 130 Nev. Adv. Op. 61,331 P.3d 876
• Parties: LAS VEGAS SANDS CORP., A Nevada Corporation; and Sands China Ltd., A Cayman Islands Corporation, Petitioners, v. The EIGHTH JUDICIAL DISTRICT COURT of the STATE of Nevada, in and for the COUNTY OF CLARK; and the Honorable Elizabeth Goff Gonzalez, District Judge, Respondents, and Steven C. Jacobs, Real Party in Interest.
• Court: Nevada Supreme Court

331 P.3d 876

130 Nev. Adv. Op. 61

LAS VEGAS SANDS CORP., A Nevada Corporation; and Sands China Ltd., A Cayman Islands Corporation, Petitioners,

v. The EIGHTH JUDICIAL DISTRICT COURT of the STATE of Nevada, in and for the COUNTY OF CLARK; and the Honorable Elizabeth Goff Gonzalez, District Judge, Respondents,andSteven C. Jacobs, Real Party in Interest.

No. 62944.

Supreme Court of Nevada.

Aug. 7, 2014.

Morris Law Group and Steve L. Morris and Rosa Solis–Rainey, Las Vegas; Kemp, Jones & Coulthard, LLP, and J. Randall Jones and Mark M. Jones, Las Vegas; Holland & Hart LLP and J. Stephen Peek and Robert J. Cassity, Las Vegas, for Petitioners.

Pisanelli Bice PLLC and Todd L. Bice, James J. Pisanelli, and Debra L. Spinelli, Las Vegas, for Real Party in Interest.

BEFORE THE COURT EN BANC.¹

OPINION

By the Court, GIBBONS, C.J.:

In this opinion, we consider whether a Nevada district court may properly issue a discovery order that compels a litigant to violate a foreign international privacy statute. We conclude that the mere existence of an applicable foreign international privacy statute does not itself preclude Nevada district courts from ordering foreign parties to comply with Nevada discovery rules. Thus, civil litigants may not utilize foreign international privacy statutes as a shield to excuse their compliance with discovery obligations in Nevada courts. Rather, the existence of an international privacy statute is relevant to a district court's sanctions analysis if the court's discovery order is disobeyed. Here, the district court properly employed this framework when it found that the existence of a foreign international privacy statute did not excuse petitioners from complying with the district court's discovery order. And because the district court has not yet held the hearing to determine if, and the extent to which, sanctions may be warranted, our intervention at this juncture would be inappropriate. We therefore deny this writ petition.

FACTS AND PROCEDURAL HISTORY

This matter arises out of real party in interest Steven C. Jacobs's termination as president and chief executive officer of petitioner Sands China. After his termination, Jacobs filed a complaint against petitioners Las Vegas Sands Corp. (LVSC) and Sands China Ltd., as well as nonparty to this writ petition, Sheldon Adelson, the chief executive officer of LVSC (collectively, Sands). Jacobs alleged that Sands breached his employment contract by refusing to award him promised stock options, among other things.

Almost three years ago, this court granted a petition for a writ of mandamus filed by Sands China and directed the district court to hold an evidentiary hearing and issue findings as to whether Sands China is subject to personal jurisdiction in Nevada. See Sands China Ltd. v. Eighth Judicial Dist. Court, Docket No. 58294, 2011 WL 3840329 (Order Granting Petition for Writ of Mandamus, August 26, 2011). Due to a string of jurisdictional discovery disputes that have arisen since that order was issued, the district court has yet to hold the hearing.

Throughout jurisdictional discovery, Sands China has maintained that it cannot disclose any documents containing personal information that are located in Macau due to restrictions within the Macau Personal Data Protection Act (MPDPA). Approximately 11 months into jurisdictional discovery, however, Sands disclosed for the first time that, notwithstanding the MPDPA's prohibitions, a large number of documents contained on hard drives used by Jacobs and copies of Jacobs's emails had been transported from Sands China in Macau to LVSC in the United States.² In response to Sands's revelation, the district court sua sponte ordered a sanctions hearing. Based on testimony at that hearing, the district court determined that the transferred documents were knowingly transferred to LVSC's in-house counsel in Las Vegas and that the data was then placed on a server at LVSC's Las Vegas property. The district court also found that both in-house and outside counsel were aware of the existence of the transferred documents but had been concealing the transfer from the district court.

Based on these findings, the district court found that Sands's failure to disclose the transferred documents was “repetitive and abusive,” deliberate, done in order to stall jurisdictional discovery, and led to unnecessary motion practice and a multitude of needless hearings. The district court issued an order in September 2012 that, among other things, precluded Sands from raising the MPDPA “as an objection or as a defense to admission, disclosure or production of any documents.” Sands did not challenge this sanctions order in this court.

