MINUTES OF THE
SENATE COMMITTEE ON JUDICIARY
Sixty-seventh Session
May 26, 1993
The Senate Committee on Judiciary was called to order by Chairman Mark A. James, at 1:45 p.m., on Wednesday, May 26, 1993, in Room 224 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator Mark A. James, Chairman
Senator R. Hal Smith, Vice Chairman
Senator Lawrence E. Jacobsen
Senator Mike McGinness
Senator Dina Titus
Senator Raymond C. Shaffer
Senator Ernest E. Adler
STAFF MEMBERS PRESENT:
Robert Erickson, Research Director
Marilyn Hofmann, Committee Secretary
GUEST LEGISLATORS PRESENT:
Senator Matthew Q. Callister, Clark County Senatorial District No. 8
Senator Diana M. Glomb, Washoe County Senatorial District No. 1
OTHERS PRESENT:
Bobbie Gang, Nevada Women's Lobby
Kay Zunino, Chief, Support Enforcement Office, State of Nevada Department of Human Resources, Welfare Division
Lance Turner, Administrator, Family Support Division, Office of the District Attorney, Washoe County, Nevada
Alicia Smalley, National Association of Social Workers
Frankie Sue Del Papa, Attorney General, State of Nevada
Chuck Gardner, Deputy Attorney General, State of Nevada, Office of the Attorney General
Judith M. Allan Rodriguez, Administrative Director, Nevada Missing Children Clearinghouse, State of Nevada, Office of the Attorney General
Kathleen Shane, Director, Children's Services, Washoe County Social Services, Washoe County, Nevada
Ben Graham, Nevada District Attorney's Association
Richard Broo, Private Citizen
Ernest del Casal, Equal Rights for Divorced Fathers
Edwin Durand, Private Citizen
Madeline Durand, Private Citizen
Ande Engleman, Nevada Press Association
Madelyn Shipman, Chief Deputy City Attorney, Reno, Nevada
Senator James opened the hearing on Senate Bill (S.B.) 298.
SENATE BILL 298: Revises provisions governing payments for support for children.
The first to appear in support of S.B. 298 was Senator Matthew Q. Callister, Clark County Senatorial District No. 8. Senator Callister indicated he was apprised of a problem which arose in connection with his law practice in the bankruptcy field. He indicated bankruptcy law is an "eccentric combination of federal law and state law," particularly in the area of bankruptcy exemptions. Senator Callister pointed out, pursuant to Nevada law, there are certain items of property which a person can keep, even if that person files a bankruptcy. He indicated one exemption which is unclear in the law is the exemption for child and spousal support. Senator Callister stated under Nevada law, it has been clear that child and spousal support, "as it is received is clearly exempt." He said a difficulty arose in a recent case in southern Nevada wherein a single, divorced woman was compelled to file bankruptcy because her former husband had not paid child and spousal support for a long period of time. Senator Callister indicated the attorney for the bankruptcy trustee "was given the task of collecting the outstanding causes of action and judgments which that individual had." He said one of the judgments was against the debtor's former husband in the approximate amount of $30,000 for back support. Senator Callister stated the attorney was able to collect the money, but it was kept by the bankruptcy trustee who stated, "Under Nevada law child and spousal support arrearages...that have been reduced to judgment...are not clearly exempt." Senator Callister indicated the money was used to pay creditors, after the trustee's fee was deducted. He said the issue was litigated and he was asked as part of that litigation to clarify the law with regard to such arrearages.
Senator Callister stated S.B. 298 would clarify that child support arrearages "whenever paid or adjudicated...are clearly exempt." He said he had prepared an amendment which would also make spousal support equally exempt. A copy of the amendment is attached as Exhibit C. Senator Callister indicated a judge has now ruled that child support arrearages are exempt but spousal support is not, and both sides in the case have appealed the issue. He continued, "The legislature needs to say, as a matter of policy, either we do or we don't want...any delinquency in child or spousal support to be exempt."
Senator James asked Senator Callister if the law was clear regarding an exemption for current spousal support; Senator Callister answered he believed it was clearly exempt but could not point to the statute in that regard. Senator James agreed accrued child support arrearages should clearly be exempt and added, "It would make a difference to me if the law already said that current spousal support is exempt like current child support is...." Senator Callister stated he had researched the subject matter in other states and found "...clearly, spousal support is exempt." He then provided the committee members with a chart showing how the different states treated child and spousal support (Exhibit D).
