On July 26, 2010, the NAM and six other business organizations filed an amicus brief urging the Nevada Supreme Court to reconsider a decision that took away defense rights in a product liability case. Case law overwhelmingly states that an order striking all defenses to liability dictates the outcome of a case, and due process protections are required. This kind of sanction has been nicknamed the "civil death penalty," since it kills all defenses. Such a sanction, awarded for alleged discovery violations, should only be used as a last resort after lesser sanctions, such as fines or adverse inferences, are tried first, and a court should look carefully at the actual underlying discovery dispute.
Unfortunately, the Nevada Supreme Court refused to rehear the case. It held that Nevada law does not entitle defendants to an evidentiary hearing before their answers are stricken as to liability, and the state does not follow the federal model that provides for progressive sanctions for discovery errors. It also ruled that since eliminating defenses does not end the case -- there are still issues of how much damages are to be awarded -- a full evidentiary hearing is not needed.
A dissenting judge argued that the discovery errors here seemed "fairly minor" -- timely serving interrogatory answers but with the verication to follow later, producing documents without labeling them to correspond to specific discovery requests, and accepting a penalty instead of going through a records authentication deposition during the week between Christmas and New Year's Day. In such a case, the trial court should have required a showing of irremediable prejudice to the plaintiff's case from the discovery errors.
If Nevada can so easily remove constitutional due process protections, manufacturers will face more difficult litigation burdens there that could make it into a magnet litigation jurisdiction.