MINUTES OF THE
SENATE Committee on Judiciary
Seventy-First Session
May 4, 2001
The Senate Committee on Judiciarywas called to order by Chairman Mark A. James, at 8:30 a.m., on Friday, May 4, 2001, in Room 2149 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Mark A. James, Chairman
Senator Jon C. Porter, Vice Chairman
Senator Mike McGinness
Senator Maurice Washington
Senator Dina Titus
Senator Valerie Wiener
Senator Terry Care
STAFF MEMBERS PRESENT:
Bradley A. Wilkinson, Committee Counsel
Allison Combs, Committee Policy Analyst
Heather Dion, Committee Secretary
OTHERS PRESENT:
Kent F. Lauer, Lobbyist, Nevada Press Association
Rose E. McKinney-James, Lobbyist, Clark County School District
Renee Lacey, Chief Deputy Secretary of State, Office of the Secretary of State
Samuel P. McMullen, Lobbyist, Philip Morris Management Corporation
John E. Jeffrey, Lobbyist, Brown and Williamson Tobacco Company, and Lorillard Tobacco Company
Alfredo Alonso, Lobbyist, R.J. Reynolds Tobacco Holdings Incorporated
Gemma Waldron Greene, Lobbyist, Nevada District Attorneys’ Association
Stan Olsen, Lobbyist, Las Vegas Metropolitan Police Department
James F. Nadeau, Lobbyist, Captain, Washoe County Sheriff’s Office
Senator James:
We will call the meeting to order, who is here to testify on behalf of Assembly Bill (A.B.) 277?
ASSEMBLY BILL 277: Revises provisions relating to settlement of certain claims or actions against governmental entities and officers and employees thereof. (BDR 3-378)
Senator Care:
You might recall when we had the hearing on Senate Bill (S.B.) 411 another bill was scheduled that day, S.B. 398, which I withdrew. The reason I withdrew it was because it was word-for-word identical to A.B. 277. I made my bill draft request (BDR) after I read a newspaper article regarding settlement agreements, specifically, if someone sued an employee of the state (or political subdivisions) in court; I concluded those should not be secret or confidential. I made my bill draft request (BDR) only to discover, once the session began, then-Assemblywoman Gene Wines Segerblom had in fact submitted the same BDR. The bill had come from government affairs on that side (Assembly). Assemblywoman Segerblom’s son, Tick Segerblom, is an attorney in Las Vegas and has frequently been involved in lawsuits against the school district and other political subdivisions. Assemblywoman Segerblom and I were thinking along the same terms, therefore I asked the chairman not to entertain my bill; I would testify on behalf of A.B. 277. Assemblywoman Segerblom is in Reno today, but she is with an ill sister and she asked I do this today.
SENATE BILL 411: Enacts provisions governing confidentiality of certain information. (BDR 3-36)
SENATE BILL 398: Revises provisions relating to settlement of certain claims or actions against governmental entities and officers and employees thereof. (BDR 3-1034)
Chairman James:
A.B. 277 stems from the strange notion that citizens have a right to know what their public servants have been accused of, and how their tax money is being spent, if it involves litigation. I have handed out a few newspaper articles (Exhibit C, Exhibit D, and Exhibit E) that certainly produced outrage with me. You can leaf through them at your leisure. The obvious need for a bill like this is based on the theory taxpayers have a right to know when their taxes are being used to settle lawsuits and to pay for settlements. I have also handed out Assemblywoman Segerblom’s written testimony and proposed amendments (Exhibit F, and Exhibit G).
For those of you who do not know it, I know we have had other discussions and hearings on settlement agreements, but generally speaking, when you threaten to sue somebody, sometimes a case will settle and you will get a mutual release of all claims. Threatening letters go back and forth, and the parties decide to resolve their differences in tort, not in contract. They enter into a mutual release of all claims, and there is a settlement agreement without the lawsuit being filed in the first place. A.B. 277 as drafted, contemplates a lawsuit actually filed, because in line 3 it says, “Any agreement to settle a claim or action brought . . .” so we are talking about a lawsuit (in A.B. 277).
Generally, the parties get into some discovery, there are depositions, the parties decide to resolve their differences, and they enter into a settlement agreement, which is a contract. They are usually fairly simple, at least, in my experience, they are. There are usually recitals along the lines of, “whereas a certain controversy has arisen between party A and party B,” and “whereas the parties have decided to resolve their differences,” and it then lays out the terms of the agreement. If there is not a public apology then, usually, the key ingredient is a payment of money. There is almost always, if you are wise, language stating neither party is, by entering into the settlement agreement, admitting fault or liability.
Nevada Revised Statutes (NRS) 41.0385, says the state and political subdivisions are supposed to release yearly summaries, giving names of claimants and dollars used to settle a claim. I have never see one nor have I ever been involved in this kind of litigation. But, I would suggest a summary is not good enough, the public has a right to see the document itself. Summaries can be couched in all kinds of terms. I do not accept the attitude of “trust us with a simple summary.” The bill only refers to matters in tort actions. Nevada Revised Statutes (NRS) 41.031 basically is the statute whereby the state and its subdivisions waive immunity for certain actions, but not all actions. The bill simply says the settlement agreement has to be made a public record, and made available to the public.
