Rick Porrello's - AmericanMafia.com - Steve Miller

The anatomy of a nixed libel lawsuit

INSIDE VEGAS by Steve Miller
AmericanMafia.com
December 19, 2005

Rick Rizzolo Ex-mayor Jan Jones Ex-councilman Mike McDonald

LAS VEGAS - In the news business, its not unusual to receive demands for retraction or correction. Legitimate news outlets usually take such demands very seriously.

In the case of a potentially defamed person, its customary for the offended party to first contact the writer or publisher and demand that the defamatory content be corrected or retracted. Then the publisher may chose to correct or retract the challenged information. If so, he must do so in like form as the original material including placement and size. If not, the potentially injured party can sue the publisher or author, and if successful, obtain punitive damages (infliction of emotional distress, etc.) in addition to real damages (loss of income, business, etc.) If no retraction demand was made prior to the lawsuit being filed (a very rare occurrence), the court is limited to awarding only real damages which are much harder to prove.

In the case of a public figure who feels he was defamed or libeled, the burden of proof is much higher based on SULLIVAN v. NEW YORK TIMES. The injured person must also prove that the defamation was made with "actual malice" and "reckless disregard for the truth." (Remember the movie "Absence of Malice" with Paul Newman?)

Regarding a demand for retraction, the offended party should clearly describe the defamatory statement and why its untrue, then give the publisher time to research and decide whether to correct or retract. Upon receiving such a demand, conscientious editors and writers usually confer immediately with the publication's lawyers. In the majority of cases, the complainant gets the benefit of the doubt, though the First Amendment is always primary when it comes to facts that are verifiable -- hurt feelings aside.

In 1999, as a columnist and reporter for the Las Vegas Tribune, a weekly newspaper then-owned by attorney John Fadgen and partners Jon Moser, Frank Vipperman, and Rolando Larraz, I began covering a story about a politically influential local strip club that had been allowed to expand without first obtaining proper permits from the city.

In my coverage, I described how a city councilman had gone on a feigned moral crusade against pornography in order to shut down an adult book book store that had a long term lease on 6,000 square feet of space that the strip club secretly wanted for expansion. Soon after the book store was closed by the city, the space was converted to the strip club's use.

It was obvious, at least to me, that the fix was in.

In a subsequent article, I reported on a lawsuit by nearby property owners who claimed the bar had not provided additional parking for the expansion, and that the city had not required a parking and traffic study as is always required. I described how the same councilman's staff helped the strip club obtain its building and occupancy permits after the expansion had been open to the public for several weeks, and only after a lawsuit had been filed.

Then, I broke a story about the councilman living rent free in a golf course villa owned by the family of an associate of the strip club owner. In the meantime, I wrote articles about the then-mayor attending social gatherings at the strip club owner's estate located several blocks from the councilman's free digs. My stories also contained accusations from citizens that she was doing the strip club owner favors. The councilman moved out several weeks after my free rent story broke, and the mayor, who was a defendant in a high profile lawsuit, decided not to run for reelection.

My columns and front page stories began to offend certain "pillars of the community" who had for years been obviously operating under the aegis of the mayor and several councilmembers.

As my stories and columns on the bar and its connection to the councilman and mayor continued, one of the newspaper's owners privately asked me to tone it down because he owed money to Fred Doumani and Joey Cusumano, two men associated with the bar. I ignored his unreasonable request, and continued reporting.

Shortly thereafter, and without warning, I was sued for defamation of character. The Tribune was included as a defendant in the lawsuit.

The complaint stated that Tribune stories and columns I authored had falsely accused Rick Rizzolo, the purported owner of the Crazy Horse Too, of "illegal and unethical activities." The complaint did not state what these "illegal and unethical activities" were, just that my stories injured Rizzolo's good reputation and status in the community. The complaint mentioned two specific articles: a story about Rizzolo spying on a neighboring business; and a story about the expansion of his business. The complaint did not state what was untrue in the articles.

Upon receipt of the complaint, Mr. Fadgen summoned his partners, this writer, and the newspaper's editors to his law office. First he asked if a demand for correction or retraction had ever been received at the paper or by me prior to the lawsuit being filed? None had. Then he meticulously picked apart the two articles (below) sentence by sentence and word by word to find anything that could be considered defamatory.

At the end of the two hour meeting, the decision was made to continue coverage of events at the Crazy Horse because Rizzolo had no basis for a defamation lawsuit, and that he was a public figure. Mr. Fadgen placed a call to Rizzolo's young attorneys, Dean Patti and Tony Sgro, to tell them the news.

