1 A. D. C D E F E N S E ASSOCIATION OF DEFENSE COUNSEL OF NORTHERN CALIFORNIA AND NEVADA VOL. 23, NO. 1 / SPRING 2008 In This Issue: Malpractice Claims Against Providers of Health Care Following Nevada s 2004 Initiative Petition Who Is Representing You in Sacramento While You Are Representing Your Clients? The Pursuit of Justice or Money?
3 STAFF editors-in-chief Stephen A. Schram John M. Vrieze Editorial/Art Direction John Berkowitz A. D. C D E F E N S E Melissa Aliotti Martin Ambacher Mike D. Belote Michael J. Brady Paul Brisso Arthur J. Casey William G. Cobb Paul R. Cotter Dave Daniels Laura Flynn Meg Gambino Contributors Peter O. Glaessner Linda Lynch Michael Mordaunt Joe Nocera Justin H. Pfrehm Todd Roberts Tiza Serrano-Thompson Stephen A. Schram Jim Treppa Patricia Tweedy John M. Vrieze Christopher Wood ADC HEADQUARTERS Office 2520 Venture Oaks Way, Suite 150 Sacramento, CA Phone: (916) Fax: (916) ADC HEADQUARTERS Staff Executive Director Jennifer Blevins, CMP John Berkowitz Publications Director/Graphic Design Nathan Carlson Account Executive Michael Cochran Webmaster Joseph Davis Special Projects Jessica Drake Administrative Assistant Kim Ingersoll Membership/Education/Advertising Erin René Nelson Meeting Planner Stephanie Schoen Special Projects Tricia Schrum, CPA Accountant The price of subscription is included in the membership dues. All other subscriptions are $ per year. The opinions and viewpoints expressed in the articles of the Defense Comment Magazine do not necessarily represent the opinions of, or reflect the official position of, the Association of Defense Counsel of Northern California and Nevada or the editors. ASSOCIATION OF DEFENSE COUNSEL OF NORTHERN CALIFORNIA AND NEVADA VOL. 23, NO. 1 / SPRING 2008 Features Malpractice Claims Against Providers of Health 4 Care Following Nevada s 2004 Initiative Petition An experienced Nevada Trial Attorney analyzes the impact of recent revisions to Nevada Statutes. William G. Cobb Who Is Representing You in Sacramento 11 While You Are Representing Your Clients? While busy attorneys represent their clients interests, the California Defense Counsel organization is representing the interest of defense attorneys in Sacramento. Stephen A. Schram The Pursuit of Justice or Money? 16 In cases where lawyers abuse the system, litigation can look more like an income-distribution racket than a search for justice. Reprinted (by permission) New York Times Commentary from December 8, 2007 Indemnification Clauses in Construction Contracts: 18 New Legislation Closes One of Several Loopholes Rules interpreting indemnity obligations in construction contracts are again addressed by the Legislature, and an analysis of potential rights or obligations may depend on the date of the contract. Paul R. Cotter Meet the 2008 ADC President 22 The new ADC President, Pat Tweedy, intends to provide more opportunities for ADC members to network with each other, the insurance industry and judges, while guiding the organization with her own love of life. John M. Vrieze Departments President s Message By Patricia Tweedy 2 California Defense Counsel (CDC) Report By Mike Belote 3 Meet ADC Board Members By John M. Vrieze 28 Substantive Law Committee Reports 30 Trials and Tribulations Members Recent Jury Trials 32 Tip of the Cap 36 In Memoriam By Peter O. Glaessner 37 Northern Lights By Paul Brisso 38 Defense Comment would be pleased to consider publishing articles from ADC members and friends. Please send all manuscripts and/or suggestions for article topics to: Stephen A. Schram, Sedgwick, Detert, Moran & Arnold, One Embarcadero Center, 16th Floor, San Francisco, CA. Phone: (415) ; Fax: (415) ; Spring 2008 Defense Comment 1
4 President s Message It is going to be an absolutely fantastic year for members of the Association of Defense Counsel as we strive for excellence in our practices. If you are reading the Defense Comment you are holding one of the best, if not the best, periodicals for California and Nevada Civil Defense Practitioners. The editor, Stephen Schram of Sedgwick, Detert, Moran & Arnold and his co-editor John Vrieze of Mitchell, Brisso, Delaney & Vrieze, continue to provide current law, stories and articles that impact your practice. The ADC is committed to excellence in content and journalistic style so that our members have current information at their fingertips that is a pleasure to read. Patricia Tweedy 2008 President The goal of the ADC is to support the fine lawyers that comprise our membership. The organization s goals for 2008 include providing continuing education of the highest quality. The seminars will be offered to members at a rate that is greatly reduced from that paid by non-member attorneys. ADC continuing education offerings in 2008 will