The Nevada Supreme Court has offered casino operator Sands China Ltd a temporary reprieve from a US$250,000 penalty levied against the company last month by a lower court. But the senior bench did not interfere with other sanctions imposed in the case.
On March 6, a Nevada District Judge ordered Sands China to pay US$250,000 to legal charities. Judge Elizabeth Gonzalez ruled the firm had improperly withheld documents relating to a wrongful termination suit brought by Steve Jacobs, a former Sands China president and chief executive.
The judge in the junior court also restricted Sands China from calling any of its own witnesses during a hearing on jurisdiction of the case, to be held on April 20.
Sands China, the Macau unit of U.S.-based casino operator Las Vegas Sands Corp, then filed an emergency motion, via the Nevada Supreme Court, for a stay on the ruling of the lower court.
The higher body initially granted a temporary stay of the sanctions order. But a report from the Las Vegas Review-Journal newspaper says the state’s Supreme Court concluded in a Thursday order that only the monetary sanctions imposed by the lower court “may warrant relief”.
“We grant petitioners’ motion for stay to the extent that we stay the portion of the district court’s order directing Sands China to make monetary contributions to third parties, until further order of this court,” the Nevada Supreme Court ruled, according to the newspaper.
The senior bench added: “We deny the motion for stay in all other respects.”
Mr Jacobs was dismissed from his post in July 2010 for what the firm said was “cause”, including an allegation of unauthorised deal making, which the former Sands China CEO denied.
In October 2010, Mr Jacobs sued Las Vegas Sands and Sands China in Nevada, making allegations including breach of contract and breach of good faith.
As part of the suit, his lawyers asked the defendants to produce to the court thousands of emails and other documents related to the Macau business.
But Las Vegas Sands had questioned whether a Nevada court could even claim jurisdiction over Sands China and over the wrongful termination suit.
In a 2012 order, Judge Gonzalez ruled that her court could hear the case, and that neither Sands China nor Las Vegas Sands could cite the Macau Personal Data Protection Act as an objection to disclosure of any documents. She said so after hearing that data from Macau had already been transferred to the United States by the defendants and reviewed by lawyers for Sands China and Las Vegas Sands.
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”There are likely to be cancellations of some Chinese New Year casino and junket parties and events [in Macau]”
Vitaly Umansky, Eunice Lee and Kelsey Zhu
Sanford Bernstein analysts