Divided court backs free-speech issue

Monday, Aug. 30, 1999 | 9:57 a.m.

CARSON CITY -- In a decision that solidifies free speech rights, a divided Nevada Supreme Court has ruled that individuals who publish statements from court documents are protected from defamation suits, even if they knew the allegations were false and the publication was intended to harm others.

This absolute privilege from lawsuits extends not only to the news media but to the general public, said the majority opinion written by Justice Myron Leavitt.

The public's right to know what is in court documents "is paramount to the fact someone may occasionally make false and malicious statements," he wrote in the decision released Friday.

But Chief Justice Bob Rose, in a concurring opinion, said the First Amendment should "not be contorted to protect malicious liars merely because the lies were contained within the context of a judicial action."

Rose said there have been lawsuits "with extravagant claims filed for political or strategic purposes ..." and that following the majority opinion "may lend itself to much mischief."

Rose suggested people lose the immunity from suit if they publish statements with actual malice -- when they knew or should have known the statements in the judicial papers were false.

While the court split on how far free speech protection should extend, the justices were unanimous in ruling that Culinary Workers Local 226 in Las Vegas and other unions could not be sued by Sahara Gaming Corp., headed by Paul Lowden, who has long battled union organization efforts.

Lowden's corporation entered into an agreement to sell property in Henderson for $15 million to Players International and to receive a management consulting fee of $2.9 million. Union officials, trying to sink the deal, wrote to Players International saying it was putting itself in the middle of a contentious labor dispute.

The union quoted from a lawsuit filed in Mississippi against Lowden involving another casino that accused him of fraud and failing to fulfill his duties in managing the Treasurer Bay casinos. Two weeks after Players International received the letter, it canceled the management consulting contract with Lowden.

Lowden filed suit claiming the unions knew the statements in the Mississippi lawsuit were false and they were willfully trying to injure his business.

District Judge Donald Mosley granted a pretrial summary judgment in favor of the unions, and Lowden appealed.

"Since the union's alleged defamatory statements were a fair and accurate report of a judicial proceeding," Leavitt said, "they are absolutely privileged and the material recited will not support a defamation suit even if the statements were made maliciously and with the knowledge of their falsity.

"This has been the policy and rule in Nevada for the last 70 years, and the privilege includes administrative hearings, quasi-judicial proceedings as well as judicial actions. It is in the public's interest to have litigants speak freely in pleadings and while testifying during a trial or hearing without fear of civil liability," said the majority decision, which was signed by District Judge Jerry Sullivan of Winnemucca, who sat for Justice William Maupin.

Rose said the majority decision "turns the traditional concepts of the law of libel upside down" by protecting those who spread false and malicious information. This absolute privilege, he said could now be turned into a weapon.

"I believe that this court should adopt a fair report privilege that is truly conditional, a privilege that is lost when one publishes maliciously," Rose said. He agreed the Lowden appeal should be dismissed because the documents filed in District Court in Las Vegas were deficient.

Justice Cliff Young agreed with Rose.

Justice Nancy Becker, in her concurring opinion, also disagreed with the majority decision that the privilege should be absolute and unconditional. "I believe the privilege should be conditional as to the general public and absolute when applied to the press.

"If an individual has actual knowledge that information contained in a legal pleading is false and then reports that information with the intent to harm another, then such a person should be subject to an action in defamation," Becker said.

She said she did not believe the union knew statements made in the Mississippi case were false and agreed with the District Court's ruling.