October 2016

Articles written by attorneys for attorneys and published in the “Transportation Law” issue of the printed journal, Communiqué (October 2016):

© 2016 The following articles were originally published in COMMUNIQUÉ, the official publication of the Clark County Bar Association. (October 2016). All rights reserved. For permission to reprint this article, contact the publisher Clark County Bar Association, 717 S. 8th Street, Las Vegas, NV 89101. Phone: (702) 387-6011.


The Intersection of Transportation and Takings

By Clark County Deputy District Attorney Scott Davis

The last two years have seen the launch of major highway projects in Nevada, including the new Interstate-11 and the massive Interstate-15 improvement known as Project Neon. Northern Nevada is also seeing major highway upgrades with the extension of the Carson City freeway and the USA Parkway. Smaller road improvement projects are always a constant.

These highway projects require space to build, which frequently means that property must be taken through eminent domain: that age-old power to take private property for public use in exchange for a just amount of compensation. Because of this, transportation projects and takings have always been inseparable. Nevada’s extensive eminent domain case law is dominated by decisions involving railroads, roads, and highways. Today, the Nevada Department of Transportation and the Regional Transportation Commission each have the power of eminent domain, as do all counties and cities that have authority over county and city roads respectively. Railroad companies have always held this power in Nevada.

Eminent domain litigation takes place in district court alongside other litigation, but it is a “special proceeding” with its own unique aspects and potential pitfalls that set it apart from run-of-the-mill civil litigation. In federal court, FRCP 71.1 governs eminent domain litigation. At the state level, NRS Chapter 37 is devoted entirely to eminent domain proceedings. Even so, some of the subtleties of eminent domain litigation can be easily overlooked. Here are five unique attributes of eminent domain litigation that set it apart from a typical civil case.

The defendant has the burden of proof.

In an eminent domain proceeding, the entity that condemns a piece of property is the named plaintiff and the landowners, and any other person holding a property interest, are the named defendants. By the time an eminent domain case goes to trial, the sole remaining issue is usually the amount of compensation that is due for the taking. In such a case the typical burden of proof is flipped and is placed on the defendants to establish the value of the property being taken.

You might not get a jury trial, at least not on every issue.

Both the United States Supreme Court in United States v. Reynolds, 397 U.S. 14 (1970) and the Nevada Supreme Court in Truckee River Gen. Elec. Co. v. Durham, 38 Nev. 311, 149 P.61 (1915) have recognized that the constitutional guarantee of a right to a jury trial does not extend to eminent domain. Instead, as the Nevada Supreme Court recognized in Durham, it is entirely a legislative choice to allow for a trial by jury in eminent domain cases.

In Nevada’s early days, property valuation was decided by a court-appointed commission rather than by a jury. However, this practice began to fade after the turn of the century and current legislation at NRS 37.110 permits a jury trial to decide issues pertaining to valuation, but still preserves the historical option of appointing a commission. A recent amendment to the Nevada constitution does allow a property owner to specially request a jury trial on the issue of whether a taking is truly for a public use; however a condemnation resolution that has been adopted by the Department of Transportation’s governing Board is considered conclusive evidence of a legitimate public use.

State law is more accommodating to a trial by jury than is federal law. In federal eminent domain cases, the general rule is for the court to try all issues without a jury. Even so, the state law allowances for trial by jury are not all-encompassing. Apart from valuation, or possibly the legitimacy of a public use, any other issues that might arise in eminent domain proceedings are still decided by the court without a jury. For example, the issue of whether there has actually been a taking in an inverse condemnation case, or whether a condemning agency is liable for certain types of special damages, remain the prerogative of the court alone to decide.

Immediate occupancy

The objective of an eminent domain case is for the condemning authority to acquire title to the property. But the condemning authority does not need to wait until final judgment to obtain control of the property. The condemning authority can obtain immediate control at any time after the complaint is filed through the process of occupancy, codified at NRS 37.100. This allows the work on a transportation project to proceed even while the litigation is pending. An order of occupancy requires the court to make a finding that the property is being taken for a legitimate public use. If a defendant is inclined to seek a special jury trial on the issue of a legitimate public use, it should be demanded before occupancy is granted.