In testimony on the Assembly side, it was noted in one of the newspaper articles the settlement was about $30,000, but the amount spent on attorney’s fees was close to half a million dollars. We had some discussion and decided on the proposed amendment (Exhibit G). The settlement agreement, which would be made confidential, would also include the amount of attorney’s fees and costs expended by the state and school district. In talking to Assemblywoman Segerblom I told her what had happened with S.B. 411; she said she had no problem in bringing back an amendment, addressing the language in S.B. 411 dealing with the labor commissioner.
Senator James:
We will not schedule this for a work session right away, but let the word go forth, if anybody has a way to fix Senate Bill 411, it would be helpful.
Senator Care:
Mr. Chairman, on the Senate floor, you had some supporting words from Senator Amodei and others. I know I voted for the bill in committee. However, I had expressed some concerns about an affirmative duty of an attorney who was drafting a settlement agreement to reveal the nature of the lawsuit.
Senator James:
Maybe you and Senator Amodei could come up with some changes.
Kent Lauer, Lobbyist, Nevada Press Association:
The press association represents 41 newspapers throughout the state. One of the primary purposes of the press association, as stated in the mission statement, is to protect the public’s right to know. It is a job we take very seriously, and a job I fight for with a lot of pride. We fully support this bill, A.B. 277. Although some government agencies have recognized confidential settlements are not in the public interest, other government agencies have settled lawsuits secretly. These confidential settlements deprive taxpayers, those footing the bill, of the fundamental right to know how their tax dollars are being spent and why. It may be argued confidentiality persuades people to settle suits and discourages the filing of unneeded claims, but I would submit for whatever reason is offered in defense of secrecy, the far greater danger is allowing tax money to be spent secretly, with little accountability to the public. I want the committee to know our association fully supports this bill, and urge you to pass it. Mr. Chairman, I have an editorial in support of this measure published in the Nevada Appeal (Exhibit H).
Rose McKinney-James, Lobbyist, Clark County School District:
I am here at the request of our general counsel, William Hoffman, who could not be present. However, as I understand it, Mr. Hoffman did offer some brief comments when this bill was presented in the Assembly. Dejectedly, the timing was such Mr. Hoffman did not have full opportunity to offer his comments. He shared some concerns and observations with me; I would like to share with you.
Mr. Chairman through you to Senator Care, I have been provided a copy of the amendment (Exhibit G), which I would like to share with Mr. Hoffman before I offer any comment. But, I would like the record to show a few important observations. I think the most significant thing is the school district, in particular, has a variety of instances in which a need for confidentiality arises. In particular, a confidentiality issue arises when a school official is sued in their personal capacity. All of our agreements are public, and can be inspected at any point. However, in an instance where an individual is not sued in their official capacity, but in their private capacity, the ability to seek punitive damages is provided. It also results, in many instances, in private information becoming public, when looking at someone who would otherwise be covered by their official capacity and through their employment. So it is important for me to point out in cases involving only the governmental entity, the district has not asserted any right to confidentiality. Settlements with public entities are already public records under Chapter 239 of NRS. Nevada Revised Statutes (NRS) 41.0285 already requires a report of all claims paid by the district. I understand the attorney general’s office is also required to provide that report. All claim payments are approved by the board of trustees in a public session, and as is set forth in NRS 387.310.
Also the cost and attorneys’ fees associated with these proceedings are public record. It is the view of Mr. Hoffman this law is not necessary. He cites other settlements, primarily settlements are not always reached as a result of liability but, in some instances, as a business decision. In particular, the Clark County School District is the sixth largest district in the nation therefore we are frequently faced with these kinds of challenges. From time to time, we have to make a business decision so that we can reduce the cost of litigation. Mr. Hoffman argues this bill potentially would interfere with a confidential settlement agreement of employment disputes by parties to a collective bargaining agreement. In many instances it is the employee who requests the confidentiality. Mr. Hoffman further notes he believes the law, as written, may potentially interfere with the court’s ability to seal a record. It is his view the courts have always had the discretion to do so. Finally, he indicates the law directly contradicts Rule 16(h) of the Nevada Rules of Appellate Procedure, which indicates, “Papers or documents prepared by counsel or a settlement judge in furtherance of a settlement conference . . . shall not be made available for public inspection . . .” A settlement agreement is certainly a document that would be created in the furtherance of a settlement conference. It is for these reasons, and in particular the concern that employees who are sued in their private capacities should be given the opportunity to enter into a confidential agreement.
Senator Care:
My experience with settlement agreements is you cannot always tell what the nature of the lawsuit. We are really talking about disclosing amounts of money the school district, in this case, used to settle a case with no admission of liability. I understand the argument of business decision, and also the amount of attorneys’ fees, because those are taxpayers’ dollars.
Ms. McKinney-James:
Mr. Hoffman’s comments indicate those costs have to be outlined in a report submitted on an annual basis.
Senator James:
But this only applies to the ones that are paid by the government. It would not be because you are a public employee, and someone sued you for painting your house.
Senator Care:
That would be in your personal capacity. I think Chapter 41 of NRS refers to suing the state and its servants, who have committed some act in their capacity as a state employee.
