Guinn signs bill, expects it to hold up in court

Wednesday, Aug. 7, 2002 | 11:07 a.m.

CARSON CITY -- While some states have found a medical malpractice limit invalid, Gov. Kenny Guinn believes Nevada's new law can pass constitutional muster.

The important distinction in Nevada's law, Guinn said, is the $350,000 limit cap for pain and suffering of a patient can be exceeded if a District Court judge finds "clear and convincing" evidence that a higher amount is justified.

Surrounded by 14 doctors in his Las Vegas office this morning, Guinn signed Assembly Bill 1, which was passed in a special session last week. The law takes effect Oct. 1.

"This is a substantial piece of legislation, there was a lot done in a short time," Guinn said this morning. "It was a long three days but we did a lot considering we started from scratch."

He said he was hopeful the bill will hold down insurance costs, and he said he has received a letter from an insurance company, which he wouldn't name, saying as much.

"They indicated every part of the bill is positive and it would improve sustainability in the market," he said.

On Tuesday the governor, at a news conference in Carson City, said malpractice laws have been declared unconstitutional in other states. He said he believes that California's law that establishes a strict $250,000 limit on pain and suffering could be open to challenge.

At the bill signing this morning, Guinn said he expects the bill to withstand legal challenges.

The lack of a "hard cap" on economic judgments eliminates much of the constitutional concern, he said, noting that the law "doesn't eliminate exceptions which should help significantly."

"I think it took care of" constitutional concerns, Guinn said. Marybel Batjer, chief of staff for Guinn, said extensive research was done on the constitutionality of the bill. Keith Munro, the governor's legal counsel, met with Brenda Erdoes, the chief lawyer for the Nevada Legislature many times.

Batjer said there were many drafts of the bill and the two attorneys talked whether they could survive a court challenge. The attorneys for the Legislature, said Batjer, are required to notify lawmakers on any bill they think may be unconstitutional.

In this case, Batjer said the lawyers for the Legislature did not issue any letters questioning the validity of the malpractice bill.

Batjer and others still expect a challenge.

James Wadhams, a Las Vegas attorney representing the American Insurance Association, isn't sure what will happen when the law is tested in court.

"Will it survive? I don't know," says Wadhams who was the chief lobbyist for the insurance industry at the Legislature. And it will be several years before that question is answered.

Any suit that is filed after the bill becomes effective Oct. 1 may take several years in the district court and then some time in the Nevada Supreme Court before the question is resolved.

Wadhams said there are three components of the bill that will be challenged. They are the $350,000 caps on pain and suffering; the $50,000 immunity limit on treating trauma patients and the complete immunity on treating indigent patients for free.

Wadhams said the $350,000 is "probably the safest" because there is a clause that allows a court to award a high amount if it finds extraordinary circumstances. He noted California has upheld the $250,000 limit on non-economic damages without any exceptions.

He said opponents said this law limits the right to sue. It doesn't. It limits the recovery, not the right to sue, Wadhams said.

He said the $50,000 immunity cap in treating trauma victims might be upheld. He noted the Nevada Supreme Court has ruled that governments are shielded by a $50,000 limit in many of their actions.

It's uncertain, he said, how the issue of complete immunity for a physician who provides free care to an indigent will come out.

Bill Bradley, a Reno attorney who represented the Nevada Trial Lawyers Association, said he doesn't know whether the law is constitutional. Trial attorneys opposed the law, saying it limited a person's day in court by capping damages.

"There are so many unpredictable factors," he said.

It will depend on a variety of things, he said. And it will take a while before the issue is finally decided.

Nevada's law does not deny a person the right to a jury trial. In some other states, courts have ruled that aspect of laws there was a major defect.

There have been complaints the insurance rates for physicians may not be lowered under the new law because of the possibility of getting judgments of more than $350,000 for non-economic damage.

Guinn said the law would not reduce the premiums immediately, but he said there have already been some rollbacks.

The legislation also provides a $50,000 limit on damages on doctors who treat trauma cases, not only in the trauma center in University Medical Center in Las Vegas but also in other emergency rooms in the state.

A part of the bill creates a medical error reporting system, although that doesn't become effective until July 2003.

Guinn Tuesday signed SB3, which infuses an additional $18 million into the financially troubled health insurance program for state workers.

Without that bill, Guinn said, there was a potential 135 percent increase in rates for state workers and their families.

The 2001 Legislature appropriated $345.7 million for the two years to cover the premiums of state workers who must pay for their dependents. But the program is running a deficit. SB3, which also becomes effective Oct. 1, requires state agencies to increase their contributions to their insurance plan.

Sun reporter Stephen Curran contributed to this report.