Occupancy also means that a preliminary amount of just compensation must be established by the condemning authority and that amount must be secured, usually by depositing an amount equal to the appraised value of the property with the court. If a deposit has been made, a defendant may apply to the court to distribute the deposit at any time. If a defendant receives a payout from the deposited amount, it will constitute a waiver of any defense to the taking other than the amount of just compensation that is owed.

The undivided fee two-step

A condemnation proceeding will also extinguish any encumbrances on the property. Any person holding such an interest is entitled to a proportionate share of the compensation award. In order to ensure just compensation for every property interest, an eminent domain case will follow the “undivided fee rule.” This approach entails a two-step process. The first step is to determine the fair market value of the property as a whole, as though the property does not have any encumbrances. This determination sets a total compensation award for the property. Once this determination is made, the condemning authority will deposit the necessary amount with the court and is then excused from further participation. The second step in the process is for the court to allocate the award among any parties that claim an interest in the property. In practice, this second step functions much like an interpleader action and the remaining parties will need to establish the value of their property interests.

Attorney’s fees are off the table

NRS 37.185 prevents a court from awarding attorney’s fees in eminent domain proceedings. This applies both to landowners and to the condemning authority. Landowners are further protected against an adverse award of fees and costs by constitutional amendment. The lone exception to this rule allows a landowner to recover attorneys’ fees in a successful inverse condemnation case.

Conclusion

Transportation projects, and highways in particular, are perhaps the quintessential example of a public use, which means that there will always be an intersection between transportation law and takings.

Scott Davis is a Deputy District Attorney representing Clark County in civil matters.


The Enduring Myth of the Common Carrier

By Michael Lowry, Esq.

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Nevada lawyer Michael Lowry

A myth exists that a common carrier is always a common carrier. The myth also holds that a common carrier is strictly liable for any malady that arises related to any trip. Like other myths, this one started with a kernel of truth and took on a life of its own. Separating fact from fiction can be important when evaluating potential claims involving a common carrier.

A common carrier is a common carrier only when it is a common carrier.

Nevada Revised Statutes (NRS) 706.036 defines a “common motor carrier” as

[A]ny person or operator who holds himself out to the public as willing to transport by vehicle from place to place, either upon fixed route or on-call operations, passengers or property, including a common motor carrier of passengers, a common motor carrier of property and a taxicab motor carrier.

NRS 706.041 defines “common motor carrier of passengers” to include

[A]ny person or operator, including a taxicab motor carrier, who holds himself out to the public as willing to transport by vehicle from place to place, either upon fixed route or on-call operations, passengers or passengers and light express for all who may choose to employ him.

Nevada follows the majority approach in defining a common carrier’s standard of care. As early as 1910, Nevada “law is also well established that a railroad acting in the capacity of a common carrier of passengers is bound to use the utmost care and diligence for the safety of the passengers, and is liable for any injury to a passenger occasioned by the slightest negligence against which human prudence and foresight should have guarded.” Sherman v. Southern Pac. Co., 33 Nev. 385, 111 P. 416, 423 (1910). This standard is similar to that contemplated by Restatement (Second) of Torts, § 314A (1965).:

(1) A common carrier is under a duty to its passengers to take reasonable action
(a) to protect them against unreasonable risk of physical harm, and
(b) to give them first aid after it knows or has reason to know that they are ill or injured, and to care for them until they can be cared for by others.

However, a common carrier is not always a common carrier. For instance, Nevada distinguishes between a common carrier and a private carrier for hire. A motor carrier may be a common carrier for one operation, but a private carrier for another. The distinction is important because it changes the standard of care. As stated in Botts v. Rushton, 63 Nev. 426, 446, 172 P.2d 147, 156 (1946),

Rushton was not a common carrier, but only a private carrier for hire, and it is agreed by the respective parties that his duty to plaintiff was only to exercise ordinary care for his safety.

Nevada is not alone in applying this exception. See Commerce Ins. Co. v. Ultimate Livery Service, Inc., 897 N.E.2d 50 (Mass. 2008).

