Las Vegas Sands v. Eighth Jud. Dist. Ct. , 2014 NV 13 ( 2014 )

130 Nev., Advance Opinion 13
IN THE SUPREME COURT OF THE STATE OF NEVADA
LAS VEGAS SANDS CORP., A NEVADA No. 62489
CORPORATION; AND SANDS CHINA
LTD., A CAYMAN ISLANDS
CORPORATION,
Petitioners,
FILED
vs. FEB 27 2014
THE EIGHTH JUDICIAL DISTRICT T E K. LINUMAN
COURT OF THE STATE OF NEVADA, PS
BY
IN AND FOR THE COUNTY OF •EPU4
CLARK; AND THE HONORABLE
ELIZABETH GOFF GONZALEZ,
DISTRICT JUDGE,
Respondents,
and
STEVEN C. JACOBS,
Real Party in Interest.
Original petition for a writ of prohibition or mandamus
challenging a district court order compelling disclosure of purportedly
privileged documents.
Petition granted.
Morris Law Group and Steve L. Morris and Rosa Solis-Rainey, Las Vegas;
Kemp, Jones & Coulthard, LLP, and J. Randall Jones and Mark M. Jones,
Las Vegas; Holland & Hart LLP and J. Stephen Peek and Robert J.
Cassity, Las Vegas,
for Petitioners.
Pisanelli Bice, PLLC, and Todd L. Bice, James J. Pisanelli, and Debra L.
Spinelli, Las Vegas,
for Real Party in Interest.
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BEFORE THE COURT EN BANC. ]
OPINION
By the Court, GIBBONS, C.J.:
In this opinion, we consider whether a witness's review of
purportedly privileged documents prior to testifying constitutes a waiver
of any privilege under NRS 50.125, such that the adverse party may
demand production, be allowed to inspect the documents, cross-examine
the witness on the contents, and admit the evidence for purposes of
impeachment. We conclude that it does. However, under the specific facts
of this case, where the adverse party failed to demand production,
inspection, cross-examination, and admission of the documents at or near
the hearing in question and instead waited until well after the district
court had entered its order, the demand was untimely under NRS
50.125(1). Accordingly, we grant petitioners' request for a writ of
prohibition to halt the production of the purportedly privileged documents.
FACTS AND PROCEDURAL HISTORY
Real party in interest Steven Jacobs filed an action against
petitioners Las Vegas Sands Corp. and Sands China Ltd. and nonparty
Sheldon Adelson, the chief executive officer of Las Vegas Sands
(collectively, Sands), arising out of Jacobs's termination as president and
chief executive officer of Sands's Macau operations. Jacobs alleged that
Sands breached his employment contract by refusing to award him
promised stock options, among other things. When the district court
'The Honorable Kristina Pickering and the Honorable Ron
Parraguirre, Justices, voluntarily recused themselves from participation
in the decision of this matter.
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denied Sands China's motion to dismiss for lack of personal jurisdiction,
Sands filed a petition for a writ of mandamus with this court, challenging
the district court's finding of personal jurisdiction. We granted the
petition for a writ of mandamus due to defects in the district court's order
and directed the district court to revisit the issue of personal jurisdiction,
hold an evidentiary hearing, and issue its findings on personal
jurisdiction. See Sands China Ltd. v. Eighth Judicial Dist. Court, Docket
No. 58294 (Order Granting Petition for Writ of Mandamus, August 26,
2011).
As a result of Sands's conduct in the ensuing jurisdictional
discovery process, the district court sua sponte ordered an evidentiary
hearing to consider sanctions. At the hearing, the district court considered
(1) whether Sands violated EDCR 7.60(b) by causing the district court and
Jacobs to waste time and resources on the applicability of Macau's
Personal Data Protection Act (MPDPA), and (2) whether Sands breached
its duty of candor to the court. 2
During the three-day sanctions hearing, Jacobs cross-
examined former Las Vegas Sands attorney Justin Jones on the theory
that Jones and another attorney had printed copies of e-mails from Jacobs
The MPDPA prohibits the transfer of personal data out of Macau,
2
but testimony revealed that Sands had transported "ghost images" of
important hard drives from Macau into the United States and that other
data links were available between Macau and Las Vegas. Despite the fact
that the information was already in the United States, Sands delayed
discovery by asserting that it was having trouble obtaining authorization
from Macau to transfer the data out of the country; it was forced to fly to
Macau to• view the data; and as a result, it could not comply with its
disclosure obligations. When the district court found out that the
information had been in the United States all along, it ordered a sanctions
hearing.
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but did not retain the copies so that they could later claim they technically
did not possess the documents, as the documents would have been in the
United States in violation of Macau law. Jacobs noted that Jones's
testimony had been fairly precise, and asked if Jones had reviewed his
billing records before arriving at court that day. Following a work product
objection, Jones responded affirmatively, explaining that he had done so to
refresh his recollection as to certain dates, and that reviewing those
records had in fact refreshed his recollection as to relevant dates. After
another work product objection, Jones revealed that he had also reviewed
e-mails that refreshed his memory as to the timing of events.
Jacobs argued at the hearing that Nevada law requires a
party to disclose any documents used to refresh a witness's recollection,
and thus, the billing records and e-mails Jones used were openly
discoverable. When Sands objected to the identification and examination
of the e-mails based on the work product doctrine and the attorney-client
privilege, the district court suggested that Jacobs file a motion requesting
that the documents be produced. The district court indicated that it would
hold argument and rule on the discovery issue at a later date. Two days
later, and without deciding the discovery issue, the district court filed its
order imposing sanctions on Sands.
Jacobs filed his motion to compel production of the documents
Jones used to refresh his recollection two months later. In this motion,
Jacobs alleged that Jones had waived the work product doctrine and the
attorney-client privilege when he refreshed his recollection with the
purportedly privileged documents. Sands opposed the motion, arguing
that NRS 50.125(1), which generally requires disclosure of a writing used
to refresh a witness's memory, does not require automatic disclosure of
privileged documents, and that the district court must employ a balancing
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test to determine whether disclosure is in the interests of justice.
Alternatively, Sands argued that the rights of production, inspection,
cross-examination, and admission provided for in NRS 50.125(1) must be
exercised at the hearing at which the witness testifies based on the
documents. The district court heard arguments in chambers and entered
an order compelling Sands to produce the documents. At Sands's request,
the district court stayed enforcement of its order pending the resolution of
these writ proceedings.
DISCUSSION
When the district court acts without or in excess of its
jurisdiction, a writ of prohibition may issue to curb the extrajurisdictional
act. Club Vista Fin, Servs., L.L.C. v. Eighth Judicial Dist. Court, 128 Nev.
„ 276 P.3d 246, 249 (2012). Thus, even though discovery matters
typically are addressed to the district court's sound discretion and
unreviewable by writ petition, this court has intervened in discovery
matters when (1) the trial court issues blanket discovery orders without
regard to relevance, or (2) a discovery order requires disclosure of
privileged information. Id. at & n.6, 276 P.3d at 249 & n.6 (explaining
that discovery excesses are more appropriately remedied by writ of
prohibition than mandamus); Valley Health Sys., L.L.C. v. Eighth Judicial
Dist. Court, 127 Nev. 252 P.3d 676, 679 (2011); Schlatter v.
Eighth Judicial Dist. Court, 93 Nev. 189, 193, 561 P.2d 1342, 1344 (1977).
This case presents a situation where, if improperly disclosed, "the
assertedly privileged information would irretrievably lose its confidential
and privileged quality and petitioners would have no effective remedy,
even by later appeal." WardLeigh v. Second Judicial Dist. Court, 111 Nev.
345, 350-51, 891 P.2d 1180, 1183-84 (1995). Thus, we choose to exercise
our discretion to consider this writ petition because the district court order
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at issue compels disclosure of purportedly privileged information. See
Valley Health, 127 Nev. at , 252 P.3d at 679; see also Aspen Fin. Servs.,
Inc. v. Eighth Judicial Dist. Court, 128 Nev. „ 289 P.3d 201, 204
(2012) ("[W]rit relief may be available when it is necessary to prevent
discovery that would cause privileged information to irretrievably lose its
confidential nature and thereby render a later appeal ineffective.").
Standard of review
Here, the parties dispute the district court's interpretation
and application of NRS 50.125. Statutory interpretation and application
is a question of law subject to our de novo review, even when arising in a
writ proceeding. Int'l Game Tech., Inc. v. Second Judicial Dist. Court, 124
Nev. 193, 198, 179 P.3d 556, 559 (2008). "Generally, when a statute's
language is plain and its meaning clear, the courts will apply that plain
language." Leven v. Frey, 123 Nev. 399, 403, 168 P.3d 712, 715 (2007). But
when a statute is susceptible to more than one reasonable interpretation,
it is ambiguous, and this court must resolve that ambiguity by looking to
legislative history and "construing the statute in a manner that conforms
to reason and public policy." Great Basin Water Network v. Taylor, 126
Nev. 234 P.3d 912, 918 (2010).
When invoked at a hearing, NRS 50.125 requires disclosure of any
document used to refresh the witness's recollection before or while
testifying, regardless of privilege
To resolve this appeal, we must determine whether the
Nevada Legislature intended all writings, including privileged documents,
to be produced for impeachment purposes when a witness uses the
document to refresh his or her recollection prior to testifying. NRS
50.125(1) provides for the production and introduction of writings used to
refresh a witness's memory:
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If a witness uses a writing to refresh his or her
memory, either before or while testifying, an
adverse party is entitled:
(a) To have it produced at the hearing;
(b) To inspect it;
(c) To cross-examine the witness thereon;
and
(d) To introduce in evidence those portions
which relate to the testimony of the witness for
the purpose of affecting the witness's credibility.
The intersection of NRS 50.125 and Nevada privilege law is an issue of
first impression in Nevada. 3
Sands argues that NRS 47.020 and NRCP 26(b)(3) guarantee
that the work product doctrine and the attorney-client privilege apply at
all stages of all proceedings except where they are "relaxed by a statute or
procedural rule applicable to the specific situation." NRS 47.020(1)(a). To
that end, Sands argues that NRS 50.125 does not "relax" any privilege
because it does not specifically mandate the forfeiture of privileged
3 We note that this court addressed the interaction between NRS
50.125 and privileged communications in Means v. State, 120 Nev. 1001,
103 P.3d 25 (2004). In Means, a former client demanded work product
from his former attorney, not the more common scenario where counsel
representing an adverse party demands disclosure. Id. at 1009-10, 103
P.3d at 30-31. Under the circumstances presented there, we concluded
that disclosure of the documents in question was warranted. Id. at 1010,
103 P.3d at 31. We take this opportunity to clarify that Means involved a
unique factual situation where a former client attempted to obtain his
former counsel's notes for the purposes of an ineffective assistance of
counsel claim. Our narrow holding was consistent with our reliance on
Spivey v. Zant, 683 F.2d 881 (5th Cir. 1982), a case holding that a former
client is entitled to all portions of his former attorney's file and that the
work product protection only applies when an adversary seeks materials.
Id. at 885. Therefore, we conclude that Means is inapplicable to the case
at hand.
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documents when a witness uses those documents to refresh his or her
memory before testifying. Alternatively, Sands argues that NRS 50.125
only provides that an adverse party is entitled to a document at the
hearing, and therefore, it cannot be used as a tool for obtaining discovery
after the relevant hearing has concluded. Jacobs responds that NRS
50.125 makes no exception for privileged documents and therefore applies
to both privileged and nonprivileged documents. Additionally, Jacobs
argues that NRS 50.125 lacks the discretionary prong that its federal
counterpart, Federal Rule of Evidence (FRE) 612, contains. 4 Thus, Jacobs
asserts that any document used to refresh a witness's recollection before
or during testimony must be disclosed.
Looking at the language of NRS 50.125, we conclude that the
language "a writing" is ambiguous because the phrase could be interpreted
to mean any writing, privileged or unprivileged. "[Al writing" could also
be interpreted under NRS 47.020 to exempt privileged documents because
under NRS 47.020, a privilege applies "at all stages of all proceedings"
except where it is "relaxed by statute or procedural rule applicable to the
specific situation." NRS 47.020(1). Therefore, we consider the statute's
legislative history.
4 Similar to NRS 50.125, FRE 612(b) provides that when a witness
uses a writing to refresh his or her memory, "an adverse party is entitled
to have the writing produced at the hearing, to inspect it, to cross-examine
the witness about it, and to introduce in evidence any portion that relates
to the witness's testimony." But FRE 612(a) differentiates between
instances when a witness uses a writing to refresh memory while
testifying as opposed to before testifying. In situations when a witness
uses a writing to refresh his or her memory prior to testifying, it is within
the district court's discretion to decide whether justice requires the writing
to be produced. FRE 612(a)(2).
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NRS 50.125 differs significantly from FRE 612
The Nevada Legislature has not amended NRS 50.125 since
its passage in 1971. At that time, the language of the statute was chosen
based on a draft version of FRE 612. Hearing on S.B. 12 Before the
Senate Judiciary Comm., 56th Leg. (Nev., February 10, 1971). During the
United States Congress's consideration of the draft rules, however, it
amended FRE 612(a) to make production of writings used by a witness to
refresh recollection before testifying subject to the discretion of the court
"in the interests of justice, as is the case under existing federal law." H.R.
Rep. No. 93-650, at 13 (1974), reprinted in 1974 U.S.C.C.A.N. 7075, 7086.
Congress implemented this change because it did not want to require
wholesale production of documents used before testifying, as doing so
"could result in fishing expeditions." Id. NRS 50.125 does not contain this
discretionary prong.
