For well over a century, Nevada has attracted prospectors in search of wealth. From gold and silver to gambling, Nevada has always held the promise of life-changing treasure.
But in recent years, a group of prospectors has come not to the Silver State’s casinos or the gold mines in search of treasure, but to the office of the attorney general. These are plaintiffs’ lawyers seeking to represent Nevada in mega lawsuits, usually against companies or industries. These cases can generate considerable wealth for those attorneys — at the expense of Nevada taxpayers.
Nevada’s attorney general has some discretion over this practice. Former Attorney General Catherine Cortez Masto was a frequent user of outside “contingency fee” plaintiffs’ attorneys during her tenure.
While reasonable people can disagree about the propriety of using outside counsel, you don’t need to be a legal expert to find it odd that Masto hired an out-of-state law firm (Cohen Milstein, headquartered in Washington, D.C.) to represent the state of Nevada in several cases.
And you don’t need to be an attorney to wonder whether the money donated to Masto’s 2010 re-election campaign by six partners of Cohen Milstein wasn’t part of some kind of pay-to-play arrangement.
The good news is that Nevada has a new attorney general, Adam Laxalt, who has promised to reform the office and reduce the use of expensive outside counsel. And there’s more good news: The Legislature passed “AG Sunshine” legislation that would govern how and when outside lawyers are hired to represent the state, and how much they are paid. Senate Bill 244, introduced earlier this month by Sen. Greg Brower with the support of Laxalt, would set common-sense limits on contingency fees — including an absolute cap of $10 million.
The governor should sign this bill.
Nevada is in good company with this proposal. Ten other states — Alabama, Arizona, Florida, Indiana, Iowa, Louisiana, Mississippi, Missouri, North Carolina and Wisconsin — have passed similar measures.
The AG Sunshine proposal is one of a number of important legal reform measures before the Legislature this year, including joint and several liability reform, and limits on punitive damages.
Limiting punitive damages in products liability cases will make Nevada a more attractive place for companies to do business. Currently, the state has a reasonable cap on punitive damages, but does not apply that cap to cases where a plaintiff alleges damages from the use of a product.
Senate Bill 296 would bar punitive damages if a product complied with rules and standards set by a regulatory agency. When a company meets the expectations from the agency that regulates its industry, it’s hard to envision a scenario where their conduct warrants punitive damages.
With regard to the state’s joint and several liability rules, current law makes an irrational distinction between types of cases: fairly allocating damages according to fault in some; and potentially holding a single defendant liable for all the damages, regardless of the amount of fault, in others. Senate Bill 300 eliminates that distinction and holds all defendants liable only for the amount of fault attributed to them by the judge or jury.
This is a matter of simple fairness; defendants should only be responsible for the harm they caused.
Senate Majority Leader Michael Roberson should be recognized for his willingness to introduce these important reforms and for working with advocates on all sides of this issue to reach a solution that is best for the citizens of Nevada.
The central theme of all of these legal reform proposals is fairness and openness for the state’s civil lawsuit system. That way, victims get their day in court, while businesses vital to our economy and good jobs don’t get scared out of the state. And plaintiffs’ firms can’t come to Nevada looking for a big payday at the expense of the taxpayers.
The Silver State should remain a destination for treasure seekers — the kind who visit the casinos, not the kind who use our courts as a plaintiffs’ lawyer slot machine.
Harold Kim is executive vice president of the U.S. Chamber Institute for Legal Reform. To learn more, visit www.instituteforlegalreform.com.