Sheldon Adelson lost his bid on Monday to dismiss a lawsuit from the National Jewish Democratic Council accusing the Republican mega-donor and casino magnate of waging a yearslong campaign of "legal sadism" in pressing a defamation suit that was ultimately dismissed under Nevada's anti-SLAPP law.

U.S. District Judge J. Paul Oetken of the Southern District of New York said that Adelson was responsible for compensatory damages and attorney fees under Nevada's anti–strategic lawsuit against public participation statute, which blocks litigation meant to intimidate individuals for their involvement in public affairs.

Oetken, however, denied the NJDC's motion for summary judgment on punitive damages, saying the issue required a response from Adelson.

The suit for damages stemmed from the NJDC's call during the 2012 presidential campaign that encouraged candidate Mitt Romney to stop accepting contributions from Adelson, claiming that the wealthy businessman had "personally approved" of prostitution in his casinos.

At the time, Adelson was ranked by Forbes as the world's 16th-richest man, with a fortune of $43 billion, and according to the complaint, had unleashed a torrent of threats against the NJDC, including a vow to "bankrupt" the organization.

The NJDC eventually removed the petition from its website, but denied having participated in any character assassination against Adelson.

Adelson sued the council, a nonprofit that aims to maximize Jewish support for Democratic candidates running for political office, and its former chairman, Marc Stanley, in 2013. Oetken dismissed the defamation suit under Nevada's anti-SLAPP law in a decision that was later upheld by the U.S. Court of Appeals in 2017, following a certification of questions to the Nevada Supreme Court.

NJDC responded with its own lawsuit in Manhattan federal court last September. The group claimed in the complaint that it was "in tatters, barely functioning," and that Stanley was still "reeling from the public relations fallout" that resulted from "Adelson's onslaught."

According to court documents, Adelson argued that the damages lawsuit itself was protected under Nevada law and that application of the statute would violate the Supremacy Clause of the U.S. Constitution.

But Oetken, in a 24-page opinion, said Adelson's argument was "fundamentally flawed" because Adelson's original defamation action was subject to Nevada's anti-SLAPP statute, which includes a provision for damages.

"Thus, a federal court sitting in diversity must apply it," Oetken wrote.

"In short, Adelson—by invoking this Court's diversity jurisdiction—must take Nevada law as he finds it," Oetken said. "The anti-SLAPP statute's damages provision, much like its requirement of dismissal or its fee-shifting provision, is part of the substantive law of Nevada. This court works no injury to the supremacy of federal law by applying it."

While the council won its summary judgment motion for compensatory damages and fees, Oetken said such a motion for punitive damages was premature, and required a showing that Adelson had acted with "oppression, fraud, or malice."

The sides were ordered to confer and report back to the court in three weeks regarding further proceedings in the case.

An attorney for Adelson was not immediately available to comment, and counsel for the NJDC did not immediately return a call Monday afternoon seeking comment on the ruling.

The NJDC is represented by Richard D. Emery, Ashok Chandran and Ogilvie Andrew Fraser Wilson of Emery Celli Brinckerhoff & Abady.

Adelson is represented by Lee A. Armstrong, Michael A. Carvin and James Matthew Gross of Jones Day.

The case is captioned National Jewish Democratic Council v. Adelson.

Read More: