Steve Wynn’s Slap at Nevada Free-Speech Law Draws Howl From Yelp

Steve Wynn, chairman and chief executive officer of Wynn Resorts Ltd.

Steve Wynn, chairman and chief executive officer of Wynn Resorts Ltd.

Photographer: Jerome Favre/Bloomberg

Steve Wynn’s push for a stronger hand when suing people who badmouth him is being viewed by some, including Yelp Inc., as stacking the deck against free speech.

The social media site called on its subscribers to stop the billionaire founder of Wynn Resorts Ltd. from “gutting” a Nevada law that bars frivolous suits aimed at intimidating critics.

Wynn’s bill rolled through the state Senate with a 21-0 vote after his lobbyist and lawyer, the only witnesses to testify, assured lawmakers no harm will come to constitutional rights. The attorney, Mitchell Langberg, told senators the new law will simply give aggrieved people like Wynn a fighting chance to win.

The casino mogul has sued critics for defamation at least four times, twice in Nevada and twice in California. His case last year against Jim Chanos, founder of Kynikos Associates LP, ended with a judge throwing out claims that the hedge fund manager lied about Wynn’s Macau casinos violating U.S. anti-bribery laws. Wynn has since appealed.

Marc Randazza, a Las Vegas First Amendment lawyer, called Wynn’s bill “an ignoble attempt to eviscerate” a law that was crucial to Nevada’s quest to attract media and technology firms.

“It drops Nevada from the gold standard to one that makes its protections lower than any other state,” Randazza wrote to state legislators. “This changes Nevada from a state that tech and media companies should move to, into one that they should actively flee.”

Important Tool

Laws to counter such bullying defamation claims, so-called strategic lawsuits against public participation, or SLAPP suits, were pioneered in California in the 1990s. They have become an important tool for activists and media outlets to fend off libel litigation by deep-pocketed public figures.

Though emerging unscathed from the state Senate, Wynn’s Nevada measure faces closer scrutiny in the Nevada Assembly.

A parade of opponents including the American Civil Liberties Union, the state’s largest newspapers and technology firms such as Yelp have sought to block the law.

Yelp has an especially large dog in the Nevada fight. It has 142 million monthly visitors and has posted 77 million reviews since it was founded in 2004, including almost 3,000 of Wynn’s Las Vegas casino resorts. Rachel Walker, a spokeswoman for the San Francisco-based company, said the website is a place for consumers to say what they really think, be it about dentists, car mechanics or restaurants.

“It would be a tragedy if the state of Nevada allowed the interests of one man to gut a law that is meant to protect the freedom of speech for all Nevadans,” the company said in a blog post.

Yelp urged its members to tell the state Assembly and Governor Brian Sandoval, a Republican, to kill Wynn’s bill. Michael Weaver, a spokesman for Wynn, declined to comment.

Ill Will

Anti-SLAPP suit laws typically require a showing that the offensive statements were made with ill will. Without such a high bar, rich plaintiffs could swamp targets with big legal bills before ever reaching trial, said Laura Handman, a media lawyer with Davis Wright Tremaine LLP.

With such laws on the books in fewer than half of U.S. states, Yelp is supporting federal legislation that would allow all U.S. courts to throw out suits deemed attacks on speech.

Wynn’s lawyer, Langberg, countered that the bar is too high. He told the Nevada senate’s judiciary committee last month that the state’s existing law makes it too difficult to bring a well-founded defamation case.

Higher Burden

While saying he respects “people’s First Amendment rights,” Langberg argued it’s wrong to require a higher burden for a defamation case “than the burden on the government in a death penalty case.”

Langberg also took a shot at Yelp, saying review sites are often used by former employees to settle scores, and by competitors to knock rivals.

“Former employees or business competitors have used these places to attack their competitors under the guise of being consumers or customers and saying the worst of the worst things,” he told lawmakers. Wynn’s bill, he said, won’t prevent people from making truthful criticisms of businesses.

In the Chanos case, Wynn said he should get his day in court because multiple government probes didn’t turn up charges, or even suggest “reliable evidence” that his firm violated federal bribery laws.

Big Victory

Wynn has had one big victory in recent years. In 2012, he won a $40 million judgment in Los Angeles against “Girls Gone Wild” creator Joe Francis. A jury found Francis falsely claimed Wynn threatened to kill him over a gambling debt and to “bury him in a hole in the desert.” The judge later cut the award to $19 million.

The casino magnate isn’t the only Nevada businessman who doesn’t take bad press lying down. Rival gaming billionaire Sheldon Adelson, founder of Las Vegas Sands Corp., has cast a wider net, going after journalists in U.K. and Hong Kong courts, a Democratic political committee in New York and his former Macau casino chief in Miami. Adelson, through a spokesman, declined to comment on Wynn’s bill.

State Senator Greg Brower, a Reno Republican who heads the judiciary committee and supports the bill, said Nevada’s existing anti-SLAPP law made it an outlier among states. The new law would restore Nevada’s position in the mainstream, he said.

The law would reduce the time that a target of a defamation suit has to respond, from 60 days to 20 days, and make it easier for the person suing to proceed with his claim.

It also removes a $10,000 penalty that can be levied for filing a lawsuit that’s found to violate the law.

“The criticism has been exaggerated considerably,” Brower said. “This bill -- at least the bill that passed out of the Senate -- created or restored some balance in our SLAPP law.”

Since 2008, Wynn and his businesses have donated $1.6 million to Nevada politicians, according to state finance records. The current members of the Senate Judiciary Committee have received $40,500 from Wynn and his companies, according to the records.

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