Wynn v. Smith

• Decision Date: 29 January 2001
• Docket Number: No. 31063.,31063.
• Citation: 117 Nev. 6,16 P.3d 424
• Parties: Stephen A. WYNN, Appellant, v. John L. SMITH, Respondent. John L. Smith, Appellant, v. Stephen A. Wynn, Respondent. Barricade Books, Inc., Lyle Stuart, Appellants, v. Stephen A. Wynn, Respondent.
• Court: Nevada Supreme Court

16 P.3d 424

117 Nev. 6

Stephen A. WYNN, Appellant, v. John L. SMITH, Respondent.

John L. Smith, Appellant, v. Stephen A. Wynn, Respondent.

Barricade Books, Inc., Lyle Stuart, Appellants, v. Stephen A. Wynn, Respondent.

No. 31063.

Supreme Court of Nevada.

January 29, 2001.

Schreck Morris and James J. Pisanelli and Todd L. Bice, Las Vegas; Stroock & Stroock & Lavan, LLP, and Barry B. Langberg and Deborah Drooz, Los Angeles, California, for Stephen A. Wynn.

JoNell Thomas, Las Vegas, for John L. Smith, Barricade Books, Inc., and Lyle Stuart.

Deutsch Klagsbrun & Blasband, New York, New York, for Barricade Books, Inc., and Lyle Stuart.

Allen Lichtenstein, Las Vegas; Davis, Wright, Tremaine and Laura Handman, Washington, D.C., for Amicus Curiae.

BEFORE THE COURT EN BANC.

OPINION

PER CURIAM:

Stephen A. Wynn is a well-known public figure in Nevada. Wynn filed an action for defamation against John L. Smith, Barricade Books, Inc., and Barricade's principal, Lyle Stuart, based upon statements made in an advertisement for Smith's unauthorized biography of Wynn. The district court awarded Smith summary judgment, and the matter proceeded to trial against the remaining defendants. The district court then entered judgment on a jury verdict in favor of Wynn and against Stuart and Barricade Books for compensatory and punitive damages totaling $3,173,000.00.¹

Wynn appeals from the summary judgment entered in favor of Smith. Smith appeals from the district court's order denying him attorney fees. Stuart and Barricade appeal from the judgment entered upon the jury verdict. We conclude the district court did not err by dismissing the case against Smith on summary judgment, since Smith did not participate in the advertisement's publication, and did not abuse its discretion by denying Smith's request for attorney fees. We conclude the district court did err, however, by giving the jury an inaccurate instruction on actual malice, which requires reversal of the judgment against Barricade and Stuart.

FACTS

Running Scared: The Life and Treacherous Times of Las Vegas Casino King Steve Wynn was written by Smith and was scheduled for publication by Stuart and Barricade. In anticipation of this event, Stuart and Barricade announced the book in a trade catalog advertisement. The announcement contained several sensational statements about Wynn. Among these statements, the advertisement declared that Smith's book "details why a confidential Scotland Yard report called Wynn a front man for the Genovese family." The "Genovese Family" is a reputed organized criminal enterprise allegedly based in New York City.

Wynn sued Smith, Stuart, and Barricade, claiming the statements in the advertisement linking him to organized crime were libelous. Smith moved for summary judgment. He argued that the facts demonstrated he had not participated in the writing or publication of the advertisement and, as a matter of law, could not be held liable for the statements contained therein. In this, he argued that the entire extent of his involvement with the advertisement was his hope that the book would be advertised and his act of sending Stuart supporting materials for the manuscript that was developed into the book, including the report about Wynn from Scotland Yard. The district court agreed and granted Smith's motion. Smith then moved to recover attorney fees and costs. The district court denied that motion.

The case against Stuart and Barricade proceeded to trial. A district court jury found that the statement describing Wynn as a "front man" for the Genovese family was libelous and, as noted, awarded Wynn substantial compensatory and punitive damages.

DISCUSSION

To establish a prima facie case of defamation, a plaintiff must prove: (1) a false and defamatory statement by defendant concerning the plaintiff; (2) an unprivileged publication to a third person; (3) fault, amounting to at least negligence; and (4) actual or presumed damages. See Chowdhry v. NLVH, Inc., 109 Nev. 478, 483, 851 P.2d 459, 462 (1993)

. Under the rule established in New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), a media defendant may not be held liable for damages in a defamation action involving a public official plaintiff unless "actual malice" is pleaded and proven. This rule was extended to public figure plaintiffs, such as Wynn, in Curtis Publishing Company v. Butts, 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967).

