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Carri Geer Thevenot
 

Las Vegas judge rules she has jurisdiction in Sands China case

25 May 2015

A Las Vegas judge ruled Friday that she has jurisdiction over Sands China Ltd. in a wrongful termination case filed by the company’s former president and CEO.

The case was filed by Steven Jacobs shortly after he was fired in 2010. District Judge Elizabeth Gonzalez issued a 39-page decision Friday afternoon.

“This matter has been pending in Nevada courts for almost five years,” Gonzalez wrote. “Judicial economy would be served by continuing this litigation in Nevada. Significant time and judicial resources of the court and the parties will have been wasted if Jacobs is required to reinstate this litigation in another forum.”

The case has made several trips to the Nevada Supreme Court over the years, and Gonzalez has said she also expects an appeal of her decision on the jurisdiction issue.

Gonzalez heard from several witness during a jurisdiction hearing, which featured four days of testimony from Sheldon Adelson, the billionaire chairman and CEO of Las Vegas Sands Corp. Both Adelson and Las Vegas Sands are defendants in the case.

The judge heard closing arguments on May 7 before taking the matter under advisement.

Attorney Todd Bice accused the defendants of raising the jurisdiction issue to stall the entire case.

“They don’t want this case heard anywhere where the facts will come out, and they’re smart enough to know that in a U.S. courtroom, you don’t get to keep secrets, and the facts are going to come out,” he said.

Attorney Randall Jones, who represents Sands China, could not be reached for comment Friday.

During the jurisdiction hearing, Adelson testified that he had “at least 34 good reasons” for firing Jacobs, but Jacobs claimed he was terminated “for blowing the whistle on improprieties and placing the interests of shareholders above those of Adelson.”

Adelson claims Jacobs made false allegations to blackmail the company.

Sands China is a Cayman Islands corporation that is 70 percent owned by Las Vegas Sands, and Sands China is publicly traded on the Hong Kong Stock Exchange.

Adelson, whose primary residence is in Las Vegas, testified that he does not run the day-to-day operations of either Las Vegas Sands or Sands China.

In Friday’s ruling, Gonzalez concluded that the control Adelson and Las Vegas Sands have over Sands China “goes far beyond the ordinary relationship of parent to subsidiary.”

Jacobs and others at Sands China were allowed to provide recommendations, the judge wrote , but “the decisions — large and small — were ultimately made by Adelson and LVS in Las Vegas.”

According to the ruling, Adelson and Michael Leven, then the president and COO of Las Vegas Sands, “formulated the strategy to terminate Jacobs.”

From Nevada, Adelson and Leven informed the Sands China board of the decision to fire Jacobs “after the decision was already made,” the judge wrote.

Gonzalez concluded that Sands China “will not suffer any burden defending this action in Nevada.”

According to her ruling, Sands China executives “routinely travel to Nevada and conduct business in Nevada on a systematic and continuous” basis.

The company “has not made a compelling case that exercising jurisdiction over it would be unreasonable,” the judge wrote.

According to Jacobs’ lawsuit, he is now a Florida resident “who also maintains a residence in Georgia.”

Bice said he and his client look forward to a trial on the merits of the case. No date has been set, but a footnote in Gonzalez’s decision indicates that “the parties will have only a few months to conduct the merits discovery and be ready for trial.”

In March, Gonzalez ordered hefty sanctions against Sands China for improperly withholding documents in the case. One sanction barred the company from calling any of its own witnesses during the jurisdiction hearing.