Clark County Nevada District Judge Elizabeth Gonzalez is considering further sanction against Sands China Ltd. for redacting “personal information” from about 2,600 documents the company produced in 2013 as part of an ongoing wrongful termination suit first filed in 2010 by Steven Jacobs, the former president of Sands Macau. Jacobs alleges that he was wrongfully fired for refusing to engage in unlawful acts, including promoting prostitution and spying on Chinese politicians in order to find potentially embarrassing information for use in obtaining favorable treatment for the casino.
Jacobs sought the production of about 100,000 emails and other documents from Las Vegas Sands Corp. and Sands China in order to show that Las Vegas controlled Sands China, and therefore the Nevada court has jurisdiction over Sands China. In 2012, Judge Gonzalez ruled that neither defendant could raise the Macau Personal Data Protection Act (the “Macau PDPA”), which has the closest approach to the European Union’s Data Protection Directive of 1995 than any other country in Asia, as an excuse to refuse disclosure. The ruling was made after it was learned that “significant amounts of data from Macau related to Jacobs was transported to the United States” and reviewed by in-house counsel for Las Vegas Sands and outside counsel. The defendants had tried to conceal the existence of the transferred data, and were subsequently ordered to make a $25,000 contribution to the Legal Aid Center for Southern Nevada, and to pay Jacobs’ legal fees for nine “needless” hearings involving issues related to the Macau PDPA.
Unable to avoid disclosure of documents, Sands China then spent US$2.4 million to redact documents, insisting that it would face civil and criminal penalties, including possible imprisonment for the company’s officers and directors if it hadn’t. David Fleming, general counsel for Sands China, testified that Macanese officials “were furious” about the prior release of data from the region.
In 2012, the Macau Office for Personal Data Protection (“OPDP”) had begun an investigation into potential violations related to the alleged transfer of “certain data” from Sands China to the United States without permission, but to date, the government office has made no statement on any outcomes of this probe. Typically, the maximum fine per violation would be 80,000 patacas (US$10,000) and the maximum jail sentence would be two years.
Judge Gonzalez rejected arguments made by Sands China and is currently considering further sanctions against the defendants.
According to the Macau PDPA, “[t]ransfers of personal data to any destination outside the Macau SAR is prohibited unless an adequate level of protection is guaranteed by the legal system of the country where the data is transferred, and such determination is left under the discretion of the OPDP.”
Wynn Macau Fined by Macau OPDP in Relation to FCPA Investigation
In 2013, Wynn Macau Ltd. was fined 20,000 patacas (US$2,500) by the Macau OPDP for unauthorized transfers of customer information to its parent. The information was used in an investigation into whether an executive at the parent company violated the Foreign Corrupt Practices Act. The data included customer relationships and entertainment expenses, and involved officials from another country, and thus its transfer violated Macau’s Personal Data Protection Act, according to the OPDP.