Even when a common carrier is operating as a common carrier, it may not owe a common carrier standard of care. Instead, the standard of care owed is defined by the aggrieved party’s relationship to the common carrier. Although this topic has not been addressed specifically in Nevada, other jurisdictions have concluded this relationship is pertinent.

McGettigan v. Bay Area Rapid Transit (BART) Dist., 57 Cal. App. 4th 1011 (1997), concerned an intoxicated passenger on a BART train. The train reached the end of the line and the passenger was asked to de-board. The passenger complied, but it was later determined his blood alcohol content was 0.37 percent, a near-lethal dose. Once he de-boarded, the passenger was not seen again until he was found by a station agent lying injured, his ankle nearly severed, on a track. The plaintiff had no recollection of what had happened.

California applied a standard of care to common carriers that was substantively identical to Nevada. “However, this heightened degree of care is owed only while ‘passengers are in transitu, and until they have safely departed the carrier’s vehicle.’” The logic of this distinction was established in railroad cases by at least 1893. Falls v. San Francisco & N. P. R. Co., 31 P. 901 (Cal. 1893) stated the common carrier standard because the “passenger while in actual progress upon his journey is exposed to countless hazards, gives himself wholly in charge of the carrier….” However, “a rule properly ceases with the reason for it; therefore, as a passenger’s entrance to the carrier’s station is characterized by none of the hazards incident to the journey itself, the rigor of the rule above announced is justly relaxed, in that at such a time and place the carrier is bound to exercise only a reasonable degree of care for the protection of his passengers.” At that point, “the carrier is bound simply to exercise ordinary care, in view of the dangers to be apprehended.” Stated another way, the common carrier’s affirmative duty of assistance applies only where the special relationship exists between the parties and the risk of harm arises in the course of that relation. Restatement (Second) of Torts, § 314A, comment c.

Applying this standard to the facts, McGettigan concluded plaintiff had safely exited the train, terminating the relationship of carrier and passenger. Thus, the special duties owed by a common carrier were inapplicable. This relatively simple factual question can help to quickly clarify and establish what standard of care is owed in a given circumstance.

A common carrier is not a guarantor.

When a common carrier owes a common carrier standard of care, the language used to describe the duty owed often leads to a presumption that a common carrier is confronted with strict liability. This is incorrect. Although the standard may be higher than normal, a carrier is not an insurer of its passengers’ safety. “A common carrier owes the highest degree of care toward its passengers commensurate with the practical operation of its services at the time and place in question. However, a common carrier is not strictly liable for injuries to its passengers and is not the insurer of its passengers’ safety.” Gebrekiros v. Skywest Airlines, Inc., NO. C15-0210, 2016 U.S. Dist. LEXIS 5555 (W.D. Wash. April 26, 2016). In other words, negligence must still be demonstrated.

When encountering matters involving common carriers, do not assume a common carrier standard of care will always apply.

Michael Lowry is a partner with Wilson Elser, practicing from the firm’s Las Vegas office. He has an active litigation and defense practice, with clients among the country’s largest and most recognizable brands in several industries, including commercial transportation.


Nevada’s Seatbelt Defense: A Call For Change

By Sarah K. Suter, Esq.

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Nevada lawyer Sarah K. Suter

Under Nevada’s existing seatbelt law, a defendant is not allowed in a civil action to submit proper evidence of the non-use of a safety belt by a plaintiff (which is a violation of Nevada state law) for consideration in terms of mitigating negligence or causation unless the plaintiff was a passenger in a taxicab at the time of the accident. This wrongheaded evidentiary rule encourages the violation of the seatbelt law, and rewards those injured operators and passengers it is meant to protect. Evidence of failure to wear an available, fully-operational seatbelt could be a failure to use reasonable care and should be considered by the jury in assessing a plaintiff’s damages.

Nevada’s seatbelt laws

On July 1, 1987, the Nevada State Legislature enacted NRS 484D.495, requiring the use of a seatbelt by all Nevada drivers and passengers, including children over the age of six and weighing more than 60 pounds. NRS 484D.495(2). Additionally, subsection four of this statute provides that “[a] violation of [the statute] [m]ay not be considered as negligence [or] misuse or abuse of a product or as causation in any [civil] action.” NRS 484D.495(4).