Within days, interrogatories arrived at the newspaper office and at my home along with a subpoena for me to appear at a deposition. The documents wanted to know the names of my sources at city hall, and asked for copies of personal records, correspondence, and notes about the Crazy Horse. They also asked questions about my personal finances and business interests. At that point, I was forced to make a claim on my Farmer's Homeowner's Insurance policy for personal legal coverage.

My insurance company assigned me an excellent attorney from a prestigious local firm. I instructed him that I would continue writing stories and columns about Rizzolo and his business, and that under the Nevada Shield Law, I could not be compelled to answer interrogatories or subpoenas to testify. He informed Patti and Sgro. They were furious!

Nevada's Shield Law, NRS 49.275 is one of the strongest in the nation. It states:

"No reporter, former reporter or editorial employee of any newspaper, periodical or press association or employee of any radio or television station may be required to disclose any published or unpublished information obtained or prepared by such person in such person's professional capacity in gathering, receiving or processing information for communication to the public, or the source of any information procured or obtained by such person in any legal proceedings, trial or investigation."

The Nevada Press Association Legal Handbook for Nevada Reporters states: "The protection provided by this statute is extremely broad. District Court Judges and Justices of the Peace have repeatedly quashed subpoenas by both defense and prosecution in criminal cases, as well as by parties in civil matters. As it is written, the statute does not require the press to testify even about those matters which have been published."

I also told my attorney that the lawsuit was simply a method to intimidate and silence me, something commonly called a SLAPP suit, and that he should not waste time answering the plaintiff's correspondence with more than one page answers. He said that my request was unusual, but he would comply.

In defiance of the Shield Law, Patti and Sgro continued sending reams of paper containing requests for production of documents along with threats of sanctions if we did not comply. They warned me and the newspaper to stop writing negative stories about the Crazy Horse or Rizzolo, or we would be "compounding the libel." This only served to peak my interest in Rizzolo and his crew, and with the blessings of John Fadgen, all the coverage of their client moved to the front page.

As we increased our coverage of Rizzolo and his associates, as expected, all of Patti and Sgro's subpoenas were quashed by the District Court Referee based on the Shield Law. Meanwhile, the lawsuit caught the attention of outside media, and generated new sources and readers for my stories. The Tribune had a tiger by the tail!

I began devoting more and more time to the Rizzolo story. I even started a website devoted to him, and began a series of daily E-Briefs including information on the latest beatings, robberies, and murders at the Crazy Horse. Seeing that I didn't fear the lawsuit, other reporters followed my lead.

For the next three years, on radio and TV talk shows, I proudly called the defamation suit my "badge of courage." I always referenced the date it was filed to time stamp the fact that I was the first writer to report the political corruption, and the violence the corruption harbored.

On October 3, 2001, a year after the defamation lawsuit was filed, I broke the story of Kirk Henry. The shocking story was picked up by NBC News that used Tribune photos in their coverage. I was also an advisor for the August 1, 2004, segment about Mr. Henry on Dateline NBC. All this while being sued for defamation!

Had I initially been intimidated by Patti and Sgro, important facts may never have been made public, and the bloodshed could have continued unabated. Though other local reporters knew what was going on, their editors were not John Fadgens, and the mere threat of litigation was enough to discourage coverage of some of the most violent episodes in the history of Las Vegas.

Then several amazing things happened:

On October 9, 2001, Mr. Rizzolo (or someone at his behest), authored a Letter to the Editor addressed to Rolando Larraz. In it, for the first time, was a demand for retraction referencing an article I authored entitled "Racketeering Charge Against Rizzolo Sticks." For the second time, the editorial board of the Tribune met and concluded that the article contained only factual information. No retraction was issued, but in fairness, Mr. Rizzolo's letter was published unedited.

On November 13, 2001, Patti and Sgro tried to get a friendly judge to place a gag order on my Crazy Horse news coverage. Because I'm deeply offended by such unconstitutional actions, and because I was completely willing to violate any gag order, I did not attend the hearing. But unbeknownst to me, in the gallery were attorneys representing the Nevada Press Association and American Civil Liberties Union (ACLU), along with Tom Mitchell, the Editor of the Las Vegas Review Journal. When she saw who was present, the compromised judge backed down at the last minute, and Patti and Sgro's obvious plan to put me behind bars fell apart.