Senator Porter:
I am trying to recall the discussion regarding the Clark County School District and the circumstances surrounding the contractor and the payment problem to the employees. Was that part of the testimony? Was it part of the arguments under S.B. 411, from members of the union?
Senator James:
This company was accepting public contracts from the school district. They hired nonunion workers but were required to pay them the prevailing wage under state law, because the contracts were public projects. The contractor was paying them the prevailing wage, but requiring the non-union workers to kick it back to the contractor. The carpenters union filed a complaint with the labor commissioner; and the company prevailed upon the labor commissioner to settle the matter, and additionally, to keep the matter confidential. The contractor continued to go back in front of the school district to seek award of additional contracts. Had the kickback not come to light, the school district would not have been aware there was this horrific practice in violation of state law. Ultimately, a group of the union people went before the board of trustees and initiated some action. The question in this case was should these violations of labor laws be sealed settlements.
Senator Porter:
Ms. McKinney-James, I want to apologize. I might have missed part of your testimony in reading some of the backup material. Are you familiar with that portion of S.B. 411?
Ms. McKinney-James:
I am not familiar with that section. I would like the opportunity to look at the language and have Mr. Hoffman review it. It appears to be outside the nature of concerns he has asked me to articulate this morning.
Senator James:
It is in Chapter 607 of NRS, it is not part of your deal. The committee will consider what you have told us. We will close the hearing on A.B. 277, and open the hearing on A.B. 547.
ASSEMBLY BILL 547: Makes various changes to provisions governing securities. (BDR 7-502)
Renee Lacey, Chief Deputy Secretary of State, Office of the Secretary of State:
I am here today to speak in support of A.B. 547, which is our bill that makes several minor housekeeping changes to the Nevada securities act. Basically it provides a definition of a central registration depository allowing security firms and individuals to file applications through the central repository, so they do not have to file in each of the 50 states. It would also allow us to access that information. Also, A.B. 547 deletes some provisions we have not utilized and other provisions in the law that allow us to bring enforcement actions against persons who are defined as essential employees. We currently have no licensing authority over essential employees, and have never brought actions under section 3. The rest of it is basically housekeeping changes, if you have any questions.
Senator Care:
The way I read this change is you cannot fine the essential employee, but lines 38 and 39 on page 4, state the broker can be fined for having failed to reasonably supervise an employee. What is the procedure in this kind of situation? Have you had this happen?
Ms. Lacey:
I think it is paragraph (k), subsection 1 of section 3, in which we have added the ability to bring such actions against investment advisor representatives. But, for essential employees, there are other provisions in the securities act whereby we could bring an enforcement action against those persons, but because they are not licensed under this section it really is not applicable. They are not licensed, but if they are an investment advisor representative or sales representative then we do not have the authority, therefore, we are not deleting that in this section.
Senator Wiener:
There are a couple of smaller changes, and if you could, explain these two. On page 5, line 29, you have changed the 1 year to 2 years. My second question would be on page 6, line 35, where you have deleted “investment advisory service,” and I am wondering why those changes are being made.
Ms. Lacey:
Section 5, line 29, the statute of limitations is 3 years for the actions of which the administrator can administer a proceeding. The change was made because if a person withdraws their security license the administrator only has 1 year in which to bring an action. However, the secretary of state has had circumstances where he has had a complaint a year and a half later, and could not bring an action or investigate because of the time frame. He said he did not think it has ever gone beyond 2 years, so he asked we put in the 2 years.
Senator Wiener:
If the statute of limitations is 3 years, why are you asking for 2 years?
Ms. Lacey:
The secretary of state said he has never had a complaint from anyone who has withdrawn their license.
Senator Wiener:
So do you foresee we will not see a request to change it to 3 years.
Ms. Lacey:
We may, and we would be open to changing it to 3 years.
Senator Wiener:
And then, why are you asking for the deletion of the investment advisory services?
Ms. Lacey:
I do not believe there is a definition, and one has not been applied. The purchase of the security is the issue, and with the investment advisory services, I do not think there is a proper definition to pull anything in under that definition.
Senator James:
We will close the hearing on A.B. 547, and open the hearing on A.B. 576.
ASSEMBLY BILL 576: Revises provisions concerning stay of execution and appeal of certain judgments. (BDR 2-1153)
Samuel P. McMullen, Lobbyist, Philip Morris Management Corporation:
I am going to try to keep this short. This bill is a very interesting and awkward. First, and foremost, the representatives of these companies saying they are worried about potential bankruptcy, or other things, are generally, not the common wisdom that relates to tobacco companies. The context is in the state of Florida where there was a judgment against the tobacco companies. The judgment was for $145 billion, and consequently, the issue arose because, to appeal the judgment, there is a bond required. The bond is for the purpose of guaranteeing if an appeal is successful in securing a judgment funds are available and the judgment can actually be paid.
In Nevada, we have an ongoing policy of having the judgment bonded for at least 100 percent. In Florida they have a bonding rule set at a 125 percent rate. It was the first time the country had to deal with the issue of appeal bonds at such a level. When we explored the market for appeal bonds, there was about $6 to $10 billion bonding capacity available in the world, so it was not available for an amount superseding the bond [appeal bond]. The bond would actually cost 5-or-6 percent; therefore, having to pay billions for the right to appeal became an issue. Our main issue, as it relates to your obligations, is the impact in the potentially for the master settlement agreement [and its continued funds] to be in somewhat sensitive shape. Companies can be forced into bankruptcy simply by the level of the appeal bond, or the cost of the appeal bond.
