Friday, February 13, 2004
Copyright © Las Vegas Review-Journal

EDITORIAL: Arbitration and legislative intent

Nevada Supreme Court justices as mind-readers

A unanimous decision handed down by the Nevada Supreme Court late last year offers ominous implications for taxpayers ... not to mention anyone who seeks predictability from the state's judicial system.

The court ruled that formal disputes between contractors and government agencies over construction projects must be settled through a private arbitration proceeding, rather than a public trial. The ruling was based on what could charitably be called an expansive interpretation of Nevada law, and perhaps a bit of mind-reading.

The case was filed by the Clark County School District in a dispute with contractor Harris Associates over an addition to Basic High School. When the two sides were unable to settle their differences, Harris wanted to submit the dispute to binding arbitration. The school district rejected that request, wanting a jury instead to resolve the matter.

On appeal, the Supreme Court sided with the contractor. The justices found a 1971 law governing public works projects, which states all contracts "shall include ... a clause permitting arbitration of a dispute between the agency and the contractor," was "ambiguous." Even though the language of the law seems clear -- arbitration is an option when disputes arise -- the court said the Legislature "intended ... to mandate arbitration." And what was the basis for this conclusion? Testimony from contractors, who are hardly neutral parties.

Taxpayers should gain little solace from this ruling. The arbitration process is conducted in secret, unlike trials, which are decided by jurors who are also taxpayers.

The ruling arrives hot on the heels of the justices' reckless Guinn v. Legislature decision, and is emblematic of a tendency by the high court's justices to creatively interpret the language of Nevada's statutes and its constitution, presumably based as much on reading entrails as on direct references to text or precedent.

Acting on such inclinations can subvert the legitimate authority of the Legislature, and damage the system of checks and balances which limits governmental power. If a law lacks clarity -- which is debatable here -- the role of the courts should be to interpret it as restrictively as possible. Loose readings based on the putative "intentions" of lawmakers can result in jurists literally legislating from the bench. Any errors should be corrected by future legislatures, as part of an orderly lawmaking process.

In a narrow sense, the court has limited the permissible range of options government agencies can use to settle disputes with contractors. Higher bills will be passed along to taxpayers.

But the court's capriciousness threatens to erode public confidence in the integrity of all aspects of local government -- a point that should not be lost on voters when these jurists stand for re-election.