Hearing set on Las Vegas Sands penalties

LAS VEGAS -- A Clark County District Court hearing starting Monday will determine whether Las Vegas Sands Corp. should face penalties for not disclosing the whereabouts of a computer hard drive sought as evidence by former Sands China CEO Steven Jacobs.

The hard drive contains about 100,000 emails and other documents that Jacobs wants to help build his case that he was wrongfully fired in July 2010. The company, however, had contended it could not turn over the data because it was in Macau and covered by the region's Personal Data Protection Act.

But midway through a routine status report in June, after recounting how much evidence had already been produced, Sands attorneys noted that the hard drive "was transferred to the United States in 2010 in error."

That otherwise innocuous line set in motion what Clark County District Judge Elizabeth Gonzalez, who will hear the case, last month termed "a very unusual hearing." After the revelation that the hard drive had been in Las Vegas all along, Gonzalez expressed unhappiness that she and her staff

Normally, attorneys request sanctions against their opponents for their conduct. In this case, Gonzalez initiated the hearing, something judges rarely do on their own, and asked attorneys for both sides to suggest penalties if she rules against the company.

"We deeply regret that our conduct has given rise to the court's concerns," Sands attorney J. Stephen Peek wrote in court papers.

At a different point, he added, "In hindsight, (Sands) acknowledges that (its) statements could have been clearer and more detailed and, had they been so, this hearing would not have been necessary. But the failure to do so was at most an honest mistake ..."

But, in court papers, Jacobs attorney Todd Bice derided Sands for "apparently want(ing) to claim that the last two years when they hid ball and made false arguments ... are all due to one isolated lapse of judgment by one or two counsel 'confused' about an 'evolving' foreign law."

Since the June revelation, Bice has called the incident part of a broader attempt by the company to hide evidence.

"It's not what they know but what they can prove, to use (Sands chairman and CEO Sheldon) Adelson's favorite saying," Bice said last month.

As something of a warm-up to the hearing, attorneys called Gonzalez twice Thursday while conducting a deposition of Adelson. The first time, according to court records, Gonzalez ordered Adelson's armed bodyguards to wait in the elevator lobby of an undisclosed building while Jacobs' attorneys questioned him.

Six hours later, the attorneys called again, prompting Gonzalez to rule that Adelson needed to answer questions about Jacobs' firing and where parts of the case belonged, in Las Vegas or Macau.