On April 1, 2015, SB 161 was passed by the Nevada Senate and sent to the Assembly Judiciary Committee for consideration. This bill is intended to modify the current law in Nevada regarding “products liability” claims, which are claims for damages to persons and property that result from defective products. Current law in Nevada, as it is in the majority of states, allows an injured party to bring a lawsuit against not only the manufacturer of the allegedly defective product, but also against those companies and businesses that originally sold the product (distributors, wholesalers and retailers). This bill is intended to limit the ability of the injured party to sue only the manufacturer, subject to certain express, limited exceptions. For example, the exceptions apply when the reseller modifies the product after it has been manufactured, or when the reseller exercises “substantial control” over the construction, assembly, installation or packaging of the product. The law also allows the reseller to be named in the lawsuit when the manufacturer is either not known or has been determined to be insolvent.
The focus of this proposed new law is to protect vendors of products from lawsuits that should rightly be against manufacturers. In the construction industry, this may well protect vendors who sell materials to builders and subcontractors, because those products are often discrete items that are packaged and delivered in substantially the same condition as when they left the manufacturer’s control – such as plumbing components, appliances, windows, sheetrock, etc.
On the other hand, a builders’ product is typically the finished structure itself, and because the builder exercised substantial control over the construction, assembly and installation of the many component parts, it is questionable whether this new law – if passed and signed by the Governor – would provide any additional protection to builders and subcontractors directly.
Distributors and vendors of materials for the construction industry would likely welcome this change, as it is designed to keep them out of products liability lawsuits. Whether it will keep them out of construction defect lawsuits could be an entirely different question, however.
The bill has yet to be voted upon by the Assembly or sent to Governor Sandoval for consideration.
This legislative update provided by Alex Flangas, Partner in the Reno Law Office of Holland & Hart; learn more at www.hollandhart.com