Supreme Court overturns Wynn’s award in libel suit

Ed Koch and Steve Kanigher

Tuesday, Jan. 30, 2001 | 11:20 a.m.

The omission of a single word -- "serious" -- in jury instructions has cost casino giant Steve Wynn a $3.3 million defamation award from a New York publisher who hinted that Wynn had mob ties.

However, Lyle Stuart faces a potentially tough retrial in Clark County District Court as a result of Monday's unanimous decision by the Nevada Supreme Court, which set a tough standard for the publisher of Barricade Books.

Stuart must prove he was on solid legal ground when he ran ads for a book by Las Vegas Review-Journal columnist John L. Smith that mentioned a confidential Scotland Yard document that inferred Wynn had a link to the Genovese crime family.

In overturning the August 1997 verdict, the Supreme Court found that District Judge Sally Loehrer erred with the jury instruction that they could find Barricade showed malice if "the publisher entertained doubt as to the veracity" of the Scotland Yard document.

The court said "serious doubt" is the standard that should have been applied in the malice instruction. The omission of that adjective, the justices said, "effectively reduced the standard of proof required to establish malice."

While the wrangling over Smith's book could lead to a second District Court trial or perhaps even a hearing before the U.S. Supreme Court, attorneys for Stuart expressed relief but concern over Monday's action.

Las Vegas attorney JoNell Thomas, who represented Smith before the Supreme Court and assisted lawyers for Stuart and his Barricade Books, rated the high court ruling as "90 percent victory and 10 percent disappointment."

The victory included that Smith was properly dropped as a defendant in Wynn's lawsuit because he did not write the catalogue promotion for the book that was the basis for the suit. Stuart did.

However, the high court ruled that the Scotland Yard report -- generated in the early 1980s when Wynn sought a gambling license in Great Britain -- is not a privileged document.

Reporters are allowed to quote from privileged documents -- those filed in court and thus made public -- without fear of a lawsuit from the people named in the document.

The justices, in their ruling, said that confidential investigatory reports by police agencies "do not qualify as an 'official action of proceeding' under the fair report privilege."

Thomas expressed disappointment over that decision, maintaining that what was revealed in the Scotland Yard document is a form of protected free press.

"That's bad for the First Amendment," Thomas said. "It's bad for journalism and it's bad for the public, because it prevents them from getting information from confidential reports. This puts a chilling effect on the media's ability to keep us informed about our government."

Las Vegas attorney Dominic Gentile, who represented Stuart at trial, said, "we felt all along that the political influence of Steve Wynn in Las Vegas with both elected officials and juries was so large that no matter how right we were, it was going to be virtually impossible to get a fair trial.

"Of course, it turned out we were correct."

James Pisanelli, the Las Vegas attorney for Wynn at trial, referred inquiries to the lead attorney in the case, Barry Langberg of Los Angeles. Langberg was on a flight this morning and could not be reached for comment, his office said.

After the trial, Pisanelli said the verdict was, "vindication ... that goes a long way in telling the country that it was damaging to (Wynn's) good name."

Wynn is the high-profile owner of the Desert Inn, which he closed and plans to turn into a megaresort. He founded Mirage Resorts Inc., which includes the Mirage and Bellagio. Wynn's gaming empire was acquired by MGM Grand Inc. last year.

At the trial, Wynn was awarded $1.5 million for damage to his reputation, $500,000 for "emotional distress, humiliation and mental anguish," another $100,000 for injury to his business and legal costs.

The title of Smith's book is "Running Scared: The Life and Treacherous Times of Las Vegas Casino King Steve Wynn."