$2.3 million or $800,000 the question in court

A voter initiative that fundamentally altered medical malpractice litigation in Nevada was the basis of an appeal heard last week by a panel of Nevada Supreme Court justices.

At issue is the $2.3 million contingency fee longtime Las Vegas attorney Robert Vannah charged a client harmed by a doctor and whether the Keep Our Doctors in Nevada ballot measure passed in 2004 was intended to be retroactive.

The law put a $350,000 cap on noneconomic damages, such as pain and suffering, and limited contingency fees attorneys can charge clients who allege they are victims of medical malpractice.

Voters overwhelmingly approved the measure amid fears doctors would flee from the state because of high medical malpractice insurance costs.

In November 2006, an arbitration panel awarded Clark County resident Kathleen Johnson-Dinsmore roughly $5.75 million.

Vincent Scott Collins, an anesthesiologist at Southwest Medical Associates, administered a general anesthetic before her undergoing surgery. The same day as the May 10, 1999, procedure, Collins was found dead in the facility's men's restroom. He died after injecting a lethal dose of fentanyl, the same drug he administered to Johnson-Dinsmore earlier that day.

Collins' body was discovered with a syringe still in his arm. The coroner ruled his death was the result of acute drug intoxication. He was 36.

Vannah alleged Collins was under the influence of the drug when he administered fentanyl to Johnson-Dinsmore, who was at Southwest Medical Associates for spinal surgery.

"He basically savaged her," Vannah said after the Oct. 29 hearing.

According to court documents, Collins repeatedly pricked Johnson-Dinsmore with the syringe needle before he located a suitable vein.

Johnson-Dinsmore, now 48, subsequently was diagnosed with reflex sympathetic dystrophy syndrome, a condition characterized by damaged nerves, burning pain, tenderness and swelling. Surgery is listed as one of many causes, according to MedicineNet.com.

The woman retained Vannah to represent her in 1999 and agreed to pay 40 percent of any monetary settlement or award.

Vannah would have been allowed to charge 15 percent, or roughly $800,000, after 2004. The law was five years away from passage when Johnson-Dinsmore retained Vannah. In 1999, 40 percent, $2.3 million, was not an uncommon contingency fee, Justice Mark Gibbons said.

Vannah's former client is now an adversary represented by Las Vegas attorney Vernon Bailey, who told justices Michael Cherry, Mark Gibbons and Nancy Saitta the law should be applied retroactively. His argument met opposition from Gibbons, who suggested language should have been included to make the legislation retroactive had that been the intent.

"Can't attorneys rely on the law in effect at the time?"

Bailey responded by saying contracts can legally be affected.

"Eight hundred thousand dollars is a lot of money for a $5.75 million judgment," he said.

Saitta mirrored Gibbons' concern, saying the question of whether the law was retroactive should have been "clearly articulated" when the legislation was written.

Attorney fees are the only segment of the law being challenged and the only question the Supreme Court will entertain.

From Bailey's perspective, the retroactivity is implied in the legislation.

"The intent of the people was for it to be retroactive," he said Thursday. "The statute says the law is in effect either at the time the contract was signed or (the contingency fee is) collected."

Bailey said the word "or" is key to his argument.

"People intended to avert the medical malpractice crisis," he said. "But this is a complex, hyper-technical argument. It's a legal decision for the high court to decide."

Vannah told justices he and Johnson-Dinsmore entered into a contract in 1999, and the case was still unresolved in 2006. He said it was unlawful for the Keep Our Doctors in Nevada legislation to be retroactive without specific language saying so in the law. Vannah said he put $172,000 of his own money in advance costs and spent "a lot of time and money" on the case.

Vannah said he quit taking medical malpractice cases and ordered the attorneys in his firm to do the same after passage of the 2004 law.

"It just didn't pencil out anymore," he said. "I'm not the only one. I know a lot of prominent firms that no longer handle these types of cases."

Vannah, who said he once was one of the "kings" of medical malpractice attorneys in Nevada, thinks the law passed in 2004 has created unintended consequences.

"They've allowed the pendulum to swing too far the other way. Now, people who are impacted by bad doctors will have a hard time finding a good, experienced attorney to represent them. The doctors got what they wanted."

The Supreme Court agreed to hear the case after Clark County District Judge Elissa Cadish dismissed Bailey's lawsuit in 2008, ruling the law was not intended to be retroactive.

In 2009, the Assembly passed a bill that would have lifted the cap on pain and suffering. The passage was prompted by a local outbreak of hepatitis C. A local clinic was determined to be the source. Thousands of people in Nevada who were administered anesthesia at the Endoscopy Center of Southern Nevada in Las Vegas were considered at risk. The bill died in a Senate committee, but the debate rages on.

Bailey thinks it wasn't just the medical community that sought reform, but the people of Nevada. He also believes some attorneys violate the statute because "people don't know it exists."

One-third of his practice involves suing other lawyers, he said, and he expects that percentage to climb regardless of how the Supreme Court rules.

"I have reason to believe attorneys owe millions of dollars due back to their clients for overcharging; and let's face it, attorneys aren't going to tell clients they're overcharging them, so people need to be aware this law exists."

The Supreme Court will issue a written ruling in the weeks to come. The lawsuit is the first that challenged any provision of the legislation before the high court.

Doug McMurdo at dmcmurdo@ reviewjournal.com or 702-380-8135.