Senator Callister stated:
Spousal support (alimony) in Nevada...is typically not extended beyond 5 or 6 years...and is not income in that concept...I believe it is additional monies in lieu of income, given in recognition of the fact the woman is not in the job market...in many instances she has been raising the children and has not been able to participate economically...and has to go back to reenter the job market. I would indicate, especially in Nevada, spousal support is really money in lieu of income she would normally have had she not married or borne children...As a matter of policy, in the vast majority of cases, spousal support...it is interim...it is temporary...it is rehabilitative...those are not things that sound like an income stream as much as they sound like payments in lieu of an income stream while someone is getting back on their feet.
Senator Callister stated even if spousal support were declared to be income, by law 75 percent would be still be exempt.
Senator James asked Senator Callister to provide him with the briefs filed in the 9th Circuit Court case.
Senator Callister said another problem he has encountered in existing Nevada law, is when a woman moves to recover a judgment for past due child support, it is an option with the judge whether or not to award attorney's fees. He said he felt this should be corrected and that there should always be an award "if the woman is victorious." Senator Callister referred to page 2, section 5 of S.B. 298, and suggested the addition of mandatory language in that regard.
The next to testify was Bobbie Gang, representing the Nevada Woman's Lobby. Ms. Gang read a statement from Judy Kline who was unable to attend the hearing. The statement is attached as Exhibit E. Ms. Gang expressed support for S.B. 298 on behalf of the Nevada Women's Lobby.
Testifying next was Kay Zunino, Chief, Support Enforcement Office, State of Nevada Department of Human Resources, Welfare Division, and
Lance Turner, Administrator, Family Support Division, Office of the District Attorney, Washoe County, Nevada. Ms. Zunino provided a prepared statement, set forth herein as Exhibit F. She pointed out the statistics which are part of that exhibit. Ms. Zunino stated she wished to discuss with the committee the impact of S.B. 298 on the division's program and the possibility of compromise due to the future implementation of a statewide automated system. She said the present systems "do not interface and do not talk to each other." Ms. Zunino indicated in 1995, as part of the Federal Family Support Act, the division will be required by federal law to have implemented a statewide system in which all district attorneys' offices in the state will be integrated. She said when the system is in place, it will allow the division to compile interest. Ms. Zunino added the current system would have to be enhanced to apply the interest component or in the alternative, it would have to be done manually. She asked if implementation of the Title IV-D Program, referred to in Exhibit F, could become effective in October 1995. Mr. Turner suggested the implementation of a "flat interest rate" so the courts will not apply different interest rates on support judgments.
Senator James inquired if Ms. Zunino and Mr. Turner were "...asking us to delay the whole interest rate matter until 1995, so the system will be on-line." Ms. Zunino answered regarding the Title IV-D caseload, which the district attorneys handle, and stated, "At the current time...staffwise...I don't know that we can do this...." She said it would be 1995 before they could do an enhancement of the present system. Senator James asked if interest could not be calculated at the statutory rate when it becomes due. Senator Adler said a problem would arise because each month's payment would require a separate calculation.
Senator Callister said he did not believe it was "all that complex." He stated the Family Law Section of the Nevada State Bar Association has "crafted a very simple computer program that is usable on any IBM-PC...which calculates based on the number of months...for this type of arrearage calculation." He said he would like to get in touch with a member of the association for more information before the issue is finally resolved. He said he believed many variables were addressed in the computer program. Ms. Zunino stated they are open to suggestions and would be willing to consider the software Senator Callister has mentioned.
The last person to testify in favor of S.B. 298 was Alicia Smalley, National Association of Social Workers. Ms. Smalley read from a prepared statement, which is attached hereto as Exhibit G.
There was no further testimony on the bill; the chairman closed the hearing on S.B. 298 and opened the hearing on Senate Bill (S.B.) 470 and Senate Bill (S.B.) 472.
SENATE BILL 470: Makes various changes relating to custody of children.
SENATE BILL 472: Makes various changes in provisions relating to custody of children.
The first to testify was Senator Diana M. Glomb, Washoe County Senatorial District No. 1, sponsor of S.B. 470 and S.B. 472. Senator Glomb said the bills were related to legislation passed in the last session, dealing with missing and exploited children. She said some of the issues in the bills now being heard included that subject. Senator Glomb asked the committee to "...keep in mind the best interests of the child and not the parents" as they reviewed the bill.
Senator Glomb read an explanation of S.B. 470, which is set forth as Exhibit H, and S.B. 472, attached as Exhibit I.
