Firm asks for dismissal of suit over Web site

Monday, Nov. 15, 2004 | 11:07 a.m.

The company that owns the lasvegas.com domain name has asked a Clark County District Court judge to dismiss a claim from the owner of VEGAS.com that it be allowed to buy the rights to lease the name.

Stephens Media Intellectual Property LLC, a subsidiary of the Arkansas-based company that owns the Las Vegas Review-Journal, said in its motion that VEGAS.com's claim is faulty because it is not a party to the Stephens leasing agreement with two resort companies that formed a limited liability company to acquire the rights to the site in order to sell hotel rooms.

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

The two resort companies, Mandalay Resort Group and Caesars Entertainment Inc., 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 motion, filed earlier this month, said VEGAS.com's claim should be dismissed.

"There simply is no legal claim asserted against Stephens, not under the joint operating agreement (between the Las Vegas Sun and the Review-Journal) and not under the license agreement," the motion says.

Meanwhile, in a separate motion, filed in District Court 10 minutes after the motion to dismiss, VEGAS.com filed a motion for a preliminary injunction asking the court to block any effort by Stephens to discontinue travel services transacted on the lasvegas.com Web site through Worldspan LP, which is subcontracted to manage customer travel arrangements with hotels and airlines.

"Absent the entry of an injunction by this court third parties will be unable to arrange and change their travel schedules through the lasvegas.com Web site, completely interrupting LAS Travel's business operations and irreparably harming the goodwill LAS Travel has established in its business and with online-purchasers," the motion says. "Thus, absent the injunction, the eventual owner of LAS Travel and the accompanying Web site and domain name will be irreparably injured."

A hearing on the injunction has been set for Dec. 2. The case is being heard by Judge David Wall.

In September, the Mandalay and Caesars subsidiaries filed suit against both VEGAS.com and Stephens Media. That 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, the owner of VEGAS.com.

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.

Because of that dispute, the Mandalay and Caesars subsidiaries opted to file suit against both VEGAS.com and Stephens Media, asking the judge for a ruling on which company it should sell to.

VEGAS.com filed an answer and cross claim in the case. In it, the company asked the judge to permit it to purchase the rights to use the lasvegas.com name.

The VEGAS.com response said the Stephens letter was ambiguous and didn't clearly present a matching offer. The response also said the Review-Journal violated terms of its joint operating agreement with the Las Vegas Sun in its establishment and maintenance of the lasvegas.com Web site. Under that agreement, the Review-Journal prints, markets, sells and distributes the Sun while the two publications maintain independent newsrooms.

The filing contends that the owner of the Review-Journal 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.

The Stephens reply filed this week said the Lefkowitz letter alleging that Stephens' bid did not match the VEGAS.com offer "is evidence of the continuing and deliberate efforts of the Greenspun Group to interfere with and destroy Stephens' contract right to acquire the plaintiffs' interests in LAS Travel and to improperly enlist the aid of one of the plaintiffs in doing so."

The filing said Stephens denies there is a contract dispute with VEGAS.com because Stephens has "the only valid contract to purchase LAS Travel."