Lawsuit documents privileged even if known to be false

The state Supreme Court in Carson City held in late August that the general public enjoys an “absolute privilege” to republish information from another lawsuit even if the person disseminating the information knows that the information is false or recklessly disregards whether it is true.

Because the statements were a fair and accurate report of a judicial proceeding, they are absolutely privileged and will not support a defamation suit, the court’s majority opinion stated. Although all seven justices joined in the result, the case generated four separate opinions and conflicting analyses.

The Sahara Gaming Corp., which operates the nonunion Sante Fe Casino in Las Vegas and the Pioneer in Laughlin, entered into a real estate agreement to sell property in Henderson to Players International for a price of more than $15 million and a management consulting fee of $2.9 million.

Culinary Workers Local Union 226, which had battled Sahara in the past concerning labor issues, sent a letter to the Players International chairman stating that a “contentious labor dispute” existed between Sahara and the union and that by “acquiring the Henderson property, Players is putting itself in the middle of this dispute.”

The letter also quoted from a complaint filed in a Mississippi lawsuit against Sahara concerning a management consulting agreement. The Mississippi complaint alleged that the Sahara chairman had made false representations, including that experienced managers would staff the Mississippi casinos and that the expenses contained in the budget projections were accurate.

Players canceled the real estate deal and management consulting agreement within two weeks of receiving the union’s letter.

In response, Sahara filed suit against the union in a Las Vegas trial court alleging among other things that the union had defamed Sahara by republishing the statements made in the Mississippi complaint, even though the union either knew that the statements were false or did not examine the truth or falsity of the allegations. Sahara also alleged that the union published the statements with “wrongful and willful intent to injure” Sahara.

The trial court dismissed the union’s defamation claims. The court held that the letter accurately quoted the allegations contained in the Mississippi lawsuit and that “any person has a right to make a fair recital about a court case.”

Sahara appealed to the Nevada Supreme Court in Carson City. It did not argue that the union had inaccurately quoted the Mississippi court documents. Instead, it argued that the trial court erred in dismissing the defamation claim because the union’s letter to Players quoted court documents with malice and intent to harm, as the union knew that the allegations in the Mississippi lawsuit were false.

The union argued that the trial court correctly dismissed the claim because it could not be sued for publishing statements contained in a public court document.

The Nevada Supreme Court unanimously held in late August that the trial court had correctly dismissed the defamation claim. Justice Myron Leavitt, who was joined by one other justice, wrote the court’s opinion holding that union had the “absolute right” to republish information contained in the Mississippi lawsuit, even if the union knew that the republished information was false. The other five justices agreed with Leavitt’s result in three concurring opinions.

Leavitt noted that there is a “special privilege of absolute immunity from defamation given to the news media and the general public to report newsworthy events in judicial proceedings” as long as the reports are “fair, accurate, and impartial.” In this case, the Mississippi complaint was “readily available for public inspection as a pleading in a judicial proceeding.”

He then described the evolution of the “absolute privilege rule” in Nevada, stating that it currently covered “communications uttered or published in the course of judicial proceedings, . . . quasi-judicial hearings, complaints filed with an internal affairs bureau against a police officer, and even letters written in anticipation of litigation.”

Given this history, Leavitt wrote that the Mississippi complaint fell within the absolute privilege rule. He wrote that applying the rule to a case such as this one served the public by allowing litigants to speak freely without fear of being sued. He added that the news media and public’s right to know what happens in Nevada legal proceedings is more important than any damage caused by repeating false and malicious statements made in court.

Chief Justice Bob Rose, joined by one other justice, concurred in a separate opinion. He stated that he disagreed “with the majority’s legal analysis of the fair report privilege” although he agreed with the outcome in this case. Rose stated that he believed “the premise upon which the fair report privilege is based — that all court documents are factually reliable — to be questionable in today’s society. . . . To balance this privilege and make it truly conditional, I would declare that a publisher loses the protection of the fair report privilege if he or she publishes a statement with actual malice — when he or she knew or should have known that the statement was false.”

Justice Miriam Shearing, joined by one other justice, went further than the court’s opinion in her concurrence. She stated that she “would hold that the fair report privilege applies to republication of all public records of judicial cases, whether or not any judicial action has been taken.” She added that she believed that the basis for the fair report privilege is not that “pleadings are presumed to be accurate and reliable” but instead “that the public is entitled to know what is in the public record.” She added, “The mischief perpetrated by a scheme to file false pleadings merely to publish lies with impunity is far less than the mischief perpetrated by denying the public access to official court pleadings.”

Justice Nancy Becker’s concurrence stated that she did not believe that the union knew that the statements made in the Mississippi lawsuit were false. Nevertheless, she wrote that she disagreed with the court about the scope of the fair report privilege. “I believe the privilege should be conditional as to the general public and absolute when applied to the press.” (Sahara Gaming v. Culinary Workers)