The next to testify was Chuck Gardner, Deputy Attorney General, State of Nevada, Office of the Attorney General. Mr. Gardner stated he was "abducted into the missing children's program, to try to solve some problems which exist nationwide." Also appearing were Frankie Sue Del Papa, Attorney General, State of Nevada, and Judith M. Allan Rodriguez, Administrative Director, Nevada Missing Children Clearinghouse, State of Nevada, Office of the Attorney General.
Ms. Del Papa provided the committee with two documents, the first entitled "Federal Laws Governing Missing & Exploited Children" (Exhibit J), and secondly, "Mission Statement for the Nevada Missing Children Clearinghouse" (Exhibit K). She stated the program has been in existence in the Office of the Attorney General since 1985 and added Nevada is one of nine states which have a missing children clearinghouse as part of that office. Ms. Del Papa provided an overview of the two bills:
S.B. 470 is a 'clean-up' measure which will take care of the rules of custody in situations where there is no court order...it defines generally what the right of custody is in parents where there is no court order...S.B. 472 creates an advocate for missing and exploited children. It also creates one place where attorneys and judges can find statutory authority to order that a child be picked up and returned to its lawful custodian after a parental abduction.
Ms. Del Papa referred to Exhibit K and said the center dealt with missing children in a number of different capacities and was also an investigative source. She added there is very good cooperation with law enforcement agencies within the state.
Mr. Gardner referred to S.B. 470, which he described as "an attempt to cover holes in custody matters where we have no court-ordered determination of custody." He continued:
The reason...is to give some rules some law so that one parent who has had his or her child taken by the other parent has legal redress to have that child returned. Presently, where there is no custody order, there is no clear law that is violated when one parent abducts a child from the other parent....
Mr. Gardner referred to section 1 of the bill and said, "It defines in the law in clear terms what we have always presumed...that when there is a marriage, but no court order, each parent has equal joint custody of the child." He said section 2 refers to a situation where a child is born out of wedlock but no custody decree has been obtained. Mr. Gardner said the language provides that the mother shall have sole custody of the child until the father either marries the mother or obtains a custody order.
Senator Adler referred to a situation where parents abandon children and the grandparents have physical custody. Mr. Gardner indicated that situation was not covered in S.B. 470. Ms. Rodriguez stated Senator Adler's concern was valid, but added she had not seen any cases where a child was later abducted by the parent from a grandparent. She said there was a distinct difference between "child abandonment" and "child abduction."
Senator James referred to a situation where a father has custody and the language, "...has indefinitely abandoned the child or relinquished custody...," and asked if the language was taken from the statutes of another state. Mr. Gardner answered the concept was obtained from Illinois law. Senator James continued:
The question is...you are making it a felony to have the child if the other person has sole custody...in cases where you might fall short of 'indefinitely abandoned or relinquished' but the father has physical custody...does that put him in the position of being in technical violation of the felony statute? Is there a way to soften it somehow, so a determination can be made in a case where you fall short of those standards? Someone should not be put in that position for a good faith attempt to take care of the child in the other parent's absence.
Mr. Gardner said he understood the chairman's concern and reiterated the law stated it was a felony to abduct your own child from the custodial parent. He said there was also a provision in the penalty phase which stated a prosecutor could recommend a misdemeanor charge. Senator James responded if a person is "in good faith taking care of his or her child" and the other person has not indefinitely abandoned or relinquished custody, "...I don't want it to be a felony, misdemeanor...nothing...it should not be a violation of the law." Ms. Del Papa asked the chairman what he was suggesting and Senator James responded he was looking for another way to deal with situations which fall into "gray areas." He stated he would like to see "some kind of standard of intent." Senator James said custody vests in a mother "by operation of law...and there is a presumption the mother has custody." He added the burden would then fall on the father to prove the mother had "indefinitely abandoned" the child and if he could not do so, he would be in violation of the law. The chairman suggested having a "specific intent crime" that one person was trying to deprive the other of custody.
Ms. Del Papa stated she believed the problem could be worked out and there were only a small percentage of cases which would fall into such a category. Senator Adler suggested removal of the word "indefinitely" and the addition of language regarding a period of time.
Senator Glomb indicated there were other minor technical changes which needed to be made to S.B. 470, and she indicated her willingness to work with committee members to resolve any remaining problems.
Mr. Gardner returned to an explanation of the bill and the issue of a married couple with equal right of custody but no court-ordered custody. He said the law must establish a series of presumptions as follows: The child has been concealed for 7 days; the child has been removed by force or deceit; the child has been taken across state lines without permission. He said then the presumption is, "One parent has the intent to deprive the other parent of joint and equal custody." Mr. Gardner stressed every presumption was rebuttable by law, unless otherwise stated.