Consequently, what we have tried to do is work on an idea similar to the state of Florida’s statutes. There would be a “cap” on the level of bonding required. The amount of the appeal bond would not exceed $50 million. Basically, it would be the limitation of the appeal bond. We had discussions with the trial lawyers, and while it is generally not their position to support any limitation like this because of the potential impact on the Master Settlement Agreement, they “held their nose” and did not testify. I am not trying to say they support it; I think, because of the policy question here, they let it roll through. I want to point out one other provision, line 24 of page 2, this limitation was a way that it could be made specific to certain companies. The limitation affected the whole world and all appeal bonds, and it actually started off at a million and a percentage up there based on the judgment. More importantly, on line 24 of page 2, we made it apply only to companies that are signatories, participating manufacturers, with respect to the Master Settlement Agreement, under the definition in Chapter 370A of NRS. Pretty limited, and pretty targeted, and then drafted now in a way the Legislative Counsel Bureau thought it was defensible, and that is why you will see the “whereas” provisions on the first page.
Senator Care:
This would come into play if one of the signatories to the Master Settlement Agreement was a defendant in the “Engle Case” in Florida? Was it a class action?
(Engle v. R.J. Reynolds Tobacco Co., Fla Ct [14 July 2000] [Florida smokers’ rights class action case jury verdict for $145 billion]. SCB: 672 So 2d 39; 682 So 2d 1000)
Mr. McMullen:
That is correct, referring to the first question. And I do not know if it was a class action, I am not sure.
Senator Care:
Do you know if there were any Nevada residents who were plaintiffs in the Engle case?
Mr. McMullen:
No, I do not know.
Senator Care:
Is there any concern that the Engle case will somehow be domesticated?
Mr. McMullen:
There was a concern; it was drafted in to the prior bill.
Senator Care:
That is what we are talking about, if someone tried to domesticate the Engle case judgment in Nevada then the defendants would only have to post . . .
Mr. McMullen:
There was language in the original proposition, A.B. 576, to speak to foreign judgments. I believe as this is drafted right now, this would relate only to a case brought here and would apply only to a judgment entered here.
Senator Care:
So the fear is if what happened in Florida were to happen here, then you could only . . . the defendant of the tobacco company would have to post, if you had a judgment in excess of $50 million, the bond would be “capped.” What would happen if you had several judgments in Nevada in excess of $50 million for each judgment?
Sam McMullen:
That is correct, this does not, at this point, have any language relating to consolidation or the aggregation of any series of judgments, even in independent cases.
John E. Jeffery, Lobbyist, Brown and Williamson Tobacco Company, and Lorillard Tobacco Company:
I want to clarify the trial lawyers’ position on this, since I represent them, on some of the matters that are a little uncomfortable for me. What happened in the original hearing, was a formula for a sliding scale calling for $1 million and going up from there to a maximum of $25 million. It was not specific to the Master Settlement Agreement and tobacco companies. When we amended the bill to raise the cap from $25 million to $50 million, the sliding scale was removed and the bill was made tobacco-specific. The trial lawyers essentially, although, they are not supporting the bill, withdrew their opposition to it because of the danger to the Master Settlement Agreement.
Senator James:
Is this a bill that is being brought?
Mr. McMullen:
Yes, this is a bill that is being brought in a number of different states. Some are a lesser level and some are higher levels. It has been passed in six or seven other states.
Senator James:
Levels in terms of the $50 million?
Mr. McMullen:
Yes.
Mr. Jeffrey:
Generally, the level in the other states, outside of Florida, was $25 million. In Florida, they finally settled with $100 million.
Senator James:
Is there any precedent for limiting the amount of a supersedes bond for appeal of a certain kind; I understand the public interest.
Mr. McMullen:
In all honesty, I do not think the issue had raised its head that people could not get bonds. The first practical issue is there is not even enough bonding capacity to do that, and they started shopping for bonds and found out it was extremely difficult. I do not think without those practicalities, in the billion-dollar range, this issue would have ever raised its head.
Senator James:
I worked for Baker Botts Limited Liability Partnership, in Houston, and we represented Pennzoil-Quaker State Company. After we admitted the case, it was $12 billion from the jury, $3.5 billion, after it was admitted it was the largest civil judgment in history. We all went across the country recording liens on Texaco property in every state. They were not able to get a bond and filed a bankruptcy petition because of the supersedes bond, which is why they ended taking Texaco through bankruptcy. I have personal experience with what happens. It is an unforgiving requirement. I just do not know, for an injunction there are requirements that you have to post a bond to protect the other party while you are appealing something or doing something, there is no exception in the law. If you cannot post a bond, you are finished and cannot appeal.
