Bankruptcy judge to decide on first trial in hepatitis case

A federal bankruptcy judge will decide whether the first trial in last year's hepatitis outbreak goes ahead as scheduled.

The medical malpractice trial involving retired veteran Michael Washington is set for Oct. 19, but every case involving the clinics blamed for the outbreak was put on hold when the clinics filed for bankruptcy last month.

Lawyers for Washington and other patients infected with hepatitis C at the clinics asked U.S. Bankruptcy Judge Mike Nakagawa on Wednesday to allow their trials to go forward.

Will Kemp, one of the lead lawyers representing infected patients, said allowing the first four trials to go forward could lead to a settlement on the dozens of lawsuits linked to the clinics.

Without a trial date looming or a trial verdict, the insurance company for the Endoscopy Center of Southern Nevada and its affiliated clinics has no reason to pay out on the malpractice claims, he said.

"Nevada Mutual (Insurance Co.) is holding on to its money because it doesn't have a trial date," Kemp said.

Jason Rudd, a lawyer for bankruptcy trustee Brian Shapiro, said the cases should remain on hold for at least two months to give the trustee time to gather more information about the companies and their assets. The trustee is responsible for ensuring that creditors, including patients, get paid.

Rudd also worried that the companies' malpractice insurance policies could be quickly drained by the first group of patients who won their lawsuits, leaving no money for patients with later trials.

But Kemp said that would not be the case. The patients' lawyers have agreed to divide payouts fairly, and they would likely have to get judicial approval of any insurance payouts anyway, he said.

"Your honor, this is not a race to judgment," Kemp said.

Nakagawa said he would issue a written ruling.