Business groups ask Nevada SC to reconsider ruling

By Jessica M. Karmasek | Aug 6, 2010

CARSON CITY, Nev. (Legal Newsline) - The senior advisor for the nation's largest industrial trade association is calling a recent decision by the Nevada Supreme Court "alarming," and his group is among the many asking the court to reconsider its decision.

Carter Wood serves as the senior advisor for the National Association of Manufacturers, which represents small and large manufacturers in every industrial sector and in all 50 states.

Wood wrote earlier this week on PointofLaw.com -- a blog providing information and opinions on the U.S. litigation system -- that the court's decision in Bahena v. Goodyear deprived the company of its ability to defend itself in a product liability case.

A Clark County trial court originally ordered sanctions to punish what it considered to be discovery violations by Goodyear Tire & Rubber Co. in a lawsuit over a fatal automobile accident allegedly caused by a defective tire.

Wood wrote, "The district court struck Goodyear's answer as to liability and damages. No defense possible, which explains why this kind of sanction is called the 'civil death penalty.'"

Wood argues that the state Supreme Court upheld the penalty despite the absence of any finding that the company had engaged in willful or malicious conduct during discovery or that the issue prejudiced the plaintiffs' case.

The result was a $30 million judgment against the company.

Last week, business and legal reform groups, including the National Association of Manufacturers, filed an amicus brief with the court, urging it to reconsider its decision.

"This Court's decision in Bahena v. Goodyear Tire was a shot heard around the United States business community," the brief said. "The ruling deprived a business of its most fundamental right in the American civil litigation system: the constitutional right to defend oneself in court.

"When the trial court struck Goodyear's answer, it took away Goodyear's right to defend itself against Plaintiffs' charges. Goodyear was precluded from showing that the tire in question was not defective, that its tire did not cause the accident, that its product was misused or that instructions were not followed.

"Goodyear was deemed liable. Full stop. No defenses allowed. All that was left for the jury to decide was how much Goodyear would have to pay."

Wood admits it's asking a lot for the court to reconsider its decision, but the case is "alarming for both the extreme outcome and its potential setting of precedent: Case law overwhelmingly holds that an order striking all defenses to liability dictates the outcome of a case, and due process protections are required."

If Nevada can so easily remove constitutional due process protections, Wood writes, companies will face more difficult litigation burdens.

The ruling, he said, further creates a incentive for plaintiffs to make discovery as long and complicated as possible in hopes that he defendant company makes a mistake -- and one that could justify a "civil death penalty."

For Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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