Mr. McMullen:
And Mr. Chairman may I again point out, if you look at line 20 on page 2, in fact, I think there are two features going on here: one, there is a public recognition that these are large companies and have the ability to pay the judgment. Secondly, on line 20 of page 2, if you find them dissipating or diverting assets, the other side may apply and the court may enter such orders as necessary to prevent such dissipation or diversion; including, without limitation, a bond be posted in an amount equal to the full amount of the judgment. If there is an issue with respect to that activity, frankly, you are right, Mr. Chairman, this is a mechanism to make sure that people do not take a bad judgment and walk with assets to the Bahamas or Elko, Nevada.
Senator James:
Have they explored other ways something like that could be collateralized other than purchase on the markets of a surety bond? I mean, probably a small group of insurance companies could assemble and take the risk.
Mr. McMullen:
Right, there is something like four to six companies, when they push it all together, to the extent they want to be part of their portfolio. I think the answer is, they did explore opportunities, and probably learned a lot about how they would securitize or bond a lesser judgment amount. This was an impossible order of magnitude.
Senator James:
It would not be to “securitize,” it would require people as participants to share the risk of the bond.
Senator Care:
Your case is a little unusual because you have talked about the bonding capacity that might be out there. That aside, one puzzle to me is it is not difficult to imagine another industry saying, “They did it for them, maybe they will do it for us,” [for example] the resort industry or the construction industry, “on the theory that if we have to post this bond, we will have to file a bankruptcy petition.” The statute thus becomes a vehicle for avoiding bankruptcy altogether. Those judgments would be far less than what you anticipate in the tobacco industry, and would probably not happen with some other tort action in Nevada. It is a difficult argument for me, if we do it for them, then, somewhere down the road, we have to do it for everybody.
Mr. McMullen:
I would say our fundamental point, not to rest the logic of this too much on the bankruptcy, the cost of a bond is actually just money, it is huge dollars paid to hold the status quo for a while, and it is a cost of litigation, I understand. I think the main thing was they were managing all of that, and I think for them it is an issue if they could think about prosecuting appeal to have full rights. I think, to the point of the amount of the bond, that was the concern of the trial lawyers and that is why it moved to $50 million.
John Jeffery:
I believe a strong argument could also be made to any other industry that came in seeking this relief that this is tied to the Master Settlement Agreement and the collection of the money, which is important to the State. There is also a policy consideration here that those monies will be protected, and this state will be able to continue to receive them.
Senator Care:
Was there any discussion about if we do not do this that it would raise some difficulty?
Sam McMullen:
There was discussion, there is a very clear feature that makes securitized much more salable. One of the problems in the market is that people do not know exactly what the ability to pay might be. The same concern that underlies this, but, actually, one of the things the Washington law firm that helped us draft this said there would be a clear indication in the market that this will help the sale of those securitized bonds. It is a direct correlation.
Alfredo Alfonso, Lobbyist, R.J. Reynolds Tobacco Holdings Incorporated:
I think it is important to remember in this age of mega-judgments this is simply a protection for the appeal process itself. You simply would not have appeals in situations such as this. It is also important there are seven states, currently, that have passed such legislation and many others pending. I think you are going to see this as a trend throughout the country.
Senator Wiener:
Are any of those states that have already gone forward with the same kind of plan?
Mr. Alonso:
I do not know, but I can find out. I think that is going to be a consideration, and is not unique to Nevada.
Mr. McMullen:
Getting to the market to securitization is an important thing, but has nothing to do with this bill, but hopefully will give some additional security to the market. There is only a certain amount of capacity to buy those instruments.
Senator Care:
I would like to know if there was any public discussion.
Mr. McMullen:
Their consistent position has always been that they will not settle, maybe the position would change based on the increasing number of these judgments. But I am sure that was the reason the case went all the way through. There are still great arguments they believe were very salient on appeal. They may have the fundamental belief that they may never pay that judgment, right or wrong, and will pay the huge cost to get to that point.
Senator James:
We will close the hearing on A.B. 576, and we will begin the work session. All proposed amendments can be found in the work session document (Exhibit I). Assembly Bill 259 has no proposed amendments.
ASSEMBLY BILL 259: Revises certain provisions governing warrantless arrests. (BDR 14-212)
SENATOR PORTER MOVED TO DO PASS A.B. 259.
SENATOR WIENER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator James:
Assembly Bill 305, video voyeurism, Senator Porter you heard this one and I did not. Is this already covered under other crimes?
ASSEMBLY BILL 305: Prohibits video voyeurism and distribution of product of video voyeurism. (BDR 15-118)
Gemma Waldron Greene, Lobbyist, Nevada District Attorneys’ Association:
No, it is not. The closest crime to it would be child pornography. In child pornography, the child has to be doing a sexual portrayal of some sort. This is designed to cover the child who is in a locker room changing out of the baseball uniform and someone has a video camera set, and the child does not know about it (and is not doing anything sexual), but may be naked. The display is being taped for the sexual gratification of the person running the video.
Senator Titus:
Would that be like a Peeping Tom, what would be the difference?
Ms. Greene:
Just peeping into someone’s window is generally a misdemeanor. I am trying to think in Washoe County if we even have an ordinance for something like that. Generally, it is trespassing.
Senator Titus:
You do not have an invasion of privacy, or something like that?
Ms. Greene:
No there is no law against invasion of privacy.
Senator Washington:
Was there an incident a few years back where someone put in a remote camera in a ladies restrooms, would that be classified in this bill?
