SAN FRANCISCO (CN) — After twice losing a bid to sue an investment expert for defamation, Las Vegas casino mogul Steve Wynn did not fare well during a Ninth Circuit hearing Tuesday.
Wynn, CEO and chairman of Wynn Resorts, claimed James Chanos, owner of a private investment firm, defamed him during an April 25, 2014 conference on the Macau gaming industry.
The UC-Berkeley Graduate School of Journalism hosted the event at which Wynn claims Chanos defamed him by saying Wynn and Wynn Resorts had violated the Foreign Corrupt Practices Act.
U.S. District Judge William Orrick disagreed in March 2015, and dismissed Wynn’s defamation complaint with prejudice, based on California’s anti-SLAPP law. Orrick said Wynn did not plead any facts that indicated Chanos’ statements amounted to defamation.
During the appeals hearing Tuesday, Wynn’s attorney Mitchell Langberg, with Brownstein Hyatt Farber & Schreck, said Chanos’ comments were direct accusations of violations of the FCPA and wrongdoing.
“His failure to disclose the facts upon which that opinion was based, if those facts are to be assumed … you have committed a defamation,” Langberg said.
Ninth Circuit Judge Paul Watford questioned Langberg’s interpretation of Chanos’ statements.
“The difference is, here we don’t know that Chanos found definitive proof of violations of the law. He found enough to be worried about it, and that’s the opinion he communicated to the audience,” Watford said.
Watford said Wynn does not dispute that Wynn Resorts was at risk of an investigation for possible wrongdoing and might have faced prosecution. “That was enough to make someone to want to make a different investment decision. That to me is all that a reasonable jury to infer from what this gentleman said,” Watford said.
He added: “There’s no defamatory meaning in there.”
Langberg cited “one of the foremost linguistics experts in the world” as saying Chanos’ statements could cause a reasonable listener to conclude he made defamatory statements about Wynn and Wynn Resorts.
Those statements suggested Chanos found violations of the Foreign Corrupt Practices Act, and an investigation would cost his clients’ money, Langberg argued.
Watford disagreed. “Everything you said just reinforces my view that this … is just an expression of his personal opinion of what the level of risk is,” the judge said.
Langberg said Chanos must disclose the facts that led him to state his opinion, and that without them, his statements are defamatory.
Representing Chanos, attorney Steven Mayer said Chanos made no core statement of defamatory facts, and that Wynn acknowledged Chanos did not say anything defamatory.
Wynn has a problem with what he thinks Chanos implied, Mayer said. He said there was still a risk the government might investigate or prosecute and impose civil penalties for violations of the FCPA.
“Chanos never used the word ‘violation’ and never said they were in violation of the law. All he said was there were risks,” Mayer said.
Ninth Circuit Judges Mary Murguia and Ferdinand Fernandez joined Watford on the panel.