Court had to clear up statute’s language

Nevada's law directing public works disputes to arbitration has been around since 1971, but its meaning hasn't always been clear.

The Nevada Supreme Court issued a 2003 decision on it that some legal observers found controversial.

In 1998, when the Clark County School District and Harris Associates were at odds over work being done at Basic High School, Harris requested arbitration but the school district declined, saying it was optional.

The law at the time -- NRS 338.150 -- read, in part: "Any agency of this state and any political subdivision ... charged with the drafting of specifications for the construction, alteration or repair of public works, shall include in the specifications a clause permitting arbitration of a dispute ..."

The school district won at the District Court level, but Harris appealed and prevailed. When the law was written, the Supreme Court said, legislators actually meant to require arbitration.

The court relied on legislative testimony to reach that conclusion, and also noted that the law exempts the state Department of Transportation from the arbitration requirement. If the Legislature had only intended to make it optional, the ruling states, "it would have had no reason to exempt any department, since each department would still be free to arbitrate or not."

The court cited testimony -- mainly from construction interests -- arguing to legislators that arbitration would resolve disputes faster and more cheaply.

"It is reasonable to conclude," justices wrote, "that the Legislature would not enact a statute that makes dispute resolution easier and more efficient and then, simultaneously, grant the disputants the authority to circumvent the process and undermine the statute's purpose."

Critics at the time called the decision "activist" and said the justices had reached beyond the meaning of the text of the law.

The Legislature amended the section in 2005. It now says that public works contracts "shall include in the specifications a clause requiring arbitration ... if the dispute cannot otherwise be settled."

Contact reporter Alan Choate at achoate@reviewjournal.com or 702-229-6435.