Ms. Greene:
I believe there was an incident a couple years ago, and Senator Matthews brought in a bill, but it did not pass. The situation still is not covered as a crime.
Senator Care:
I was not here for the hearing, but have grave reservations about the A.B. 305. Just reading it, I cannot tell, but I would note there are torts against this. It is invasion of privacy, intrusion and seclusion where somebody distributes a product that is publication of private facts. Those are covered in tort law. When I read subsection 1, there is no reference to nudity or anything like that. (I suppose someone who is not aroused by photographing someone who is fully clothed.) What I am saying is the bill is so broadly drafted I can see it would raise all manner of difficulties. I am not a prosecutor, but I am a civil litigator; there are civil causes of action to cover these actions. To criminalize tort actions here I think it is unenforceable and too broadly drafted.
Senator Titus:
I recall another incident where it was law enforcement that put up cameras in the restrooms of a park to catch people engaged in certain activities. Would that be a violation of someone’s privacy?
Ms. Greene:
This law would require they are doing it with the intent of sexually gratifying themselves or another person. I cannot imagine that law enforcement is going to put up a camera to catch unlawful activity in a restroom, where it is law enforcement’s intent to gratify their sexual desires to do so. There lies the difference, the person that sets up the camera in the men’s restroom, who is not law enforcement; as a prosecutor I am going to show they did it for sexual gratification, and it may be where my case falls apart. If I can show that, then I have the crime completed.
Stan Olsen, Lobbyist, Las Vegas Metropolitan Police Department:
I was not involved in the drafting of the bill, but I do know the bill drafters worked with the Nevada Press Association to ensure some of the concerns addressed here did not become issues. I can tell you some examples. One was an incident in a showroom where several showgirls were photographed in various stages of undress by one of the stagehands. The camera was concealed in a box in the dressing room, and was discovered as was the stagehand. There was no law that could provide assistance, and nothing could be done except civil litigation. In another example, Reno, a Reno employer put a camera in the restroom of the ladies room, and was caught with the restroom videotapes; nothing could be done. Another example came up when the bill was presented in 1999, after a Nevada park service caught a guy who had gone inside one of the outhouses with a video camera, video taping people from below. Again, there was nothing that could be done criminally to these individuals.
Senator James:
That is my question, regardless of what the politics are, is invasion of privacy a crime? I do not remember in law school studying these things as crimes. If you start criminalizing torts, invasion of privacy, then, is the next one liable? It could be even worse in terms of the damages it causes an individual to their reputation, to their psyche; that you would expose them to a false light or say lies about them. I want to be careful making things criminal I remember studying were not crimes.
Ms. Greene:
It has advanced to the point that we want to start making crimes of some of the things that were traditionally torts, because of the advent of the Internet. As an example, there was a doctor who was supposed to be an abortion doctor. This group put out a hit on him on the Internet and he was shot dead; that could be liable for whatever was said on the Internet. If it incited someone to go out and kill him, then we start getting into the criminal arena.
Senator James:
You would not get to a crime unless you had someone writing a book about how horrible some person was, full of lies, then someone gets upset and commits a violent act; but there is no crime in writing a book.
Ms. Greene:
There is no crime in writing a book, but if the prosecutions can show some connection that the person who wrote the book incited others to act then there might be a conspiracy involved in that.
Senator James:
Regardless of that, this does not say anything about the Internet.
Ms. Greene:
On this kind of situation a lot of times people will take the pictures and the next thing you know they put them on the Internet, and you have been in the ladies room and not knowing it, you have been filmed. You had no intention of ever having anything like this ever distributed. Perhaps that is how you should couch it; it has to be distributed in some fashion to be a crime of possession of nude photographs of someone who does not even know they were taken, for someone else’s sexual gratification. Right now, child pornography is a crime to take the picture, possess the picture, and distribute the picture. The thing is it could happen without the child knowing they are being filmed, and yet, is still being used for a sexual tool.
Senator James:
It would still be child pornography.
Ms. Greene:
Not necessarily, if it is not a sexual portrayal. The child has to be engaging in sexual conduct, and simply being nude is not a sexual portrayal.
Senator Washington:
During the hearing that was my question as well. Could this bill actually be used to diminish the crime of child pornography? Then, instead of the more severe penalty, the accused would get the lesser penalty because they could use A.B. 305 as a defense to say, “I was just videotaping for my own gratification.”
Ms. Greene:
It would all have to come out factually as to what we are looking at. If it is obviously a kid taking off a baseball uniform, which is not a sexual portrayal of any sort, and therefore is not child pornography, then it is not covered under the law.
Senator Care:
I would point out again that section 1, subsection 1, does not say anything about disrobing or any degree of nudity. It simply says, ”sexually arousing gratifying himself,” and that could be a fully clothed person. When you start talking about reasonable expectation of privacy, let me use the example of the dressing room; I know I have seen documentaries where camera teams have gone into these showrooms. In doing documentaries, you might think because you are in a dressing room, there is an expectation of privacy, but I am not so sure of that. It was not long ago that major league baseball mandated locker rooms be open to women reporters for after-game interviews. I think you have to be really careful here. It is disgusting to insult people, and hurt people, but it is not against the law to do so. I think this bill runs the risk of criminalizing what has always been known as simply a tort.