Attorney Tony Sgro, who represents topless club owner Rick Rizzolo, argues Tuesday in favor of a gag order against former City Councilman Steve Miller and the Las Vegas Tribune. At right are attorneys Dowon Kang, Chris Rasmussen and Gus Flangas, who opposed the request. Las Vegas Review Journal photo by Gary Thompson

On February 28, 2003, Tribune "Editor in Chief" Rolando Larraz told Cathy Scott of the Las Vegas CityLife magazine; "(Fred) Doumani is my friend for 40 years. I owe him money. He's never asked for it back."

Two years earlier in 2001, Larraz told me that Doumani and Cusumano were very upset with my stories and columns and wanted me to stop writing about the Crazy Horse. He also told me he owed both men large sums of money. Undaunted, I continued my coverage. I never told Mr. Fadgen of the secret meeting -- though I now wish I had.

In March 2001, my friend and colleague John Fadgen passed away.

John P. Fadgen

Just prior to his untimely death, Mr. Fadgen allowed me to use the front steps of his newspaper office for a press conference to announce the recall of Las Vegas City Councilman Michael McDonald -- Rizzolo's sycophant at city hall.

Steve Miller holds a photo of Las Vegas City Councilman Michael McDonald on Thursday as he plays "Ring of Fire" by Johnny Cash on a tape recorder during a news conference. The conference was called to announce a recall effort against McDonald. Steve Marcus / Las Vegas SUN

The death of John Fadgen was the beginning of the end of credibility for the Las Vegas Tribune.

Soon after Fadgen's passing, Larraz, who owned twenty-five percent of the Tribune's stock, began exerting pressure on his two remaining partners and myself to stop reporting violent events at the Crazy Horse Too, but he was overruled by Moser and Vipperman who owned fifty percent of the stock. Unfortunately, we did not know that John Fadgen had willed his Tribune stock to Larraz, and the tables were about to turn. In the meantime, the Crazy Horse stories continued.

On October 10, 2002, a frustrated Tony Sgro wrote to my attorney: "Virtually every week, Mr. Miller writes an article in the Tribune, and posts that article on his website, disparaging Mr. Rizzolo. On some ambitious weeks, he writes two or three of these articles. I understand the importance of a free press. Mr. Miller is certainly entitled to his opinion and he is entitled to express that opinion in print. What Mr. Rizzolo has always objected to is not Mr. Miller’s negative opinions of him, but of the weekly misstatements of fact. In the hundreds of articles written by Mr. Miller about Mr. Rizzolo over the years, one would be hard pressed to find a single one that was not replete with inaccuracies."

The Crazy Horse reports were our top stories until Mr. Fadgen's probate was settled in the fall of 2002. Then the Tribune suddenly did a bizarre one-hundred-eighty degree turn and began defending Rizzolo! I immediately started looking for another writing job. After I left, Moser told me that Larraz, an ex-felon, allowed Doumani to ghost write the pro-Rizzolo editorials.

Rolando Larraz

In late 2002, I began writing INSIDE VEGAS for Rick Porrello's AmericanMafia.com.

On February 20, 2003, the Crazy Horse was raided by the FBI and IRS. When the Tribune, now under Larraz and his creditor's control, ignored their once-top story, the readership plummeted and has never recovered.

Photo by John Gurzinski, Las Vegas Review Journal

On August 6, 2003, Farmer's Insurance offered Rizzolo $62,000 to drop his defamation suit against me. He quickly accepted the money with no conditions attached. Consequently, my "badge of courage" line could no longer be used (probably by design).

On January 19, 2005, Rizzolo's club manager, Bobby D'Apice, was taken down in front of the club by the FBI and IRS for Extortion, Robbery, False Statements, and Tax Evasion.

On Thursday, November 3, 2005, Southern California's second largest newspaper, the Orange County Register, revealed for the first time that "Rizzolo has a criminal record: he pleaded guilty in 1985 to battery for a baseball bat attack on a Crazy Horse patron, who suffered brain damage."

Last week, Jeff German of the Las Vegas SUN reported that lawyers for Rizzolo traveled to Washington, DC to try to convince Department of Justice prosecutors to go easy on their client. Rick Rizzolo is expected to suffer the same fate (see above photo) as D'Apice sometime shortly after the New Year when indictments are expected.

It is currently unknown whether local public officials who have been aiding and abetting Rizzolo's criminal enterprise will be included in the pending indictments.

Because the the following two articles were the only articles mentioned in Rizzolo's defamation lawsuit, its expected that information they contain will be used by federal prosecutors at upcoming trials.

Something I wrote must have really struck a nerve!

