Tuesday, April 2, 1996 | 11:59 a.m.
Culinary Union members can continue to criticize two Las Vegas banks without fear of criminal prosecution.
A federal judge issued a temporary restraining order Monday that prohibits state authorities from charging union supporters with making derogatory statements against the banks. The act is considered a misdemeanor.
U.S. District Judge Lloyd George ruled that the 1971 statute prohibiting such speech appeared to be ambiguous and unconstitutional when he granted the 15-day restraining order.
Local 226 sought the judge's opinion after balking at a letter from Attorney General Frankie Sue Del Papa, who warned the union that it may be violating the law and could face criminal charges.
"We're a fighting union and we're going to continue to fight for justice and freedom of speech for the hard-working men and women we represent," Secretary-Treasurer Jim Arnold said Monday.
The attorney general's office said that while the leaflets were factual, they misled people to believe the banks were losing money.
Union members have targeted Commercial Bank and Community Bank to call greater attention to members' labor struggle with two casino owners, Sue Lowden of the Santa Fe and Margaret Elardi of the Frontier. Lowden is listed as a Commercial Bank board member and Elardi is a member of Community Bank.
Union leaders hope, among other things, that the leaflets will encourage union supporters to boycott the banks because of their connection to Lowden and Elardi.
The leaflet that touched off the union's lawsuit March 21 is being revised and no longer distributed, said attorney Richard McCracken, adding that there are at least three other fliers being handed out.
"There is really no way for the court to rescue this statute," McCracken said. "The state cannot punish, cannot penalize ... true speech."
Assistant Attorney General Thomas Ray conceded that the statute was ambiguous, but argued against the temporary restraining order, as did an attorney with the Nevada Bankers Association.
"You do not have the First Amendment right to defame somebody or harm somebody with defamatory comments," Ray argued.
Twenty-two court jurisdictions have statutes similar to Nevada's, and all but 19 limit theirs to inaccurate statements, according to the Nevada Bankers Association.
The Nevada law was passed to prevent "bank panics" similar to the ones experienced during the Great Depression when many customers tried to withdraw money at the same time, causing banks to collapse, Ray said.
He urged the judge to only protect union members who passed out fliers with accurate information, and permit the state to prosecute them should they spread libelous material.
George refused, though he plans to revisit the issue during a preliminary injunction hearing to be held by April 15.
The judge ordered the union to post a $25,000 bond as part of the temporary restraining order. If the members were to lose their suit, the banks could petition the judge for the money as compensation for damages sustained.
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