include a public entity seminar in Oakland, California and a two-session Toxic Tort seminar in San Francisco. We will also have an employment law seminar, a transportation seminar and numerous brown bag lunches. The Law Firm Management Seminar on August 1-2, 2008 in Monterey, California will be an event unsurpassed by any other of its kind. The seminar will pay for itself by the dollars you will save in software and hardware investment and information technology consulting services. You will learn how your profit can be greatly improved with simple time-tested technology. You will learn from IT-savvy lawyers (not sales people) the technology that is available to help you reduce your workforce, reduce your workload and manage your cases profitably. Law firms should send their managing partners, their law office administrators and their young lawyers who have embraced technology. Law firms should send any lawyer who has an interest in moving into the 21st Century. The Law Firm Management Seminar will provide education on numerous issues that have come up or will surely arise in the practice. Included in the offering will be managing requests by partners and employees for lengthy leaves of absence to handle caregiver responsibilities. What are your rights and obligations? Can you respond favorably to these requests in a way that serves the employee or partner and the firm? This seminar will include the ever-popular and informative roundtable discussions. We expect this seminar to be a very well-attended event. 2 Defense Comment Spring 2008 Continued on page 40
5 California Defense Counsel (CDC) Report Michael D. Belote, Esq. California Advocates, Inc. In football, it has been said that the quarterback receives too much credit for wins, and too much blame for losses, the recent exploits of Eli Manning notwithstanding. A similar comment has been made about government leaders, that they take too much credit for economic good times and receive too much blame for recessions. Whatever his other strengths and weaknesses, Jimmy Carter probably didn t cause the inflation and high interest rates of the late 1970 s, but they were at least partially responsible for his lack of a second term. In California, history is still out on the degree to which Gray Davis was responsible for budget deficits and power outages, but the recall ended his political career just the same. In other words, there is a certain inexorability to forces such as the economy. Politicians, all of whom would rather govern in times of plenty, sometimes must simply respond to market forces. As this column is written, California tax revenues continue to come in below projections, and various costs continue to rise. The result is a current year cashflow shortage and a projected budget deficit in fiscal year of at least $14 billion. Consideration of all manner of pet projects will come to a resounding standstill. The judicial branch cannot escape receiving some of the budget pain. The Governor has called for 10% across-the-board reductions, which, if enacted, would reduce the judicial branch budget by approximately $245 million. Fortunately, the actual spending reduction would be less, because the budget reduction is calculated on formulae which include growth factors, but still the reduction is significant. And because much of court activity is completely nondiscretionary, such as criminal caseloads and family law matters, the cuts will fall disproportionately on the civil side. Given the reality that state budgets are likely to be constricted for several years, it stands to reason that some judicial branch projects, however important, may go unfunded for a time. Court facilities and other infrastructure, case management upgrades, interpreter expansions, self-help programs for unrepresented litigants and other programs will be tested against limited budget revenues. On the other hand, the hope is that the third installment of additional judgeships will continue to be funded. Why is all of this important to CDC and the rest of the civil bar? For one thing, because the budget shortfalls are likely to put increased pressure on civil filing fees. There is always a tendency to raise user fees in times of budget pressure, and a legislativelyimposed moratorium on filing fee increases has expired. CDC will be participating in a working group to address possible increases in filing fees, and the tension is simple and fundamental: the need for additional revenue balanced against the problem of reducing access to justice. Continued on page 41 Spring 2008 Defense Comment 3
6 Malpractice Claims Again Providers of Health Care Following Nevada s 2004 Initiative Petition 4 Defense Comment Spring 2008 By William G. Cobb, Esq. Erickson, Thorpe & Swainston, Ltd.
