The U.S. Court of Appeals for the Second Circuit on Wednesday upheld the dismissal of a defamation suit brought by billionaire casino magnate Sheldon Adelson against the National Jewish Democratic Council for a 2012 online petition that stated Adelson personally approved of prostitution in his Asian casinos.
The Democratic organization created the petition to urge then-Republican presidential candidate Mitt Romney to return Adelson’s campaign donations. Adelson—a major GOP donor—was said to have “dirty,” “tainted” money from his Chinese operations, which supposedly were allowing prostitution at Adelson’s behest. The petition linked to a report from The Associated Press of a former executive in Adelson’s Chinese operations claiming in court papers that Adelson was aware and approved of prostitution at his operations in Macau.
In 2013, the appellate court upheld, in part, a previous dismissal of the defamation suit for failure to state a claim, as well as Nevada’s strategic lawsuit against public participation (anti-SLAPP) statute designed to protect freedom of speech.
However, the appellate court sent two certified questions to the Nevada Supreme Court for consideration. The first sought clarification whether a link in an online petition is protected under common-law fair report privilege. The second asked about whether the state’s anti-SLAPP law protected political speech not aimed at the government before the law was amended in 2013—the year after the petition went public.
In September, the Nevada court responded in the affirmative on both questions. The Second Circuit then ordered parties to brief on the responses. Adelson argued for a revival of his claims based on other non-privileged statements regarding using proceeds from prostitution as campaign contributions, while arguing that U.S. District Judge J. Paul Oetken of the Southern District of New York erred in holding that the statements were made without knowledge of falsehood—a requirement for defamation—and that he should have been allowed additional discovery on the anti-SLAPP’s scienter requirement.
The panel of Circuit Judges Guido Calabresi, Reena Raggi,and Denny Chin said the court’s previous affirmation of Oetken’s dismissal covered issues around statements of opinion. Further, Nevada’s response resolved the issue.
The panel acknowledged that it hadn’t addressed the knowledge of falsehood issue previously. “But, when we explained that the district court properly exercised its discretion in deciding not to allow discovery on the topic, we implicitly approved of the district court’s determination that, as a matter of law, appellees acted in good faith,” it found, affirming the district court’s refusal to allow more discovery.
Adelson’s legal team was led by Mayer Brown partner James Ferguson. Ballard Spahr attorney Lee Levine represented the National Jewish Democratic Council defendants‐appellees. Neither attorney could be reached for comment.
Adelson could not be reached for direct comment. A request for comment from the National Jewish Democratic Council was not returned.