Editorial: Logic gets stretched in ruling

Monday, June 9, 2003 | 9:05 a.m.

Dedric Holman and Christina Edwards went together to gamble at the Gold Coast on a February night in 1994. But after a security guard sought to evict Edwards because he thought she was underage, a fistfight ensued between Holman and the security guard. Holman, who is black, said the security guards used racial slurs and took him to an office where he was severely beaten. Edwards, meanwhile, said that a security guard frisked her entire body, including her breasts and crotch, before handcuffing her.

Holman and Edwards subsequently filed a civil lawsuit against the hotel-casino and security guards, alleging battery and false imprisonment. Holman testified that his beating had occurred at times in front of the hotel-casino's director of security. The guards denied that they had beaten Holman, made racial comments or engaged in any sexual touching, but a District Court jury ruled in favor of the couple. Holman was awarded a total of $178,000 in compensatory damages and $279,000 in punitive damages against the hotel-casino. Edwards was awarded a total of $20,000 in compensatory damages and $93,000 in punitive damages.

The Nevada Supreme Court has overturned part of the jury's verdict. The court ruled 4 to 3 that the hotel-casino was liable for compensatory damages, but it wasn't liable for punitive damages because the director of security -- although a supervisor -- didn't have policy-making authority. In essence, the majority determined that a company isn't liable for punitive damages as long as its top executives aren't present when the damage occurs. This is a real stretch by Justice Miriam Shearing, who wrote the opinion.

As Justice Robert Rose noted in the dissent, which Justices Myron Leavitt and Bill Maupin concurred with, the hotel-casino should be held accountable because the director of security supervised the employees and enforced the company's use-of-force policy. Rose noted there was plenty of evidence that the director of security "approved the heinous acts by simply standing by and by permitting the violent conduct by the employees he was supervising." We couldn't agree more with Rose, who concluded his dissent by writing: "At a time when we have seen many illegal and outrageous acts committed by corporate America, it is not appropriate to reduce corporate responsibility for such egregious action."