Senator James referred to the matter of payment for medical, psychiatric or psychological counseling provided to the child or his family because of the child's detention. He said usually there is a "reasonableness standard" attached to this type of provision and asked for a definition of "family." Mr. Gardner answered the term "reasonably necessary" would provide guidance to a judge in that situation.
Mr. Gardner's final comment regarding S.B. 470 concerning "fallback custody" to the mother when a child is born out of wedlock. He said in that case, a father must obtain a court order for custody in a case where a mother is a proven drug addict or is otherwise unfit. Mr. Gardner indicated that situation exists in all cases, even in a marriage where a mother has been adjudged to be unfit.
Mr. Gardner referenced S.B. 472 and the matter of a parent requesting law enforcement to pick up an abducted child. He said at the present time, it is necessary for the court to issue a writ of habeas corpus or writ of attachment, both of which are cumbersome and do not apply to children who have been abducted. Mr. Gardner indicated S.B. 472 places the correct method in statutory form. Senator Glomb provided amendments to the bill, set forth in Exhibit L. Mr. Gardner reviewed those amendments with the committee.
The next to testify on S.B. 472 was Kathleen Shane, Director, Children Services, Washoe County Social Services, Washoe County, Nevada. Ms. Shane indicated she had reviewed the amendments and supported the legislation with those amendments set forth on Exhibit L.
Mr. Ben Graham, Nevada District Attorney's Association, praised the attorney general's office and the committee for dealing with the issue of missing and exploited children. He said one of his jobs in the district attorney's office was "...not only to answer the calls from parents who are having custody problems, but also the police agencies who inquire what they are supposed to do...." Mr. Graham expressed support for both S.B. 470 and S.B. 472 on behalf of the association. He encouraged the committee to process legislation "which would work not only for the people who are suffering...but for those of us who are in charge of trying to enforce these matters."
The next to testify on behalf of both pieces of legislation was Richard Broo, private citizen. Mr. Broo identified himself as the father of an abducted son, who was taken to The Netherlands four years ago. He said until Ms. Del Papa became attorney general, "...there was no guidance within the police department." Mr. Broo said the police in Carson City "call me once each year and ask me what I have done." He continued, "We need to take care of our children here in Nevada and we have not done so."
The last to testify was Ernest del Casal, who indicated he represented Equal Rights for Divorced Fathers (E.R.D.F.) in Nevada. Mr. del Casal stated the organization represented "visitation parents, custodial parents and joint custodial parents." He said the organization opposes one paragraph in S.B. 470, beginning at line 10 of the bill. Mr. del Casal said this portion of the legislation relates to a mother who has sole custody of a child born out of wedlock. He stated there were concerns regarding a possible erosion of the state "presumption of legal custody." Mr. del Casal suggested a change in the language from "sole custody" to "primary or physical custody." Mr. del Casal also pointed to what he described as "an erosion of our state policy that when awarding custody there should not be a preference for custody solely because a person is the mother of the child." He added there was concern regarding "a return to maternal preference." Mr. del Casal continued:
The custody should be agreed upon by the parties or by an order of the court if the parties cannot agree...this is why we have spent a lot of money for family courts. This [also] overlooks case law that states the best interests of children should prevail over parental rights....
Mr. del Casal also asked for clarification regarding the issue of "relinquishment or abandonment," together with the term "absent parent." He said he believed there should be clarification of those definitions.
Mr. del Casal indicated his organization was generally in support of the bill but felt the issues addressed needed work.
Senator James indicated he understood "a presumption based upon maternity," but said if a father goes to court to establish paternity, at that time custody should be awarded based upon the best interests of the child. Mr. Gardner responded there was nothing in the legislation which would tell the court, once a father has asked for an order of custody, "...that there was any presumption in favor of anybody." He said they were attempting to address the best interests of the children in the bills. Mr. Gardner stressed the law which states "...there shall be no presumption in favor of the mother in awarding custody" is not affected in any way by the legislation presented to the committee. He stated the intention was "...for somebody to go in and get a custody order...or a law that clearly states what custody is."
Senator James indicated he would appoint a subcommittee to study the issues raised in the hearing and asked Mr. Gardner if he would work with that subcommittee in developing "the best bill possible." Mr. Gardner expressed his willingness to do so. Senator James appointed Senator Adler, Senator McGinness and Senator Smith to the subcommittee on S.B. 470 and S.B. 472.
