The builder of the flawed Harmon tower on the Las Vegas Strip says hotel owner CityCenter has improperly engaged expert “spin doctors” to influence potential jurors in an upcoming trial over construction defects and unpaid bills there.
Attorneys for builder Tutor Perini Building Corp. of Sylmar, Calif., say CityCenter public relations operatives and attorneys have been working to influence the jury pool by trying to place negative news stories to portray Tutor Perini as “the scum of the earth.”
To pursue their suspicions, attorneys have issued subpoenas for information on the Harmon to the public affairs department of MGM Resorts International, manager and co-owner of CityCenter, as well as California public affairs companies specializing in litigation support Sitrick & Co. and GFBunting.
In a court brief supporting its belief, Tutor Perini said CityCenter had retained a “litigation spin doctor” and launched “a full-scale attempt to try this case in the media.”
CityCenter attorneys, however, said there’s nothing improper about its hiring of litigation consultants and its public relations efforts related to the Harmon, which it plans to demolish because of defects that CityCenter says could cause it to collapse in an earthquake.
“As a company with fiduciary duties to its partners and shareholders, it was reasonable for CityCenter and its lawyers to take into consideration the public affairs impact of its litigation decisions,” CityCenter attorneys wrote in motion requesting that at least one of the subpoenas be canceled.
Clark County District Court Judge Elizabeth Gonzalez, who is presiding over the high-stakes Harmon litigation, this week allowed Tutor Perini to continue its inquiry into CityCenter’s public affairs efforts.
She refused to block one of the subpoenas but also said Tutor Perini can’t see material provided by CityCenter attorneys to the litigation consultants, as that’s protected by attorney/client privilege.
Tutor Perini, in its filing justifying its inquiry, focused on comments it says were made in 2010 by Patricia Glaser, at the time an outside attorney for CityCenter and a prominent litigator in high-profile cases, including some involving Las Vegas Sands Corp.
Tutor Perini’s filing said that during a Los Angeles panel discussion, Glaser and Sitrick CEO Michael Sitrick “espoused the virtues of trying cases in the media” and that Glaser “expressed her intention to do so in this case by retaining an outside communications firm to plant media articles to shape the public’s perception.”
Tutor Perini said that one of her goals was to communicate to the media that Perini is the “scum of the earth” and that all of this was part of a strategy in which companies in litigation “cannot allow the judge and/or jury in high-visibility cases to adopt the world view espoused by the opposing party.”
MGM Resorts, however, says it beefed up its own public affairs efforts on the Harmon after Tutor Perini went public with its grievances and pressed its case on CityCenter payment issues with then-Gov. Jim Gibbons during a 2010 meeting.
Both sides have also communicated extensively with Clark County commissioners and county building officials, as Clark County is responsible for ensuring buildings on the Strip are safe and designed and built to code.
“MGM routinely hires media counsel on significant issues. In this case, MGM initially hired consultants to respond to a public relations blitz by Perini that blamed MGM for Perini’s mistakes,” Alan Feldman, senior vice president of public affairs at MGM Resorts International, said Friday. “None of this affects the fundamental question of this case: How much money does Perini owe MGM for handing MGM a defective building?”
Developed at a cost of $275 million, the 26-story Harmon sits vacant and uncompleted at CityCenter on the Las Vegas Strip and faces demolition likely in 2013 or 2014.
Construction was halted there because of defects. CityCenter blames Perini and its subcontractors for widespread problems with reinforcing steel that was either not installed or was installed improperly.
Perini says the building is safe, defects involve CityCenter design errors and that the flaws can be repaired. It says CityCenter is using the defects as an excuse to get rid of a hotel it has no use for, given the continuing over-supply of hotel rooms in Las Vegas tied to the recession.
Both sides are gearing up for a 2013 trial in which CityCenter will demand to be reimbursed for its investment and lost business opportunities while Perini and the subcontractors will demand that they be paid up to $240 million for work on the structure.
Unless the case is settled, jurors will have to decide who is to blame for the Harmon’s problems, and that’s why both sides are interested in the public’s perception of the case.