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Gaming Guru

Tim O'Reiley

Las Vegas Sands fined for "intention to deceive" court

17 September 2012

LAS VEGAS -- Finding that Las Vegas Sands and affiliate Sands China had shown an "intention to deceive the court," Clark County District Judge Elizabeth Gonzalez on Friday fined the companies $25,000 and imposed several other sanctions.

Besides the financial penalty, which will be donated to the Legal Aid Center of Southern Nevada, Gonzalez ordered Sands to cover the legal bills of former Sands China CEO Steven Jacobs for nine hearings that involved Macau's Personal Data Protection Act.

Jacobs, who was fired in 2010 and then sued the company for wrongful termination, had asked Sands to turn over about 100,000 emails and other documents to help him make his case. But for more than a year, the company argued in court that the data protection law forbids this even though copies were in Las Vegas and beyond the reach of Macau authorities.

Further, Gonzalez said the companies could not use the law in the future as a defense and could not claim that Jacobs improperly possessed about 40 gigabytes of electronic evidence, a flashpoint in the past.

In crafting the ruling, Gonzalez staked out a middle ground. Sands advocated limiting the penalties to a fine and an oral reprimand. Jacobs' attorneys pushed for sterner measures, including reimbursement for more legal bills and effectively ruling against Sands in a key part of the case.

Sands spokesman Ron Reese declined to comment on the outcome. Jacobs attorneys Todd Bice and James Pisanelli could not be reached for comment.

The nine-page ruling recounted testimony from the three-day hearing that began Monday, highlighted by the extraordinary sight of attorneys defending their actions from the witness stand, plus numerous court papers detailing how a computer hard drive containing the evidence that Jacobs sought had been shipped across the Pacific in August 2010 and then transferred to Sands' in-house computer network.

Corporate executives and Sands attorneys in the case could or did view the documents in Las Vegas, yet invoked the Macau law as a defense in yearlong hearings beginning in May 2011.

"As the transferred data had already been reviewed by counsel, the failure to disclose the existence of the transferred data to the court caused repeated and unnecessary (hearings)," Gonzalez wrote.

At another point, she added, "Given the number of occasions the (Macau law) and the production of (electronically stored information) by (Sands) was discussed there can be no other conclusions than that the conduct was repetitive and abusive."

Nevertheless, she declined to strike the defense that Sands China is beyond the reach of Nevada courts, an action that would have handed Jacobs an unopposed victory on the issue. Much of the legal combat in the case so far has stemmed from the jurisdiction question.

Jacobs sought the emails and documents to show that decisions made in Las Vegas controlled Sands China on many subjects. Included in the list was the allegation that Las Vegas Sands chairman and CEO Sheldon Adelson had personally approved a "prostitution strategy" for Macau, hotly denied by the company.