Mr. Olsen:
I understand what Senator Care is saying. The concern here was, and why it includes talk about sexual gratification, and whereas, we do not anticipate this being used often at all, we do anticipate there are some situations when it comes up where it is not a legitimate use. The example of the showgirls in the dressing room, as it would be impossible for them to start some sort of litigation, they are on the road on a regular basis. The woman who was the victim, was pretty devastated by the entire event, especially when she found out law enforcement could do nothing for her. We see some tight controls on this, but if you feel there needs to be tighter controls, we just have no tools at this point.
Senator James:
Maybe there could be an amendment that would make it more limiting. I think it is an interesting juxtaposition because I remember studying the Fourth Amendment, and being shocked to find out, as a constitutional matter, there is no reasonable expectation of privacy in any of these places: phone booth, restroom, dressing room. I have read cases about all of them, and all of the cases say there was an expectation of privacy. No, there is not an expectation of privacy and no Fourth Amendment rights there. Now we are going to pass a law that says we will consider that you have reasonable expectation of privacy and we are going to prosecute somebody who invades it. We, as a government, are not going to respect your expectation of privacy and you trod upon the Fourth Amendment, and we come in and search you. But, if someone else does it, then we, as a government, are going to say you have a reasonable expectation of privacy there, so now it is a crime. That is such a double standard, and I know you are not trying to do so, but that is the situation we would have if we went down this road. I always thought you did have an expectation of privacy in those places and I was shocked to think the U.S. Supreme Court thinks you do not.
Senator Porter:
That was going to be my comment, and I would assume we have certain rights and expectations of privacy. I guess that is why this seems very reasonable to me, that my family should have a reasonable expectation of privacy. I am confused to the arguments because it does not seem logical we cannot expect that.
Senator Titus:
What we are doing so often is passing a law because of one case and one showgirl. You have to remember these laws are for everybody. We should just respond in the “knee-jerk” fashion overwhelming to one particular situation? I do not believe this is major, and I know you can list a couple of graphic examples, but you can do that with any kind of situation.
Senator Porter:
To my colleague, Senator Titus, my concern is with all the new technology today you are now seeing things that you have not seen in the past. I think this is a real problem, but I am not sure this is the way to handle it.
Senator Washington:
Can we hold the bill, and catch up with the sponsor of the bill and maybe, there are some possible amendments.
Senator James:
That is my intention, maybe to see if there is a way to limit it to address some of the concerns of the committee. Thank you, Senator Washington.
Assembly Bill 336 is the bill regarding information to adoptive parents. There were some proposed amendments by the attorney general’s office. The amendments are found on page 2 of the work session document (Exhibit I). I will accept a motion.
ASSEMBLY BILL 336: Requires provision of certain information and assistance to certain adoptive parents, prospective adoptive parents and other persons involved in adoption of child. (BDR 11-1186)
SENATOR PORTER MOVED TO AMEND AND DO PASS A.B. 336.
SENATOR WIENER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator James:
The next one is A.B. 375, this is the barcodes. There were no proposed amendments.
ASSEMBLY BILL 375: Enacts provisions governing possession, use, manufacture and distribution of certain items employed to commit theft. (BDR 15-1462)
Senator Titus:
I am sorry I did not hear the testimony on this, but the penalties seem high.
Senator James:
I asked the question at the hearing, “Should these penalties be based on value to get these high-level felonies?”
Mr. McMullen:
I think it was brought up in the additional witness’ testimony, what really we are trying to talk about is a crime of forgery, not necessarily a crime of shoplifting or theft. To direct your attention to NRS 205.090, which is the general forgery statute. It makes any handwritten document that somebody forges a Category D felony. What we tried to do was create a specific felony crime related to forgery, not to the value of the theft, but the actual crime of forgery and attach a criminal penalty to it. This is functionally the same thing, but is more specifically targeted to intent to defraud a retailer. It says in the first instance the forgery is a Category E felony. The issue was addressed with Speaker of the Assembly Perkins, and there was an issue about the value of what those documents attempted to be stolen, but the underlying reason was this is a crime of forgery.
Senator James:
It is not included in NRS 205.090, this incredible litany of words.
Mr. McMullen:
It theoretically is, and it says, “receipt for money or property.” The inventory- pricing label, the new term is established in this law.
Senator James:
Is there a better way to deal with this, then add in inventory pricing label into this statute rather than having a whole different crime?
Mr. McMullen:
Our request was to make sure there was a clear understanding of the kinds of documents that we are talking about here. I guess it could be done that way, but we would also, in A.B. 375, have two levels. One was the single forgery, and would be a lesser penalty than what is put into NRS 205.090, then there would be the secondary level. I think the issue, if I understand it correctly, it was about what receipt for money or property meant in this context.
Senator Care:
If we are going to analogize forgery the statute; if I sit in my living room and forge a check and the next morning I wake up and have better thoughts, have I committed a crime? The way I read section 1, subsection 2, if I do that in my living room, then I have committed a crime. I was wondering if the forgery statutes address if I have to present the check, or have possession of a forged check.
Mr. McMullen:
If you look at the bottom three lines of NRS 205.090, that has an intent to prejudice damage. There is a different crime for presenting: uttering.
