Sheldon Adelson Loses Defamation Appeal vs. Political Group

Sheldon Adelson Lawsuit Dismissed

The Venetian Macau was at the center of the National Jewish Democratic Council’s allegations.

Las Vegas Sands CEO Sheldon Adelson lost his appeal of a defamation lawsuit dismissal against the National Jewish Democratic Council in the U.S. 2nd Circuit Court of Appeals on Wednesday. The lawsuit stemmed from an 2012 online petition by the NJDC which stated Adelson approved of prostitution in Venetian Macau and Marina Bay Sands, LVS’s Asian casinos.

A panel of three judges ruled on the matter on Wednesday: Circuit Judges Guido Calabresi, Denny Chin, and Reena Raggi. The three judges ruled that the Nevada Supreme Court’s earlier ruling on the matter was sufficient. The ruling should settle the matter.

The petition came during the 2012 U.S. presidential election. The National Jewish Democratic Council launched the petition drive to pressure Republican Party candidate Mitt Romney to return Sheldon Adelson’s considerable campaign donations.

National Jewish Democratic Council Petition

2012 was the first US presidential election since the controversial Supreme Court decision “Citizens United”. Super PACs were allowed to donate limitless amounts of cash to the political campaigns and Adelson had donated $90 million to GOP causes. As the single largest political contributor in 2012, the National Jewish Democratic Council sought to limit the casino magnate’s influence.

Thus, the NJDC petition linked to an Associated Press story quoting court documents in which a former Sands China executive, Steven Jacobs, who said Adelson “was aware and approved of prostitution at his operations in Macau“, according to the New York Law Journal.

Sheldon Adelson Filed Defamation Lawsuit

Claiming the petition was defamatory, Sheldon Adelson sued the National Jewish Democratic Council. In October 2013, a Manhattan-based federal judge, U.S. District Judge J. Paul Oetken of the Southern District of New York, dismissed the lawsuit, saying that “a hyperlink is the modern-day equivalent of a footnote.” Because the National Jewish Democratic Council linked to an AP story which made the charges, Sheldon Adelson could not sue them for libel.

Later, an appellate court upheld the original ruling in the case. The appellate court ruled that a SLAPP strategic lawsuit (Strategic Lawsuit Against Public Participation) by the State of Nevada designed to protect freedom of speech was upheld.

Nevada Supreme Court Ruling

On that occasion, the appellate court sent two questions to the Nevada Supreme Court. First, it asked the high court whether a hyperlink was akin to a footnote, under “common-law fair report” legal privilege. Second, it asked whether anti-SLAPP protections applied to non-governmental figures and entities — at least before a 2013 change to the SLAPP laws.

In September 2017, the Nevada Supreme Court ruled in the affirmative on both questions. Returning the question to the Second Circuit court, both sides were ordered by the Court of Appeals to file legal briefs.

“Proceeds from Prostitution as Campaign Contributions”

Adelson’s lawyers, led by Mayer Brown partner James Ferguson, argued in their brief that the case should be revived because of non-privileged statements that Adelson used “proceeds from prostitution as campaign contributions”. Adelson’s team also argued that U.S. District Judge J. Paul Oetken had erred when he ruled that the statements in the AP article were made without knowledge of falsehood, which is a standard requirement for defamation. The argued that more discovery should have been ordered, according to anti-SLAPP’s scienter requirement.

Judges Calabresi, Chin, and Raggi wrote in their unanimous opinion, “When we explained that the district court properly exercised its discretion in deciding not to allow discovery on the topic, we implicitly approved of the district court’s determination that, as a matter of law, appellees acted in good faith.”

Ballard Spahr attorney Lee Levine represented the National Jewish Democratic Council in this week’s case. Neither Lee Levin nor the Ballard Spahr law firm gave a statement on the winning decision. Neither did James Ferguson or the Mayer Brown law firm. Sheldon Adelson, Las Vegas Sands Corp, and the National Jewish Democratic Council all declined to give a comment on the ruling.