7 st In the 2004 General Election, Nevada voters approved an Initiative Petition which amended certain provisions of Chapter 41A of the Nevada Revised Statutes ( Actions for Medical or Dental Malpractice ). Ballot Question No. 3, entitled Keep our Doctors in Nevada (KODIN), 1 was characterized as a measure which would ostensibly only allow persons who were genuinely injured by a physician s negligence to recover economic losses. The measure also embraced several liability, abolished the collateral source rule and capped noneconomic damages at $350,000 in malpractice actions. The stated intent of this ballot measure was to stabilize medical malpractice premiums and [to] help your doctor stay in Nevada. 2 The purpose of this article is not to comment on whether any implementation of Question 3 will indeed resolve the fullblown medical liability crisis 3 proponents of the Initiative contended it would. Instead, this article will discuss certain anomalies which are now inherent in the medical/health care malpractice arena as a result of KODIN. A New Definition of Professional Negligence Now Pertains to a Broad Range of Health Care Providers Question 3 did not replace in toto Chapter 41A of the Nevada Revised Statutes, which previously only addressed actions for medical, osteopathic, dental or hospital malpractice. 4 Rather, the Initiative Petition amended Chapter 41A so that this chapter now pertains to a broader range of providers of health care, including optometrists and dispensing opticians, chiropractors, registered physical therapists, licensed psychologists, doctors of oriental medicine and certain other health care professionals. 5 Although malpractice also remains defined in Chapter 41A for doctors and dentists, 6 KODIN adopted a definition of what is called professional negligence which is extended to providers of health care. Codified as NRS 41A.015, professional negligence is a negligent act or omission to act... in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death. * * * What a negligent act or omission to act necessarily entails, however, is not defined by the Initiative Petition. Continued on page Spring 2008 Defense Comment 5
8 Malpractice Claims continued from page Whether the authors of Question 3 intended the Initiative s definition of malpractice to supersede the prior statutory definitions of malpractice is unknown. However, not only did Chapter 41A previously include definitions of dental and medical malpractice before the passage of the Initiative, these definitions remain today as part of the statutory scheme found in Chapter 41A of the Nevada Revised Statutes. 7 For example, dental malpractice is defined in NRS 41A.004 as having the meaning ascribed to malpractice in NRS This statute (NRS ) requires a showing the dentist failed to exercise the degree of care, diligence and skill ordinarily exercised by dentists in good standing in the community in which he practices (the issue of the community in which he practices is discussed infra). 9 This definition of dental malpractice is not markedly different from the definition of professional negligence in KODIN. Nevertheless there are some noteworthy distinctions between NRS 41A.004/NRS (dental malpractice) and NRS 41A.015 (professional negligence). For example, there is nothing in NRS 41A.015 which requires professional negligence to be established by comparison to the care, diligence and skill of other dentists in good standing (discussed infra is the requirement of expert testimony in medical/dental malpractice actions under NRS 41A.100). Similar to dental malpractice, medical/ osteopathic malpractice remains defined in Chapter 41A as the failure of a physician to exercise reasonable care, skill or knowledge ordinarily used under similar circumstances. 10 This definition, like that of dental malpractice, currently coexists in the Nevada Revised Statutes with the KODIN definition of professional negligence. Professional Negligence is defined in KODIN as being a negligent act or omission to act. 11 But what is a negligent act? Presumably one has to return to the previously-discussed definitions of medical or dental malpractice in Chapter 41A which pre-existed this legislative initiative. These predecessor definitions more precisely delineated what constituted malpractice, at least for those professions. Additionally, NRS 41A.100 requires that negligence in the performance of medical care must be established, generally speaking, with expert medical testimony. A provider of medical care is defined in NRS 41A.100 to include a physician, dentist, registered nurse or licensed hospital. In light of this definition, in a dental malpractice case, dental expert testimony would be required to establish dental malpractice, nursing expert witnesses in a nursing malpractice case, and so on. But note the anomaly in the requirement for expert testimony under NRS 41A.100: this statute specifically addresses only medical, dental or nursing cases. Its plain language (and the requirement of expert testimony therein) does not apply to other providers of health care, such as psychologists, dispensing opticians, physical therapists, etc., who are now brought within the scope of Chapter 41A. Compare, NRS 41A.100, requiring expert testimony in medical, hospital, dental and nursing malpractice cases, with NRS 41A.015, which defines the negligence of a broad spectrum of health providers is silent as to any expert testimony requirement. The question thus posed is this: Is it only medical, dental, nursing and hospital malpractice claims which must be established via expert testimony or does this requirement pertain to all health care professionals? The Nevada Supreme Court in a 1991 decision set forth elements of a negligence claim brought as a malpractice action. In Lopez v. Las Vegas Medical Center, the Court stated that to prevail on a medical negligence claim, the plaintiff generally must show that (1) the defendant had a duty to exercise due care towards the plaintiff; (2) the defendant breached the duty; (3) the breach was an actual cause of the plaintiff s injury; (4) the breach was the proximate cause of the injury; and (5) the plaintiff suffered damage. 12 The cause of action in Lopez arose before the Legislature s adoption of a statutory definition of malpractice in Yet these Lopez elements of proof should still be applicable not only to the pre-existing legislative scheme but the Initiative s definitions of malpractice as well, particularly with regard to the burden of establishing the duty of care. The issue becomes, as will be discussed next, how the duty of care and any breach of such a duty are to be established. is expert testimony required for professional negligence actions against providers of health care? Prior to the public s vote on KODIN, Nevada law had long held that medical malpractice must be established through expert medical testimony demonstrating a deviation from the standard of care. 14 NRS 41A.100 codified that obligation, at least, as noted above, as to certain other professions (i.e., dental, hospital and nursing malpractice). The Initiative s definition of professional negligence 15 does not explicitly adopt what is called the professional standard (which requires expert testimony to establish professional negligence) for all of the professionals identified as providers of health care. However, one assumes an Initiative Petition which stated its goal was to stabilize malpractice premiums and Continued on page 6 Defense Comment Spring 2008
9 Malpractice Claims continued from page to help doctors stay in Nevada was not intended to make it easier for a plaintiff to establish malpractice. The recent decision of the Nevada Supreme Court in IGT v. Second Judicial District Court addressed the issue of statutory interpretation. 16 Although its analysis was not done in the context of a ballot initiative impacting a previously codified statute, nevertheless IGT s instructions provide guidance on how Chapter 41A might be construed in light of these amendments: When interpreting a statute, a court should consider multiple legislative provisions as a whole. The language of a statute should be given its plain meaning unless, in so doing, the spirit of the act is violated. Thus, generally, a court may not look past the language of a facially clear statute to determine the legislature s intent. An ambiguous statute, however, which contains language that might be reasonably interpreted in more than one sense or that otherwise does not speak to the issue before the court, may be examined through reason and considerations of public policy to determine the legislature s intent. 17 Presumably, therefore, if a Court were faced with the interpretation of a KODIN issue, that considerations of public policy would govern. As such, the pre-existing statutes and KODIN amendments would presumably be interpreted harmoniously to fulfill the public policy espoused by KODIN, i.e., to stabilize medical malpractice premiums and to keep our doctors in Nevada. Accordingly, KODIN s provisions would likely be liberally construed. Inasmuch as professional negligence must be established with expert testimony in medical and dental malpractice actions, presumably malpractice actions against the other providers of health care who are now brought within the scope of Chapter 41A would face similar requirements. This reciprocal requirement of expert testimony would at least apply to those providers of health care whose professions have specific statutes defining malpractice. Examples of such statutes which specifically define negligence for that respective profession (in addition to doctors and dentists) would be the statutory provisions applicable to psychologists and homeopathic physicians. The definitions for these professions, not so coincidentally, basically parallel the definition of dental malpractice discussed above. 18 Certainly as to dentists, medical doctors and doctors of osteopathy, any action asserting malpractice generally required expert testimony by reason of the terms and provisions of Chapter 41A. 19 Until 2004, and prior to KODIN, it was an open question whether the standard of care in a malpractice action against a provider of health care who was not covered by Chapter 41A must be established by expert testimony. This issue, however, was resolved by the Nevada Supreme Court s decision in Bronneke v. Rutherford. 