Court: California residents can sue Nevada casinos for false advertising

Adam Goldman

Tuesday, June 7, 2005 | 9:37 a.m.

LAS VEGAS -- California residents may bring suit in their own state courts against Nevada casinos for false advertising and deceptive business practices, the California Supreme Court ruled Monday.

Even though Nevada casinos might not have any properties in California, that state's courts have jurisdiction in such cases because Harrah's Entertainment Inc. advertises heavily in California and receives a significant amount of its business from Californians, the state's seven high court justices wrote in a unanimous opinion.

The ruling could have broad implications because of the large number of Californians who visit Nevada hotel-casinos each year.

The decision stems from a 2002 class action suit filed by a Los Angeles area man against a group of Harrah's properties. In 2001, Frank Snowney claimed that he made a reservation at a Harrah's resort, which said the room would cost $50 a night plus room tax.

But when Snowney paid his bill it included a $3 energy surcharge. Snowney said Harrah's never disclosed the charge when he booked the room.

In his complaint, Snowney accused Harrah's of deceptive business practices, breach of contract and unjust enrichment.

Harrah's asked that the lawsuit be quashed after arguing, in part, that it didn't have any businesses or bank accounts in California, meaning the state didn't have jurisdiction. A trial court agreed, but the California Court of Appeals reversed that decision, which the Supreme Court affirmed.

Snowney's California lawyers, Edwin Schreiber and his son, Eric, said the decision allows them to move forward with their case in Los Angeles Superior Court.

"We're still allowed to pursue it," Edwin Schreiber said. "That in itself was a big victory."

Schreiber cautioned that Harrah's could take its case to the U.S. Supreme Court.

A Harrah's spokesman declined to comment Monday.

Schreiber said he had no idea how many Californians had paid the surcharge because the case was thrown out before any discovery was completed. But if Harrah's loses this case, it could end up paying a hefty price.

In 2001, 35 million people visited Las Vegas. Of those, about 30 percent, or 10.5 million, came from California. Last year, 37.4 million people visited Las Vegas. About 31 percent, or 11.6 million, came from California.

The case is Snowney v. Harrah's Entertainment, Inc. S124286.