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Adrienne Packer

Libel lawsuit motion granted in Vegas case

4 November 2008

LAS VEGAS, Nevada -- A federal bankruptcy judge Monday conditionally granted a motion that could end a contentious three-year-long libel lawsuit between Las Vegas Sands Chairman Sheldon Adelson and Las Vegas Review-Journal columnist John L. Smith.

U.S. District Judge Bruce Markell granted Adelson's request to dismiss his federal bankruptcy court action against Smith with prejudice, which prevents the plaintiff from bringing the same lawsuit against the same plaintiff in the future.

For the motion to be granted, two things must occur: Adelson has to agree to pay Smith's expenses of about $11,000 and a libel lawsuit brought by Adelson against Smith in California must be dismissed.

If Adelson does not agree with the ruling, a trial might be scheduled in December.

Adelson filed the libel lawsuit against Smith in 2005 in Los Angeles. Smith's case moved to Nevada in 2007, when he filed for bankruptcy protection. The California case was stayed after the bankruptcy filing.

Adelson's lawsuit stems from a couple of paragraphs in Smith's book "Sharks in the Desert," which was published in 2005 by Barricade Books Inc. Smith paraphrased and footnoted the Adelson-related information from a book by Sally Denton, but Smith's attorney Donald Campbell said Adelson never filed a libel suit against that writer. Adelson's attorney said in court Monday that Adelson never saw the passages in the Denton book.

Campbell told Markell on Monday that Adelson wanted to "walk away from the whole thing" when he learned that records obtained from the Nevada Gaming Control Board would be made public at trial. The contents of the records have not been disclosed.

"He would have chased Mr. Smith to the end of the Earth if it were not for these records," Campbell said of Adelson, who ranks 15th on Forbes' list of the world's billionaires.

Adelson initially asked Smith for $1 and an apology to settle the lawsuit. He later offered Smith $200,000 to go toward his daughter's medical costs. Adelson learned that Smith's daughter had been diagnosed with a brain tumor during the litigation. Smith turned down the offer, saying it would be unethical for a journalist to accept money.

Smith wrote a correction that was inserted in unsold copies of the book.

Markell questioned the merits of Adelson's case on Monday. Markell said at most, Smith was "hapless" in his research for the book.

"To be honest, I have not seen any evidence that Mr. Smith acted with malice," Markell said.

Adelson's lawyer Kathryn Catherwood argued against her client covering Smith's expenses related to the lawsuit, saying it was Smith's legal team who wanted to "ramp up" discovery, which racked up legal fees for both parties.

She said Adelson acted in good faith and tried on a number of occasions to settle the case with Smith. Because Smith was named the prevailing party, Adelson cannot claim to have won the lawsuit.

Adelson's settlement agreement with Barricade Books, which was also sued for libel, is scheduled to be heard on Nov. 20 in the District of New York. The two sides stipulated to a judgment of $250,000, but it is unlikely that Adelson will see any of that money.

Campbell said the publisher doesn't have $250,000 and owes more than $1 million to creditors, who must be paid first.

In a motion filed Monday, Campbell said Barricade simply entered the judgment to avoid additional costs, throwing Smith "under the bus." Campbell suggested that Smith was eager to go to trial because he believed the allegations were without merit. When Barricade consented to the judgment with Adelson, Campbell said it essentially damaged Smith's reputation.

Once the agreement was penned with the publishing company, Campbell said, Adelson was no longer interested in pursuing Smith.

"This deprives Mr. Smith the opportunity to clear his name at trial," Campbell said.