A national manufacturing association is one of many groups asking the Nevada Supreme Court to reconsider its decision in July to uphold a $30 million verdict against Goodyear Tire and Rubber Co., saying a district judge erred in applying civil law’s equivalent of the death penalty for alleged pretrial misconduct.
Calling the high court’s 6-1 decision a “shot heard around the United States business community,” Las Vegas attorney Dennis Kennedy said in court papers that taking away Goodyear’s ability to defend itself “deprived a business of its most fundamental right in the American civil litigation system.”
After finding that Goodyear stalled and obstructed the pretrial process, former District Judge Sally Loehrer ruled the company could not challenge its liability, virtually rendering it incapable of mounting a defense. All that was left for the jury to decide was the amount of damages.
The case dates to Aug. 16, 2004, when three people were killed and seven injured in a van rollover on Interstate 70 near Moab, Utah. Those killed in the wreck were Evertina Tapia, Frank Enriquez and Andres Torres. One of the injured, a man now 20, is in a persistent vegetative state, according to court papers.
The travelers rented the van in Las Vegas and were driving to a boxing tournament in Kansas.
Supreme Court Justice Mark Gibbons, in a decision affirming the award, wrote that Loerher imposed sanctions after concluding Goodyear’s conduct “throughout the discovery process caused stalling and unnecessary delays.” Prior to the district judge’s ruling, a discovery commissioner made a written finding that the tire giant was not acting in good faith and ordered Goodyear to produce specific documents.
Other evidence of stalling by Goodyear included inappropriate answers to fact-finding questions called interrogatories and failure to produce a witness, according to Gibbons. The district court concluded there was “substantial evidence” in support of the sanctions.
“It is clear that Goodyear has taken the approach of stalling, obstructing and objecting,” Loerher wrote in her order, adding the tire company’s behavior was unjustified.
Critics say Goodyear’s actions did not merit the harsh ruling. Joining the National Association of Manufacturers in filing court papers asking the high court to reconsider are the national arm of the Chamber of Commerce; the National Federation of Independent Business Small Business Legal Center; the American Tort Reform Association; the American Insurance Association; the American Chemistry Council; and the American Legislative Exchange Council.
The associations have an ally in Nevada Justice Kris Pickering, who wrote in her lone dissent that her colleagues ignored “the unanswered, material questions of whether Goodyear’s alleged discovery abuse was willful and whether it prejudiced” the parties.
Pickering said Loerher, who is now a senior judge, abused judicial discretion and violated Goodyear’s due process rights when she handed down the sanctions without first holding an evidentiary hearing.
Goodyear avoided punitive damages by showing a road hazard played a role in the fatal accident, and not necessarily a defective tire.
Kennedy said Loehrer’s decision to hand down sanctions with such severe consequences was uncommon and serious enough to prompt the multiple friend of the court briefs, which are filed by parties who are not directly involved in a case but have an interest in its outcome.
In court papers, Kennedy said the sanction precluded Goodyear from offering evidence that its tire was not defective or did not cause the accident.
Ford Motor Company and Valley View Hitch & Truck Rental, which had rented the 15-seat van, settled prior to trial for an unspecified amount.
Because the Supreme Court ruled the district court’s sanction was “non-case concluding,” meaning it was not entitled to exercise due process rights, the decision “significantly shakes the confidence of the business community,” Kennedy wrote.
“The one safeguard that provides comfort and protection to American businesses who are regularly named in civil cases is that in every lawsuit filed in a court, the plaintiff has the burden to prove the case and the defendant has the constitutional right to defend itself.”
Attempts to contact attorneys for the plaintiffs or survivors of the crash were unsuccessful.
“All we ask the court to do is reconsider what it did,” said Kennedy, who was retained by the American Tort Reform Association. “Just take another look at it.”
Contact Doug McMurdo at email@example.com or 702-224-5512 or read more courts coverage at lvlegalnews.com.