Las Vegas Tribune

September 20, 2000

By Alexandra Cohen

Several top executives of one of Las Vegas’ premier political advertising agencies have come under fire for illegally mailing a political campaign hit piece to thousands of city voters with a false return address.

This lawsuit comes in the wake of a similar case that resulted in the Nevada Secretary of State rendering fines on Mark Brown, an executive of Station Casinos, for mailing an anonymous hit piece against Clark County Commissioner Lance Malone. Brown first denied sending the piece, then recanted his statement.

The flier was mailed during the final days of the 1999 Las Vegas City Council election that pitted Las Vegas Tribune columnist Steve Miller against Michael McDonald. McDonald won the election by a two-thirds margin after spending $435,000 on the campaign in comparison to Miller’s $26,000.

A JOINT REQUEST FOR EXEMPTION FROM ARBITRATION was filed in Clark County District Court on September 13, by attorneys Thomas Murphrey, Patrick K. McKnight, Charles W. Bennion, Peter S. hristiansen, and John W. Norheim.

The attorneys are representing parties in STEVE MILLER v. BIG ELEPHANT CLUB, GEORGE HARRIS, KELLY MICHAEL SULLIVAN, PALADIN ADVERTISING, STEVE WESTMORELAND, DESERT MEDIA GROUP INC.

They are requesting that the year old lawsuit be exempted from arbitration pursuant to Nevada Arbitration Rules 3 and 5 because it presents an issue of public policy, and involves an amount in excess of the financial limits placed on cases eligible for arbitration.

Arbitration is a method used to force parties to sit down and try to settle cases prior to trial in order to cut back on the court’s case load.

In this case the attorneys agree that this case: 1. Presents a significant issue of public policy;

2. Involves an amount in issue in excess of $25,000.00, exclusive of interest and costs; and 3. Presents unusual circumstances which constitute good cause for removal from the arbitration program.

A summary of the facts presented in the document authored by attorney Patrick McKnight representing Defendant Steve Westmoreland included: "POINTS AND AUTHORITIES – This action arises from a mail piece directed against City Council candidate Steve Miller during the 1999 election. The piece was not favorable to Miller and included statements which Miller says were both untrue and defamatory. Miller brought suit against a myriad of parties, all of whom deny responsibility for the mail piece."

"Steve Westmoreland and Desert Media Group were brought into the action late. By the time they were named, the case had already been assigned to arbitration under the Supreme Court Arbitration Rules. Westmoreland and Desert Media decided to conduct discovery before determining whether to take this matter out of arbitration."

"After having conducted extensive discovery, including Interrogatories, Request for Production of' Documents and taking the depositions of at least five witnesses so far, it is clear this matter should be removed from arbitration because 1) It involves matters of public policy; 2) The recovery by any of the parties is likely to exceed $40,000 and 3) Presents unusual circumstances which constitute good cause for removal from the program."

McKnight went on to state "In May of 1999, Steve Miller was running against Mike McDonald for a seat on the Las Vegas City Council. Jim Ferrence of Paladin advertising met with McDonald's campaign adviser, Rick Henry, to discuss a possible mail piece against Miller. After Ferrence told Henry that he needed to distance himself from the mail piece, Henry suggested that Steve Westmoreland may be willing to take responsibility for the piece."

"According to Westmoreland, both Henry and Ferrence came to his office and suggested that Westmoreland form a Political Action Committee, or PAC, to take responsibility for a mail piece. Westmoreland consulted with his attorney and decided against forming a PAC, but told Henry and Ferrence that an existing PAC, the Big Elephant Club, might be interested. Westmoreland gave Ferrence and Henry the name and number of the Big Elephant Club's founder, George Harris, and told them to contact him."

"As for the mail piece itself; Westmoreland told Ferrence and Henry that his company, Desert Media, produced such things for a fee, and that Westmoreland insisted on reviewing the

written copy to be provided by Ferrence and Henry before agreeing to produce it. Westmoreland heard nothing until after the election and the lawsuit by Miller and never even saw the mailer until the day of his deposition."

"Ferrence, on the other hand, tells a quite different tale. He says that be met with Westmoreland alone and that Westmoreland asked him to produce the mailer at Paladin. Ferrence alleges that Westmoreland gave him all of the information, including newspaper articles about Miller and asked him to write the copy, produce and mail the piece on the Big Elephant Club's behalf. Ferrence claims he faxed Westmoreland a draft before publication, sent the work out to one of Desert Media's competitors, Defendant Las Vegas Color Graphics for final publication, and then mailed the piece out to 20,000 homes."

"It is clear that this is no case of simple misunderstanding. Someone is lying."

"To add further intrigue, Councilman McDonald has since been hired by Las Vegas Color Graphics for $52,000 per year."

In McKnight’s LEGAL ARGUMENT, he states "Matters are exempt from arbitration if the probable jury award is in excess of $40,000 or if the matter involves issues of public policy. Both apply in this case."

"The case is valued at more than $40,000."

"Westmoreland's claim against Paladin for defamation is valued at $250,000. The value of this case increases in proportion to the deceptiveness by the other defendants. This is not simply a case of misunderstanding. This is a conspiracy, trying to set up Westmoreland as a patsy to take the blame for a mail piece someone else produced."

"Westmoreland is being blatantly accused of violating the law requiring those responsible for political mailers to identify themselves on the mail piece (see N.S. 294A.320 below)."

"Westmoreland is being blamed for producing a mail piece which potentially defamed Miller."

"And none of this was by accident. This was clearly by a shrewd, calculated conspiracy, and Westmoreland's reputation has been severely damaged thereby."

"This action involves issues of public policy."

"Nevada law requires that any advertising or mail piece must contain the name of the person or group paying for it. N.S. 294A.320."

The law states: I. Except as otherwise provided in subsection 2, it is unlawful for any person to publish any material or information relating to an election, candidate or any question on a ballot unless that material or information contains: (a) The name and mailing or street address of each person who has paid for or who is responsible for paying for the publication; and (b) A statement that each such person has paid for or is responsible for paying for the publication.

McKnight continued "It is clear that someone in the instant case has gone to great lengths to circumvent this law by trying to put someone else's name on the mail piece. Public policy demands that the proper parties be identified and held responsible not only in this action, but under N.S. 294A.320 as well."

"I hereby certify pursuant to N.R.C.P., 11 this case to be within the exemption(s) marked above and am aware of the sanctions which may be imposed against any attorney or party who without good cause or justification attempts to remove a case from the arbitration program."

Patrick McKnight, Attorney, signed the document for Steve Westmoreland and Desert Media Group; Thomas J. Murphrey, Attorney for Plaintiff Steve Miller; and Peter S. Christiansen, Attorney for Las Vegas Color Graphics. Inc.

Now that Arbitration is cancelled, Discovery will continue and is expected to include depositions of Councilman Michael McDonald and his aide Rick Henry.

If the Plaintiffs are successful at trial, judgements against Paladin Advertising and yet unnamed parties could total in excess of one million dollars. All the Plaintiffs are requesting a trial by jury.

© Copyright Las Vegas Tribune, Inc.