EXHIBIT "A"

Rizzolo Caught in the Act of Spying on Neighboring Business
Las Vegas Tribune
FRONT PAGE
December 6, 2000
By Steve Miller

Photos by Mike Christ

(Left) Hastily installed camera. (Middle photos) Frederick Rizzolo and his bodyguards stand near ladder they removed. (Right) Rizzolo and Al Rapuano make hasty retreat when police arrive.

LAS VEGAS – For the past two years, topless nightclub owner Frederick Rizzolo has wanted to expand his Crazy Horse Too strip joint into space leased by his neighbor Allstate Auto and Marine. The reason? In 1998, the Nevada Department of Transportation announced that it intended to widen Industrial Road thereby taking fifty parking spaces and the main entrance from the club. In order to remain in business at that location, Rizzolo would be forced to make major alterations to his leased building.

A feud developed between Rizzolo and Allstate Auto when the landlord, Renate Schiff, attempted, then rescinded (after Allstate filed a lawsuit against her), evicting the auto shop to make way for Rizzolo’s planned new entrance. Rizzolo and Schiff had alleged that Allstate customers were blocking fire exits at the nightclub.

Allstate Auto has leased its 11,000 square feet from Schiff for the past twenty-two years with nine years remaining on its lease. Allstate pays 43 cents per square foot while Rizzolo reportedly pays many times that amount per foot for his space.

The catch? Neither Rizzolo nor Schiff has offered to buy out Allstate to make way for the Crazy Horse’s expansion.

Last year, a racketeering lawsuit was filed by Allstate owner Buffalo Jim Barrier against Rizzolo and Schiff alleging a conspiracy to harass Barrier and his customers through the use of city inspectors. Named in the suit are Rizzolo’s friends former Mayor Jan Jones and current Councilman Mike McDonald. Jones and McDonald are accused of ordering city officials to pester Barrier as a favor to Rizzolo.

Jones was a frequent visitor to Rizzolo’s Canyon Gate home, and McDonald leases a Canyon Gate County Club villa valued at $500,000 from the family of Rizzolo’s associate Joey Cusamano. The amount McDonald pays in rent has never been disclosed.

McDonald was recently convicted of violating city ethics laws when he was caught doing a favor for Rizzolo to help squelch competition from opening nearby.

In the meantime, employees of Barrier spotted an unusual box last week mounted on the roof of a building across the alley from the auto repair shop. Upon closer inspection an amateurishly installed television camera was discovered aimed at the back of Barrier’s garage. Barrier summoned photographer Mike Christ to take photos of the camera installation for evidence in his lawsuit.

When Christ climbed onto the roof the take photos from in front of the TV camera, Rizzolo suddenly emerged from the rear of his nightclub accompanied by several persons Christ described as bodyguards. The men ordered Christ to stop taking pictures. When Christ refused, one of the men at Rizzolo’s behest removed Christ’s ladder thereby stranding the photographer on the roof. Christ called 911. While waiting for police, he took several photos of Rizzolo and his men standing below in what Christ described as an intimidating manner.

Rizzolo had often complained that Barrier was violating city health and safety codes by painting vehicles in the alley. Barrier denies doing so and suspected that the camera was aimed at his business to document such activities.

Prior to Councilman McDonald’s conviction on ethics violations, neighbors of Rizzolo’s business complained that city and fire inspectors ignored their complaints about unsafe conditions at the nightclub, but were quick to respond to Rizzolo’s complaints. However, last week, for the first time, it was reported that Rizzolo was cited by city inspectors for dumping kitchen degreasing chemicals in the alley behind the Crazy Horse, along with having unapproved signage in front of his building.

A city inspector, who wished to remain unnamed for fear of retaliation, stated that this was the first time his bosses let him respond to a complaint on the Crazy Horse. He said he believed that it was because McDonald had lost his clout at city hall since the ethics convictions and recall effort against him.

When Metro Police arrived on the scene at the photographer's request, Rizzolo retreated back into the rear of his nightclub while his men were ordered by police to replace the ladder and let Christ climb off the roof.

Just before Tribune press time, it was reported that the camera aimed at Allstate Auto and Marine had been removed.

EXHIBIT "B"

COLUMN: Steve Miller
Las Vegas Tribune
December 13, 2000

"Councilman Rizzolo?"

Property owners near the expanded Crazy Horse Too are still questioning whether the circumstances leading up to last year's approval -- after the fact -- of the topless club's 6000 square foot expansion are related to the sudden lifestyle change of Councilman Michael McDonald?

Soon after the questioned expansion, McDonald began wearing a diamond Rolex watch valued at over $20,000; began driving a new Lincoln Navigator; and took up residence in a half-million dollar villa owned by the mother-in-law of a business partner of Rick Rizzolo, the owner of the Crazy Horse.