The legislative history of NRS 50.125 does not shed light on
whether the Nevada Legislature intended to require automatic disclosure
despite a document's privileged status. But the legislators who worked on
Nevada's evidence code noted that they wanted the code to promote "the
search for truth," that "as much evidence as can come out, should come
out," and therefore, they attempted to limit exceptions. Hearing on S.B.
12 Before the Senate Judiciary Comm, 56th Leg. (Nev., February 10,
1971).
Sands argues that the difference in the text between FRE 612
and NRS 50.125 is slight and does not affect the outcome of the case and
that Nevada courts should have discretion on a case-by-case basis to
balance the adverse party's need for the writing against the important
public interests in protecting privileged documents. Jacobs responds that
unlike FRE 612, NRS 50.125 draws no distinction between documents
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used prior to and while testifying, and contains no provision for the
exercise of discretion. Further, Jacobs argues that even under federal
cases that apply the discretionary prong, the weight of authority mandates
disclosure of the privileged documents.
We conclude that the differences between NRS 50.125 and
FRE 612 are significant. Whereas FRE 612 permits the district court's
exercise of discretion to preclude disclosure of privileged documents used
to refresh a witness's recollection before testifying, no such discretionary
language exists in NRS 50.125. Without such language in NRS 50.125,
Nevada district courts lack discretion to halt the disclosure of privileged
documents when a witness uses the privileged documents to refresh his or
her recollection prior to testifying. In the 40 years since the passage of
FRE 612, the Nevada Legislature has had the option to bring NRS 50.125
in line with the federal rule by adding a discretionary prong, but has not.
Thus, we conclude that NRS 50.125 mandates that documents relied on
before and during testimony to refresh recollection be treated the same.
We therefore decline to read a discretionary element into NRS 50.125
where the Legislature has provided none.
Additionally, allowing privilege to prevail at this stage of a
witness's testimony would place an unfair disadvantage on the adverse
party. Sands's interpretation of NRS 50.125 would encourage witnesses to
use privileged writings to refresh recollection in an attempt to shield the
witness from any meaningful cross-examination on his or her testimony. 5
5 We have previously observed that "the attorney-client privilege was
intended as a shield, not a sword." Wardleigh v. Second Judicial Dist.
Court, 111 Nev. 345, 354, 891 P.2d 1180, 1186 (1995) (internal quotation
marks omitted). It would be unfair to allow a witness to rely on a
privileged document to refresh his or her recollection, and then disallow
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Such an interpretation of NRS 50.125 would inhibit the cross-examining
party from investigating discrepancies between the writing and the
witness's testimony, and as such, would serve to inhibit "the search for
truth."
The Nevada Legislature enacted NRS 50.125 to allow an
adverse party to inspect and use the document to test a witness's
credibility at the hearing. Thus, we conclude that where a witness
refreshes his or her recollection with privileged documents, the witness
takes the risk that an adversary will demand to inspect the documents.
Therefore, when invoked at a hearing, we conclude that NRS 50.125
requires disclosure of any document used to refresh the witness's
recollection before or while testifying, regardless of privilege. See
Wardleigh, 111 Nev. at 354-55, 891 P.2d at 1186 (indicating that the
"attorney-client privilege is waived when a litigant places information
protected by it in issue through some affirmative act for his own benefit"
(internal quotations omitted)). However, as explained below, Jacobs did
not properly invoke NRS 50.125 at the sanctions hearing, rendering the
issue of Jones's credibility a moot point.
We note that Jones's reliance on the purportedly privileged
documents for the purposes of refreshing his recollection would have only
...continued
the cross-examiner to know the extent to which that document influenced
or contradicts the witness's testimony. See James Julian, Inc. v. Raytheon
Co., 93 F.R.D. 138, 146 (D. Del. 1982) ("The instant request constitutes
neither a fishing expedition into plaintiffs files nor an invasion of
counsel's 'zone of privacy.' Plaintiffs counsel made a decision to educate
their witnesses by supplying them with the [privileged documents], and
the Raytheon defendants are entitled to know the content of that
education.").
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required disclosure of the documents to opposing counsel upon appropriate
request under NRS 50.125, and would not constitute any further waiver of
the work product doctrine or the attorney-client privilege that would have
made the documents discoverable at a later point. See Marshall v. U.S.
Postal Serv., 88 F.R.D. 348, 351 (D.D.C. 1980) ("[U]se of a document for
recollection purposes requires only the disclosure of the document to
opposing counsel, and [the] disclosure does not, in and of itself, constitute
any further waiver of the attorney-client privilege.").
The district court abused its discretion when it ordered the production of
purportedly privileged documents because the request was untimely and
Jones's credibility was no longer at issue
Sands argues that NRS 50.125 was designed to ensure that an
adverse party has a full and fair opportunity to test the witness's
credibility when the witness's testimony is based on recollection that was
refreshed by examining particular writings. Sands points out that when
the district court entered its order compelling production of the documents
in question, there was no longer any need or opportunity to test Jones's
credibility because the hearing was already over and the district court had
issued its sanctions order. Jacobs argues that the fact that the district
court made its decision post-hearing does not impair Sands's production
requirements.
NRS 50.125(1) plainly states that the adverse party is entitled
to have a document used to refresh the witness's recollection produced at
the hearing, to allow inspection and cross-examination based on the
document, and to permit the adverse party to introduce the document into
evidence "for the purpose of affecting the witness's credibility." As the
United States Court of Appeals for the Third Circuit has noted, "[FRE] 612
is a rule of evidence, and not a rule of discovery. Its sole purpose is
evidentiary in function 'to promote the search of credibility and memory."
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Sporck v. Peil, 759 F.2d 312, 317 (3d Cir. 1985) (quoting FRE 612 advisory
committee note); see also Derderian v. Polaroid Corp., 121 F.R.D. 13, 17
(D. Mass. 1988) (indicating that FRE 612 "is a rule of evidence, not a rule
of discovery"); A,guinaga v. John Morrell & Co., 112 F.R.D. 671, 683 (D.
Kan. 1986) (same). 6 Although Jacobs argues that Sands's misconduct is
ongoing, we are convinced that permitting such an untimely motion would
encourage the types of "fishing expeditions" that both the Nevada
Legislature and Congress sought to avoid with NRS 50.125 and FRE 612.
The sole purpose of MRS 50.125 is to test the witness's credibility at the
hearing, and the statute clearly states that the production must occur at
the hearing.
Here, the district court order compelling production of the
purportedly privileged documents effectively turns MRS 50.125 into a
discovery tool that has no relation to testing any witness's credibility. The
district court read MRS 50.125 too broadly when it ordered the production
of the billing entries and e-mails two months after Jones left the stand and
after it issued its sanctions order. This is evident in the district court
order's language, which states that "[phirsuant to NRS 50.125, once a
document is used by a witness to refresh his recollection, then that
document is subject to discovery." This reading of NRS 50.125 ignores the
"at the hearing" language and turns the statute into a general rule of
discovery, not a rule of evidence. See Derderian, 121 F.R.D. at 17. As a
result, we conclude that the district court abused its discretion by
6 We note that despite the differences between FRE 612 and NRS
50.125, the two provisions serve the same fundamental purpose. Thus, we
find this authority persuasive inasmuch as it relates to the proper purpose
of MRS 50.125.
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mandating the production of the purportedly privileged documents after it
had issued its sanctions order. See Skender v. Brunsonbuilt Constr. &
Dev. Co., 122 Nev. 1430, 1435, 148 P.3d 710, 714 (2006) (explaining that a
district court abuses its discretion if its decision "exceeds the bounds of
law or reason").
Under these facts, when the district court indicated that it
wanted briefing and would defer ruling on the issue, Jacobs should have
noted that NRS 50.125 required the district court to rule on his request at
the hearing. Alternatively, Jacobs should have submitted his motion
immediately following the hearing to ensure that Jones could be put back
on the stand and cross-examined regarding the contents of the purportedly
privileged documents before the district court issued its ruling.
However, because the district court already issued its ruling
on the sanctions issue, the issue of Jacobs's credibility became a moot
point and there was no evidentiary reason to produce the documents.
Thus, this is precisely the scenario in which "writ relief. . . is necessary to
prevent discovery that would cause privileged information to irretrievably
lose its confidential nature and thereby render a later appeal ineffective."
Aspen Fin. Servs., Inc., 128 Nev. at , 289 P.3d at 204.
CONCLUSION
We conclude that upon a timely request, NRS 50.125
mandates production of documents used by a witness to refresh his or her
recollection prior to testifying, regardless of privilege. However,
considering these facts, Jacobs's request for production of the documents
was not timely because the district court had already issued its ruling on
the underlying sanctions issue. We therefore grant Sands's petition and
direct the clerk of this court to issue a writ of prohibition ordering the
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district court to halt the production of the purportedly privileged
documents. 7
Gibbons
We concur:
%,egalLA . , J.
Hardesty
Dr_3-69 14a
Douglas
Cheri
J.
Saitta
7 In
light of this disposition, we need not address the parties' other
arguments, and Sands's alternative request for a writ of mandamus is
denied.
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