Tuesday, June 7, 2005
California Residents Can Sue Nevada Hotel Chain Here For False Advertising, State Supreme Court Rules
From Staff and Wire Service Reports
California courts have jurisdiction of suits by guests against Nevada hotels that market extensively in this state, the California Supreme Court ruled yesterday,
A unanimous court reinstated a local man’s Los Angeles Superior Court class action against the Harrah chain of casino-hotels, which the plaintiff claims imposed an undisclosed energy surcharge when he stayed at one of its properties four years ago.
Harrah’s Entertainment Inc. advertises heavily in California and receives a significant amount of its business from Californians, Justice Janice Rogers Brown explained for the court.
The ruling could have broad implications because of the large number of Californians who visit Nevada hotel-casinos each year.
Frank Snowney claimed that when he made his reservation, he was told the room would cost $50 a night plus room tax.
But when Snowney paid his bill it included a $3 energy surcharge. Snowney said Harrah’s never disclosed the charge when he booked the room. In his complaint, Snowney accused Harrah’s of deceptive business practices, breach of contract and unjust enrichment.
Los Angeles Superior Court Judge Peter Lichtman granted Harrah’s motion to quash, citing among other concerns the company’s lack of business operations or bank accounts in the state. But the Court of Appeal for this district reversed, and the high court said the lower panel was correct.
Harrah’s and its affiliate companies, Brown wrote, “purposefully availed themselves of the privilege of doing business in California.” The companies advertise on billboards in newspapers, and on television and radio stations around California, the justice noted, in addition to soliciting reservations from Californians via the Internet and a toll-free phone number.
The Web site, Brown noted, touts the proximity of the Harrah’s hotels to California.
The justice went on to conclude that the subject matter of the suit and the advertising activities were sufficiently related to support specific jurisdiction over the subject matter, distinguishing cases holding that advertising activities in the plaintiff’s home state are insufficiently related to personal injuries suffered by the plaintiff during a hotel stay to support home-state jurisdiction.
“Unlike the injuries suffered by the plaintiffs in those cases, the injury allegedly suffered by plaintiff in this case relates directly to the content of defendants’ advertising in California,” the jurist wrote.
Snowney’s California lawyers, Edwin Schreiber and his son, Eric—practicing as Schreiber & Schreiber in Encino—said the decision allows them to move forward with their case in Los Angeles Superior Court.
“We’re still allowed to pursue it,” Edwin Schreiber said. “That in itself was a big victory.”
Schreiber cautioned that Harrah’s could take its case to the U.S. Supreme Court.
A Harrah’s spokesman declined to comment. Harrah’s was represented by Robert W. Fischer Jr. of Fulbright & Jaworski.
Schreiber said he had no idea how many Californians had paid the surcharge because the case was thrown out before any discovery was completed. But if Harrah’s loses this case, it could end up paying a hefty price.
In 2001, 35 million people visited Las Vegas. Of those, about 30 percent, or 10.5 million, came from California. Last year, 37.4 million people visited Las Vegas. About 31 percent, or 11.6 million, came from California.
The case is Snowney v. Harrah’s Entertainment, Inc., 05 S.O.S. 2672.
Copyright 2005, Metropolitan News Company