Libel, in turn, is defined by Nevada statute as

a malicious defamation, expressed by printing, writing, signs, pictures or the like, tending to blacken the memory of the dead, or to impeach the honesty, integrity, virtue, or reputation, or to publish the natural defects of a living person or persons, or community of persons, or association of persons, and thereby to expose them to public hatred, contempt or ridicule.

NRS 200.510(1). The statute further provides that "[e]very person,whether the writer or publisher, convicted of the offense is guilty of a gross misdemeanor." NRS 200.510(2) (emphasis added).

Claim of liability as to Smith

We first address Wynn's contention that the district court improperly granted summary judgment to Smith. This court reviews orders of summary judgment de novo. See Bulbman, Inc. v. Nevada Bell, 108 Nev. 105, 110, 825 P.2d 588, 591 (1992)

. Summary judgment is appropriate where "there is no genuine issue as to any material fact." NRCP 56(c).

Wynn does not challenge the district court's factual findings. He concedes that Smith took no part in the drafting or publication of the advertisement. Wynn disputes, however, the district court's determination that Smith was not liable for Barricade's defamatory statement as a matter of law because he did not publish the advertisement. He urges this court to hold instead that a source of a defamatory statement may be held liable for that statement when the statement has been published and the source intended that the statement be published. In support of his proposed rule, Wynn cites Mitchell v. Superior Court, 37 Cal.3d 268, 208 Cal.Rptr. 152, 690 P.2d 625 (1984).

In Mitchell, the California Supreme Court concluded that, in civil actions for libel, a news reporter has a qualified privilege (a "reporter's privilege") to withhold disclosure of the identity of confidential sources or information obtained from those sources. Id.208 Cal.Rptr. 152,690 P.2d at 632. In considering the scope of this privilege, the California court observed via obiter dictum that "if a source acting with actual malice furnishes defamatory material to a publisher with the expectation that the material (either verbatim or in substance) will be published, the source should be liable for the publication." Id.208 Cal.Rptr. 152,690 P.2d at 633. The court further explained that the "rationale for making the originator of the defamatory statement liable for its foreseeable republication was the strong causal link between the actions of the originator and the damage caused by republication." Id. (quoting McKinney v. County of Santa Clara, 110 Cal.App.3d 787, 168 Cal.Rptr. 89, 94 (1980)).

We decline to adopt the Mitchell dictum in this instance. Here, Smith provided Stuart and Barricade a manuscript accompanied by his own investigatory documents, including the Scotland Yard Report. The language in the report to which the advertisement referred was that:

The strong inference which can be drawn from the new intelligence is that Stephen WYNN, the President of GNI [Golden Nugget Incorporated], has been operating under the aegis of the Genovese family since he first went to Las Vegas in the 1960's to become a stockholder in the New Frontier Casino.

It must be said that some of the data supporting this view, taken on its own, is not conclusive. However, the connections are so numerous and significant that it would be impossible to accept coincidence as a reasonable explanation.²

(Footnote added.)

These statements are much more qualified and couched in statements of investigative opinion than the ultimate phraseology that marks the advertisement published by Barricade. It was Barricade that recast the subject of the report into a representation of the contents that is arguably factual rather than mere opinion. See discussion infra.

Accordingly, we affirm the district court and hold that Smith may not be held liable for defamation for a statement that he did not write, edit, print, distribute or otherwise publish. Because we affirm the district court's summary judgment in favor of Smith for the reasons stated above, we need not address Smith's alternative arguments.

Smith's claim for attorney fees

We now review whether the district court correctly denied Smith's request for attorney fees. Smith's application for fees was premised on NRS 17.115 and NRCP 68, which allow an award of attorney fees and costs when a party fails to recover more than a tendered offer of judgment. The focus of Smith's argument is not that the district court failed to consider his request under the Beattie factors, but that it reached the wrong conclusion under those factors.

Claims for attorney fees under NRS 17.115 and NRCP 68 are fact intensive. Thus, we will not disturb such awards in the absence of an abuse of discretion. Uniroyal Goodrich Tire v. Mercer, 111 Nev. 318, 324, 890 P.2d 785, 789 (1995) (citing Schouweiler v. Yancey Co., 101 Nev. 827, 833, 712 P.2d 786, 790 (1985)

). In exercising its discretion under NRCP 68, the district court must carefully evaluate the following factors: (1) whether the plaintiff's claim was brought in good faith; (2) whether the defendant's offer of judgment was reasonable and in good faith in both its timing and amount; (3) whether the plaintiff's decision to reject the offer and proceed to trial was grossly unreasonable or in bad faith; and (4) whether the fees sought by the offeror are reasonable and justified in amount. Beattie v. Thomas, 99 Nev. 579,...