417 F.Supp.3d 416
S.D.N.Y.2019Background
- Sheldon Adelson sued the National Jewish Democratic Council (NJDC) and its chair Marc R. Stanley for defamation based on a 2012 NJDC statement; the court dismissed that suit under Nevada’s anti‑SLAPP statute and awarded defendants attorney’s fees.
- Under Nev. Rev. Stat. § 41.670(1)(c), a prevailing anti‑SLAPP defendant may file a separate action to recover compensatory damages, punitive damages, and attorney’s fees; Stanley and the NJDC brought this separate damages action.
- Plaintiffs moved for partial summary judgment on liability under Nevada’s anti‑SLAPP damages provision.
- Adelson moved to dismiss under Fed. R. Civ. P. 12(b)(6) (arguing Supremacy Clause, New York choice‑of‑law, and that Nevada requires an “objectively baseless” showing) and separately moved to dismiss under Nevada’s anti‑SLAPP statute (arguing the damages suit itself was protected petitioning).
- The Court denied both of Adelson’s dismissal motions, held Nevada law governs the damages action, rejected the incorporation of an “objectively baseless” requirement into Nev. Rev. Stat. § 41.670(1)(c), and denied Adelson’s anti‑SLAPP motion for lack of the required threshold evidence.
- The Court granted plaintiffs’ partial summary judgment as to liability for compensatory damages and attorney’s fees (the statutory precondition was met) but denied summary judgment on punitive damages (fact issue over malice/oppression/fraud remains).
Issues
| Issue | Plaintiffs' Argument | Adelson's Argument | Held |
|---|---|---|---|
| Whether applying Nevada’s anti‑SLAPP damages provision here violates the Supremacy Clause | Federal court sitting in diversity must apply substantive state law (Erie); applying Nevada damages provision is proper | Nevada’s damages award "punishes" use of federal forum and thus infringes federal rights | Rejected — Erie requires application of Nevada substantive law; no Supremacy Clause violation |
| Choice of law governing the damages action | This action is a continuation of the Nevada‑law defamation suit; Nevada law governs compensatory damages and fees | New York law should govern the separate damages action (depecage) | Nevada law governs compensatory damages and fees; punitive damages require separate choice‑of‑law analysis but Nevada’s interest is strongest |
| Whether Nev. Rev. Stat. § 41.670(1)(c) requires a showing that the original suit was "objectively baseless" before damages can be recovered | Statute’s text contains no such precondition; successful special‑motion dismissal suffices | Statute should be read to incorporate an "objectively baseless" (or malicious‑prosecution–style) requirement | Rejected — statute is unambiguous; no objective‑baselessness element is read into §41.670(1)(c) |
| Whether Adelson’s special motion under Nevada’s anti‑SLAPP statute can dismiss this damages suit | Plaintiffs: damages action is statutory remedy, not shielded; Adelson bears burden to show his prior suit was a good‑faith communication | Adelson: prior suit was protected petitioning, so the damages suit is itself a SLAPP | Denied — Adelson failed to meet the initial burden to show the prior suit was a good‑faith communication (no evidentiary showing) |
| Whether plaintiffs entitled to summary judgment on liability for damages and fees | Statutory precondition satisfied (court previously granted special‑motion dismissal); facts about jurisdiction and dismissal are undeclared by Adelson | Summary judgment premature or jurisdictional facts insufficient | Granted in part — summary judgment for liability as to compensatory damages and attorney’s fees; denied as to punitive damages (factual dispute on malice/oppression/fraud) |
Key Cases Cited
- Erie R. Co. v. Tompkins, 304 U.S. 64 (federal courts in diversity apply state substantive law)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard: plausibility)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard and inference drawing)
- Donovan v. City of Dallas, 377 U.S. 408 (states may not curtail right to federal forum by punitive state action)
- Terral v. Burke Construction Co., 257 U.S. 529 (state action that curtails federal forum is void)
- Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (Noerr‑Pennington "objectively baseless" sham standard in antitrust context)
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (limits on extending specialized statutory standards beyond their textual/contextual roots)
- Cotton v. Slone, 4 F.3d 176 (state statutory attorney’s fees apply in diversity)
- Adelson v. Harris, 774 F.3d 803 (2d Cir. treatment of Nevada anti‑SLAPP fee‑shifting in prior appeal; cited for applying state law in diversity)