20 In this case, the Court extended the requirement of establishing professional medical negligence with expert testimony to actions against chiropractors. Bronneke reviewed the statutory definition of chiropractic malpractice found in NRS (which is similar to the definition of dental malpractice found in NRS ). This statute states that chiropractic malpractice is determined by examining whether the chiropractor exercise[d] the degree of care, diligence and skill ordinarily exercised by chiropractors in good standing in the community in which he practices. Based on this definition, the Nevada Supreme Court observed that even though NRS 41A.100 is limited to the medical profession, expert chiropractic testimony would still be necessary to establish malpractice * * * 21 One would thus presume that the Bronneke rationale would necessitate testimony in a professional negligence action from an expert in the particular field in which the health care professional practices. This interpretation would certainly be appropriate as to those health care professions where the legislature has actually defined malpractice relative to those professions, such as with chiropractors, 22 dentists, 23 homeopathic physicians 24 and psychologists. 25 In each of these professions, comparison to the care, diligence and skill exercised by professionals in the professional s field would be required by statute in order to establish malpractice. will actions against other health care providers not included under kodin s definition require expert testimony? But what about those providers brought within the scope of Chapter 41A by the Initiative Petition for whom the Legislature has not specifically defined malpractice within that profession? While dispensing opticians, optometrists, registered physical therapists, podiatric physicians and doctors of Oriental medicine were included among the KODIN definition of providers of health care, 26 the respective chapters of the Nevada Revised Statutes regulating these professions do not have corresponding definitions of what constitutes malpractice for these providers. While each chapter governing these professions notes that malpractice or repeated malpractice may be grounds for professional discipline, 27 there is no specific corresponding definition of malpractice for these professions. Accordingly, there is no expression of legislative intent regarding whether any negligence of this group of professionals Continued on page 8 Spring 2008 Defense Comment 7
10 Malpractice Claims continued from page must be determined by examining the degree of care, diligence and skill ordinarily exercised by health care providers in that profession who are in good standing in the community (as the Legislature did for chiropractors, dentists, psychologists, etc.). And to carry this rhetorical question one step further, what of those health care professionals who were not brought under the umbrella of the KODIN definition of providers of health care? Health care professions which were omitted therefrom include homeopathic physicians, occupational therapists, athletic trainers, massage therapists, social workers and marriage or family therapists. All of these professions are governed by Title 54 of the Nevada Revised Statutes, as are doctors, dentists, chiropractors, etc., yet each was excluded from the Initiative s definition of a health care provider. The issue thus becomes, whether after KODIN, expert testimony would be required to establish deviation from the acceptable degree of care, diligence and skill which would be ordinarily exercised by similar providers. While there has been no case reported in Nevada where this issue has arisen, one could reasonably assume, certainly as to those professions who were included in KODIN s definition of health care providers, that establishing professional negligence in that field will require expert testimony. This should also hold true where the profession in question has a statutory definition of malpractice which incorporates the concept of a deviation from the care, diligence and skill exercised by other providers in that profession, particularly after Bronneke (such as to chiropractors, psychologists, etc.) Moreover, in light of the Court s rationale in Bronneke, embracing what is called the professional standard which requires expert testimony to establish a deviation from the standard of care, 28 one could assume such a requirement might be imposed as to all such actions against any provider of health care. the role of material risk in informed consent cases The requirement of expert testimony would also pertain to professional negligence actions based on informed consent. Of course, in the medical arena, consent of the patient to a surgical procedure or other treatment is required. 29 Whether the medical doctor deviated from the obligation to discuss a risk sufficiently material so as to require disclosure is also the subject of expert testimony in medical malpractice actions. 30 A patient need not be apprised of the risk of treatment if the procedure is simple and the danger remote and commonly appreciated to be remote. 