Why Is Steve Wynn Trying to Gut Nevada's Anti-SLAPP Law?

By | April 23, 2015

Casino mogul Steve Wynn, known for suing people who say things he does not like, is trying to grease the skids for such cases in Nevada, which since 2013 has had one of the country’s strongest statutes aimed at discouraging “strategic lawsuits against public participation” (SLAPPs). In a memo to state legislators, First Amendment lawyer Marc Randazza, who is based in Las Vegas, warns that a bill Wynn is pushing “guts” Nevada’s protections against frivolous defamation claims, taking the state “from first to worst” in this area of civil law.

S.B. 444, which was introduced at the behest of Wynn Resorts on March 23 and unanimously approved by the Nevada Senate on April 15, is scheduled to be considered by the Assembly Judiciary Committee on Friday. At an April 6 hearing of the Senate Judiciary Committee, Wynn Resorts lobbyist Todd Mason said “our intent today is to improve the existing law, not to roll back the SLAPP statute.” Mason said the revised law would “continue to protect the critical right for core First Amendment speech as well as protecting the right to petition.” But Randazza, who helped enact Nevada’s anti-SLAPP law, and Popehat’s Ken White highlight several changes that would make it easier for thin-skinned rich guys to punish their critics with litigation:

1. Nevada’s anti-SLAPP law, like those of other states, covers speech related to “an issue of public concern.” S.B. 444 narrows the definition of that phrase, saying it must be a topic that “concerns not only the speaker and the speaker’s audience, but the general public, and is not merely a subject of curiosity or general interest.” Randazza says that definition could exclude “consumer reviews, social commentary, and other forms of important public speech.”

 2. S.B. 444 shortens the amount of time a defendant has to file an anti-SLAPP motion after he is sued from 60 days, which is standard, to 20, which White calls “a very short period to find a lawyer and have that lawyer brief a potentially complex issue.”

3. S.B. 444 weakens the standard for the evidence a plaintiff must present to defeat an anti-SLAPP motion. Under current law, the plaintiff needs “clear and convincing evidence” that he has “a probability of prevailing”; the Wynn-backed bill changes that to “prima facie evidence.” It also says the plaintiff needn’t present evidence regarding the “subjective intent or knowledge of the defendant,” meaning he does not have to address the question of whether the defendant knew or should have known his statement was false—a crucial issue in defamation cases brought by public figures (such as Steve Wynn).

4. S.B. 444 limits the penalty for filing a SLAPP to paying the defendant’s legal expenses. Current law makes it possible to recover an additional $10,000 in statutory damages and gives SLAPP targets an affirmative cause of action that allows them to seek punitive damages. The bill eliminates the statutory damages and the cause of action. Those changes, White observes, “substantially reduce the deterrent effect of the statute.” Randazza notes that the possibility of punitive damages is especially important as a deterrent for wealthy litigants (such as Steve Wynn). 

5. S.B. 444 makes it easier for a plaintiff to obtain attorney’s fees from a defendant who files an unsuccessful anti-SLAPP motion. Under current law, the motion has to be “frivolous or vexatious”; the Wynn-backed bill says it’s enough to show the motion lacked “a reasonable basis.”

What’s in it for Steve Wynn? Las Vegas Review-Journal columnist John L. Smith notes that Wynn last year sued hedge fund manager James Chanos for slander in California, where he was defeated by that state’s anti-SLAPP law. Last month a federal judge dismissed the suit with prejudice after concluding that the comments to which Wynn objected, concerning his company’s operations in Macau, “do not amount to a statement of fact, but rather an opinion that is not actionable.” 

That was three weeks before the introduction of S.B. 444. The main witness who testified in favor of the bill was Mitchell Langberg, who represented Wynn in his lawsuit against Chanos. Langberg complained that Nevada’s anti-SLAPP law “allows for potentially meritorious lawsuits to be dismissed” by imposing excessively tight deadlines and too heavy a burden of proof on plaintiffs. Since Langberg thought Chanos’ comments, which a judge said clearly amounted to an expression of opinion, were actionable, his notion of meritorious lawsuits may not be the same as yours or mine. Langberg nevertheless claimed “I’m here to help you find the middle ground.”

Langberg said finding that middle ground requires limiting the scope of the anti-SLAPP law’s speech protections. “We think it’s important to narrow it closer to core First Amendment speech,” he said. For example, he said, a story about “a celebrity having an affair with another celebrity” would arguably be covered by the current law but not by S.B. 444, since that is not truly “an issue of public concern.” I’m not sure about that. What if the celebrities are socially conservative politicians?

In any case, if the celebrities have no hope of winning a libel suit because the story is demonstrably true, why should the author or publisher have to bear the legal cost of their anger any longer than necessary? The point of anti-SLAPP laws is to expeditiously dispose of baseless claims so that plaintiffs who bring them cannot punish the objects of their ire by subjecting them to a drawn-out legal process. That threat has a chilling effect on  speech even if the plaintiffs ultimately lose. Penalties for people who bring SLAPPs, by contrast, deter such intimidation without blocking truly meritorious claims.

Langberg has helped Wynn with various defamation claims over the years, including a 1995 lawsuit against Barricade Books over a catalog description of a Wynn biography by Smith, the Review-Journal columnist. In that case Wynn won a $3 million award that was overturned on appeal. The case, which dragged on for nine years, was ultimately settled out of court.

The advantages of S.B. 444 for a serial litigant (or his lawyer) are pretty clear. But why did the entire Nevada Senate go along? Nevada journalist Jon Ralston reports on Twitter that Sen. Tick Segerblom (D-Clark County) told him Democrats were “asleep at the wheel.” The lack of objections from First Amendment fans may be partly due to the vague online description of the bill: “Revises provisions governing civil actions.”

Mason and Langberg—Wynn’s lobbyist and lawyer, respectively—were the only witnesses heard by the Senate Judiciary Committee. There was no real debate about the bill, which was officially sponsored by the Senate Judiciary Committee rather than any particular legislator. Segerblom tells me the committee’s chairman, Greg Brower (R-Washoe County), “was responsible for the bill, although it was done at the request of Steve Wynn.” Segerblom says he regrets voting for the bill, “although I don’t fully understand the changes and how they will impact the real world.”

Randazza is hoping S.B. 444 can be stopped in the Assembly. “We’ve got a state that’s really interested in tort reform,” he says. “When you have tort reform that also protects  freedom of expression, why would you repeal that?”

Category: Liberty
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