Senator James:
We will hold on to it and we will let you address it. We will bring it back. We are moving on to A.B. 377. We heard this bill yesterday.
ASSEMBLY BILL 377: Makes various changes regarding orders for protection against domestic violence. (BDR 3-978)
SENATOR PORTER MOVED TO AMEND AND DO PASS A.B. 377.
SENATOR WIENER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator James:
Assembly Bill 397 is where the declarant is unavailable as a witness in a domestic violence case.
ASSEMBLY BILL 397: Provides for admissibility in evidence of certain statements made by unavailable declarants. (BDR 4-997)
Senator Care:
I appreciate the purpose for the bill, but, it seems to me, the testimony from Clark County was that these statements come in anyway. Additionally, it seems to me if we are going to make the exception here then we have to make it for all victims of battery.
Senator James:
I agree. No action is taken. Assembly Bill 400 revises penalties for aggravated stalking. This is the “James’ re-appealer bill.”
ASSEMBLY BILL 400: Revises provisions concerning crimes of harassment, stalking and aggravated stalking. (BDR 15-474)
Gemma Waldron Greene, Lobbyist, Nevada District Attorneys’ Association:
Senator, you indicated you suggested the language, and it was back in 1995. I looked up the legislative history and provided it to you and Allison [Allison Combs, Committee Policy Analyst], and I can provide it to anyone else who wants it. Actually, in reading this, what we are asking to do is your intention, Mr. Chairman. In reading the legislative history, you wanted it to be a felony for custodial and divorce situations. Now we see what problems have been presented for it being a gross misdemeanor.
SENATOR TITUS MOVED TO DO PASS A.B. 400.
SENATOR WIENER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator James:
Assembly Bill 489 is genetic testing of offenders convicted of certain felonies.
ASSEMBLY BILL 489: Requires genetic marker analysis to be obtained from certain offenders convicted of felony. (BDR 14-1038)
James F. Nadeau, Lobbyist, Captain, Washoe County Sheriff’s Office:
I know there was some concern about the Category C felonies. There are five states that do genetic analysis in all felonies in the United States, and several states that have a variation of that. If it is the pleasure of the committee to eliminate Categories A and B felonies, it would be fine. I think there was concern about some of the Category C felonies.
Senator James:
How about A and B, and only C felonies involving the use of violence?
Captain Nadeau:
That would be acceptable. And, we would like the laundry list already there because some of those are gross misdemeanors, and we feel it is very important to leave them included.
Senator James:
Does everybody understand the amendment? Do we have a motion?
SENATOR WASHINGTON MOVED TO AMEND AND DO PASS A.B. 489.
SENATOR MCGINNESS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator James:
Assembly Bill 535 has no controversy.
ASSEMBLY BILL 535: Reduces filing fees and requires court to waive court costs when petition is filed for adoption of child with special needs. (BDR 2-988)
SENATOR PORTER MOTIONED TO DO PASS A.B. 535.
SENATOR TITUS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator James:
Assembly Bill 581 orders for protection of domestic violence. We will have to do this when we have more time.
ASSEMBLY BILL 581: Makes various changes concerning orders for protection against domestic violence. (BDR 3-480)
Senator James:
Assembly Bill 582 this is a good bill. Any questions on this?
ASSEMBLY BILL 582: Revises provisions pertaining to competency of defendants. (BDR 14-345)
SENATOR PORTER MOVED TO DO PASS A.B. 582.
SENATOR WASHINGTON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator James:
Assembly Bill 586 is the address-confidentiality program, and just a couple of minor amendments.
ASSEMBLY BILL 586: Revises provisions governing program to assist victims of certain crimes in maintaining confidential addresses. (BDR 16-609)
SENATOR PORTER MOVED TO DO PASS A.B. 586.
SENATOR MCGINNESS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator James:
This is the exact same bill establishing an immediate or intermediate appellate court processed by this committee in the 1993, 1995, and 1997 sessions, Assembly Joint Resolution (A.J.R.) 12.
ASSEMBLY JOINT RESOLUTION 12: Proposes to amend Nevada Constitution to establish intermediate appellate court and revise term of person appointed to fill vacancy in office for supreme court justice, court of appeals judge or district judge. (BDR C-523)
SENATOR PORTER MOVED TO DO PASS A.J.R. 12.
SENATOR WASHINGTON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Senator James:
Assembly Joint Resolution 13 of the Seventieth Session makes some technical changes. This will go onto the ballot if it passes this time.
ASSEMBLY JOINT RESOLUTION 13 OF THE SEVENTIETH SESSION: Proposes to amend Nevada Constitution to revise term of office of justice of the supreme court or judge of district court who is appointed to fill vacancy. (BDR C-916)
SENATOR WASHINGTON MOVED TO DO PASS A.J.R. 13 OF THE SEVENTIETH SESSION.
SENATOR MCGINNESS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TITUS VOTED NO)
*****
Senator James:
There being no further business, we will close the meeting at 10:32 a.m.
RESPECTFULLY SUBMITTED:
Heather Dion,
Committee Secretary
APPROVED BY:
Senator Mark A. James, Chairman
DATE: