Tuesday, November 15, 2005
Justices Deny Review of Ruling That Nevada Hotel Can Be Sued Here
California Supreme Court’s Holding That Harrah’s Advertising Subjects It to State’s Jurisdiction Left Standing
By KENNETH OFGANG, Staff Writer/Appellate Courts
A California Supreme Court ruling that allows California residents to sue a Nevada hotel chain in this state’s courts, based on the hotels’ extensive advertising here, was left standing yesterday by the U.S. Supreme Court.
The justices, without comment or dissent, denied a petition for writ of certiorari by Harrah’s Entertainment, Inc., allowing Frank Snowney to proceed with his 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 California high court in its ruling last June. Brown is now a judge of the U.S. Court of Appeals for the District of Columbia Circuit.
The ruling could have broad implications because of the large number of Californians who visit Nevada hotel-casinos each year.
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.
Eric Schreiber of Encino’s Schreiber and Schreiber, an attorney for the plaintiff, said he had no idea how many Californians had paid the surcharge because the case was thrown out before any discovery was completed. Californians make up an estimated 31 percent of all visitors to Las Vegas, which draws more than 35 million tourists per year.
Harrah’s and its attorneys, from the firm of Fulbright & Jaworski, declined to comment on the case.
Copyright 2005, Metropolitan News Company