Stephen Wynn Lawsuit Dismissed In Big Win For Jim Chanos

Stephen Wynn Lawsuit Dismissed In Big Win For Jim Chanos
Jim Chanos photo via Insider Monkey (CC BY-ND 2.0)

Stephen Wynn & Wynn Resorts v James Chanos – Order Granting Motion to Dismiss and Motion to Strike and Denying Plaintiff’s Motion for Discovery

via Sam E. Antar

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[drizzle]JIM CHANOS,
Case No. 14-cv-04329-WHO
Re: Dkt. Nos. 52, 54, 60

In an attempt to hold defendant Jim Chanos liable for slander per se, plaintiffs Stephen Wynn and Wynn Resorts Ltd. (collectively, “Wynn”) filed a First Amended Complaint (“FAC”) after I dismissed their original complaint without prejudice. The FAC fails to remedy the legal shortcomings of Wynn’s original cause of action – namely, that Jim Chanos’s statements were not slanderous as a matter of law. Wynn has not pleaded any additional facts that would, if true, alter my prior ruling that Jim Chanos’s statements do not constitute slander per se. Accordingly, I GRANT Chanos’s motion to dismiss. I also GRANT Jim Chanos’s motion to strike under California’s anti-SLAPP statute, which is particularly apt in this case. No amount of discovery would help Wynn defeat any element of the motion to strike, and so his pending motion for discovery is DENIED.

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I discussed the factual backdrop of Jim Chanos’s comments and Wynn’s business in detail in the order issued on December 16, 2014, and will not repeat it here. See Order at 1-3 (Dkt. No. 44). After I granted Wynn’s complaint with leave to amend, Wynn filed a First Amended Complaint (“FAC”). FAC (Dkt. No. 50). Jim Chanos subsequently filed a second motion to dismiss and motion to strike under California’s anti-SLAPP statute. I heard argument on the motions to dismiss and to strike on February 25, 2015.

Legal Standard

I. Motion To Dismiss

A motion to dismiss shall be granted where the plaintiff fails “to state a claim upon which relief can be granted.” FED. R. CIV. P. 12(b)(6). In reviewing these motions, courts view all of the plaintiff’s material facts as true and in the light most favorable to the moving party. Lee v. City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001). In order to survive a motion to dismiss, the plaintiffs “must not only establish that [the assertions] about which they complain are reasonably capable of sustaining a defamatory meaning, they must also show that they are not mere comment within the ambit of the First Amendment.” Knievel v. ESPN, 393 F.3d 1068, 1073-74 (9th Cir. 2005) (internal quotations and citations omitted).

II. Motion To Strike

California law provides a cause of action for a special motion to strike “arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue.” CAL. CIV. PROC. CODE § 425.16(b)(1). This motion, known as an “anti-SLAPP” motion, “was enacted to provide a procedure for expeditiously resolving nonmeritorious litigation meant to chill the valid exercise of the constitutional rights of freedom of speech and petition in connection with a public issue.” Riese v. County of Del Norte, No. 12–cv–03723–WHO, 2013 WL 4732603, at *2 (N.D. Cal. Sept. 3, 2013).

Under California’s anti-SLAPP statute, a complaint for defamation shall be stricken if it arises from a defendant’s speech in connection with a public issue and if the plaintiff cannot establish a probability of prevailing on the merits of the claim. Troy Group, Inc. v. Tilson, 364 F. Supp. 2d 1149, 1152 (C.D. Cal. 2005); CAL. CIV. PROC. CODE § 425.16(b)(1). Courts first look to whether the defendant makes a threshold showing that the activity at issue is protected. Tilson, 364 F. Supp. at 1152. If this requirement is satisfied, the plaintiff must then establish a probability of success on its claim for defamation, showing both that the complaint is legally sufficient and that there is a prima facie showing of facts to support its claim. Id.

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