MINUTES OF THE ASSEMBLY COMMITTEE ON JUDICIARY Sixty-eighth Session June 27, 1995 The Committee on Judiciary was called to order at 8:23 a.m., on Tuesday, June 27, 1995, Chairman Anderson presiding in Room 332 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Bernie Anderson, Chairman Mr. David E. Humke, Chairman Ms. Barbara E. Buckley, Vice Chairman Mr. Brian Sandoval, Vice Chairman Mr. John C. Carpenter Mr. David Goldwater Mr. Mark Manendo Mrs. Jan Monaghan Ms. Genie Ohrenschall Mr. Richard Perkins Mr. Michael A. (Mike) Schneider Ms. Dianne Steel Ms. Jeannine Stroth COMMITTEE MEMBERS EXCUSED: Mr. Thomas Batten GUEST LEGISLATORS PRESENT: None STAFF MEMBERS PRESENT: Dennis Neilander, Research Analyst Christine Shaw, Committee Secretary OTHERS PRESENT: David Sarnowski, Chief Criminal Deputy Attorney General Judy Jacoboni, President, MADD, Lyon County Chapter Bob Faiss, Lionel Sawyer and Collins, counsel for NRA Jack Godfrey, Nevada Resort Association Bill Bible, Chairman, State Gaming Control Board Brain Harris, Gaming Control Board Paul Larsen, Nevada Resort Association Carolyn Ellsworth, Mirage Resorts Burton Cohen, NRA Roger Trounday, Executive Vice President, John Ascuaga's Nugget Kay Scherer, NRA Peter Chase Newman, attorney Major Dan Hammack, Nevada Highway Patrol Dora Mae Jacobsen, citizen Laurel Stadler, MADD Judy Jacoboni, MADD Pat Cashill, NTLA Brother Matthew Cunningham, Diocese of Reno-Las Vegas Kris Jensen, NCC Janine Hansen, President, Nevada Eagle Forum SENATE BILL 358 - Revises provisions regarding establishment of authenticity of records of regularly conducted activity by affidavit. David Sarnowski, Chief Criminal Deputy Attorney General, appeared as the proponent of S.B. 358. He stated the bill proposes amendments to a small part of Nevada's Evidence Code. As it presently exists, the Evidence Code carves out exceptions to a general rule requiring the custodian of records of a business to appear personally to authenticate records as being business records. He noted the amendatory language added by the Senate is shown on Page 3, lines 5 through 14. This would help streamline court proceedings if a party has a good faith reason to challenge whether or not documents are authentic. ASSEMBLYMAN HUMKE MOVED DO PASS S.B. 358. ASSEMBLYMAN OHRENSCHALL SECONDED THE MOTION. THE MOTION CARRIED. SENATE BILL 498 - Limits by statute civil liability of sellers and servers of alcohol. Judy Jacoboni, President, Mothers Against Drunk Driving: Lyon County Chapter, requested the committee withdraw S.B. 498 as in its present form it has no resemblance to the bill draft which they asked the Senate Judiciary Committee to have drafted. Their bill draft, early in the session, specified if a person illegally served a minor an intoxicating beverage resulting in a third person being injured, the innocent victim would have an avenue of relief for recovery of civil damages against the negligent server. She noted this bill goes hand in glove with a bill processed earlier in the session. S.B. 498 in its original form would have deterred the server of the minor from serving the minor. Mr. Neilander explained once a bill is introduced in the legislature it then becomes within the jurisdiction of whatever committee takes receipt of that bill. The requester can ask that the bill be withdrawn but the committee has jurisdiction over the bill. Mr. Anderson asked if there was a motion to withdraw the bill from the committee. Since there was no response he indicated the bill is as presented in its first reprint. SENATE BILL 497 - Clarifies provisions governing nature and circumstances of entertainment subject to casino entertainment tax. Mr. Robert Faiss, Lionel Sawyer and Collins, and counsel for the Nevada Resort Association (NRA), spoke in support of S.B. 497. He stated the NRA joined with the Gaming Control Board asking for S.B. 497 approval to provide clear direction for enforcement of the casino entertainment tax. His prepared testimony is submitted as Exhibit C. A collection of Nevada legislative amendments, opinions of the Attorneys General and decisions of the Nevada Supreme Court illustrating the history of the Casino Entertainment Tax (Exhibit D) can be viewed in the Research Library. This collection is labeled "Exhibits in Support of Senate Bill 497." A news release describing plans for the "Star Trek Experience" at the Las Vegas Hilton (Exhibit E) is an example of the interactive entertainment that the Control Board and the NRA agree is not subject to the casino entertainment