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Carri Geer Thevenot

Nevada Judge considers sanctions against Sands China Ltd.

9 March 2015

LAS VEGAS -- A Las Vegas judge is mulling what, if any, sanctions to impose on Sands China Limited for redacting personal information from documents the company produced out of Macau in January 2013.

District Judge Elizabeth Gonzalez, who heard nearly five hours of legal arguments on the topic Tuesday, said she plans to issue a written decision by early next week.

The issue of sanctions arose in a 2010 lawsuit filed by Steven Jacobs, the fired former president of Sands Macau. Gonzalez previously ruled that Sands China violated her September 2012 order in the case by redacting documents.

Jacobs’ attorney, Todd Bice, argued that Sands China should not be allowed to benefit from the violation.

“We are here today because of a long series of misrepresentations,” Bice told the judge on Tuesday.

Jacobs sued Las Vegas Sands Corp. and Sands China for breach of contract related to his termination and had asked the defendants to turn over about 100,000 emails and other documents.

In her order, Gonzalez ruled that neither defendant could raise the Macau Personal Data Protection Act as an objection to the disclosure of any documents.

She made the ruling after learning that “significant amounts of data from Macau related to Jacobs was transported to the United States” and reviewed by in-house counsel for Las Vegas Sands and outside counsel. The judge also determined that the transferred data was relevant to the ongoing question of whether the Nevada court has jurisdiction over Sands China.

The defendants concealed the existence of the transferred data from the court until June 2012, according to the judge’s order, in which she required the defendants to make a $25,000 contribution to the Legal Aid Center of Southern Nevada.

Gonzalez also ordered the defendants to cover Jacobs’ legal bills for nine “needless” hearings that involved issues related to the Macau Personal Data Protection Act.

“Unfortunately, your first sanctions order did not change this conduct,” Bice argued Tuesday.

The judge ruled in March 2013 that Sands China had violated her previous order by redacting documents based on the Macau law. She scheduled a hearing, which lasted a total of six days, to determine whether the company’s disobedience was willful and whether Jacobs has been prejudiced by the violation.

Randall Jones, who represents Sands China, argued that the company did not willfully violate the judge’s order. He also argued that Jacobs was not prejudiced by the redactions.

Jones said Gonzalez’s 2012 order put his client in an “extremely difficult position.”

David Fleming, general counsel for Sands China, testified that he “had no choice but to redact personal information from the documents.”

Violating Macau’s data protection law carried the risk of civil and criminal penalties, including possible imprisonment for the company’s officers and directors, Fleming said.

The witness said Macanese officials “were furious” about the prior release of data from the region.

“At the end of the day, I came to the conclusion that I could not, under any circumstances, breach Macau law,” Fleming said.

According to one court document, Sands China spent $2.4 million on procedures related to the document redaction. About 7,900 documents were redacted.

Bice said the amount spent on redactions shows that the defendants have unlimited resources. He said it also shows that monetary sanctions alone will not change their conduct.

“They will spend us all into the grave,” he argued.

Gonzalez has scheduled an April hearing to determine whether she has jurisdiction over the case.