There was no further testimony on S.B. 470 and S.B. 472; the hearing was closed on the bills and opened on Assembly Bill (A.B.) 492.
ASSEMBLY BILL 492: Makes various changes relating to support for dependent children.
The first to appear was Kay Zunino, Chief, Support Enforcement Office, State of Nevada, Department of Human Resources, Welfare Division. Ms. Zunino said A.B. 492 "...would help to create a more expeditious program." She provided a prepared statement to the committee, which
is attached as Exhibit M. She referred to that statement and reviewed each section of the bill.
Following an explanation of the bill, Senator McGinness asked for a further explanation of section 8 regarding attorney compensation. Ms. Zunino explained there are two ways income withholding can be accomplished: a district attorney can do income withholding; or a private attorney may do a wage assignment. She said in the Nevada statutes dealing with district attorneys, they are allowed to do an income assignment against industrial insurance compensation, but that privilege is not extended to private attorneys. Senator McGinness asked what would happen in the case of a large award to the children of a deceased parent with respect to attorney fees. Senator Adler answered an ad litem guardianship would have to be established on behalf of the child, in which case the attorney would receive a court-approved fee.
Ms. Zunino indicated any money collected by the district attorney's office is given to the family and none is retained as attorney's fees.
There was no further testimony on A.B. 492. The hearing was opened on Senate Bill (S.B.) 405.
SENATE BILL 405: Provides immunity from civil action for communication made in good faith to governmental agency.
Senator Dina Titus explained the background of the legislation to the committee:
The bill is designed to protect well-meaning individuals who petition government for some cause from being hit by retaliatory "SLAPPS" (Strategic Lawsuits Against Public Participation).
Senator Titus provided the committee with an informational packet regarding "SLAPPS," set forth herein as Exhibit N. She indicated "'SLAPPS' relate to our right to petition government," which is protected by the First Amendment to the United States Constitution. Senator Titus stated this includes all forms of communication which individuals have with governmental agencies, bodies and employees. She indicated people who engage in petitioning of government "...are more and more finding themselves being sued for such actions." Senator Titus stated the suits are primarily filed by developers and businesses involved in environmental and consumer protection issues.
Senator Titus stated most "SLAPPS" lawsuits are thrown out and very few are won in court, but the fact the cases are filed has a "very chilling effect" on people's participation in the governmental process. She said the lawsuits "intimidate other citizens who may think about speaking out." Senator Titus added the filing of such suits "moves political disputes from a public forum to the private judicial arena...derails public debate and stifles legitimate political expression."
Senator Titus referred to material contained in Exhibit N and said a study conducted in Colorado tracked "hundreds of cases" and found the average case asked for $9 million in damages and took approximately 36 months before it was finally thrown out of court. She said seven states have now actively considered "SLAPPS" legislation and 13 other states are contemplating such legislation.
Senator Titus quoted a statement by Robert Richards, Professor of Law, Penn State University:
As more courts recognize the 'SLAPPS' problem, the situation may improve. Yet courts are constrained by civil procedure land expanding tort doctrine. The burden is therefore upon state legislatures to step in and safeguard the rights of their citizens to speak out on public issues and in the process, help thaw the chill of intimidation brought on by 'SLAPPS.'
Senator Titus urged the committee to follow Professor Richards' advice and pass S.B. 405. She said it was her intent "to protect all forms of petition" but indicated the bill may be drawn too narrowly and will need amendment to be certain it includes testimony before publicly elected bodies, such as the legislature and county commissions.
Senator Adler stated his support for the bill and indicated he knew of three instances during the present session wherein parties have not testified or relayed information to the legislature because of fear of lawsuits. He continued:
When this type of thing starts happening...when we cannot get information from citizens because of fear of lawsuits, something needs to be done. It is an outrageous situation. ...Even if the things they are going to tell us aren't exactly accurate...I think we are in a position to sort out what is true and what is not...and make a decision. Everyone should have an opportunity to present their side of the story to the legislature, county commissioners, or anyone else they wish to testify in front of....
Senator Titus indicated there were persons present who had testified at a legislative hearing and have been "hit with a 'SLAPPS.'" She introduced Edwin Durand, who testified as follows:
Some of you may have seen my name in the newspapers last week with Lewis E. Laughlin and his attorney, James Wilson, going public making false and exaggerated claims to discredit me...and the facts which I had already presented to the legislature, using Laughlin's own quotes and writings.