tax. He further emphasized that S.B. 497 does not reduce tax obligations of the gaming industry. Jack Godfrey, Nevada Resort Association, explained S.B. 497 as amended is a joint recommendation of the State Gaming Control Board and the gaming industry to finally resolve differences in interpretation of the casino entertainment tax. He subsequently touched on highlights of the proposed amendments. Bill Bible, Chairman, State Gaming Control Board, spoke in support of S.B. 497 as written. Responding to Mr. Carpenter's inquiry as to whether smaller auditoriums would be affected, Mr. Bible said in order for the applicability to tax, it would have to be in licensed gaming premises and in Elko, for example, there would not be an auditorium of that size. Brian Harris, Gaming Control Board, discussed various enforcement problems they have had with the tax. Because of perplexities in the continually evolving entertainment industry, the problem as years have gone by is knowing when the tax should be assessed. ASSEMBLYMAN HUMKE MOVED DO PASS S.B. 497. ASSEMBLYMAN MANENDO SECONDED THE MOTION. THE MOTION CARRIED. Mr. Humke was delegated floor assignment. SENATE BILL 498 - Limits by statute civil liability of sellers and servers of alcohol. Bob Faiss, counsel for the Nevada Resort Association, testified in support of S.B. 498. His written testimony is submitted as (Exhibit F). Paul Larsen, Lionel, Sawyer & Collins, in support of S.B. 498 first reprint, gave an overview of the bill and explained its technical points. It was he who had prepared the research and analysis upon which the bill was based. He cited a discussion on the radio talk show, "PERFECTLY FRANK" where host Frank LaSpina posed the question, "Should victims of drunk drivers be allowed to sue the place where the drinks were served?" 85% of callers were opposed to the idea. See (Exhibit G). Mr. Larson emphasized S.B. 498 recognizes it is the consumption, not sale or service of alcoholic beverages, that can cause injuries inflicted by intoxicated persons. Carolyn Ellsworth, Mirage Resorts, Inc., speaking in support of S.B. 498 said the bill is a mere codification of what the Nevada Supreme Court has set for the last 26 years. The law is necessary because the Supreme Court can change the law at any time. Currently they are leaning toward an erosion of requiring personal responsibility because they are under the mistaken impression that dram shop acts save lives. Dram shop laws require servers of alcohol to be responsible for injuries caused by drinkers of alcohol. They, however, do not save lives. What does work, according to Ms. Ellsworth, is mandated server training which seeks to educate servers of alcohol. The only state in which it is required is Oregon. In essence, the responsibility lies with the consumer of alcohol. Burton Cohen, private citizen and formerly of NRA, stated S.B. 498 is a shifting of responsibility and is unenforceable in its original intent. He said the real source of solving drunk driving is education....to create awareness of the fact that if they cause an accident while intoxicated, they will pay the price. Roger Trounday, Executive Vice President of John Ascuaga's Nugget, concurred with Mr. Cohen. He stressed the individual, somewhere along the line, has to assume the responsibility for his own conduct...and passing that burden on to someone else is unacceptable. Ms. Kay Scherer, communications professional, explained she has been working with the NRA to evaluate and put together a program to serve as a model to the country for education and awareness as it relates to problem drinking and intoxication as well as under age drinking and gambling. The booklet entitled "Nevada Resort Association Presentation to The Assembly Judiciary Committee" is submitted as Exhibit H and is on file in the Research Library. Speaking in opposition to S.B. 498 was Peter Newman. His testimony is taken verbatim. "Mr. Chairman, members of the committee, my name is Peter Chase Newman. I'm an attorney in Nevada. I've been practicing law for 32 years. I generally represent people that are injured or families of people killed in various kinds of mishaps such as product liability cases, drunk driving cases, some malpractice cases and so forth. I come today to speak on behalf of myself and my clients, both past clients, present clients, and future clients. I speak in opposition to this bill knowing that I am doing so in opposition to our major industry in Nevada. I understand the industry's concern and the reasons