Nevada’s Mandatory Court-Annexed Arbitration Program Survives Constitiutional Challenge

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In the recent Nevada Supreme Court opinion of Zamora v. Price, 125 Nev. Adv. Op. 32, 213 P.3d 490 (2009), two aspects of Nevada’s Mandatory Court Annexed Arbitration Program survived constitutional challenge.

Nevada’s Mandatory Court-Annexed Arbitration Program, as set out in NRS 38.250, has been controversial from the outset.  As regular readers of this blog are aware, the Arbitration Program requires that almost all claims valued at $50,000 or less must be arbitrated prior to going to trial.  (Additional info available Here)  While either party can ask for a trial following the mandatory arbitration, the Program also provides that either party may introduce into evidence the Arbitration Award per NRS 38.259(2)(a).  In other words, before the jury makes its decision, it is allowed to know who won the arbitration and how much was awarded.

In Zamora, the appellant raised two constitutional challenges to the Program.  First, appellant argued that the admission of the arbitration award at his later trial was a violation of his constitutional right to a jury trial.  In addition, he argued that the program violated his right to equal protection under the law because he was forced to go to arbitration while claimants with higher value cases did not have to go to arbitration.

The Nevada Supreme Court ruled against the Appellant on both arguments.  The Court found that the introduction of the Award did not violate Appellant’s right to a jury trial.  The Court found that the Award is merely one piece of evidence among many others.  In addition, the law requires that the jury be read a mandatory instruction that the Award must not be given undue weight. See NRS 38.259(2)(b).

The Court also brushed aside the Appellants equal protection argument.  The Court said that it was not unconstitutionally unfair to require cases of a value of $50,000 or less to go through arbitration, while cases of a higher amount could go straight to trial.  The Court found the distinction to be a rational legislative choice, providing a more expedited and less expensive handling for smaller claims, while at the same time preserving the litigants’ right to a jury trial.

The Mandatory Court-Annexed Arbitration Program will remain controversial.  However, with the Zamora opinion, opponents will no longer be able to argue the Program is fatally flawed because of these two aspects of the program.