I am normally a private person with my own opinions. However, I have found myself among hundreds of people harmed by the actions and false claims made by Laughlin Associates, Incorporated, who have intimidated everyone with their unauthorized, illegal, manual entries into personal credit files with never confirming any corporation named in their endless run of suing everyone. Not even the federal government or the IRS can input negative data in the credit files without a court order.
This morning I seriously considered remaining silent in fear of my family's safety, because our lives have been turned upside down with "SLAPPS" suits...being stalked. I have had retired police friends park a 40-foot motor home in front of my home to protect us...
Laughlin Associates, Incorporated is nothing more than an alter ego corporation with Lewis E. Laughlin and his mother, Dorothy J. Laughlin, listed as the only officers with the secretary of state of Nevada. Along comes a Mr. Harley Laughlin throwing his weight around and the two attorneys, James Wilson and Steven Stucker...questioning me for one hour about my assets...like where do my children live...where does my grandson live...where do we shop for groceries?
I think you can get the point...that is for us to take flight rather than fight, which I am told the Laughlins bank on. I should note I am the only person to be put through this 'Order for Examination of Judgment Debtor' in the hundreds of Laughlin suits. My wife told Cheryl Lau...in the secretary of state's office...following my being served...on May 3...with this Order...if one thing happened to physically harm us...they were on notice who to look to.
I was physically threatened by Laughlin's manager...in the office at 1000 East Williams on March 7, 1991...with a contract thrown at me and in placing a '357' on his desk, saying, 'I would pay or else on this false suit...'.
...
I mistakenly and under duress signed my name to a document called a 'Staff Contract Office Package Agreement' concerning Arbuckle Construction, Incorporated, dated March 27, 1989...I attended a Laughlin tax seminar in Anaheim, California. When I heard of the Laughlin tax scam to sell the assets of a Nevada corporation...at an inflated value with usury interest of 24 percent per annum compounded monthly...I told Robert Van Arsdel of Laughlin Associates that neither I nor Arbuckle Construction, Incorporated, wanted anything to do with Laughlin. Moreover, I wanted my money back, which he said was up to the Laughlins. The $355 tax seminar was supposed to have a money-back guarantee.
...
The basis of fraud is to be deceived and I was deceived by Laughlin Associates Incorporated. Lewis E. Laughlin claims everyone using his tax lessons will never pay state taxes. However, in California there is an $800 minimum tax...even if a corporation has no profit. Secondly, no one can run a corporation from one pocket to the other without becoming joint. When California or other states' tax man catches up, the penalties and fines are staggering...
Appraisal of assets which do not have an established market value by independent authorities shall be required in order to arrive at a market value. Therefore, in claiming a bulldozer...from $50,000 to $300,000, as claimed by Lewis Laughlin and Robert Van Arsdel, would be deceptive fraud to both the state and all parties...as a basis to avoid taxes or creating a false write-off in deductions.
When I first appeared before the legislative subcommittee on Thursday, May 22, around 7:30 p.m.,...I gave testimony based on my opinion and experience with Laughlin Associates, Incorporated, that there should be regulations controlling resident agent activities beyond process of service as detailed in Nevada Revised Statutes (NRS) 78.090. While no legal transcript of this testimony has been made by the legislature to date, Laughlin has filed suit, claiming to have a true and correct transcript of my statement. The Laughlin complaint, filed May 10, makes claims that I made false statements...guilty of oppression, fraud and/or malice, etc. Under a motion for preliminary injunction, Laughlin Associates, Inc., doing business as Lewis Laughlin and Harley Laughlin, Plaintiffs, request an injunction prohibiting me as a defendant from publishing false statements of facts concerning Laughlin Associates, Incorporated.
The Laughlins seek for me to stop dealing in facts and just shut up, contrary to the First Amendment of the Bill of Rights to the Constitution of the United States.
...
There is nothing professional about Laughlin Associates, Incorporated, especially the five essential parts of a contract, which are consideration, time frame, good faith, performance or intent. There is a Nevada statute dealing with unfair trade practices....
In addition to my experience with credit abuse...insider trading against my corporations...credit collection from out-of-state, unlicensed...[Credit Management Services/ Nevada], I have found the abuse of the Sherman Anti-Trust Act.
...
The Laughlins file suit every 2 to 3 1/2 days against people who do not want any part of their way of doing business...
...