that they would like the bill as amended...and if I were in the industry myself I'm sure that I would support them. But I don't think the bill is good legislation and I think what you people have to decide ultimately here is by passing this legislation, am I as a legislator doing the right thing? Am I as a legislator going to make Nevada a better place to live and a safer place to live...or is this legislation going to have the opposite effect? And I would respectfully argue to you that this legislation is not needed by the industry because there is not a problem that they have demonstrated where they have actually ever been the subject of a verdict against them for dram shop liability, number one. And number two, by the Legislature telling the world (and that's what you are doing with this legislation) that we don't care as a policy making group...we don't care if people serve minors or drunk people intoxicating beverages knowing that they very well may hurt someone else or kill someone else...we don't care enough to have them legally accountable. It seems to me that you are actually, by implication, inviting this kind of conduct. Now the gentlemen and the ladies that have testified so far represent that segment of industry that I think is quite responsible...and I read the presentation that they passed out and I agree with Mr. Humke..it is very impressive...and I think probably, certainly the Nugget for example, which I am a customer of many times, I am sure they have a policy like this that is very effective. And I'm not really concerned that the Nevada Resort Association is a problem here...but as a lawyer representing people...and I have represented many people that have been killed or very, very badly injured by drunk driving, I'm concerned more about the ABC Bar, or Joe's Bar, or some organization that doesn't have the resources to put out a program like the ones we've heard here today which would be very commendable. And, by telling those bars, or those venders, or those 7-11 stores, or those grocery stores that they have no liability, no legal accountability at all for knowingly or intentionally violating the law in serving a minor or serving an obviously intoxicated person, then I think we're just laughing at the problem. And the problem is very real. I have passed out to you a study...and the representative from the gaming...or the Nevada Resort Association, talked about studies that have been done. Well, I'm giving you an actual study here..done by a very responsible group, The Insurance Institute for Highway Safety. I get their publication and have for many years and their June, 1995 issue happens to be on this very subject. They tell you in the studies they've done, and they've done several studies..one of which involved 4000 people..a very large study...and they cite other studies in this article...showing that the problem of fake IDs and selling and buying of alcohol to and from minors is a very real problem. This article also shows that of the fatal accidents that occur in this country, and as we all know there are about forty to fifty thousand people killed each year on our highways, and in Nevada we have about 250 people killed each year on our highways in motor vehicle accidents, that alcohol is a very large percent of the reason for those crashes. Nationally the rate is about 37 percent over all. In other words, if you take all the people killed in this country, which per year is as many as we lost in Viet Nam...for the whole Viet Nam war...we lose that many people killed in this country each year on our highways. 37 percent of those people killed...and you talk about a cost to society ...you talk about a cost to the taxpayers of all these deaths...not to mention the millions of very serious injuries which are in many respects even more serious and more costly than deaths...almost 40 percent of those are caused by alcohol and as you'll see on the 6th page of this study, in those fatal injury cases that occur between nine at night and six o'clock in the morning, 60 percent of those are caused, or related to alcohol. Now, I'm stating the obvious. You know as well as I do that alcohol is a very dangerous thing when it comes to motor vehicles and that it causes a lot of problems, a lot of injuries and deaths and a lot of cost to society. But I don't think any of you probably realized that it was as high as 60 percent between the hours of 9 p.m. and 6 a.m. I surely didn't. That's a very, very large number. So the question is, does the legislature of Nevada want to encourage legislation, adopt legislation, which will basically do nothing to help the problem but will actually encourage a lack of accountability. When the gaming industry, or the Nevada Resort Association acts responsibly, which I believe it is trying to do, in telling people "Look, you've had too much to drink, I'm going to call a cab for you...take you home," and encourage their employees to watch for these people, I think that's wonderful. But, if we as a legislature say there's absolutely no accountability legally, then I think the incentive to continue with those kind of programs will be absent. And there will be a lot of companies that will not follow through with those kind of programs. I represent a lady by the name of Shawna Schneider, which the Schneider case was alluded to. And in that case, as well as the Heingardner case, the Supreme Court of Nevada in a three to two decision...a very, very divided court, held that the proximate cause was the person drinking. But the Shawna Schneider case, there's a petition for re-hearing on that case, pending before the court. That case is not over yet. In Ham vs. Carson City Nugget case which I worked on when I worked for Peter Cheveria in 1969 as a young lawyer, I was the one that helped write the brief on that case. And in Ham vs. Carson City Nugget, Mrs. Ham lost her husband...she and her children lost her husband to a drunk driver that had been here in Carson City drinking at the Carson City Nugget...and very visibly intoxicated and they kept serving him. That was many, many years ago but basically in that case and the other cases cited by the ladies and gentlemen from Lionel Sawyer, our court did not invite this legislature, in my opinion, if you read those cases, our court was not asking this legislature to come out with this kind of legislation. Rather, what our court was saying was the legislature has never adopted a policy one way or the other...and so the majority of the justices in the three to two cases said "we're not going to do that here because the legislature hasn't done it." So now obviously, if the legislature says "well there is no accountability", then our court will probably, in the next case, will probably say "well now the legislature has passed this statute and we find that the policy of the state of Nevada is that there is no accountability." I just am urging you as responsible legislators to say, "Look, it's not good legislation to say there is no legal responsibility". There can never be any legal responsibility in any kind of case no matter what the scenario. There has never been a jury verdict against a casino or a vender of alcohol in Nevada, or an individual person as Ms. Monaghan mentioned, for selling alcohol or furnishing alcohol. We've never had a case in which a verdict has come down. But I would like to at least keep the door open so that if one of you loses a husband or a child to a drunk driver and it turns out that drunk driver went to the 7-11 store and was visably intoxicated so that he was staggering in drunk, he was sixteen years old, obviously not twenty one years old, obviously intoxicated, and the 7-11 store went ahead and sold him a six-pack of beer...and then he goes out and kills your kid, I think we should leave the door open to at least you would have a chance of making a claim against the vendor of that alcohol. I can't see a jury holding someone like the Nugget responsible or someone who has an in-room service and furnishes liquor to an in-room patron and then that patron goes out....I can't see a jury ever finding someone guilty and accountable for that. But I can see the problem where they intentionally serve a minor or intentionally serve a visably intoxicated person...I think the policy of the state should not be to say that victim has no right. Now, for that reason I have done a research this morning on Westlaw of all the states that have dram shop law..and the closest that I can come..." Mr. Carpenter asked what would happen if the establishment or whoever sold the alcohol was held responsible ("then there wouldn't be any responsibility on that party for his own actions"). Mr. Newman continued: "The law as I understand it is that there can be more than one proximate cause of an injury...by not adopting this statute you wouldn't be changing the present law which is the primary responsibility is already on the drunk driver...there's no question about that...but what I'm saying is that it's not good policy for the state of Nevada