Bobette Lee Taylor, the wife of businessman Tony Tegano, owns the house located in the Canyon Gate Country Club that was occupied, up until last month, by McDonald. The house was a few blocks from Rizzolo's residence. Tegano is the father in law of Joey Cusamano who is listed in Nevada's Black Book of excluded persons. Cusamano is known to be a close associate of Rick Rizzolo, the owner of the Crazy Horse Too.

McDonald refused to state what he paid to lease the 2,300 square foot Italian style villa only to say; "I pay my fair share." McDonald makes $37,000 per year as a City Councilman and $52,000 as a salesman for Las Vegas Color Graphics. He also has received several settlements from slip and fall lawsuits he filed. Real estate experts estimate that the house he occupied should rent for between $3,000 and $4,000 per month not including utilities and homeowner's association fees.

Property owners near the Crazy Horse Too reportedly believe that the house is a payback for favors resulting in the post-approval of the club's expansion plans.

In Rizzolo's case, even with the full knowledge that the Nevada Department of Transportation planned to take all of the parking spaces in front of his Crazy Horse Too and the majority of spaces in an adjacent lot located under the Sahara overpass for the widening of Industrial Rd., the Las Vegas City Council waived normally required parking and traffic studies and allowed his expansion to take place.

This unprecedented action has resulted in a lawsuit by Meadows Village property owners led by Peter Christoff. Through their attorney they claim that the enlarged business does not have adequate parking and adversely impacts the nearby low-income residential neighborhood with overflow parking and crime.

At the February 8, 1999, council hearing when the expansion was approved, several protesters accused former Mayor Jones and Councilman Michael McDonald of doing Crazy Horse Too owner Frederick Rizzolo a political favor by allowing the expansion.

Jones and McDonald are often seen at social functions held at Rizzolo's Canyon Gate home, and when this fact was made known by protesters, Jones and McDonald became visibly angry.

Sources inside city hall report that Doug Rankin, an assistant to Councilman McDonald, "Walked through" the topless club's application in the city Public Works Department. Rankin was also seen sitting in the audience with associates of Rizzolo at the initial Planning Commission hearing in early 1999. The Mayor and Council appoint members of the Planning Commission.

It is customary that an NDOT road-widening plan be included in the backup information provided to councilmembers prior to a vote for an expansion that would necessitate additional parking -- in this instance it was conspicuously omitted.

"Walk through" is a term used when a councilmember or one of his staff accompanies a developer through the application phase of a project. This practice, though not illegal, is considered improper and shows favoritism. "Walk throughs" are legally tolerated but usually are looked upon as favors being given to selected political campaign contributors or cronies. The practice should be outlawed!

In the case of expansions of similar business, the businesses are required to submit traffic and parking studies, site plans, artist's renderings of elevations, and stamped architectural plans. Careful investigation failed to locate any such documents for Rizzolo's project.

Reno attorney Glade Hall representing the adjacent property owners stated in his complaint: "On or about December 15.1998 the Crazy Horse Too filed an application to the City of Las Vegas Board of Zoning Adjustment for a variance to allow the expansion of a non-Conforming sexually oriented business where that expansion is explicitly prohibited. At the time of such application the expansion for which approval was sought, had already been Constructed, apparently with the consent of officers and employees of the City of Las Vegas."

Hall goes on to state: "The applicant failed to provide landscaping plans, adjacent land uses and streets, property lines, elevations, and other necessary items. The site and floor plans that were provided are unsigned and undated copies that no engineer or architect apparently wished to take credit for."

Further on in the complaint it states: "The Nevada Department of Transportation was in the process of designing a street widening project that would take approximately 20 feet of space from the front of the lot on which the Crazy Horse Too conducts its business, resulting in the further loss of parking and access space. When petitioner and his attorney attempted to address these parking and traffic concerns, they were advised by Mayor Jan Jones that such issues were not going to be discussed and that attempts at such discussion was out of order, thereby denying Petitioner's due process rights. Respondents did not require Crazy Horse Too to prepare and submit with the subject application traffic and parking studies which Respondents invariably require other applicants to prepare and submit."

Another lawsuit was filed by a neighboring business alleging "Racketeering" involving Rizzolo and his landlord Renate Schiff. Rizzolo and Schiff unsuccessfully attempted to evict the neighboring business to provide additional parking for the topless club. Both lawsuits are pending in District Court.

Have a MERRY CHRISTMAS and a JUSTICE FILLED NEW YEAR!