What I have said is 100 percent fact. It is only part of the story to come out...with Laughlin's [words] about being sued, 'None of us are exempt from the attack of the greedy and insensitive...or go ahead, sue me...you will be able to say that to just about anyone without the slightest fear. You will also be able to do business without paying any state income tax. Your chances of having your assets and your life work wiped out by a large judgment in favor of some lawsuit-happy yoyo is greater than ever before. It's no longer if you are sued, it is when you are sued. Fair is fair, but enough is enough...justice is great. Losing everything you have over a frivolous lawsuit ramrodded by a sharp lawyer is not.' These are Laughlin's writings.
These written statements are made from a man who with his attorney, both paid lobbyists, sat in this building on May 3 at 10:15 a.m...responding to the legislative subcommittee saying, 'Everyone has the right to invest in space alien corporations and that there were many space aliens walking around the earth today...apparently known to Lewis Laughlin personally.
Not only did Laughlin destroy a $500,000 personal line of credit to me in the building of quality homes by Arbuckle Construction at Lake Mead...Laughlin has attempted through his resident agency and insider trading to harm another corporation I have been involved with....
Mr. Durand indicated he and his wife have been married less than one year and she has been summoned by Laughlin Associates, Inc. to give testimony regarding her assets. He stated, "Through their suit-happy harassment they are demanding she show a list of every check she has written since 1990...we didn't even know each other then." Mr. Durand stated Laughlin has "financially, physically and mentally abused myself, as well as my family...this is nothing more than malicious harassment because I spoke up, telling the truth." He concluded:
I have spoken up against this resident-agency tax-scam marketing because of the many people already harmed with many more to follow, unless business scams are stopped...I hope for the good of all citizens that S.B. 405 is enacted to allow people to come forward without being intimidated....
Senator Adler asked Mr. Durand if the suit filed against him was after he had testified before the Assembly Committee on Judiciary. Senator Adler also asked how Mr. Durand knew the injunction which was filed was the result of his testimony. Mr. Durand answered, "It was pretty obvious...because I got up and spoke." He also indicated the injunction was served upon him at the legislature when he later appeared to testify at another hearing.
Mr. Durand's wife, Madeline Durand, approached the committee to answer Senator Adler's questions. She stated the complaint filed against Mr. Durand contains a copy of his testimony before the assembly committee.
Senator Adler asked what the office of the Secretary of State did when they were advised of the actions of Laughlin Associates, Inc., a resident agent. Mr. Durand replied that office "felt this was wrong" but did not take any action.
The next to appear was Senator Matthew Q. Callister, cosponsor of S.B. 405. Senator Callister provided a copy of the Motion for Preliminary Injunction filed in Mr. Durand's case, with names removed (Exhibit O). He said he believed it was "long overdue" that testimony before the legislature, as well as testimony before any government body, "...should be just as protected a form for free, unfettered speech... as you have in a courtroom." Senator Callister submitted an amendment to S.B. 405, which is set forth as Exhibit P. He discussed the provisions of that amendment with the committee, saying it was clear what it meant, i.e., "For us to make accurate policy assessments here, we need public involvement...we need testimony before the legislature." Senator Callister reiterated the bill would prohibit the bringing of a lawsuit against someone who, in good faith, "...comes before us in response to our invitation to the public and gives us information...thinking the result of that participation in the policy-making process will not lead to a lawsuit."
Senator James asked if the legislation would provide immunity from lawsuits regarding communication to third parties, and Senator Callister answered it would not. Senator Callister stated it would not protect someone "from the worst kind of intentional acts of slander." Senator James indicated he understood the "good faith" standard which would apply but asked, "Should there be something in here saying [a person] should be truthful...you should not protect false communications where they are intentionally false." Senator James continued, "What about the situation...of reckless disregard of the truth or falsity, which under the law a lot of times would not arise into bad faith necessarily...should we deal with that?" Senator Callister answered it was his recollection there was a standing rule in both houses "...that you are considered to be sworn whenever you appear...." He added anything formally submitted to a committee "comes with traditional notions of perjury sanctions if it is intentionally false." Senator Callister stated, "A good faith standard...is not an absolute immunization...it does not protect you from acts of intentionally dishonest conduct...."
Senator James stated he agreed with the intent of the bill but added, "I am trying to decide whether or not legally the good faith standard is the correct one to use...maybe you can lie or provide false information and still be in good faith." Senator Adler agreed false information could be conveyed while acting in good faith and added a person should still be immune. He continued, "I think if you are going to err, you need to err in favor of free speech and communication." Senator Adler said there are people "who honestly convey things they think are true which turn out not to be true...I don't think they should be subject to suit for that." He said he believed the legislators and other public officials "could separate that out...before [they] act."