to say there can never be a case where there couldn't be responsibility on an additional person as well in some instances. I gave an extreme example...if it were your store, as you say, it wouldn't be a problem because you would never serve someone like that...but suppose there were? I had a case that I tried to a jury l5 or 16 years ago...a little boy was killed on his bicycle...he was 6 years old...he was killed by a drunk driver who had been drinking all day long at a place called the "Dew Drop Inn". And the Dew Drop Inn knew that he was drunk and they loaned him their car...he wanted to go get some more money and wanted to cash a check...they wouldn't cash a check and they said well, we'll loan you our car. They loaned him their car and he went out and killed this perfectly innocent little six year old boy...and so there are cases where that happens. I don't think it's a problem for a responsible organization..and that's my point is that I don't think we need this legislation. " Mr. Carpenter wondered if there were other additional protections in the law for a seller or provider of alcohol. Mr. Newman: "Yes there are, and it's called a jury system. I can't see that a jury would ever convict or make someone like yourself or a responsible person accountable if they acted reasonably. And as I say, we've never had a verdict, Mr. Carpenter, in the state of Nevada against a major hotel or casino. The case I said about the Dew Drop Inn is the only one I know of and that was a very strong set of facts. In my package that I've given you I have suggested some language to the bill in S.B. 498 which would say "no person who serves or sells alcoholic beverages to an adult (add the words "to an adult") is liable in a civil action based on the grounds that the service or sale was the proximate cause of injuries inflicted by an intoxicated person on himself"...and strike the words "or another person". By adding those words to the bill, you would be ameliorating it to some extent. I agree that the intoxicated person, himself or herself, should not have a cause of action. If that person is drunk or gets hurt, I don't think the person should be allowed to sue the vendor of the alcohol. But if the person gets drunk in the scenario that I said, like at the Dew Drop Inn, and injures another innocent person, I just feel that you shouldn't close the door on the right of that person...or the mother of that person that I represented, to make a claim. Idaho has done that and the language of the Idaho statute is that there is no liability expect in cases where the intoxicated person was younger than the legal age for the consumption of alcoholic beverages or that the intoxicated person was obviously intoxicated at the time the beverages were sold or furnished ...and the person who sold or furnished the alcoholic beverages knew that the intoxicated person was obviously intoxicated. In those instances the Idaho Legislature has said they would preserve the right of legal action." The amended language change by Mr. Newman is submitted as Exhibit I. Mr. Anderson questioned Mr. Newman's intent as to whether a person would have a higher standard of accountability in selling to a minor than to an adult. Mr. Newman said yes, because it is against the law to sell to a minor. Major Dan Hammack, Nevada Highway Patrol, stated the division is opposed to S.B. 498 on the basis of a traffic safety issue. Both the business industry and law enforcement must mutually cooperate to reduce the DUI offender problem. To limit civil liability on this issue will reduce the deterrent effect on these violations. The solution to DUI offenders involves education, treatment and enforcement. The division would encourage the committee to consider this issue a matter for the courts to decide based upon individual negligence of each case. Dora Mae Jacobsen, citizen, testified in opposition to S.B. 498. Her 30 year old daughter was killed by a drunk driver who had consumed 18 beers in July of 1993. She stated anyone who gives alcohol to an intoxicated person or minor resulting in the death or injury of someone, should be held jointly responsible. Laurel Stadler, MADD, expressed opposition to S.B. 498 "as it has currently been gutted by the Senate Judiciary Committee". She noted the concept presented in their bill draft was totally reversed by the Nevada Resort Association amendment which was then adopted by that committee. She said in the five years she has been working with MADD she has yet to see a victim looking for "deep pockets"...a slap in a victim's face to suggest that! She noted proponents mentioned there are current statutes and ordinances making servers responsible; however, she has not seen statistics showing how many times fines are actually levied against those establishments or servers. Also there were no statistics to show how this legislation is going to harm the tourist industry; no figures to support that insurance liability premiums may increase because of any dram shop liability; and no numbers of cases experienced in other states to show there actually would be the plethora of civil cases that would clog the courts. Ms. Stadler, in addressing the original version of the bill, stated the lack of the dram shop statute identifies alcohol retailers, taverns and casinos as a protected class because any lawsuits brought are routinely thrown out of court. If the circumstances to support the negligent service of alcohol to an intoxicated person or minor are so blatant that the injured victim or grieving family believes another possible victimization by the legal system is worth that risk to them, they should be able to bring suit. Ms. Stadler stressed responsible vendors will not be found in violation under the law...and irresponsible, negligent vendors need to be found in violation under the original version of S.B. 498. Judy Jacobini, MADD, explained on the issue of personal responsibility their bill draft request does not attempt to shift the personal responsibility off of the drinker. They only ask that personal responsibility be extended to everyone who, in violation of a law, sets in motion a dangerous, uncontrollable force and that they too be held responsible. ASSEMBLYMAN SCHNEIDER MOVED TO DO PASS S.B. 498. ASSEMBLYMAN MONAGHAN SECONDED THE MOTION. THE MOTION CARRIED WITH ASSEMBLYMAN CARPENTER ABSTAINING FROM THE VOTE. SENATE BILL 482 - Authorizes court to require attorney to pay additional costs, expenses and fees reasonably incurred as result of certain actions taken by attorney in civil action or proceeding. Pat Cashill, Nevada Trial Lawyers Association, spoke in support of S.B. 482. He stated the bill is aimed at a concern which has been expressed earlier relative to frivolous lawsuits. S.B. 482 places the onus on a lawyer himself and places the power in the hands of a judge to sanction the lawyer personally. He noted this is a good bill, strong tort reform, and deserving of passage. Rule 11, according to Mr. Cashill, is part of both the Nevada Rules of Civil Procedure and part of the Federal Rules of Civil Procedure. All courts in Nevada are governed by Rule 11 which permits a party or his or her lawyer to be sanctioned for instituting a frivolous proceeding. Also, there is in effect 28 United States Code, Section 1927 which is the litigation statute under the Federal Judiciary Act. That statute enables a judge to impose sanctions on a lawyer personally. He added, "What we have done in conjunction with Senate Judiciary is to blend the rule in the statute to make the rule here, as embodied in this bill, all the stronger...to enable a judge upon a finding that a lawyer has either brought a frivolous suit, filed a bogus motion, has wasted court's time...to impose sanctions on the lawyer himself." ASSEMBLYMAN SANDOVAL MOVED DO PASS S.B. 482. ASSEMBLYMAN STEEL SECONDED THE MOTION. THE MOTION CARRIED. SENATE BILL 234 - Provides that act of assisting suicide is not condoned, authorized or approved by Uniform Act on Rights of the Terminally ill. Brother Matthew Cunningham, Diocese of Reno-Las Vegas, explained he was appearing in order to present a letter from Bishop Daniel Walsh (Exhibit J) expressing his strong support for S.B. 234. He read the letter to the committee. Patricia Glenn, President, Nevada Right to Life, spoke in support of S.B. 234. Her prepared testimony is submitted as Exhibit K. Kris Jensen, Nevada Concerned Citizens, explained it is in the proper role of government to protect innocent, human life and urged support of S.B. 234. Janine Hansen, State President, Nevada Eagle Forum, spoke in support of S.B. 234. She said it was a positive way to move and encouraged committee support. ASSEMBLYMAN CARPENTER MOVED TO DO PASS S.B. 234. ASSEMBLYMAN GOLDWATER SECONDED THE MOTION. THE MOTION CARRIED. There being no further business to come before the committee, Chairman Anderson adjourned the meeting at 9:52 a.m. RESPECTFULLY SUBMITTED: ____________________________ Christine Shaw, Committee Secretary Assembly Committee on Judiciary June 27, 1995 Page