Subsequently, Sands filed a report detailing its Macau-related document production. Sands's report indicated that, with respect to all of the documents that it had produced from Macau, it had redacted personal data contained in the documents based on MPDPA restrictions prior to providing the documents to Jacobs. In response to Sands's redactions based on the MPDPA, Jacobs moved for NRCP 37 sanctions, arguing that Sands had violated the district court's September 2012 order.

The district court held a hearing on Jacobs's motion for sanctions, at which the court stated that the redactions appeared to violate the September 2012 order. In its defense, Sands argued that the September 2012 order had prohibited it from raising the MPDPA as an objection or defense to “admission, disclosure or production” of documents, but not as a basis for redacting documents. The district court disagreed with Sands's interpretation of the sanctions order, noting:

I certainly understand [the Macau government has] raised issues with you. But as a sanction for the inappropriate conduct that's happened in this case, in this case you've lost the ability to use that as a defense. I know that there may be some balancing that I do when I'm looking at appropriate sanctions under the Rule 37 standard as to why your client may have chosen to use that method to violate my order. And I'll balance that and I'll look at it and I'll consider those issues.

Based on the above findings, the district court entered an order concluding that Jacobs had “made a prima facie showing as to a violation of [the district] [c]ourt's orders which warrants an evidentiary hearing” regarding whether and the extent to which NRCP 37 sanctions were warranted. The district court set an evidentiary hearing, but before this hearing was held, Sands filed this writ petition, asking that this court direct the district court to vacate its order setting the evidentiary hearing.

DISCUSSION

A writ of mandamus is available to compel the performance of an act that the law requires or to control an arbitrary or capricious exercise of discretion. Aspen Fin. Servs., Inc. v. Eighth Judicial Dist. Court, 128 Nev. ––––, ––––, 289 P.3d 201, 204 (2012). A writ of prohibition may be warranted when the district court exceeds its jurisdiction. Id. Although a writ of prohibition is a more appropriate remedy for the prevention of improper discovery, writ relief is generally unavailable to review discovery orders. Id.; see also Valley Health Sys., L.L.C. v. Eighth Judicial Dist. Court, 127 Nev. ––––, ––––, 252 P.3d 676, 679 (2011) (providing that exceptions to this general rule exist when (1) the trial court issues a blanket discovery order without regard to relevance, or (2) a discovery order requires disclosure of privileged information). Nevertheless, “in certain cases, consideration of a writ petition raising a discovery issue may be appropriate if an important issue of law needs clarification and public policy is served by this court's invocation of its original jurisdiction....” Aspen Fin. Servs., Inc. v. Eighth Judicial Dist. Court, 129 Nev. ––––, ––––, 313 P.3d 875, 878 (2013) (internal quotation marks omitted). “The burden is on the petitioner to demonstrate that extraordinary relief is warranted.” Valley Health, 127 Nev. at ––––, 252 P.3d at 678.

In its writ petition, Sands argues generally that this court's intervention is warranted because the district court has improperly subjected Sands to discovery sanctions based solely on Sands's attempts to comply with the MPDPA. Sands has not persuasively argued that either of this court's two generally recognized exceptions for entertaining a writ petition challenging a discovery order apply. See Valley Health, 127 Nev. at ––––, 252 P.3d at 679. Nevertheless, the question of whether a Nevada district court may effectively force a litigant to choose between violating a discovery order or a foreign privacy statute raises public policy concerns and presents an important issue of law that has relevance beyond the parties to the underlyinglitigation and cannot be adequately addressed on appeal. Therefore, we elect to entertain the petition. See Aspen Fin. Servs., 129 Nev. at ––––, 313 P.3d at 878.

Foreign international privacy statutes cannot be used by litigants to circumvent Nevada discovery rules, but should be considered in a district court's sanctions analysis

The intersection between Nevada discovery rules and international privacy laws is an issue of first impression in Nevada. The Nevada Rules of Civil Procedure authorize parties to discover any nonprivileged evidence that is relevant to any claims or defenses at issue in a given action. NRCP 26(b)(1). On the other hand, many foreign nations have created nondisclosure laws that prohibit international entities from producing various types of documents in litigation. See generally Note, Foreign Nondisclosure Laws and Domestic Discovery Orders in Antitrust Litigation, 88 Yale L.J. 612 (1979).

The United States Supreme Court has evaluated the intersection between these two competing interests and determined that such a privacy statute does not, by itself, excuse a party from complying with a discovery order. See Societe Nationale Industrielle Aerospatiale v. U.S. Dist....