31 Whether a risk is material is also the subject of expert witness testimony. 32 Nevada embraced this rationale in the Bronneke decision and extended the expert witness requirement to informed consent claims as it previously held applicable in standard malpractice actions. 33 One final comment about the interplay between the locality rule which has found its way into certain definitions of malpractice appearing in the Nevada Revised Statutes -might be in order. In several of the statutes defining professional malpractice, the deviation which must be demonstrated is determined by testimony from one who is in good standing in the community (which is the definition as to psychologists) 34 or even one who is in good standing in the community in which he practices (which is basically the definition of dental and chiropractic malpractice). 35 These community requirements seemingly smack of the locality rule. Nevada, of course, overturned the locality rule as applied to medical specialists in Orcutt v. Miller. 36 In Wickliffe v. Sunrise Hospital, Inc., 37 the Court embraced a national standard in an action against a hospital. In the Bronneke decision, although not specifically an issue on appeal, the Court similarly adopted a national standard for adjudicating claims of chiropractic malpractice. 38 Thus, it appears to be a reasonable assumption, in spite of restrictive language in certain statutory definitions of professional negligence, that where the deviation from the standard of care must be established by a professional from the community in which he practices, that community will be a national one. conclusion Despite adopting a new definition of professional negligence, which is silent as to any requirement of establishing a duty and the breach thereof through expert testimony, it appears that an action against a provider of health care in Nevada (with certain exceptions) must still be established by expert testimony demonstrating the deviation from the standard of care. This requirement applies not only to medical doctors and dentists but likely to all providers of what is considered health care in Nevada. 8 Defense Comment Spring 2008
11 Malpractice Claims continued from page 8 Endnotes 1 The text of the Initiative may be found at IP1.pdf. 2 Argument in favor of Question 3, Nevada Secretary of State s Office. 3 Id. 4 See NRS 41A.004 (definition of dental malpractice ), NRS 41A.009 (definition of medical malpractice, which includes hospitals) and NRS 41A.013 [defining physician to include those persons licensed under Chapter 630 (mainly medical doctors and physician assistants) and under Chapter 633 (osteopathic physicians)]. 5 NRS 41A NRS 41A.009 & NRS 41A NRS 41A.004 & 41A NRS 41A NRS ; emphasis added; 10 NRS 41A.009 and NRS 41A.013; emphasis added. 11 NRS 41A Nev. 1, 4, 805 P. 589, (1991; citation omitted; emphasis in the original). 13 See Laws of Nevada, 1985, p. 2006; amended, p See e.g., Beattie v. Thomas, 99 Nev. 579, 584, 668 P. 2d 268, 271 (1983); Brown v. Capana, 105 Nev. 665, , 782 P. 2d 1299, (1989); NRS 41A.100(1). 15 NRS 41A IGT v. Second Judicial District Court, 127 P. 3d 1088 (2/9/06). 17 Id (internal footnotes omitted). 18 NRS : the failure on the part of a psychologist to exercise the degree of care, diligence and skill ordinarily exercised by psychologists in good standing in the community. NRS 41A.004 and NRS : the failure to exercise the degree of care, diligence and skill ordinarily exercised by dentists in good standing in the community. NRS 630A.060, the failure to exercise the degree of care, diligence and skill ordinarily exercised by homeopathic physicians in good standing in the community in which he practices. 19 NRS 41A.100 requires expert testimony in an action against a provider of medical care, unless one of five exceptions is demonstrated (e.g., foreign substance left in surgical site, unintended burn, etc.) Nev. 230, 89 P. 3d 40 (2004). 21 Id. at p NRS NRS NRS 630A NRS NRS 41A See e.g., grounds for discipline against nurses [NRS (7)(e)]; against dispensing opticians [NRS (L)]; against podiatrists [NRS (i)]; against optometrists (NRS & NRS ). 28 Bronneke, supra, 89 P. 3d at p See generally, NRS et seq. and NRS 41A.100. See also Brown v Campagna, 105 Nev. 665, , 782 P. 2d 1299, (1989); see also, Patient Rights, NRS et seq. 30 Id; See also Smith v Cotter, 107 Nev. 267, 272, 810 P. 2d 1204, 1207 (1991). 31 Cobbs v. Grant, 8 Cal. 3d 229, 104 Cal. Rptr. 505, 502 P. 2d 1, 12 (1972). 32 See, e.g., Canterbury v. Spence, 464 F. 2d 772, 778 (D.C. Cir. 1972). 33 Bronneke v. Rutherford, 89 P. 3d 40, 46 (2004). For a more comprehensive discussion of the informed consent doctrine and the requirement of expert testimony, see, Cobb, defending the informed consent case, The Defense Counsel Journal, Vol. 72, No. 4, p NRS Chiropractic malpractice, NRS ; dental malpractice, NRS (emphasis added). Note, however, the definition of the community in which the dentist practices is not necessarily local Nev. 408, 414, 595 P. 2d 1191 (1979) Nev. 542, , 706 P. 2d 1383, Bronneke, supra, 89 P. 3d at p. 46. Spring 2008 Defense Comment 9