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Court reverses verdict in casino owner's suit over mob ties allegation

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  1. Libel and Privacy

    NMU         NEVADA         Libel         Feb 2, 2001    

Court reverses verdict in casino owner’s suit over mob ties allegation

  • The state high court found that a lower court misapplied the “actual malice” standard in casino owner Steve Wynn’s libel suit, but refused to extend the “fair report” privilege to an unofficial, unreleased report by Scotland Yard investigators.

The Nevada Supreme Court on Jan. 29 overturned a $3.1 million jury verdict against the publisher of a book on a Las Vegas casino mogul, holding that the trial court gave an incorrect instruction to the jury on the issue of actual malice.

But the court also ruled that the “fair report” privilege did not extend to an unofficial, non-public Scotland Yard report. In addition, the court upheld the trial court’s dismissal of the case against the book’s author because he was not involved with the allegedly libelous statement contained in an advertisement for the book.

John L. Smith authored “Running Scared: The Life and Treacherous Times of Las Vegas Casino King Steve Wynn,” an unauthorized biography of Wynn, a Las Vegas businessman in the casino industry. Announcing the book pre-publication in a trade magazine, the book’s publisher, Barricade Books, Inc., declared that the book had “details why a confidential Scotland Yard report called Wynn a front man for the Genovese family.” The Genovese family is believed to be involved in organized crime.

Wynn sued Smith and Barricade. Smith asked that the claim against him be dismissed, claiming he was not directly involved with the advertisement. The trial court granted him summary judgment. A jury later found that the publisher was liable for the defamation to Wynn for $3.1 million.

Several media outlets and organizations, including The New York Times and Playboy Enterprises, argued in a friend of the court brief that the fair report privilege — which allows comment on official reports and government actions if the comment is accurate and complete or a fair abridgement — should apply to the Scotland Yard report on which the publisher relied. The group argued that many stories based on confidential government documents leaked to the press would be spiked unless the fair report privilege covered such material.

The court refused to apply the privilege because the confidential report was not already before the public. The court read a non-binding 1988 federal appellate decision to require that the information already be before the public for the privilege to apply.

“Allowing the privilege to cover confidential reports would bring to light information that the government had no intention of releasing, and which could be used as a powerful tool for injury,” the court wrote.

The court decided, however, that the jury instruction on actual malice was erroneous because it defined “reckless disregard for the truth” as where a publisher entertains “doubt” as to the veracity of the statement. Nevada Supreme Court and U.S. Supreme Court cases require that a reckless disregard for the truth requires that the publisher entertain “serious doubt” as to the statement’s veracity.

The court here also allowed the jury on remand to determine whether the statement was an opinion or a fact. Statements of opinion are not actionable, but statements of fact may be.

The appellate court also upheld the summary judgment against Smith, even though Smith provided his publisher with the Scotland Yard report on which the advertisement statement was based. The court said that the publisher recast the report into a representation of fact rather than opinion.

(Wynn v. Smith; Media Counsel: JoNell Thomas, Las Vegas; Deutsch Klagsbrun & Blasband; Allen Lichtenstein, Laura Handman, Davis Wright Tremaine) DB

© 2001 The Reporters Committee for Freedom of the Press

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