Las Vegas Sun, Inc. v. Adelson

District Court, D. Nevada·Decided November 16, 2022·No. 2:19-cv-01667·Unknown

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

* * *

LAS VEGAS SUN, INC., Case No. 2:19-cv-01667-ART-VCF Plaintiff, v.

SHELDON ADELSON, et al.,

Defendants.

ORDER REGARDING PARTIES’ LAS VEGAS REVIEW-JOURNAL, OBJECTIONS (ECF NOS. 592, 627, INC., a Delaware corporation, 628, 629, 630) TO MAGISTRATE JUDGE FERENBACH’S ORDERS (ECF NOS. 572, 619). Counterclaimant, v.

LAS VEGAS SUN, INC., a Nevada corporation; BRIAN GREENSPUN, an individual and as the alter ego of Las Vegas Sun, Inc.; GREENSPUN MEDIA GROUP, LLC, a Nevada limited liability company, as the alter ego of Las Vegas Sun, Inc.,

Counterclaim-Defendants.

Pending before the Court are objections (ECF Nos. 592, 627, 628, 629, 630) by Defendants and Counter-Claimant News+Media Capital Group, LLC and Las Vegas Review Journal, Inc. (collectively the “RJ”), and Plaintiff and Counter- Defendant Las Vegas Sun (the “Sun”) to Magistrate Judge Ferenbach’s orders overruling the parties’ objections to orders by Special Master Pro. (ECF Nos. 572, 619). Regarding documents related to Elizabeth Cain, this Court overrules the RJ’s objections to ECF No. 572. (ECF No. 592). Regarding the four 30(b)(6) deposition topics, this Court overrules the RJ’s objection. (ECF Nos. 627, 628). Regarding Interrogatories 14 and 15, the Court grants the Sun’s objection to ECF No. 619 (ECF Nos. 629, 630), overrules the relevant portion of Magistrate Judge Ferenbach’s order (ECF No. 619 at 5), and orders the RJ to respond to Interrogatory Nos. 14 and 15 as written. Other topics in ECF No. 619 were either not objected to or have already been resolved. (ECF No. 647.) Because the Court read and considered the proposed replies filed by the Sun (ECF No. 649) and the RJ (ECF No. 652), the Court grants these motions for leave to file a reply. In this antitrust action the Sun claims that the RJ’s failure to honor a 2005 Joint Operating Agreement (“2005 JOA”) between the parties has resulted in the RJ monopolizing the local newspaper market. In its Complaint, the Sun claims that the RJ is liable for: (1) monopolization, in violation of § 2 of the Sherman Act 15 U.S.C. § 2; (2) attempted monopolization, in violation of § 2 of the Sherman Act; (3) conspiracy to monopolize, in violation of § 2 of the Sherman Act; (4) violation of § 7 of the Clayton Act. 15 U.S.C. § 18; and (5) violation of Nevada’s Unfair Trade Practices Act. NRS 598 (ECF No. 1). The Sun filed the Amended Complaint on March 24, 2022, alleging additional facts and adding a sixth claim for violation of § 1 of the Sherman Act. (ECF No. 621). Central to the antitrust claims are the RJ’s alleged violations of the 2005 JOA. According to the Sun, since 1989, the RJ has published and distributed both papers under a 50-year Joint Operating Agreement authorized by the Newspaper Preservation Act (the “NPA”). The NPA provides a limited antitrust exemption for newspapers to combine production, marketing, distribution, and sales, so long as their editorial and reportorial functions are maintained separate and independent. (Id. at 3). Under the terms of the 1989 Joint Operating Agreement (“1989 JOA”), the Sun and RJ produced and distributed separate daily newspapers using a single platform (the RJ’s plant and equipment). In 2005, the 1989 JOA was amended. Under the 2005 JOA, the parties combined the two newspapers into a single-media product that separately branded the RJ and the Sun and included the Sun as a separate newspaper located inside the RJ. (ECF No. 621 at 12). The 2005 JOA details how the RJ is required to market and promote the Sun, charge expenses attributable to the Sun, and share profits. The RJ agreed to continue to print the Sun and oversee all accounting, management, and operational control, except for the operation of the Sun’s news and editorial department. (Id.). Regarding promotion, the RJ was required to (1) follow formatting specifications for the Sun’s pages; (2) publish a box above the Review- Journal’s own banner on its front page with the Sun’s logo, lead story headline, and its location (Id.); (3) market and promote the Sun (using commercially reasonable efforts to maximize the circulation of both newspapers), including equal mention of the Sun in the RJ’s promotional activities to ensure the Sun’s brand remains as robust as the RJ’s (Id. at 13); (4) use commercially reasonable efforts to promote the Sun in equal prominence to the RJ; and (5) publish the Sun paper as part of RJ’s electronic replica edition. (Id). The 2005 JOA provides that the Sun shall receive annual profits payment monthly and includes audit and arbitration rights exercisable only by the Sun. (Id. at 14). The Sun alleges operational and accounting violations of the 2005 JOA going back to 2015, after the RJ was acquired by Defendants. The allegations include failing to comply with marketing and promotion requirements, threatening to terminate the 2005 JOA, and impermissibly charging promotional activity for the RJ against the joint operation. The Sun alleges that its profit payments have dwindled since 2015, attributing the decline to the RJ’s alleged manipulation of the earnings before interest, taxes, depreciation, and amortization (EBITDA) by charging the RJ’s individual editorial and promotional costs against the joint operation. (ECF No. 621 at 24). At issue here are three areas of discovery: documents relating to Elizabeth Cain, four 30(b)(6) topics, and Interrogatories 14 and 15. The Court addresses each objection in turn. In reviewing a magistrate judge’s non-dispositive pretrial order, the magistrate judge’s factual determinations are reviewed for clear error. See 28 U.S.C. § 636(b)(1)(A); see also Fed. R. Civ. P. 72(a); LR IB 3-1(a) (“A district judge may reconsider any pretrial matter referred to a magistrate judge in a civil or criminal case pursuant to LR IB 1-3, where it has been shown that the magistrate judge’s ruling is clearly erroneous or contrary to law.”). A magistrate judge’s decision is clearly erroneous or contrary to law “when he makes an error of law, when he rests [a] decision on clearly erroneous findings of fact, or when [the Court is] left with a definite and firm conviction that he committed a clear error of judgment.” United States v. Ressam, 679 F.3d 1069, 1086 (9th Cir. 2012) (quotation omitted). Relevance and proportionality define the scope of discovery under Rule 26. “[B]road discretion is vested in the trial court to permit or deny discovery.” Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). To be permissible, discovery must be “relevant to any party's claim or defense.” In re Bard IVC Filters Prods. Liab. Litig., 317 F.R.D. 562, 563-64 (D. Ariz. 2016). Rule 26(b)(1) outlines the factors that a court must consider when determining whether relevant discovery is proportional to the needs of the case: (1) “the importance of the issues at stake in the action,” (2) “the amount in controversy,” (3) “the parties’ relative access to relevant information,” (4) “the parties’ resources,” (5) “the importance of the discovery in resolving the issues,” and (6) “whether the burden or expense of the proposed discovery outweighs its likely benefit.” Id. The “benefit” of discovery is reflected in the importance of the issues (1) and the discovery (5); the “burden or expense” takes into accoun

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Las Vegas Sun, Inc. v. Adelson, (D. Nev. 2022).

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