On October 1, 2003, the Nevada State Legislature enacted NRS 484D.500, a similar seatbelt statute specific to taxicab passengers, which requires the use of a seatbelt, with certain exceptions, by any taxicab passenger 18 years of age or older and the posting of a sign within each taxicab advising passengers that they must wear seatbelts while being transported by the taxicab. NRS 484D.500. This statute, when enacted in 2003, also provided that “[a] violation of [the statute] [m]ay not be considered as negligence [or] misuse or abuse of a product or as causation in any [civil] action.” NRS 484D.500(3). However, in 2015 the Nevada State Legislature removed this unfair and anachronistic legal limitation from NRS 484D.500(3). Consequently, the failure of an adult taxicab passenger to wear a seatbelt in violation of Nevada’s seatbelt law is admissible to be considered as evidence of negligence or as causation in a civil action in Nevada.

Nevada’s seatbelt facts

It only takes two seconds to buckle up and wearing your seatbelt is the “single most effective thing you can do to protect yourself in a crash.” Nevada Departments of Public Safety and Transportation’s Zero Fatalities Nevada, http://www.zerofatalitiesnv.com/always-buckle-up/. Nonetheless, between 2009 and 2013, 321 unbelted vehicle occupants lost their lives and 960 were seriously injured in traffic crashes on Nevada’s roadways. Id.

According to the group Zero Fatalities Nevada, the statistics show that an unbelted vehicle occupant in Nevada:

  • Is 75% more likely to be killed in a rollover crash.
  • Is four times more likely to die in a crash if ejected from the vehicle.
  • Has a 50% increased risk of getting seriously injured or dying in a crash.

Further, it costs on average an additional $44,329 to treat a patient injured from not wearing a seatbelt. Id.

The time has come for a change in Nevada’s seatbelt law

When Nevada’s seatbelt law was enacted decades ago, data regarding the efficacy of seatbelts was nearly nonexistent, states had just begun enacting legislation requiring seatbelt use, and the vast majority of vehicle occupants did not wear their seatbelts. But, the rationales that may have once existed to support legislation limiting seatbelt evidence are no longer applicable. Years of exhaustive studies have shown that the effectiveness of seatbelts in reducing deaths and injury severity is substantial and unequivocal. The exclusion of seatbelt evidence pursuant to NRS 484D.495(4) undermines the deterrent effect of Nevada’s seatbelt laws, encourages irresponsibility, and leads to unfair and even often ridiculous litigation results. The seatbelt defense is not about what caused the initial accident; instead, it is about what caused the plaintiff’s subsequent injuries. As a result, the defense applies not to liability, but to damages. When applied appropriately at the damages stage of the trial, the seatbelt defense will lead to the most equitable result for both parties.

The risk associated with not wearing a seatbelt is huge, and the intrusion on personal liberty is minor–no more than a slight inconvenience. Plaintiffs should pay for their failure to take proper and minor precautions that are readily available and required by Nevada law. It should also follow that they bear the burden of their reckless failure to use common sense.

Given modern-day conditions, [the Arizona Supreme Court] conclude[d] as a matter of public policy that the law must recognize the responsibility of every person to anticipate and take reasonable measures to guard against the danger of motor vehicle accidents that are not only foreseeable but virtually certain to occur sooner or later. Rejection of the seatbelt defense can no longer be based on the antediluvian doctrine that one need not anticipate the negligence of others. There is nothing to anticipate; the negligence of motorists is omnipresent.

Law v. Superior Court of State of Ariz., 755 P.2d 1135 (Ariz. 1988).

When a defendant proves that a plaintiff was not wearing a seatbelt, and that injuries could have otherwise been avoided, the seatbelt defense should be allowed. The exclusion of seatbelt evidence is anachronistic and insensible, given what time and experience has shown us about the use of safety belts to save lives and reduce injuries. An important public policy is served by reversing this outdated rule of evidence. The time has come for the Nevada State Legislature to amend NRS 484D.495(4) to allow the admissibility of seatbelt evidence when there is competent evidence to prove that the failure to use an available and operational seatbelt produced or contributed substantially to producing at least a portion of plaintiff’s damages.

