Judge: Newspapers’ agreement unrelated to Web site case

Friday, Dec. 3, 2004 | 11:10 a.m.

A Clark County District Court judge has granted a portion of a motion to dismiss a claim in connection with VEGAS.com's bid to acquire the rights to lease the lasvegas.com Internet domain name.

Judge David Wall ruled Thursday that the Las Vegas Sun has no standing in a court case involving Stephens Media Intellectual Property LLC, a subsidiary of the Arkansas-based company that owns the Las Vegas Review-Journal, and VEGAS.com.

VEGAS.com is owned by the Greenspun Media Group, which also operates the Las Vegas Sun.

The Sun and the Review-Journal have a joint operating agreement under which the Review-Journal prints, markets, sells and distributes the Sun while the two publications maintain independent newsrooms.

VEGAS.com attorneys argued that Stephens used joint operating agreement resources to acquire and maintain the Internet site and then developed the lease agreement to discriminate against the Sun and affiliates of the Greenspun Group.

But Stephens attorney Steve Morris said the argument had no bearing on the matter and that a cross-claim filed by VEGAS.com was "altogether unnecessary and a distraction" to the case.

While Wall took the Sun and the joint operating agreement argument out of play with his decision, he didn't dismiss the VEGAS.com cross claim and will set a date to hear arguments.

The cross claim arose from a suit filed in September. In it, subsidiaries of Mandalay Resort Group and Caesars Entertainment Inc. filed suit against both VEGAS.com and Stephens Media.

Mandalay and Caesars formed a holding company, LAS Travel LLC, in February 2002 to use the lasvegas.com domain name to help the resort companies sell hotel rooms.

The suit asked a judge to declare which company should be entitled to acquire the rights to the domain name after a dispute arose over a proposed VEGAS.com buyout of the rights to the name.

According to the original agreement between Stephens and the two hotel companies, LAS Travel or its owners had the right to transfer their interest in the domain name to the Greenspun Media Group.

Under terms of the agreement, if a deal was to be made with the Greenspun Media Group, a "notice of intent" was to be sent to Stephens Media. The agreement also stated that Stephens would then have a 30-day option to acquire the controlling interest in LAS Travel "at the price and on the same terms set forth in the notice of intent."

If Stephens Media failed to exercise its option, the agreement said, controlling interest in LAS Travel could be transferred to the Greenspun Media Group.

Court records say that in July Greenspun Media offered $12 million for the rights to the lasvegas.com name. Stephens was issued the "notice of intent" a day after the offer was made. On Aug. 19, Sherman Frederick, president of Stephens Media, sent a letter exercising the company's option rights. But on Aug. 24, VEGAS.com President Howard Lefkowitz responded that the Stephens bid did not match the terms of the VEGAS.com offer.

At issue is whether the Stephens response constituted a matching offer.