Las Vegas Sun

March 29, 2024

R-J wants documents in lawsuit with Sun withheld from public

Review

John Locher / AP

This Dec. 17, 2015, file photo shows a sign outside the building housing the Las Vegas Review-Journal in Las Vegas.

In the latest development in a long-running legal dispute between Nevada’s two largest newspapers, the Las Vegas Sun on Wednesday accused the Las Vegas Review-Journal of employing a double standard on public records after the R-J’s attorneys pressed for documents in the case to remain hidden from the public.

After a hearing before Clark County District Judge Timothy Williams, Sun attorney Leif Reid said that although the R-J liked to present itself as a champion of open records, its commitment to transparency didn’t apply to matters involving the R-J itself.

“It’s ironic that the R-J uses its pages on an almost-daily basis to rail about open courtrooms and public access to court documents, except when it comes to its own case and exposing its own anticompetitive conduct,” Reid said.

At issue during Wednesday’s hearing was whether information from a 2019 arbitration ruling should remain sealed.

The R-J not only stridently opposed the release of the information, it complained about the presence of a Sun reporter during hearings on the matter.

“We’re talking about highly confidential business information,” said Michael Gayan, an attorney for the R-J. “The bulk of the information produced and discussed in the arbitration was the Review-Journal’s information — documents about how they run their business, advertising revenue and how negotiations happen, trade agreements and how they run their accounting. If made public, this information would have the possibility of causing irreparable harm to my client’s business.”

As part of an ongoing series of disputes surrounding a newspaper joint operating agreement between the R-J and the Sun, an arbitrator ruled in July that the R-J — purchased by billionaire Sheldon Adelson in 2015 — violated terms of the pact. The agreement, the structure of which was created by Congress in the 1970s, provides limited antitrust protection for newspapers to combine business functions while remaining editorially independent.

The arbitrator said the R-J’s violations of the JOA deprived the Sun of millions of dollars in annual profit payments to which it was entitled.

Williams ruled in December that the arbitrator was correct about the missed payments, ordering the R-J to pay $1.6 million in damages, plus $261,000 in interest, to Sun in the first phase of a multimillion-dollar judgment for violating terms of the agreement.

Arbitration proceedings, however, were not public, though Sun lawyers have argued that they should be because the matter later came before the Clark County District Court.

“The starting presumption is always going to be the open access to court records,” Sun lawyer Kristen Martini said. “Just because the parties initially went to arbitration, that doesn’t change, at the end of the day, that the parties still have to come to court and use judicial resources. In the judicial arena, the public has the right to see what this court does in confirming or vacating the arbitration award. The public is entitled to know what happened.”

Wednesday’s hearing over the R-J’s motion to seal arbitration documents is part of a case between the two parties in state court. A separate case, filed by the Sun last year and also involving the joint operating agreement, is being heard in federal court.

After hearing arguments from both sides, Williams said he likely would make a decision regarding the arbitration documents in mid-April.

“I think the public policy issues here are tremendous,” Williams said.

In addition to saying the release of certain documents would compromise business interests, R-J lawyers warned that any public disclosure wouldn’t be fair to those who testified as part of the arbitration proceedings with the understanding that what they said would be kept confidential.

“There is a strong public policy, here in Nevada and nationwide, favoring private arbitrations,” Gayan said. “Courts should be making rulings to support that strong public policy, not rulings that chip away at it or make it less desirable for parties to want to privately and confidentially arbitrate disputes.”

In many cases, Gayan said, the R-J would be a proponent of open records, though circumstances surrounding the arbitration documents put the newspaper in a different category.

“I want to make it clear: Our clients, the Review-Journal, are strong proponents to public access to government records, including court records,” Gayan said. “That’s one thing they feel strongly about. Our clients also recognize that public access is not unlimited, unfettered or absolute. There are certain situations where the sealing of court records is appropriate.”

Martini said the importance of maintaining open records in court went far beyond the R-J/Sun case.

“America’s democracy in our court system is founded on this presumption of access to court documents,” Martini said. “Imagine what would happen if parties were in fact allowed to privately agree that all documents ever exchanged or used in litigation would be confidential and, even when they came in front of the court, records would be sealed.”

The two parties will come before Williams for another hearing related to the state case next week.

In the federal suit, the Sun’s filing accuses the R-J of engaging in what amounted to a violation of federal antitrust regulations and an attempt to create an illegal newspaper monopoly in Clark County by attempting to leave the JOA.

The JOA structure was created under the Newspaper Preservation Act, which was approved by Congress and signed into law in 1970. Under the agreement between the Sun and R-J, the R-J prints and distributes the Sun print publication. The Sun does not sell or carry advertising in that print publication but instead receives a portion of the R-J’s revenue.