Nevada legislators have a continuing responsibility to the citizens of this state to ensure that the law remains both fair and realistic as society and technology change. It is time for the Nevada State Legislature to yield to common sense and recognize that the seatbelt defense is the only rational method for apportioning damages when a plaintiff has failed to wear a seatbelt. “The seatbelt defense is not a radical doctrine but rather a rational approach to a very real problem. To refuse its application is to fly in the face of fundamental notions of logic, fairness, and public policy.” Comment: The Seatbelt Defense: A Doctrine Based On Common Sense, Tulsa L. Rev. 405.

Sarah K. Suter, Esq. is the managing attorney and owner of Suter Law & Advocacy LLC. Ms. Suter practices primarily in the areas of civil litigation defense, trucking/transportation, construction defect, risk management, and premises liability. Ms. Suter also serves as the Las Vegas Defense Lawyers’ Advocacy Committee Chair.


The Graves Amendment Eliminates Vicarious Liability Of Motor Vehicle Rental Companies . . . Mostly?

By Michael C. Mills, Esq.

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Nevada lawyer Michael C. Mills

Many lawyers are unfamiliar with the 2005 Graves Amendment, 49 U.S.C. § 30106(a). This federal law eliminates vicarious liability claims against vehicle rental companies based exclusively on a company’s status as the owner of the vehicle. Most direct challenges to the law have failed. But practitioners have found ways around effects of the law and may use those same methods to overcome Nevada’s limitations to claims against rental car companies.

The legislation was meant to protect vehicle rental companies from vicarious liability claims. Anglero v. Hanif, 140 A.D.3d 905, (N.Y. App. Div. 2016). The statute preempts contrary state law. See Carton v. Gen. Motor Acceptance Corp., 611 F.3d 451, 456 (8th Cir. 2010); Curry v. Raymond, No. 15-2314, 2016 U.S. Dist. LEXIS 55472, at *6 (E.D. La. Apr. 26, 2016).

Many industries have directly benefited from the Graves Amendment. For example, short-term car rental companies have seen success in overcoming claims of vicarious liability brought by those harmed by the negligent operation of rental vehicles. Cruz v. The Hertz Corporation, 5 So.3d 758 (Fla. Ct. App. 2009). Long-term auto leasing companies have also used Graves Amendment to their benefit. See Kahn v. MMCA Lease Ltd., 100 A.D.3d 833, (N.Y. App. Div. 2012).

Renters and lessors of commercial grade vehicles have seem some success using this law. Byrne v. Collins & Budget Truck Rental, 77 A.D.3d 282, (N.Y. App. Div. 2011). Others have not. Vargas v. FMI, Inc., 233 Cal. App. 4th 638, (2015). Self-moving companies have prevailed in cases using the Graves Amendment. Aubry v. U Haul of Arizona, 2012 N.Y. Slip. Op. 52040 (N.Y. Sup. Ct. 2012).

At the time Congress passed the Graves Amendment, 12 jurisdictions, including Nevada, were allowing plaintiffs to assert some form of vicarious liability against a rental or leased vehicle’s owner. Gregory J. Johnson, “Auto Dealer Buzz, Rentals and Vicarious Liability, An Overview of the Graves Amendment” (Aug. 26, 2014).

Because of the impact of the Graves Amendment, plaintiff’s attorneys have found ways to circumvent its effect. Initially, head-on challenges to the amendment were not uncommon. Plaintiffs often argued that the law was unconstitutional. For the most part, courts have rejected those arguments. Rodriguez v. Testa, 993 A.2d 955 (Conn. 2010); Garcia v. Vanguard Car Rental USA, Inc., 540 F.3d 1242 (11th Cir. 2008); Vargas v. Enterprises Leasing Co., 60 So.3d 1037 (Fla. 2011). There have been no reported challenges to the constitutionality of the Graves Amendment in Nevada. The U.S. Supreme Court has also not addressed the constitutionality question.

In addition to constitutional challenges, plaintiffs’ have looked for other ways around the Graves Amendment. For example, the Graves Amendment does not protect a vehicle’s owner from its own direct negligence. 49 U.S.C. § 30106(a)(2). If an employee of the vehicle’s owner is operating the vehicle in the course and scope of employment, the Graves Amendment is not a bar.

Other plaintiffs have asserted claims of direct negligence by the owner of the rental vehicle, like negligent entrustment or negligent maintenance. Khan V. MMCA Leasing, Ltd., 100 A.D.3d 833, (N.Y. App. Div. 2012); Terranova v. Waheed Brokerage, 78 A.D.3d 1040 (N.Y. App. Div. 2010).

Nevada recognizes the theory of negligent entrustment. Zugel v. Miller, 100 Nev. 525, 688 P.2d 310 (1984). When defending allegations of negligent entrustment, Nevada rental car companies point to NRS 483.610. The statute requires rental companies to verify the following three items:

  1. The rental driver must be licensed in the state or country of his/her residence;
  2. The rental driver’s signature on the rental contract must match the signature on the renter’s driver’s license; and
  3. The company must record the date, name, and address of the renter and the registration number of the vehicle rented to that person.

Nevada rental car companies argue that absent egregious facts, such as renting to a clearly intoxicated driver, if the rental companies meet these requirements, they have satisfied their duty of care. No Nevada appellate court has confirmed the companies’ position.
The Supreme Court of Nevada has recognized the theory of negligent maintenance or repair. Coblentz v. Hotel Emples. & Rest. Emples. Union Welfare Fund, 112 Nev. 1161, 925 P.2d 496 (1996). The case coming closest to that theory in the auto context is Stubli v. Big D International Truck, Inc., 107 Nev. 309, 810 P.2d 785 (1991). In Stubli, the plaintiff brought suit for negligent repair and products liability against the mechanic, Big D, and the trailer’s manufacturer. A springhanger on the trailer’s suspension had broken loose. Big D welded it back onto the trailer frame. Later, the tractor-trailer was involved in a single vehicle accident on I-80 in Wyoming. Stubli’s expert opined that the cause of the accident was a second failure of the weld. The expert said that the failure was a result of either a manufacturing defect or a repair defect. The plaintiff saved the failed parts, but did not save the entire trailer. This was Stubli’s downfall. When the defendants asked to inspect the trailer, only the parts were available. Defendants filed a motion to dismiss as a sanction for spoliation. See, e.g., Fire Ins. Exchange v. Zenith Radio Corp., 103 Nev. 648, 649, 747 P.2d 911, 912 (1987). The Supreme Court of Nevada upheld the trial court’s sanction of dismissal. There is no reason to believe that Nevada appellate courts would not recognize a cause of action for negligent maintenance of a rental vehicle. If the facts support such an allegation, negligent maintenance may be a way around the effects of the Graves Amendment.

Under NRS 482.305, a rental company can in fact be held jointly and severally liable for the negligence of the rental driver, but only if the rental car company does not have the proper insurance. This outcome may seem to be prohibited by the Graves Amendment. However, such an outcome is remarkably unlikely. Before rental car companies can conduct business, they must provide proof of minimum coverage on every rental vehicle. If the rental car company has the minimum limits of insurance as required by NRS 482.295, the rental car company will be dismissed out of the suit pursuant to NRS 482.305(4). Thus, a properly insured rental car company should never be held liable in contravention of the Graves Amendment. Nevertheless, practitioners should still assert the Graves Amendment affirmative defense even if the problem might never arise.

Nevada practitioners have done their best to use the same causes of action that overcome the effects of the Graves Amendment to work equally as well against the effects of NRS 482.305(4). Thus, claims of negligent entrustment, negligent maintenance, or vicarious liability due to employee negligence are often seen in complaints naming Nevada rental car companies as defendants.

The Graves Amendment preempts state law by eliminating or limiting vicarious liability of rental car companies just because they own the automobile. Under the right facts, plaintiffs have devised ways around the Graves Amendment. Defendants should continue to assert the Graves Amendment to claim the benefits of its effect.

Michael C. Mills, Esq. practices with Bauman Loewe Witt & Maxwell in Las Vegas, Nevada. He can be reached at mmills@BLWMLawFirm.com or by phone at 702-240-6060. For more information regarding transportation issues, please subscribe to the Nevada Trucking Law Blog at http://nevadatruckinglaw.com/.


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