UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW … · Gayle C. Sproul Seth D. Berlin Chad R. Bowman (pro hac vice) Rachel F. Strom LEVINE SULLIVAN KOCH & SCHULZ, LLP 321 West

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

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SHELDON G. ADELSON,

Plaintiff,

v.

DAVID A. HARRIS, MARC R. STANLEY, and

NATIONAL JEWISH DEMOCRATIC COUNCIL,

Defendants.

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Case No. 12-Civ-6052-JPO

ECF Case

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COMBINED REPLY MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’

SPECIAL MOTION TO DISMISS PURSUANT TO THE D.C. ANTI-SLAPP STATUTE

AND MOTION TO DISMISS PURSUANT TO RULE 12(b)(6)

Lee Levine (pro hac vice)

Gayle C. Sproul

Seth D. Berlin

Chad R. Bowman (pro hac vice)

Rachel F. Strom

LEVINE SULLIVAN KOCH & SCHULZ, LLP

321 West 44th Street, Suite 510

New York, New York 10036

Telephone: 212-850-6100

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

Counsel for Defendants

David A. Harris, Marc R. Stanley,

and National Jewish Democratic Council

Case 1:12-cv-06052-JPO Document 37 Filed 12/07/12 Page 1 of 35

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES .......................................................................................................... ii

I. DISTRICT OF COLUMBIA LAW APPLIES TO THIS ACTION ....................................1

A. New York’s Choice of Law Analysis ......................................................................1

B. D.C. Has the Most Significant Relationship to this Claim ......................................3

II. THE ANTI-SLAPP ACT DOES NOT VIOLATE THE SEVENTH AMENDMENT .......5

III. THE D.C. ANTI-SLAPP ACT APPLIES IN FEDERAL COURT .....................................8

A. The Erie Analysis ..................................................................................................10

B. The D.C. Anti-SLAPP Act Does Not Directly Collide with Rules 12 and 56 ......12

C. The D.C. Anti-SLAPP Statute Does Not Directly Collide with Rule 41(b) ..........14

D. The D.C. Anti-SLAPP Act Confers Substantive Rights and Remedies ................15

E. Erie’s Twin Aims Are Served by Application of the D.C. Anti-SLAPP

Statute ....................................................................................................................16

IV. THE PETITION IS A PRIVILEGED REPORT OF A JUDICIAL PROCEEDING. .......17

A. Hyperlinks Are a Critical Component of the Publication at Issue

and Provide the Necessary Attribution to the Jacobs Declaration .........................17

B. The Petition Provides a Full and Fair Account of the Jacobs Declaration ............19

V. THE REMAINING STATEMENTS ARE OPINION AND FAIR COMMENT .............20

VI IF THIS ACTION IS NOT DISMISSED, A STAY IS WARRANTED IN LIGHT OF

ONGOING PROCEEDINGS IN THE JACOBS ACTION ...............................................23


ii

TABLE OF AUTHORITIES

Page(s)

CASES

3M v. Boulter,

842 F. Supp. 2d 85 (D.D.C. 2012) .................................................................................9, 10, 13

Agora, Inc. v. Axxess, Inc.,

90 F. Supp. 2d 697 (D. Md. 2000),

aff’d, 11 F. App’x 99 (4th Cir. 2001) .....................................................................17, 18, 21, 22

Armington v. Fink,

2010 WL 743524 (E.D. La. Feb. 24, 2010) .............................................................................13

AroChem Int’l, Inc. v. Buirkle,

968 F.2d 266 (2d Cir. 1992)...................................................................................................4, 5

Auscape Int’l v. Nat’l Geographic Soc’y,

461 F. Supp. 2d 174 (S.D.N.Y. 2006)......................................................................................21

Baltazar v. Yates,

2010 WL 2195979 (C.D. Cal. Apr. 28, 2010) .........................................................................21

Batzel v. Smith,

333 F.3d 1018 (9th Cir. 2003) ...........................................................................................12, 16

Beacon Theaters, Inc. v. Westover,

359 U.S. 500 (1959) ...................................................................................................................6

Bio/Basics Int’l Corp. v. Ortho Pharm. Corp.,

545 F. Supp. 1106 (S.D.N.Y. 1982)...........................................................................................5

Biro v. Condé Nast,

-- F. Supp. 2d --, 2012 WL 3264059 (S.D.N.Y. Aug. 9, 2012) ...........................................7, 20

Block v. First Blood Assocs.,

691 F. Supp. 685 (S.D.N.Y. 1988) ............................................................................................5

Briggs v. Eden Council for Hope & Opportunity,

969 P.2d 564 (Cal. 1999) ...........................................................................................................7

Burlington Northern R.R. Co. v. Woods,

480 U.S. 1 (1987) .....................................................................................................................10

Bus. Guides, Inc. v. Chromatic Commc’ns Enters., Inc.,

498 U.S. 533 (1991) .................................................................................................................11


iii

Calvi v. Knox County,

470 F.3d 422 (1st Cir. 2006) ......................................................................................................6

Card v. Pipes,

398 F. Supp. 2d 1126 (D. Or. 2004) ........................................................................................13

Carolco Pictures Inc. v. Sirota,

700 F. Supp. 169 (S.D.N.Y. 1988) ............................................................................................5

Chamberlain v. Giampapa,

210 F.3d 154 (3d Cir. 2000).....................................................................................................15

Chandok v. Klessig,

648 F. Supp. 2d 449 (N.D.N.Y. 2009),

aff’d, 632 F.3d 803 (2d Cir. 2011) .............................................................................................8

City of New York v. United States,

179 F.3d 29 (2d Cir. 1999).........................................................................................................6

Cohen v. Beneficial Indus. Loan Corp.,

337 U.S. 541 (1949) .................................................................................................................11

Coles v. Washington Free Weekly, Inc.,

881 F. Supp. 26 (D.D.C. 1995),

aff’d, 88 F.3d 1278 (D.C. Cir. 1996) .......................................................................................22

Condit v. Dunne,

317 F. Supp. 2d 344 (S.D.N.Y. 2004)....................................................................................1, 3

Contemporary Mission, Inc. v. N.Y. Times Co.,

842 F.2d 612 (2d Cir. 1988).....................................................................................................19

Cooper v. Greeley,

1 Denio 347 (1845) ....................................................................................................................1

Dameron v. Washington Magazine, Inc.,

779 F.2d 736 (D.C. Cir. 1985) .................................................................................................18

Davis v. Costa-Gavras,

580 F. Supp. 1082 (S.D.N.Y. 1984)...........................................................................................2

Derbaremdiker v. Applebee’s Int’l Inc.,

2012 WL 4482057 (E.D.N.Y. Sept. 26, 2012) ........................................................................18

Diwan v. EMP Global LLC,

841 F. Supp. 2d 246 (D.D.C.),

appeal dismissed, 2012 WL 556277 (D.C. Cir. Feb. 6, 2012)...............................................8, 9


iv

Egiazaryan v. Zalmayev,

2011 WL 6097136 (S.D.N.Y. Dec. 7, 2011) .............................................................................8

Eklund v. City of Seattle Mun. Court,

410 F. App’x 14 (9th Cir. 2010) ..............................................................................................16

Ellingson v. Walgreen Co.,

78 F. Supp. 2d 965 (D. Minn.1999) .........................................................................................15

Erie v. Tompkins,

304 U.S. 64 (1938) .....................................................................................................8, 9, 10, 16

Farah v. Esquire Magazine,

863 F. Supp. 2d 29 (D.D.C. 2012) ...................................................................................8, 9, 13

Four Navy Seals v. Associate Press,

413 F. Supp. 2d 1136 (S.D. Cal. 2005) ....................................................................................13

Fteja v. Facebook, Inc.,

841 F. Supp. 2d 829 (S.D.N.Y. 2012)......................................................................................18

Gardner v. Martino,

563 F.3d 981 (9th Cir. 2009) ...................................................................................................12

Garman v. Campbell Cnty. Sch. Dist. No. 1,

630 F.3d 977 983 (10th Cir. 2010) ..........................................................................................10

Gasperini v. Ctr. for Humanities, Inc.,

518 U.S. 415 (1996) .................................................................................................................11

General Elec. Co. v. New York State Dep’t of Labor,

936 F.2d 1448 (2d Cir. 1991).....................................................................................................6

Gilman v. Spitzer,

--- F. Supp. 2d ----, 2012 WL 4510681 (S.D.N.Y. Oct. 1, 2012) ..............................................8

Godin v. Schencks,

629 F.3d 79 (1st Cir. 2010) .............................................................................................. passim

Goforth v. Avemco Life Ins. Co.,

368 F.2d 25 (5th Cir. 1966) .....................................................................................................20

Goldstein v. Cogswell,

1992 WL 131723 (S.D.N.Y. June 1, 1992) ...............................................................................5

Goldstein v. Time Warner N.Y. City Cable Grp.,

3 F. Supp. 2d 423 (S.D.N.Y. 1998) .........................................................................................24


v

Grass v. News Group Publ’ns, Inc.,

570 F. Supp. 178 (S.D.N.Y. 1983) ............................................................................................3

GTFM, LLC v. TKN Sales, Inc.,

257 F.3d 235 (2d Cir. 2001).......................................................................................................6

Haack v. City of Carson City,

2012 WL 3638767 (D. Nev. Aug. 22, 2012) .............................................................................9

Hanna v. Plumer,

380 U.S. 460 (1965) .............................................................................................................9, 10

Henry v. Lake Charles Am. Press, L.L.C.,

566 F.3d 164 (5th Cir. 2009) .............................................................................................13, 16

Herbert v. Lando,

441 U.S. 153 (1979) .................................................................................................................15

Hilton v. Hallmark Cards,

599 F.3d 895 (9th Cir. 2010) .......................................................................................12, 13, 14

Hometown Props., Inc. v. Fleming,

680 A.2d 56 (R.I. 1996) .............................................................................................................6

Howard Univ. v. Best,

484 A.2d 958 (D.C. 1984) .......................................................................................................18

Idema v. Wager,

120 F. Supp. 2d 361 (S.D.N.Y. 2000),

aff’d, 29 F. App’x 676 (2d Cir. 2002) ......................................................................................19

In re Digital Music Antitrust Litig.,

812 F. Supp. 2d 390 (S.D.N.Y. 2011)......................................................................................10

In re Suprema Specialties, Inc.,

285 F. App’x 782 (2d Cir. 2008) .............................................................................................16

In re Zyprexa Prods. Liab. Litig.,

2011 WL 5563524 (E.D.N.Y. Nov. 15, 2011) .........................................................................16

Jankovic v. Int’l Crisis Grp.,

593 F.3d 22 (D.C. Cir. 2010) .............................................................................................17, 18

John v. Douglas Cnty. Sch. Dist.,

219 P.3d 1276 (Nev. 2009) ........................................................................................................5


vi

Klayman v. Segal,

783 A.2d 607 (D.C. 2001) .......................................................................................................18

Klein v. Biben,

296 N.Y. 638 (1946) ................................................................................................................20

La Luna Enters., Inc. v. CBS Corp.,

74 F. Supp. 2d 384 (S.D.N.Y. 1999)......................................................................................2, 3

Lane v. Random House, Inc.,

985 F. Supp. 141 (D.D.C. 1995) ..............................................................................................22

Lee v. Bankers Trust Co.,

166 F.3d 540 (2d Cir. 1999).......................................................................................................2

Lee v. Pennington,

830 So. 2d 1037 (La. App. 2002)...........................................................................................6, 7

Levin v. McPhee,

917 F. Supp. 230 (S.D.N.Y. 1996),

aff’d, 119 F.3d 189 (2d Cir. 1997) .............................................................................................1

M’Culloch v. Maryland,

17 U.S. 316 (1819) .....................................................................................................................6

Machleder v. Diaz,

801 F.2d 46 (2d Cir. 1986).....................................................................................................2, 3

Maritima de Ecologia, S.A. v. Sealion Shipping Ltd.,

2011 WL 1465744 (S.D.N.Y.),

reconsideration denied, 2011 WL 2671541 (S.D.N.Y. July 6, 2011) .....................................25

Merrill Lynch, Pierce, Fenner & Smith Inc. v. Savino,

2007 WL 895767 (S.D.N.Y. Mar. 23, 2007) .............................................................................2

Milam v. State Farm Mut. Auto. Ins. Co.,

972 F.2d 166 (7th Cir. 1992) ...................................................................................................16

Miwon, U.S.A., Inc. v. Crawford,

629 F. Supp. 153 (S.D.N.Y. 1985) ..........................................................................................25

Nat’l Endowment for the Arts v. Finley,

524 U.S. 569 (1998) ...................................................................................................................6

Nat’l Fed’n of Indep. Bus. v. Sebelius,

132 S. Ct. 2566 (2012) ...............................................................................................................6


vii

Nevada Indep. Broad. Corp. v. Allen,

664 P.2d 337 (Nev. 1983) ..........................................................................................................5

Nexus v. Swift,

785 N.W.2d 771 (Minn. App. 2010) ......................................................................................6, 7

Nicosia v. De Rooy,

72 F. Supp. 2d 1093 (N.D. Cal. 1999) .....................................................................................22

Northon v. Rule,

637 F.3d 937 (9th Cir. 2011) ...................................................................................................12

Palmer v. Hoffman,

318 U.S. 109 (1943) .................................................................................................................11

Parklane Hosiery Co. v. Shore,

439 U.S. 322 (1979) ...................................................................................................................7

Pernell v. Southall Realty,

416 U.S. 363 (1974) ...................................................................................................................7

Phansalkar v. Andersen, Weinroth & Co.,

356 F.3d 188 (2d Cir. 2004).....................................................................................................18

Potts v. Dies,

132 F.2d 734 (D.C. Cir. 1942) .................................................................................................22

Q Int’l Courier, Inc. v. Seagraves,

1999 WL 1027034 (D.D.C. Feb. 26, 1999) .............................................................................19

Ragan v. Merchs. Transfer & Warehouse Co.,

337 U.S. 530 (1949) .................................................................................................................11

Redmond v. Gawker Media, LLC,

2012 WL 3243507 (Cal. App. Aug. 10, 2012) ........................................................................21

Retained Realty, Inc. v. McCabe,

376 F. App’x 52 (2d Cir. 2010) ...............................................................................................10

Sack v. Low,

478 F.2d 360 (2d Cir. 1973).....................................................................................................14

Sahara Gaming Corp. v. Culinary Workers Union,

984 P.2d 164 (1999) ...................................................................................................................5

Sandals Resorts Int’l v. Google, Inc.,

925 N.Y.S.2d 407 (1st Dep’t 2011) .........................................................................................22


viii

Semtek Int’l Inc. v. Lockheed Martin Corp.,

531 U.S. 497 (2001) ...........................................................................................................11, 14

Shady Grove Orthopedic Assocs. v. Allstate Ins. Co.,

130 S. Ct. 1431 (2010) ..................................................................................................... passim

Sherrod v. Breitbart,

843 F. Supp. 2d 83 (D.D.C. 2012) .........................................................................................8, 9

Silvercorp Metals Inc. v. Anthion Mgmt. LLC,

2012 WL 3569952 (Sup. Ct. N.Y. Cty. Aug. 16, 2012) ..........................................................22

Stuborn Ltd. P’ship v. Bernstein,

245 F. Supp. 2d 312 (D. Mass. 2003) ......................................................................................13

Synanon Church v. United States,

820 F.2d 421 (D.C. Cir. 1987) .................................................................................................25

Tellabs, Inc. v. Makor Issues & Rights, LTD,

551 U.S. 308 (2007) ...................................................................................................................7

United States ex rel. Newsham v. Lockheed Missiles & Space Co.,

190 F.3d 963 (9th Cir. 1999) .............................................................................................12, 17

United States v. Raines,

362 U.S. 17 (1960) .....................................................................................................................8

United States v. Salerno,

481 U.S. 739 (1987) ...................................................................................................................6

Walker v. Armco Steel Corp.,

446 U.S. 740 (1980) ...........................................................................................................10, 11

Weasel v. St. Alexius Med. Ctr.,

230 F.3d 348 (8th Cir. 2000) ...................................................................................................15

Weissinger v. United States,

423 F.2d 795 (5th Cir. 1970) ...................................................................................................14

Williams v. United States,

754 F. Supp. 2d 942 (W.D. Tenn. 2010)..................................................................................15

Zermeno v. Stratosphere Corp.,

2010 WL 2265167 (D. Nev. June 2, 2010) ................................................................................9


ix

RULES AND STATUTES

28 U.S.C. § 2072 ............................................................................................................................15

Cal. Code Civ. P. § 425.16.............................................................................................................12

D.C. Code § 16-5502(c)(2) ............................................................................................................15

Fed. R. Civ. P. 3 .............................................................................................................................11

Fed. R. Civ. P. 8 .............................................................................................................................11

Fed. R. Civ. P. 11 ...........................................................................................................................11

Fed. R. Civ. P. 12. .................................................................................................................. passim

Fed. R. Civ. P. 23 .....................................................................................................................10, 11

Fed. R. Civ. P. 41 ..........................................................................................................9, 11, 14, 15

Fed. R. Civ. P. 56 ...........................................................................................................9, 12, 13, 15

Fed. R. Civ. P. 59 ...........................................................................................................................11

Me. Rev. Stat. tit. 14, § 556 ...........................................................................................................13

Nev. Rev. Stat. §§ 41.637, 41.650 ...................................................................................................1

OTHER AUTHORITIES

Restatement (Second) of Conflicts of Laws § 6 ................................................................................1

Restatement (Second) of Conflicts of Laws § 145 ............................................................................5

Restatement (Second) of Conflicts of Laws § 150 ........................................................................1, 2

Robert D. Sack, Sack on Defamation: Libel, Slander & Related Problems § 2:4.6 (4th ed.

2012) ........................................................................................................................................19


Defendants respectfully submit this combined reply memorandum in support of their

pending motions to dismiss pursuant to the D.C. Anti-SLAPP Act and Rule 12(b)(6):

I. DISTRICT OF COLUMBIA LAW APPLIES TO THIS ACTION.

“He will not bring the action in New York, for we are known here, nor in Otsego,

for he is known there.” Cooper v. Greeley, 1 Denio 347, 348 (1845) (reciting

Horace Greeley’s well-known quip about James Fenimore Cooper).

Plaintiff Sheldon Adelson filed this defamation action in New York – despite it having no

connection to this lawsuit – over publications prepared in and disseminated from D.C. by two

D.C. residents. To avoid application of D.C. law and its Anti-SLAPP Act, Adelson argues for

Nevada law because he maintains a residence and operates some of his casinos there.1 But, the

parties’ connections to and the interests of each jurisdiction strongly favor application of D.C.

law.

A. New York’s Choice of Law Analysis

The parties agree that, in defamation actions, “New York applies the law of the state with

the most significant interest in the litigation.” Mem. at 23; Opp. at 11. Thus, Adelson’s

formalistic analysis under various “tests” notwithstanding, the fundamental inquiry is which state

has the most significant relationship to the dispute. See, e.g., Restatement (Second) of Conflicts

of Laws § 150 (apply law of state which, “with respect to the particular issue, has the most

significant relationship to the occurrence and the parties under the principles stated in § 6”);2

Condit v. Dunne, 317 F. Supp. 2d 344, 352, 354 n.2 (S.D.N.Y. 2004) (looking to nine-factors

“not as definitive statements of New York law, but as guidance consonant with the body of New

1 Like D.C., Nevada has also enacted an anti-SLAPP statute. See Nev. Rev. Stat. §§ 41.637,

41.650 (emphasis added). Should the Court decide that Nevada law applies, defendants reserve the right

to address that state’s law, including its anti-SLAPP Act, more fully. See Mem. at 2 n.2.

2 Section 6 focuses, inter alia, on “the relevant policies of [the] interested states,” their “interests

[in] the determination of the particular issue,” and “the basic policies underlying the particular field of

law.” See also Levin v. McPhee, 917 F. Supp. 230, 235-36 (S.D.N.Y. 1996) (applying § 6 to select law of

defendant’s domicile in defamation action), aff’d, 119 F.3d 189 (2d Cir. 1997).


2

York law,” which “‘applies the law of the state with the most significant interest in the

litigation’”) (citation omitted).3

While the state with the most significant interest is often plaintiff’s home state, where, as

here, another state has a greater relationship to the claim, New York courts have not hesitated to

apply that state’s law instead. See Mem. at 23 (citing cases). Indeed, because defamation claims

present an issue “of special concern to . . . authors and artists, and to the states of their domiciles

and principal places of business,” New York courts can and do apply the law of the defendant’s

domicile when the allegedly defamatory statements were prepared and published from that state.

See, e.g., Davis v. Costa-Gavras, 580 F. Supp. 1082, 1092 (S.D.N.Y. 1984).4

Adelson cites only three cases for the broad proposition that courts rarely apply the law

of a defendant’s domicile in defamation actions, see Opp. at 12, but they actually confirm that a

plaintiff’s domicile is, in and of itself, an insufficient basis for applying that state’s law. Rather,

in each of those cases, plaintiff’s domicile was “coupled” with some other dispositive factor

favoring that state’s law. See Machleder v. Diaz, 801 F.2d 46, 52 (2d Cir. 1986) (New Jersey

law applied where reporter conducted newsgathering in New Jersey, because New Jersey’s

3 The Second Circuit has questioned whether the “New York Court of Appeals would adopt” the

nine-factor test Adelson invokes, Lee v. Bankers Trust Co., 166 F.3d 540, 545-46 (2d Cir. 1999), and

“other district courts have noted that it has not found favorable use among recent New York decisions,”

Merrill Lynch, Pierce, Fenner & Smith Inc. v. Savino, 2007 WL 895767, at *7 (S.D.N.Y. Mar. 23, 2007).

See also La Luna Enters., Inc. v. CBS Corp., 74 F. Supp. 2d 384, 389 n.3 (S.D.N.Y. 1999) (Opp. at 12,

19) (declining to apply nine-factor test but noting court’s analysis led to same result). Moreover, Adelson

should not be permitted to manipulate the nine-factor test by filing suit in a state with no connection to the

dispute and then claiming that fewer factors favor application of the law of defendant’s domicile than in

cases where that state is also the forum. See Opp. at 14. Indeed, in applying the various tests, courts have

emphasized that “such contacts should not merely be enumerated, but must be evaluated according to

their relative importance with respect to the particular issues.” Davis, 580 F. Supp. at 1092.

4 While elsewhere invoking Davis because it applies the nine-factor test, see Opp. at 12, 14,

Adelson then challenges its result – application of the law of defendant’s domicile where the publication

had been prepared and published – ostensibly because the court misquoted a comment to Restatement

§ 150, see id. at 16 n.7. Given that the court in Davis looked to the Restatement only as one of several

ways to determine which state’s law had the most significant relationship to that defamation claim, see

580 F. Supp. at 1091, it is hard to see how misquoting two words would have changed the outcome.


3

plaintiff’s domicile “[c]oupled with New Jersey’s additional interest in governing the fault of

those who come within its boundaries to investigate the news and later broadcast it there . . . call

for the application of New Jersey law”); La Luna, 74 F. Supp. 2d at 389 (Florida law applied to

suit by Florida nightclub where “CBS filmed footage of plaintiff’s establishment” in Florida);

Condit, 317 F. Supp. 2d at 355 (applying California law where defendant’s comments “have no

specific connection to New York, except that defendant happened to be physically present in

New York when he uttered the statements,” and defendant “did not speak . . . through a New

York media outlet about a matter of national significance”). Here, defendants did not travel to

Nevada in connection with the publications at issue. And, unlike the little known plaintiffs in La

Luna and Machleder, Adelson has a concededly international reputation. Compl. ¶¶ 4, 16-22.

B. D.C. Has the Most Significant Relationship to this Claim.

The Parties’ Connection to Nevada: While Adelson claims to have his principal

residence in Nevada, it is well-settled that “the plaintiff’s domicile should not be transferred into

a rigid rule for determining choice of law issues in libel actions.” Grass v. News Group Publ’ns,

Inc., 570 F. Supp. 178, 185 (S.D.N.Y. 1983) (citations omitted). Recognizing this, Adelson

contends – without any evidentiary support for this or any other of his contentions – that his case

is about “business decisions” he “made in Nevada,” his “personal funds” which “are managed

from Nevada,” and statements solely about whether he approved of prostitution “at his casinos.”

Opp. at 13, 20. But the publications at issue address prostitution at Adelson’s casinos in Macau;

his contributions to the Republican Party and a number of Super-PACs headquartered in D.C.;

and investigations undertaken by the United States Department of Justice and SEC.5 Moreover,

5 Adelson does not contest reports that (a) he traveled to Macau to supervise his casinos –

including on the day that more than 100 prostitutes and 22 pimps were arrested on his premises; (b) Senator John McCain criticized Adelson’s contributions as improper “foreign” money; or (c) the


4

when it suited his purposes in the Jacobs Action, Adelson’s company argued that the Macau

casinos are not and have never been managed from Nevada. Strom Dec. ¶¶ 38, 39. As for

defendants, none has any connection to Nevada. They did not travel there to prepare the

publications, and their substance concerns Macau, China, and federal agencies in Washington.

The Parties’ Connection to the District of Columbia: The allegedly defamatory

publications were prepared in and “emanated” from D.C., see Mem. at 24; Harris Dec. ¶¶ 10-11,

14; see also Opp. at 18 n.8. Two defendants are D.C. residents, and the third helped prepare the

Statement while in D.C. Harris Dec. ¶¶ 2, 5, 15. In response to this undisputed showing,

Adelson argues only that he has a “lack of connection to DC.” Opp. at 14. This contention is

demonstrably false. Adelson has contributed literally millions of dollars to political action

committees headquartered in D.C. See Strom Dec. ¶ 18 & Ex. 8, 33; Strom Reply Dec. ¶¶ 1-8 &

Exs. 119-126. He is identified, on its website, as a board member of the Republican Jewish

Coalition, which is headquartered in D.C. Id. ¶ 9 & Ex. 127. And, his company pays substantial

sums to and employs professional lobbyists in D.C. Id. ¶¶ 10-12 & Exs. 128-30. See also id.

¶ 19 & Ex. 138 (quoting Adelson as saying “he has many friends in Washington, ‘but the reasons

aren’t my good looks and charm. It’s my ‘pocket personality,’’ referring to his donations”); id.

¶¶ 13-18 & Exs. 131-137 (documenting numerous other connections to D.C.).

The Respective Interests of Each Jurisdiction: While Nevada concededly has an

interest in protecting the reputation of its residents, in this context, D.C. has the stronger interest

in protecting the rights of its citizens. Indeed, the law of defendant’s domicile typically governs

issues related to privileges and immunities precisely because these defenses are meant to protect

defendants. See AroChem Int’l, Inc. v. Buirkle, 968 F.2d 266, 270-71 (2d Cir. 1992) (because the

federal government is investigating his companies for alleged bribes to Chinese officials. Harris Decl. Exs. B-E; Strom Exs. 3, 4, 28, 55-64, 69-74, 77-78, 83-87.


5

“‘purpose of a common law or statutory privilege is the regulation of defamatory conduct that

occurs within a state’s borders,’” privilege “lose[s] its force if weight were given to the domicile

of the parties or the place of injury in determining choice of law”) (applying California judicial

proceeding privilege); Restatement (Second) of Conflicts of Laws § 145 cmt. d.6

The D.C. Anti-SLAPP Act provides defendants with a substantive “immunity” in

connection with “constitutionally protected actions on matters of public interest.” Strom Ex. 116

at 1, 4. This important policy is consonant with and will not frustrate Nevada’s interest, as it too

has a strong preference for “filter[ing] unmeritorious claims in an effort to protect citizens from

costly and retaliatory lawsuits arising from their right to free speech.” John v. Douglas Cnty.

Sch. Dist., 219 P.3d 1276, 1282 (Nev. 2009) (applying Nevada anti-SLAPP statute); see note 1

supra. Similarly, the privileges afforded reports of judicial proceedings and fair comment are

important protections for D.C. speakers and are fully consistent with those of Nevada. See

Sahara Gaming Corp. v. Culinary Workers Union, 984 P.2d 164 (1999) (absolute privilege for

reports of official proceedings); Nevada Indep. Broad. Corp. v. Allen, 664 P.2d 337, 343 n.6

(Nev. 1983) (Opp. at 41) (“fair comment” protected by constitutional opinion doctrine).

In sum, the parties’ connections to each jurisdiction, the publications’ contents and the

interests of each jurisdiction all favor application of D.C. law.

II. THE ANTI-SLAPP ACT DOES NOT VIOLATE THE SEVENTH AMENDMENT.

The District of Columbia broke no new ground in joining nearly thirty other states that

have enacted anti-SLAPP legislation. Courts have routinely rejected Seventh Amendment

6 See Goldstein v. Cogswell, 1992 WL 131723, *25 n.32 (S.D.N.Y. June 1, 1992) (“Since the

letter was apparently written in New York. . . , it is appropriate to apply New York’s substantive law

regarding privileges”); Bio/Basics Int’l Corp. v. Ortho Pharm. Corp., 545 F. Supp. 1106, 1113-14

(S.D.N.Y. 1982) (“the state where the allegedly defamatory statement was made” may apply to any

immunity or privilege); Block v. First Blood Assocs., 691 F. Supp. 685, 698 (S.D.N.Y. 1988) (applying

New York privilege to California plaintiff’s defamation claim against New York defendant); Carolco

Pictures Inc. v. Sirota, 700 F. Supp. 169, 171 (S.D.N.Y. 1988) (same).


6

challenges to those statutes. See, e.g., Hometown Props., Inc. v. Fleming, 680 A.2d 56, 60 (R.I.

1996); Lee v. Pennington, 830 So. 2d 1037, 1043 (La. App. 2002); Nexus v. Swift, 785 N.W.2d

771, 778 (Minn. App. 2010) (“[W]e observe that at least 24 states have passed anti-SLAPP

statutes. Nexus does not cite, and we do not find, any authority holding any of these statutes

unconstitutional. Rather, the anti-SLAPP statutes that have been challenged have been upheld.”).

Adelson nevertheless asks this Court to declare the D.C. Act facially unconstitutional,

invoking a method of constitutional adjudication “‘that has been employed by the [Supreme]

Court sparingly and only as a last resort.’” Nat’l Endowment for the Arts v. Finley, 524 U.S.

569, 580 (1998). Indeed, such “a facial challenge to a legislative act ‘is, of course, the most

difficult challenge to mount successfully, since the challenger must establish that no set of

circumstances exists under which the act would be valid.’” General Elec. Co. v. New York State

Dep’t of Labor, 936 F.2d 1448, 1456 (2d Cir. 1991) (quoting United States v. Salerno, 481 U.S.

739, 745 (1987)); City of New York v. United States, 179 F.3d 29, 33 (2d Cir. 1999).7

Adelson’s constitutional challenge relies on his prediction that the D.C. Act’s “likelihood

of success on the merits” requirement will necessitate “detailed and extensive fact-finding.”

Opp. at 22. Even if that were so, however, because “the Seventh Amendment’s jury trial right

. . . exists only with respect to genuinely disputed issues of material fact,” Calvi v. Knox County,

470 F.3d 422, 427 (1st Cir. 2006), there is no Seventh Amendment concern presented by

7 Rather than attempt to apply the governing standard, Adelson cites two cases, see Opp. at 21,

standing for the unremarkable and in this context irrelevant proposition that legislation must be

“‘consist[ent] with the letter and spirit of the constitution’” under the Necessary and Proper Clause. See

Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2579 (2012) (quoting M’Culloch v. Maryland, 17

U.S. 316, 421 (1819)). Neither case addresses the Seventh Amendment. In addition, the language

Adelson quotes from GTFM, LLC v. TKN Sales, Inc., 257 F.3d 235, 238 (2d Cir. 2001) (Opp. at 21), is

actually taken from the underlying district court decision – which the Second Circuit reversed, id. at

245. That underlying decision, in turn, referenced a 1959 Supreme Court ruling addressing whether

specific claims should be deemed equitable or legal for purposes of the Seventh Amendment, an issue not

presented here. See Beacon Theaters, Inc. v. Westover, 359 U.S. 500 (1959) (Opp. at 21).


7

applying the D.C. Act to any of the three issues currently before the Court, see Parklane Hosiery

Co. v. Shore, 439 U.S. 322, 336 (1979) (“The Seventh Amendment has never been interpreted in

the rigid manner advocated by the petitioners. On the contrary, many procedural devices

developed since 1791 that have diminished the civil jury’s historic domain have been found not

to be inconsistent with the Seventh Amendment.”). All three issues are routinely adjudicated as

a matter of law on pretrial motions, see Mem. at 32, 37, 41; Biro v. Condé Nast, -- F. Supp. 2d --,

2012 WL 3264059, at *12, 30 (S.D.N.Y. Aug. 9, 2012), and they raise no conceivable Seventh

Amendment concern. Moreover, literally hundreds of anti-SLAPP motions have been decided

based either on analogous legal issues or on factual records involving no disputed issues of

material fact, see, e.g., Mem. at 27-28 & n.20; Part III infra, driven in no small part by the

judicial preference for early adjudication of defamation claims even outside the SLAPP context.

Thus, despite the fact that one might imagine an anti-SLAPP motion turning on a central

disputed issue of material fact, courts have refused to sustain Seventh Amendment challenges

based on a plaintiff’s speculation that a given anti-SLAPP statute could in theory be applied

unconstitutionally. See Godin v. Schencks, 629 F.3d 79, 90 n.18 (1st Cir. 2010); Briggs v. Eden

Council for Hope & Opportunity, 969 P.2d 564, 574-75 (Cal. 1999); see Lee, 830 So. 2d at 1043;

Nexus, 785 N.W.2d at 782; see also Pernell v. Southall Realty, 416 U.S. 363, 365 (1974)

(enforcing “‘cardinal principle’” of constitutional avoidance in Seventh Amendment challenge).

So, too, here the D.C. Act provides for permissible “gatekeeping judicial determinations” that

“prevent submission of claims to a jury’s judgment without violating the Seventh Amendment.”

Tellabs, Inc. v. Makor Issues & Rights, LTD, 551 U.S. 308, 327 n.8, 329 (2007) (statute requiring

plaintiff in securities litigation to “demonstrate that it is more likely than not that the defendant


8

acted with scienter,” and judge to weigh competing inferences from alleged facts in adjudicating

motion to dismiss, does not violate Seventh Amendment).8

III. THE D.C. ANTI-SLAPP ACT APPLIES IN FEDERAL COURT.

Adelson next contends that the D.C. Anti-SLAPP Act “cannot be applied by a federal

court sitting in diversity.” Opp. at 22. His brief, however, fails even to acknowledge the

substantial body of case law, including every federal appellate decision to address the issue,

reaching the opposite conclusion. See Mem. at 27-28 n.20 (citing more than twenty such cases).9

Similarly, Adelson gives short shrift to several decisions by district courts sitting in D.C. which

establish that the D.C. Act itself properly applies in federal court. Thus, he incorrectly dismisses

as unpublished, Farah v. Esquire Magazine, 863 F. Supp. 2d 29 (D.D.C. 2012) (Opp. at 27),

which conducted a detailed analysis of the statute, invoked decisions of the First, Fifth and Ninth

Circuits applying anti-SLAPP statutes as substantive protections of state law under Erie, and

dismissed claims for defamation and related torts under the D.C. Act. He likewise fails to

acknowledge that, in Sherrod v. Breitbart, 843 F. Supp. 2d 83, 85 (D.D.C. 2012), the court found

that “the legislative history make[s] clear that the D.C. Anti-SLAPP Act is substantive” such that

it would apply in federal court.10

See also Diwan v. EMP Global LLC, 841 F. Supp. 2d 246, 247

8 For the same reason, Adelson lacks standing to assert such a challenge, because “one to whom

application of a statute is constitutional will not be heard to attack the statute on the ground that impliedly

it might also be taken as applying to other persons or other situations in which its application might be

unconstitutional.” United States v. Raines, 362 U.S. 17, 21 (1960). At this juncture in these proceedings,

the Court has, at Adelson’s request, limited the issues under consideration in connection with the “success

on the merits” prong of the Anti-SLAPP Act to three issues of law that can be decided without discovery,

much less the resolution of disputed issues of material fact at a trial. Dkt. #25.

9 Since defendants filed their motions, this Court adjudicated but denied on its merits a claim

under New York’s anti-SLAPP Act. See Gilman v. Spitzer, --- F. Supp. 2d ----, 2012 WL 4510681, at *7-

9 (S.D.N.Y. Oct. 1, 2012) (citing Chandok v. Klessig, 648 F. Supp. 2d 449, 460 (N.D.N.Y. 2009), aff’d,

632 F.3d 803 (2d Cir. 2011); Egiazaryan v. Zalmayev, 2011 WL 6097136 (S.D.N.Y. Dec. 7, 2011)).

10 Sherrod declined to apply the D.C. Act retroactively because it affords substantive protections

and only procedural statutes are applied retroactively under D.C. law. 843 F. Supp. 2d at 84-85. The

Court added that, were the statute procedural, Erie would bar its application in federal court, but reiterated


9

n.1 (D.D.C.) (adjudicating but denying motion under D.C. Act because non-moving parties “are

likely to succeed on the merits”), appeal dismissed, 2012 WL 556277 (D.C. Cir. Feb. 6, 2012).

As the Sherrod court further explained, “the statutory text” also “supports the conclusion

that the statute is substantive.” 843 F. Supp. 2d at 85 n.4. For example, the Act “shifts the

burden of proof to the plaintiff to show her claims are likely to succeed,” and “‘it is long settled

that the allocation of [the] burden of proof is substantive in nature and controlled by state law.’”

Id. (quoting Godin, 629 F.3d at 89). Similarly, the Act provides for an award of “attorneys’ fees

and costs for the prevailing party,” and “such statutory provisions are substantive in nature” as

well. Id. See also Farah, 863 F. Supp. 2d at 36 n.10 (“It was certainly the intent of the D.C.

Council and the effect of the law . . . to have substantive consequences.”).11

While effectively ignoring this authority, Adelson’s argument is premised on 3M v.

Boulter, 842 F. Supp. 2d 85 (D.D.C. 2012).12

In that case, the district court analyzed the D.C.

Act under Erie and Hanna v. Plumer, 380 U.S. 460 (1965), and their progeny, including Shady

Grove Orthopedic Assocs. v. Allstate Ins. Co., 130 S. Ct. 1431 (2010). It concluded that the Act

conflicts with Federal Rules 12, 41 and 56 and therefore cannot be enforced in federal court. As

explained below, however, that lone decision and Adelson’s arguments which follow from it do

not withstand reasonable scrutiny.

that the Act was substantive for that purpose as well. Id. at 85 (citing Erie v. Tompkins, 304 U.S. 64

(1938)). See also Opp. at 28 n.12 (conceding that Sherrod held that Act has “substantive consequences”).

11 Having insisted that Nevada law applies, Opp. at 11-20, Adelson nevertheless fails to

acknowledge that federal courts routinely apply its anti-SLAPP statute, see note 1 supra, to grant special

motions to dismiss. See, e.g., Haack v. City of Carson City, 2012 WL 3638767 (D. Nev. Aug. 22, 2012);

Zermeno v. Stratosphere Corp., 2010 WL 2265167, at *1 n.1 (D. Nev. June 2, 2010).

12 Although the Boulter decision had been appealed and consolidated for argument with the

appeal in Sherrod, the Boulter case was subsequently settled and the appeal has now been dismissed.

Strom Reply Exs. 142, 143. In the surviving Sherrod appeal, the D.C. Circuit issued an emergency order

finding that the district court lacked jurisdiction to proceed with discovery based on appellant’s

contention that the Act “provides a defendant with protections that are in the nature of immunity from

trial.” Sherrod v. Breitbart, No. 11-7088 (D.C. Cir. Nov. 29, 2012) (Strom Reply Ex. 144).


10

A. The Erie Analysis

The “broad command of Erie” is that “federal courts sitting in diversity . . . apply state

substantive law and federal procedural law.” Hanna, 380 U.S. at 465. The first question,

therefore, is whether a federal rule “answers the question in dispute,” Shady Grove, 130 S. Ct. at

1437 (Scalia, J.), or whether “the scope of the federal rule is sufficiently broad to control the

issue before the court, thereby leaving no room for the operation of seemingly conflicting state

law,” id. at 1451 (Stevens, J.) (quoting Burlington Northern R.R. Co. v. Woods, 480 U.S. 1, 4-5

(1987)) (emphasis added).13

Where there is no “direct collision” between the federal rule and

state statute, or where they can both “can exist side by side” with “each controlling its own

intended sphere of coverage without conflict,” Walker v. Armco Steel Corp., 446 U.S. 740, 750

n.9, 752 (1980), the court proceeds to evaluate whether the failure to apply state law would

frustrate the “twin aims” of Erie: “discouragement of forum-shopping and avoidance of

inequitable administration of the laws,” Hanna, 380 U.S. at 468.

13

In Shady Grove, Justice Scalia announced the judgment of the Court that Fed. R. Civ. P. 23

directly conflicted with a state statute, but marshaled five votes only with respect to Parts I and II-A of his

opinion. Justice Stevens concurred in part and concurred in the judgment, and his opinion garnered five

votes with respect to the balance of the analysis. See also Shady Grove, 130 S. Ct. at 1463 n.2 (Ginsburg,

J., dissenting). Subsequent courts have generally concluded that “‘Justice Stevens’ concurrence is the

controlling opinion by which interpreting courts are bound,’” In re Digital Music Antitrust Litig., 812 F.

Supp. 2d 390, 415 (S.D.N.Y. 2011) (citation omitted); see also Garman v. Campbell Cnty. Sch. Dist. No.

1, 630 F.3d 977 983 n.6 (10th Cir. 2010) (same), cert. denied, 132 S. Ct. 95 (2011), or at a minimum that

it controls everything other than Parts I and II-A of Justice Scalia’s opinion, see Boulter, 842 F. Supp. 2d

at 95 n.7. Thus, Adelson’s contentions that “Part II.B of [Justice Scalia’s opinion in] Shady Grove . . .

was joined by a majority of the justices,” Opp. at 24 n.9, and that Justice Stevens’ opinion “is not the law

in the District of Columbia as it was not joined by other justices,” id. at 26 n.11, are simply wrong.

Similarly, to the extent Boulter relied on portions of Justice Scalia’s opinion that even that court agreed

are not controlling, see 842 F. Supp. 2d at 110 (“federal rule is valid so long as it ‘really regulates

procedure’”) (quoting Shady Grove, 130 S. Ct. at 1442 (Scalia, J., Part II-B)), its conclusion is also in

error. Regardless, in this case, the differences between the two Justices’ opinions in Shady Grove are

unlikely to matter given the overwhelming weight of authority concluding that anti-SLAPP statutes do

not collide with or even address the same question as the Federal Rules. See, e.g., Retained Realty, Inc. v.

McCabe, 376 F. App’x 52, 55 n.1 (2d Cir. 2010) (noting that Shady Grove “does not set forth a single

test” but reaching same result “[u]nder either of these tests”).


11

Where there is a direct collision, however, the Court analyzes whether “application of the

federal rule ‘represents a valid exercise’ of the ‘rulemaking authority [under] the Rules Enabling

Act,’” bearing in mind the statutory “mandate that federal rules ‘shall not abridge, enlarge or

modify any substantive right’” under state law. Shady Grove, 130 S. Ct. at 1451 (Stevens, J.)

(citations omitted). This “second step of the inquiry may well bleed back into the first” if a

federal rule would curtail a state substantive right because the court must also then “consider

whether the rule can reasonably be interpreted to avoid that impermissible result.” Id. at 1452.

“A federal rule, therefore, cannot govern a particular case in which the rule would displace a

state law that is procedural in the ordinary use of the term but is so intertwined with a state right

or remedy that it functions to define the scope of the state-created right.” Id.

Applying these principles in Shady Grove, the Court held that Rule 23, which sets forth

the conditions under which a “‘class action may be maintained,’” supplanted a state rule

providing that certain claims “‘may not be maintained as a class action’” because they “attempt[]

to answer the same question.” Id. at 1437-38 (Scalia, J.). The Court also found no issue under

the Rules Enabling Act because the state statute’s limitation on class actions did not affect the

substantive rights of the class plaintiffs who could still assert individual claims in state court,

even if they were prohibited from bringing them as a class action. Id. at 1457-60 (Stevens, J.).14

14

In reaching that unremarkable conclusion, the Court in Shady Grove did not purport to sweep

away a long line of authority holding that other federal rules do not directly collide with or displace state

statutes – even in cases in which the state statutes are decidedly more procedural than the D.C. Anti-

SLAPP Act. See, e.g., Palmer v. Hoffman, 318 U.S. 109, 117 (1943) (Rule 8(c) and state burdens of

proof); Ragan v. Merchs. Transfer & Warehouse Co., 337 U.S. 530, 531-33 (1949) (Rule 3 and

commencement of action under state law for limitations purposes); Walker, 446 U.S. at 749-52 (same);

Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 556-57 (1949) (then Rule 23 and state bond

requirements); Bus. Guides, Inc. v. Chromatic Commc’ns Enters., Inc., 498 U.S. 533, 551-54 (1991)

(Rule 11 and state malicious prosecution laws); Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 422

(1996) (then Rule 59(a) and state standards for excessive jury verdicts); Semtek Int’l Inc. v. Lockheed

Martin Corp., 531 U.S. 497, 503 (2001) (Rule 41(b) adjudication on merits and state statute of

limitations).


12

B. The D.C. Anti-SLAPP Act Does Not Directly Collide with Rules 12 and 56.

Virtually every federal court – including every federal appellate court – to have

considered the question has recognized that anti-SLAPP statutes can exist side by side with

Rules 12 and 56. As the Ninth Circuit held in United States ex rel. Newsham v. Lockheed

Missiles & Space Co., 190 F.3d 963 (9th Cir. 1999), California’s anti-SLAPP statute – which,

like the D.C. Act, requires a plaintiff to demonstrate a “probability that [he] will prevail,” Cal.

Code Civ. P. § 425.16 – “‘can exist side by side’” with the Federal Rules, “‘each controlling its

own intended sphere of coverage without conflict.’” 190 F.3d at 972 (citation omitted). The

court explained that a defendant “may bring” an anti-SLAPP motion in federal court and, “[i]f

unsuccessful, the litigant remains free to bring a Rule 12 motion to dismiss, or a Rule 56 motion

for summary judgment.” Id. Thus, the court “fail[ed] to see how the prior application of the

anti-SLAPP provisions will directly interfere with the operation of” Rules 12 or 56 since there

were no “federal interests that would be undermined by application of the anti-SLAPP

provisions” and “California ha[d] articulated the important, substantive state interests furthered

by the” statute. Id. at 973. See also Batzel v. Smith, 333 F.3d 1018, 1025-26 (9th Cir. 2003);

Hilton v. Hallmark Cards, 599 F.3d 895, 900 n.2 (9th Cir. 2010). The Ninth Circuit similarly

upheld application in federal court of Oregon’s anti-SLAPP statute, which also requires a

plaintiff to establish a “probability that [she] will prevail on the claim.” See Gardner v. Martino,

563 F.3d 981, 986 (9th Cir. 2009); Northon v. Rule, 637 F.3d 937, 938-39 (9th Cir. 2011).

Applying Shady Grove, the First Circuit explained that the “similarities between [Maine’s

anti-SLAPP statute] and Rules 12 and 56 as mechanisms to efficiently dispose [of] meritless

claims before trial occurs does not resolve the issue.” Godin, 629 F.3d at 89 n.16.15

Rather,

15

The Maine statute requires a plaintiff to demonstrate that “‘the moving party’s exercise of its

right of petition was devoid of any reasonable factual support or any arguable basis in law and that the


13

“Federal Rules 12(b)(6) and 56 are addressed to different (but related) subject-matters,” and do

not “attempt[] to answer the same question” as the anti-SLAPP act. Id. at 88. Unlike the federal

rules, the First Circuit recognized, an anti-SLAPP statute provides a substantive limitation on

state law where “the claims in question rest on the defendants’ protected petitioning conduct”

and “the plaintiff cannot meet the special rules . . . created to protect such petitioning activity

against lawsuits.” Id. at 89. Because the anti-SLAPP statute is “‘so intertwined with a state right

or remedy that it functions to define the scope of the state-created right,’ it cannot be displaced

by Rule 12(b)(6) or Rule 56.” Id. (citation omitted).16

See also Henry v. Lake Charles Am.

Press, L.L.C., 566 F.3d 164 (5th Cir. 2009) (Louisiana statute, requiring plaintiff to show

“probability of success on the claim,” provides substantive immunity applicable in federal court).

In addition, the actual experience of courts around the country supports the conclusion

that anti-SLAPP statutes can and do exist side by side with Rules 12 and 56. See, e.g., Boulter,

842 F. Supp. 2d at 111-20 (denying anti-SLAPP motion but granting Rule 12(b)(6) motion);

Farah, 863 F. Supp. 2d at 36-40 (dismissing defamation claim under both D.C. Act and Rule

12(b)(6)); Card v. Pipes, 398 F. Supp. 2d 1126, 1136-37 (D. Or. 2004) (granting motions under

both Oregon statute and Rule 12(b)(6)); Four Navy Seals v. Associate Press, 413 F. Supp. 2d

1136, 1140, 1149-50 (S.D. Cal. 2005) (same under California statute and Rule 12(b)(6));

Armington v. Fink, 2010 WL 743524, at *3 n.2 (E.D. La. Feb. 24, 2010) (Louisiana anti-SLAPP

statute “does not directly collide with Rule 56. Rule 56 summary judgment remains available to

the parties . . . .”). As the Ninth Circuit explained in Hilton:

moving party’s acts caused actual injury to the responding party.’” Godin, 629 F.3d at 82 (quoting Me.

Rev. Stat. tit. 14, § 556).

16 Adelson relies on Stuborn Ltd. P’ship v. Bernstein, 245 F. Supp. 2d 312 (D. Mass. 2003) (Opp.

at 26-27), but that decision was effectively overruled by the First Circuit’s contrary decision in Godin.


14

[A]n anti-SLAPP motion requires the court to ask, first, whether the suit arises

from the defendant’s protected conduct and, second, whether the plaintiff has

shown a probability of success on the merits. If the first question is answered in

the negative, then the motion must fail, even if the plaintiff stated no cognizable

claim. Of course, if a plaintiff stated no cognizable claim, then the defendant

would be entitled to dismissal under Rule 12(b)(6). Thus, a Rule 12(b)(6)

motion to dismiss may succeed where an anti-SLAPP motion to strike would not.

599 F.3d at 900-02; id. (noting the “second stage of the anti-SLAPP inquiry” is “similar to the

one courts make on summary judgment, though not identical”). Thus, applying anti-SLAPP

statutes in federal court presents no discernible conflict with Rules 12 or 56.

C. The D.C. Anti-SLAPP Statute Does Not Directly Collide with Rule 41(b).

Adelson also contends that the D.C. Act “robs district courts of their discretion under

Rules 12(b) and 41 by mandating dismissal with prejudice.” Opp. at 25. In fact, Rule 12(b) is

silent on this issue and Rule 41(b) “sets forth nothing more than a default rule for determining

the import of a dismissal” which might otherwise be ambiguous. Semtek, 531 U.S. at 503. As

Judge Friendly explained in Sack v. Low, 478 F.2d 360, 364 (2d Cir. 1973), the provision in Rule

41(b) “permitting a judge to specify that dismissal is without prejudice would seem to have been

designed for cases in which the judge has discretion whether to dismiss, e.g., for want of

prosecution, where his decision might be affected by determination whether dismissal should be

with or without prejudice, not for cases which he must dismiss as a matter of law.” See also

Weissinger v. United States, 423 F.2d 795, 798 (5th Cir. 1970) (en banc) (Rule 41(b) establishes

“a procedure for construing the general and ambiguous dismissal order”). For this reason, other

courts have similarly concluded that state laws mandating dismissal with prejudice must be


15

enforced in diversity actions.17

In short, there is simply no conflict with Rule 41(b) in applying a

state statute mandating dismissal with prejudice.18

D. The D.C. Anti-SLAPP Act Confers Substantive Rights and Remedies.

Because “federal rules ‘shall not abridge, enlarge or modify any substantive right’” under

state law, the court must “consider whether the rule can reasonably be interpreted to avoid that

impermissible result,” particularly where the federal rule “would displace a state law that is . . .

so intertwined with a state right or remedy that it functions to define the scope of the state-

created right.” Shady Grove, 130 S. Ct. at 1451-52 (Stevens, J.) (quoting 28 U.S.C. § 2072). In

this regard, Adelson characterizes the D.C. Act as “‘a summary dismissal procedure that the

Defendants . . . seek to clothe in the costume of the substantive right of immunity’” and then

asserts that “‘this is largely a masquerade.’” Opp. at 27 (citation omitted).19

This contention

17

See, e.g., Weasel v. St. Alexius Med. Ctr., 230 F.3d 348, 351, 353 (8th Cir. 2000) (under North

Dakota expert affidavit statute “designed to minimize frivolous claims” by mandating dismissal with

prejudice, district court “had to dismiss the case”; otherwise “it would render the mandatory dismissal

language . . . useless”) (emphasis in original); Chamberlain v. Giampapa, 210 F.3d 154, 162-63 (3d Cir.

2000) (same under New Jersey statute); Ellingson v. Walgreen Co., 78 F. Supp. 2d 965, 968 (D.

Minn.1999) (same under Minnesota statute); Williams v. United States, 754 F. Supp. 2d 942, 954 (W.D.

Tenn. 2010) (same under Tennessee statute).

18 In passing, Adelson appears to contend that the provision of the D.C. Act staying discovery

conflicts with the federal rules. Opp. at 25. But both the Act and the federal rules permit discovery

where needed to respond effectively to an otherwise dispositive motion. See, e.g., D.C. Code § 16-

5502(c)(2) (allowing “targeted discovery” if needed “to defeat the motion”); Fed. R. Civ. P. 56(d)

(allowing discovery if needed “to present facts essential to justify its opposition”). And, Adelson fails to

explain how limiting discovery to protect defendants’ expressive activities collides with the federal rules

given that courts routinely do so in cases challenging speech for similar reasons. See Herbert v. Lando,

441 U.S. 153, 178-79 (1979) (Powell, J., concurring) (“district court has a duty to consider First

Amendment interests” when supervising discovery in defamation actions).

19 In addressing this issue, Adelson repeatedly relies on Part II-B of Justice Scalia’s opinion in

Shady Grove. See e.g., Opp. at 26 (“Compliance with the REA is solely a function of the Federal Rule in

question, without regard [to] the conflicting state law.”) (citing Shady Grove, 130 S. Ct. at 1444) (Scalia,

J., Part II-B)); id. (“‘it is not the substantive or procedural nature or purpose of the affected state law that

matters, but the substantive or procedural nature of the Federal Rule’”) (quoting Shady Grove, 130 S. Ct.

at 1444 (Scalia, J., Part II-B)). By relying on parts of Justice Scalia’s opinion that are not controlling

under any interpretation of Shady Grove, see note 13 supra, Adelson’s argument fails to credit the D.C.

Act’s substantive protections as required by Justice Stevens’ opinion speaking for the Court on this issue.


16

simply ignores the stated purpose of the statute and the interpretation of it and similar statutes by

the overwhelming majority of courts.20

There is no question that D.C. could simply abolish the

tort of defamation or, as Adelson concedes, “could have simply granted immunity from SLAPP

suits.” Opp. at 27. It can therefore also choose a less extreme course: limiting causes of action

challenging expressive conduct to instances where a plaintiff can make a threshold showing of

merit. See Godin, 629 F.3d at 91 (state may enact “mechanisms meant to curtail rights-

dampening litigation through the modification of pleading standards”); Milam v. State Farm Mut.

Auto. Ins. Co., 972 F.2d 166, 170 (7th Cir. 1992) (Posner, J.) (“where a state in furtherance of its

substantive policy makes it more difficult to prove a particular type of state-law claim,” rule

“will be given effect in a diversity suit as an expression of state substantive policy”).21

E. Erie’s Twin Aims Are Served by Application of the D.C. Anti-SLAPP Statute.

Applying the D.C. Act also serves the “twin aims of the Erie rule: discouragement of

forum shopping and an inequitable administration of the laws.” Godin, 629 F.3d at 91. Because

the statute “substantively alters” claims arising from advocacy on a matter of public interest “by

shifting the burden to the plaintiff,” thereby “altering the showing the plaintiff must make,” and

20

See, e.g., Mem. at 26-27; Strom Ex. 116 at 4 (D.C. Act “[f]ollows the lead of other

jurisdictions, which have similarly extended absolute or qualified immunity to individuals engaging in

protected actions”); Batzel, 333 F.3d at 1025-26 (California statute provides “a substantive immunity

from suit”); Eklund v. City of Seattle Mun. Court, 410 F. App’x 14 (9th Cir. 2010) (Washington statute

“grants immunity”); Godin, 629 F.3d at 85 (Maine statute designed “‘to protect speakers from the trial

itself rather than merely from liability’”) (citation omitted); Henry, 566 F.3d at 181 (Louisiana statute

“embodies a legislative determination that parties should be immune from certain abusive tort claims”).

21 State statutes reflecting policy judgments that balance tort claims against other interests and

requiring a similar threshold showing are routinely enforced in federal court. See, e.g., In re Suprema

Specialties, Inc., 285 F. App’x 782, 784 (2d Cir. 2008) (enforcing New Jersey statute requiring plaintiff in

malpractice action to submit threshold affidavit showing “reasonable probability” that defendant’s

conduct “fell outside acceptable professional or occupational standards or treatment practices” and

rejecting challenge that statute “conflicts with the federal rules”); In re Zyprexa Prods. Liab. Litig., 2011

WL 5563524, at *3-4 (E.D.N.Y. Nov. 15, 2011) (rejecting challenge to enforcement of similar Ohio

statute “‘to establish the adequacy of the complaint’” and noting that a “number of the United States

Courts of Appeals have concluded that similar state-law affidavit requirements are substantive, rather than

procedural, under Erie”) (citations omitted).


17

by allowing “courts to award attorney’s fees to prevailing defendants,” not applying the statute in

federal court would “result in an inequitable administration of justice between” state court and

federal court. Id. at 91-92. Likewise, “the incentives for forum shopping would be strong:

electing to bring state-law claims in federal as opposed to state court would allow a plaintiff to

avoid [the statute’s] burden-shifting framework . . . and circumvent any liability for a

defendant’s fees and costs.” Id. at 92; see also Newsham, 190 F.3d at 973 (same). “Such an

outcome would directly contravene Erie’s aims.” Godin, 629 F.3d at 92.

IV. THE PETITION IS A PRIVILEGED REPORT OF A JUDICIAL PROCEEDING.

A. Hyperlinks Are a Critical Component of the Publication at Issue and Provide

the Necessary Attribution to the Jacobs Declaration.

The lynchpin of Adelson’s argument addressing the merits of his claims is the assertion

that the hyperlinks embedded within the Petition, specifically the AP news report describing the

Jacobs Declaration and the litigation in which it was submitted, may not properly be considered

in the privilege analysis. Opp. at 31, 35-36. In making this argument, Adelson no doubt

recognizes that consideration of the link dooms his contention that the privilege is inapplicable.

At the outset, it bears emphasis that the Petition was neither a print nor broadcast

publication, but rather a publication on the Internet, where readers could see for themselves and

explore the Petition’s accessible hyperlinks to the “reports” that were specifically and repeatedly

referenced in and linked to it. In applying the privilege, that distinction makes all the difference.

Indeed, although the case law assessing the privilege in the unique context of reading

publications online is relatively sparse, those courts that have addressed the issue to date have

readily acknowledged that links are properly considered in the privilege analysis. See Mem. at

33-34 (citing Jankovic v. Int’l Crisis Grp., 593 F.3d 22, 26 (D.C. Cir. 2010); Agora, Inc. v.


18

Axxess, Inc., 90 F. Supp. 2d 697, 704-05 (D. Md. 2000), aff’d, 11 F. App’x 99 (4th Cir. 2001)).22

Defendants are aware of no cases holding to the contrary, and Adelson cites none. Moreover, on

this point, Jankovic and Agora are consistent with the host of other decisions holding that links

are properly considered in assessing context in the analogous opinion analysis. See Part V infra.

Even outside the defamation context, courts have recognized that hyperlinks are properly

treated as part and parcel of Internet publications. As the court explained in Fteja v. Facebook,

Inc., 841 F. Supp. 2d 829, 839-40 (S.D.N.Y. 2012), it is immaterial that a website’s

Terms of Use appear on another screen rather than another sheet of paper. What is

the difference between a hyperlink and a sign on a bin of apples saying “Turn Over

for Terms” or a cruise ticket saying “SUBJECT TO CONDITIONS OF CONTRACT

ON LAST PAGES. . . .? [I]t is not too much to expect that an internet user . . . would

understand that the hyperlinked phrase “Terms of Use” is really a sign that says

“Click Here for Terms of Use.” So understood, . . . clicking the hyperlinked phrase is

the twenty-first century equivalent of turning over the cruise ticket.

Id. (citation omitted). See Derbaremdiker v. Applebee’s Int’l Inc., 2012 WL 4482057, at *6

(E.D.N.Y. Sept. 26, 2012) (consumers not misled by contest rules disclosed in hyperlink);

Phansalkar v. Andersen, Weinroth & Co., 356 F.3d 188, 190 (2d Cir. 2004) (hyperlinks in

briefs). In short, whether relying on the traditional rules of construction governing allegedly

defamatory publications, or the emerging case law dealing specifically with hyperlinked

material, one thing is clear: in today’s Internet-infused world, hyperlinks are properly part of the

Court’s analysis of the challenged publication as a whole, including in determining whether the

“attribution” requirement has been satisfied. See Jankovic, 593 F.3d at 26.

22

Indeed, courts have long recognized that, in determining the fair construction of a published

statement, “the publication must be considered as a whole, in the sense in which it would be understood

by the readers to whom it was addressed.” Howard Univ. v. Best, 484 A.2d 958, 989 (D.C. 1984)

(emphasis added). See also Klayman v. Segal, 783 A.2d 607, 614 (D.C. 2001) (“a statement in an article

may not be isolated . . . . Rather, any single statement or statements must be examined within the context

of the entire article.”). This is especially the case in applying the privilege’s “attribution” requirement.

See, e.g., Dameron v. Washington Magazine, Inc., 779 F.2d 736, 739 (D.C. Cir. 1985) (“It must be

apparent either from specific attribution or from the overall context that the article is quoting,

paraphrasing, or otherwise drawing upon official documents or proceedings.”) (emphasis added).


19

Conducting such an analysis here confirms that the Petition attributes its “report” that

Adelson condoned prostitution in his Macau casinos specifically to a declaration filed in a

judicial proceeding by the fired executive in charge of those casinos. It does so by

(1) hyperlinking to a news report describing that declaration and the litigation in which it was

filed;23

(2) by using phrases such as “reportedly” to signal to readers that the link provides the

source of the referenced “report”; (3) by employing similar phrases and accompanying links to

provide the source material for the other allegations it reports; and (4) by opining that such

allegations (and mainstream media reports about them) cumulatively render Adelson’s

contributions “tainted” regardless of whether they ultimately prove to be true.24

The privilege’s

attribution requirement is therefore satisfied by the Petition’s hyperlink to the AP news report.

B. The Petition Provides a Full and Fair Account of the Jacobs Declaration.

Adelson devotes very little attention to the second prong of the privilege analysis – i.e.,

whether the Petition provides a fair and accurate account of the Jacobs Declaration – suggesting

only that its language, specifically the terms “reportedly” and “reports,” “imparts an imprimatur

of legitimacy, allowing a reader to believe the Petition was sourced from a[n] impartial, detailed

account or judicial opinion.” Opp. at 33. But nothing in the Petition suggests a judicial opinion

23

Adelson’s contention that only the headline of the AP article should be considered, see Opp. at

32-33 n.15, is without merit. In the overwhelming majority of jurisdictions, including the District of

Columbia and this Circuit, it is well settled that “headlines are to be construed in conjunction with their

accompanying articles,” including for purposes of the fair report privilege. See Q Int’l Courier, Inc. v.

Seagraves, 1999 WL 1027034, at *3-4 (D.D.C. Feb. 26, 1999) (applying rule in fair report context); see

also Contemporary Mission, Inc. v. N.Y. Times Co., 842 F.2d 612 (2d Cir. 1988); Idema v. Wager, 120 F.

Supp. 2d 361, 369 (S.D.N.Y. 2000) (in fair report context, headline must be reviewed in context of

article), aff’d, 29 F. App’x 676 (2d Cir. 2002); Robert D. Sack, Sack on Defamation: Libel, Slander &

Related Problems § 2:4.6 (4th ed. 2012) (“the majority view [is] that the headline and body of a

publication are assessed together”).

24 Beyond the fact that the Petition, unlike the Adelson’s hypothetical publication, see Opp. at 36,

uses words like “reportedly” and phrases like “according to reports,” in the hypothetical, the hyperlinked

materials contradict the publication at issue (rendering the latter not a “fair and accurate” report), whereas

the Petition, as discussed infra, through the linked news report, provides a fair and accurate summary of

the Jacobs Declaration.


20

had been issued or that the referenced “report” regarding the prostitution allegation is anything

other than the AP article’s detailed account of the Jacobs Declaration. Indeed, Adelson cannot

and does not assert that, when the Petition was published, anything exculpatory existed in the

court record regarding the allegations contained in the Jacobs Declaration. In fact, it was filed on

June 27th (Strom Ex. 29), the AP article (and many others reporting the same information) was

published on June 28th (Harris Dec. Ex. E), the Petition was posted on July 5th, and the

Statement was posted on July 11th. The defendants in the Jacobs Action did not file their

response to the Declaration, including the three emails that they now claim are exculpatory, until

July 17, 2012 (Strom Dec. ¶ 63 & Ex. 111 Tabs A-C).25

Accordingly, by linking to the AP

article, which accurately recounted the allegations made in the Jacobs Declaration, the Petition

would not produce a different impact on the mind of the reader than reviewing the declaration

itself, which at the time stood uncontested. See Mem. at 35 (citing cases).

26

V. THE REMAINING STATEMENTS ARE OPINION AND FAIR COMMENT.

Adelson concedes that, if the Petition’s report of the prostitution allegation is privileged,

its remaining allegedly defamatory statements are protected expressions of opinion. Specifically,

he concedes both that “the tainted money statements are opinion” and that “the political context”

is relevant in “show[ing] that the statements are opinion.” Opp. 37 n.17. While he otherwise

25

Although there is “‘no requirement that the publication report the plaintiff’s side of the

controversy,’” Biro, 2012 WL 3264059, at *29 (citation omitted), the linked AP article contained multiple

statements by Adelson’s representatives denying Jacobs’ allegation.

26 Adelson also takes issue with the Statement, which he calls “the Republication,” claiming that

it “endorsed, republished and affirmed the prior defamatory statements” in the Petition. Opp. at 8. But

the Statement is not a republication. See, e.g., Goforth v. Avemco Life Ins. Co., 368 F.2d 25, 28 n.7 (5th

Cir. 1966) (“a mere reference to another writing which contains defamatory matter does not constitute an

actionable repetition or republication of that libelous material”); Klein v. Biben, 296 N.Y. 638 (1946) (per

curiam) (same). It contains no independently defamatory statement regarding Adelson and, as he himself

contends, is only capable of defamatory meaning to the extent it refers back to the Petition. See Compl.

¶ 47 (“The gist of the [Statement] is false and defamatory because the accusations contained in the

[Petition] are false and defamatory.”). Even if the Statement constituted a republication, the privileges

that protect the Petition from defamation liability protect the Statement as well. See Mem. at 34 n.4.


21

contends the underlying prostitution allegation is false, he further concedes that “an allegation or

a charge can be the factual basis for a protected opinion.” Id. at 40.

Accordingly, Adelson’s quarrel with defendants’ invocation of the opinion doctrine is

reduced to his contention that defendants failed to “disclose that the factual basis is merely an

allegation or a charge.” Id. at 40. But the Petition is replete with signals to this effect: It both

uses “accused of,” “reportedly,” “reports surfaced” and “allegedly” to describe the various

allegations on which the proffered opinion is based, and hyperlinks to news reports detailing

each of them, including the AP article describing the Jacobs Declaration. Adelson’s charge that

the Petition omitted exculpatory facts and denials, and therefore “implied a false assertion of

fact,’” id. at 39, is similarly contradicted by the plain language of the Petition and the AP report.

Thus, Adelson’s argument that the opinion doctrine does not apply in this case is again

premised entirely on his efforts to sever the Petition from the reports to which it hyperlinks.

Once again, however, this argument ignores both the ubiquity of hyperlinks in the context of

Internet publications and the emerging body of case law, see Mem. at 39, demonstrating that the

facts upon which an opinion is based can be disclosed through hyperlinked materials. Adelson

cites no authority to the contrary, and his effort to distinguish the existing case law actually

confirms this point. See Opp. at 39-40 (“by specifically listing in the allegedly defamatory

article itself the sources for the opinion, and then linking to these original sources,” the

“statements complained of were protected opinion”) (describing Redmond v. Gawker Media,

LLC, 2012 WL 3243507, at *6 (Cal. App. Aug. 10, 2012) (unpublished)).27

See also Agora, 90

27

Adelson attempts to dismiss the decision in Redmond because it is unpublished. Opp. at 40 &

n.19. Putting aside that defendants expressly noted that fact, see Mem. at 39, federal courts are not

precluded from considering California unpublished decisions “for their persuasive reasoning,” Baltazar v.

Yates, 2010 WL 2195979, at *11 n.8 (C.D. Cal. Apr. 28, 2010), which are therefore considered and cited

by federal courts in this district as appropriate, see, e.g., Auscape Int’l v. Nat’l Geographic Soc’y, 461 F.

Supp. 2d 174, 185 n.55 (S.D.N.Y. 2006).


22

F. Supp. 2d at 704-05 (defendants’ “website clearly discloses the facts upon which its assessment

. . . is based” and “factual basis . . . is confirmable” to “the reader” by “activating the hyperlink

adjacent to [plaintiff’s name]”). And, Adelson simply ignores Sandals Resorts Int’l v. Google,

Inc., 925 N.Y.S.2d 407, 409, 416 (1st Dep’t 2011) (Mem. at 39), in which the court held

protected a challenged email that “intersperse[d] comments by the writer with links to various

Web sites that presumably contained information that prompted or support the writer’s remarks.”

See also Silvercorp Metals Inc. v. Anthion Mgmt. LLC, 2012 WL 3569952, at *10 (Sup. Ct. N.Y.

Cty. Aug. 16, 2012) (challenged statements not “based upon undisclosed facts” where they “were

derived from data accessible by the provided hyperlink, giving readers the opportunity to review

the underlying facts and form their own conclusions”); Nicosia v. De Rooy, 72 F. Supp. 2d 1093,

1102-03 (N.D. Cal. 1999) (where Internet “posting directed readers to specific articles on

[defendant’s] web-site and provided a hyperlink for immediate access to such articles,” court

held that “[t]hese articles were at least as connected to [the] posting as the back page of a

newspaper is connected to the front” and therefore “adequately disclosed the facts underlying”

the opinion expressed). Given this now substantial body of precedent, Adelson’s argument that

hyperlinks cannot provide the basis for the opinions expressed in the Petition must be rejected.28

28

Similarly, Adelson concedes both that D.C. recognizes a fair comment privilege that “provides

‘“legal immunity” for the honest expression of opinion on matters of legitimate public interest when

based upon a true or privileged statement of fact,’” Opp. at 41 (quoting Coles v. Washington Free Weekly,

Inc., 881 F. Supp. 26, 32 (D.D.C. 1995), aff’d, 88 F.3d 1278 (D.C. Cir. 1996)), and that describing his

money as “tainted,” “dirty” and worthy of rejection fall comfortably within that privilege, Opp. at 41-42.

Thus, beyond recycling his objections to application of the opinion doctrine addressed supra, Adelson’s

contention that the fair comment privilege does not apply is limited to the assertion, based on his citation

to a 70-year-old case, that the privilege is defeasible by a showing of common law malice. See Opp. at 41

(citing Potts v. Dies, 132 F.2d 734, 735 (D.C. Cir. 1942)). In the wake of the advent of the constitutional

opinion doctrine, in which the law “now gives first amendment protection to opinion[s]” without regard

to malice, see Opp. at 41, contemporary applications of the fair comment privilege under D.C. law do not

reflect such an exception. See, e.g., Lane v. Random House, Inc., 985 F. Supp. 141, 148-50 (D.D.C.

1995) (“fair comment” privilege applied without considering plaintiff’s allegations that defendant “sullied

his reputation . . . knowingly” and “intentionally caus[ed] him mental anguish and emotional distress”);

Coles, 881 F. Supp. at 32 (applying “fair comment” privilege without considering malice).


23

VI. IF THIS ACTION IS NOT DISMISSED, A STAY IS WARRANTED IN LIGHT

OF ONGOING PROCEEDINGS IN THE JACOBS ACTION.

In response to defendants’ showing that, if it is not dismissed, at the very least this action

should be stayed pending the outcome of ongoing proceedings in the Jacobs Action, Adelson

asserts that “‘the Jacobs court determined that it did ‘not appear that any evidence has been

irreparably lost.’” Opp. at 43. This statement, based on a quotation wrenched from its context, is

plainly incorrect. In fact, the court in the Jacobs Action took pains to emphasize that it has not

yet addressed the issue of whether evidence has been lost. See Strom Ex. 104 at 8 n.11 (“There

is an issue that has been raised regarding the current location of those computers and hard drives

from which the ghost image was made. The Court does not in this Order address any issues

related to those items.”); Strom Reply Ex. 139 at 7 (acknowledgement by Sands attorneys that

“there is no spoliation issue currently before the Court”).29

Indeed, both the court and the

litigants made clear that a separate sanctions proceeding would be forthcoming, see Strom

Ex. 109 at 5; id. Ex. 110 at 64, and such a motion was filed on November 21st, seeking sanctions

for “pervasive obstructionism” that includes the failure to preserve electronic evidence. See

Strom Reply Ex. 141. An argument on the motion is scheduled later this month. Id.

Moreover, in the proceedings already conducted, Adelson’s company and his agents have

conceded, under oath, that electronic evidence has been lost. Mem. at 42; Strom Dec. ¶ 47.

Indeed, Adelson offers no evidence to the contrary – not a declaration or any other submission to

dispute these sworn admissions. See Opp. at 42-43. Rather, Adelson simply urges this Court to

refrain from exercising its discretion to stay discovery should the pending dispositive motions be

29

The full sentence from the Order, from which Adelson quotes only a portion, reads: “Based

upon the evidence currently before the Court it does not appear that any evidence has been irreparably

lost.” Strom Ex. 104 at 8 (emphasis added). That is not surprising because the September sanctions

hearing was limited to the issue of in-court misrepresentations by Sands lawyers, Strom Reply Ex. 140 at

10 (“But this really isn’t that complicated a hearing. It’s [about] why were misrepresentations made to

me for a year and a half. That’s really all it is”), expressly reserving the issue of missing evidence.


24

denied because (1) any lost evidence is not “essential” and (2) further proceedings in the Jacobs

Action will not be of any relevance to this Court. Opp. at 43. He is wrong on both counts.

First, if the case is not otherwise dismissed, the truth or falsity of the prostitution

allegation contained in the Jacobs Declaration will be at the core of this action. In it, Jacobs

swore to the existence of emails supporting his allegations that have been lost or concealed by

Adelson’s companies. See Strom Ex. 29 at ¶¶ 3, 5. In response (and after the Petition and

Statement were disseminated), the Sands defendants miraculously produced three emails

purportedly supporting the contention that the prostitution allegation is false. While Adelson

now asks this Court to believe that these emails constitute the only relevant evidence on the

issue, that assertion is belied by both Jacobs’ sworn declaration and the testimony of others in

Sands management regarding the loss of at least one of the hard drives of Jacobs’ computers. It

also strains credulity that these three emails are the full extent of relevant communications within

a major company claiming a “‘no tolerance’” policy regarding prostitution in its many casinos,

Compl. ¶¶ 62-63, and which purports to have fully cooperated with Chinese authorities

investigating precisely that issue, Strom Exs. 71-74. Because it appears one or more computer

drives containing this very evidence has been lost or destroyed, this central issue should be

resolved before proceeding with the balance of the case and imposing a substantial litigation

burden on defendants and the Court. Simply put, Adelson should not be permitted to assert the

falsity of the defamatory meaning he attributes to defendants’ publications if, through no fault of

defendants, key evidence relating to that assertion in Adelson’s control has gone missing.

Second, Adelson’s preclusion argument is without merit. E.g., Goldstein v. Time Warner

N.Y. City Cable Grp., 3 F. Supp. 2d 423, 437-38 (S.D.N.Y. 1998) (entering stay “‘does not

require that the issues in such proceedings are necessarily controlling of the action before the


25

court’”) (citation omitted). The forthcoming proceedings in the Jacobs Action concerning the

loss of evidence will almost certainly “have a significant bearing on” this case. Maritima de

Ecologia, S.A. v. Sealion Shipping Ltd., 2011 WL 1465744, at *5 (S.D.N.Y.), reconsideration

denied, 2011 WL 2671541 (S.D.N.Y. July 6, 2011). Moreover, a judicial finding in Nevada that

Adelson’s company destroyed evidence central to this case would warrant dismissal of this

action. See, e.g., Synanon Church v. United States, 820 F.2d 421 (D.C. Cir. 1987) (dismissing

case because plaintiff had destroyed relevant evidence in a different court in a different case);

Mem. at 43 (citing cases). Even absent such a finding, the evidentiary record generated in the

Jacobs Action is likely to be admissible in this case either as a party admission or because there

is “a substantial identity of issues and parties in the two actions.” Miwon, U.S.A., Inc. v.

Crawford, 629 F. Supp. 153, 154 n.3 (S.D.N.Y. 1985). Accordingly, fundamental fairness and

judicial economy are both served by staying this action to allow the Nevada Court to address

these issues in the first instance.

Dated: December 7, 2012 Respectfully submitted,

LEVINE SULLIVAN KOCH & SCHULZ, LLP

By: /s/ Seth D. Berlin

Lee Levine (pro hac vice)

Gayle C. Sproul

Seth D. Berlin

Chad R. Bowman (pro hac vice)

Rachel F. Strom

321 West 44th Street, Suite 510

New York, New York 10036

Telephone: 212-850-6100

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

Counsel for Defendants David A. Harris, Marc R.

Stanley and National Jewish Democratic Council


Documents

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW … · Gayle C. Sproul Seth D. Berlin Chad R. Bowman (pro hac vice) Rachel F. Strom LEVINE SULLIVAN KOCH & SCHULZ, LLP 321 West