By Jonathan Stempel
NEW YORK (Reuters) - Sheldon Adelson, the billionaire casino magnate and prominent Republican donor, has lost a $60 million libel lawsuit in which he claimed a Democratic group spread a false accusation that he had condoned prostitution in his casinos in Macau.
At issue was an article published on July 3, 2012 by the National Jewish Democratic Council on its website that sought to dissuade then-presidential candidate Mitt Romney and other Republicans from accepting Adelson's allegedly "dirty" and "tainted" money.
It cited reports about an accusation that the Las Vegas Sands Corp chief executive "personally approved of prostitution" in his Macau properties.
U.S. District Judge J. Paul Oetken in Manhattan on Monday said the article constituted protected speech and was not libelous.
That accusation, which Adelson has denied, surfaced in a lawsuit brought against him by Steven Jacobs, a fired Las Vegas Sands executive. The allegedly libelous material contained a hyperlink to an Associated Press article that discussed Jacobs' lawsuit.
Adelson, 80, is worth $28.5 billion and the 11th-richest American, Forbes magazine said this month, and donated tens of millions of dollars to Republican candidates and organizations in the 2012 election cycle.
He claimed that the NJDC article was intended to advance the group's political interests by "assassinating" his character.
But in a 57-page decision, Oetken said Adelson failed to show that the defendants, which also included NJDC Chairman Marc Stanley and former NJDC President David Harris, acted with actual malice or reckless disregard of the truth.
The judge said the expressions "dirty money" and "tainted money" were imprecise and could not be proven true or false, and in context constituted protected expressions of opinion.
He also said the use of the hyperlink was proper, and that the defendant's reliance upon an article from a "reputable" news organization precluded a finding of liability.
"Protecting defendants who hyperlink to their sources is good public policy, as it fosters the facile dissemination of knowledge on the Internet," Oetken wrote. "It is to be expected, and celebrated, that the increasing access to information should decrease the need for defamation suits."
Adelson had sought $10 million of compensatory damages and $50 million of punitive damages. Oetken also ordered him to pay the defendants' legal fees.
In a phone interview, Stanley said he was pleased with the decision. "You just can't bully people with your money, and Adelson was trying to bully us with a lawsuit to suppress our speech during the election," he said. "David beat Goliath."
L. Lin Wood, a partner at Wood, Hernacki & Evans representing Adelson, did not immediately respond to requests for comment.
The case is Adelson v. Harris et al, U.S. District Court, Southern District of New York, No. 12-06052.
(Reporting by Jonathan Stempel in New York)