Senator James stated, "What we want to do is facilitate the free flow of truthful, helpful communication, not false information." Senator Callister said:
From my point of view, the sanction for a lobbyist who doesn't tell the truth is...he loses his credibility. I haven't seen many actions brought by one lobbyist against another. I have seen too far too many threatened and now increasingly brought by a large institutional entity against some individual who dares speak out against the system.
The next to testify was Ande Engleman, Nevada Press Association. Ms. Engleman stated the association "fervently supports this legislation, with the amendment." She continued:
Sometimes what people call a malicious lie is only a word that is open to interpretation. For instance, if [a person] were sitting next to me and I said to you, 'She is far richer than I'...[that person] might not think she is rich...because she knows how much money she has...but to me, that might be a lot of money. So, the word 'rich' can have a different meaning to different people. It doesn't mean I am lying...these are the kinds of things that are called 'malicious lies...slander or defamation'...and that people try to bring suit upon.
Ms. Engleman said she believed the legislation would give the average person who may be threatened with lawsuits a sense of security if someone is trying to prevent them from speaking. She continued, "They can stand up for what they believe in without having to risk total financial ruin."
Testifying next was Madelyn Shipman, Chief Deputy City Attorney, City of Reno, Nevada. Ms. Shipman stated she believed the concept of the bill was good but wished to clarify "...whether this is a discretionary assumption of defense or not...since the phrase used in section 4 is 'may provide'." Senator James answered he understood the word 'may' allowed for discretion. Ms. Shipman said the City of Reno was involved in a "SLAPPS" lawsuit at the present time. She indicated an individual was named in the suit "for filing a complaint with the City of Reno 'as a conspirator with Reno'...." Ms. Shipman stated such a lawsuit was extremely costly and added, "An entity undertaking a defense is going to be assuming a major expense."
Senator James asked Senator Callister to respond to the following question, "You couldn't write a slanderous letter about somebody...send it to private people then copy it to a government agency...to cloak it with a privilege, could you?" Senator Callister answered he believed "good faith" language would be clearly violated because the effort was not to primarily communicate with a governmental entity. Senator Titus said a safeguard for that type of situation existed in section 3 which states, "...the communication regards a matter reasonably of concern to that agency."
There was no further testimony on S.B. 405; the chairman closed the hearing on the bill and opened the work session on Senate Bill (S.B.) 45, Senate Bill (S.B.) 178, and Senate Bill (S.B.) 423.
SENATE BILL 45: Regulates solicitation of elderly persons.
Senator James stated there is another piece of legislation which addresses the same issues set forth in S.B. 45 and indicated Senator Titus asked not to process S.B. 45..
SENATOR McGINNESS MOVED TO INDEFINITELY POSTPONE S.B. 45.
SENATOR SMITH SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR ADLER WAS ABSENT FOR THE VOTE.)
* * * * *
SENATE BILL 178: Prohibits certain actions by court and makes voidable provisions of settlement agreement which conceal information regarding civil action against law enforcement agency.
The chairman stated he had been requested by Senator Neal to hold action on the bill, pending receipt of a similar bill now being processed by the assembly committee.
SENATE BILL 423: Authorizes court to appoint advisory panel of experts to review claim of dental malpractice.
Senator James indicated he would hold action on the bill at the request of its sponsors.
The chairman indicated he wished to discuss Senate Bill (S.B.) 321, although it was not on the scheduled work session.
SENATE BILL 321: Requires department of prisons to establish by regulation reasonable deduction from money credited to account of offender to repay certain costs.
Senator James reminded the committee they did not concur in the assembly amendment which would not allow deductions for proceedings brought based on rule violations. He said the assembly committee has refused to recede and it would be necessary to appoint a subcommittee. The chairman appointed himself, Senator Titus and Senator Smith to serve on such subcommittee.
BILL DRAFT REQUEST 15-1513: Prohibits person from selling, without authority of lawful holder, code or number that can be used to obtain telephone services.
Senator James indicated he would entertain a motion for committee introduction of Bill Draft Request (BDR) 15-1513.
SENATOR TITUS MOVED FOR COMMITTEE INTRODUCTION OF BDR 15-1513.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR ADLER WAS ABSENT FOR THE VOTE.)
* * * * *
There being no further business to come before the committee, the hearing was adjourned.
RESPECTFULLY SUBMITTED:
Marilyn Hofmann,
Committee Secretary
APPROVED BY:
Senator Mark A. James, Chairman
DATE:
??
Senate Committee on Judiciary
May 26, 1993
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