INSTRUCTIONS

1. Correct multiple choice answers are to be marked in the correct space in pencil on the ANSWER SHEET (and NOT with a check or a circle). Both the QUESTION and ANSWER SHEETS are to be given back to the proctor with your exam number on them.

2. You must give up your QUESTION and ANSWER SHEETS before you can continue with the essay section of the exam.

3. Put your correct class section at the top of this page and your answer book.

4. You have three hours for the exam.

5. Please write clearly on the essay. Read the facts and the issues, and, in your answer, refer only to those facts pertaining to the issues presented in this exam.

6. Succinctness, organization and clarity will count significantly towards the grade.

7. Write on every other page to permit instructor comments. Typists should leave wide margins.

8. Good Luck!

ESSAY

On June 1, 1995, in Las Vegas, Nevada, a terrible incident occurred. Las Vegas, which is the setting for the Nevada Gambling Research Center, a multimillion-dollar residential research center, suffered an earthquake, resulting in many injuries, much property damage, and some loss of life.

As might be expected, many law suits resulted from the earthquake for such things as negligence in failing to follow building codes and safety regulations. In particular, the Nevada Gambling Research Center was faulted and sued regarding harm which occurred due to a series of minor safety regulation failure, such as non-operating egress lights and locked egress doors, both from a personal injury perspective, and even as to property damage concerning clothing, cars and other similar personal property losses.

One of the most difficult problems resulting from the Las Vegas earthquake was the problem of insurance reimbursement. The Nevada Gambling Research Center, a state institution, had no insurance, and like many city and state agencies, was self-insured.

The Center, as with most public and private enterprises whose patrons or employees had suffered losses in the earthquake. attempted to settle with people regarding their losses. Under Nevada law, there was no obligation on the part of the Center to give anyone anything, both because it was an act of God, and because the Nevada Gambling Research Center was a state agency. However, the concern was that, particularly as to the Center, there had been some shoddy building of particular buildings that might give rise to successful law suits.

One particular problem was that, in 1994, the Center had come into a substantial amount of money through gifts and through some very successful research projects. At that point the Center decided to expand, and particularly its residential areas, and the parking and residency halls which would support these areas. In fact, twelve buildings were built. by two separate Minnesota contracting firms. Center officials, delighted with the funding, but anxious that the process be completed in order that they not lose the money and that there not be any cost overages, tried to insure that the buildings go forward as soon as possible. A Center official, Peter "Deano" Keno was put in charge of assuring the completion of the process. Deane, who was independently wealthy, did his job all too well, as there was no overage, and the process moved forward so rapidly that certain safety checks were not made by the contractors. The result was that some of the ibeams, which required x-rays to discover flaws, were not xrayed, and flaws present in the ibeams were not discovered.

In the earthquake which occurred at three in the afternoon, three of these buildings, a gambling rehabilitation school, a parking building, and a residency hall, were thoroughly destroyed. Twenty-five people were injured, and four of them died. As well another one hundred twenty people suffered property damage such as to their cars and other personal belongings. Generally, upon presentation of claims, the Center was quite sympathetic, but refused to settle the claims since it felt these were Acts of God. The result was that one hundred and sixty-five law suits were filed during the month of May, 1996, just before the running of the one year Nevada negligence Statute of Limitations, four by administrators of the estates of the deceased four people. The suits were filed against the Center, naming no individuals as defendants and not seeking jury trials. No documents were appended to the complaints, and the complaints were not verified. On a subsequent motion by defendants, the suits were consolidated for all purposes.

At that time, the Center, of course, didn't know that there were problems with the three buildings, nor did any of the plaintiffs, their attorneys or the executor/plaintiffs. However, an enterprising reporter for the local tv station, Barbara Wawa, was informed by one of the Center graduates who worked on the project, David Proppenheim, that things hadn't gone as they should have. Ms. Wawa, an intrepid reporter, researched the failure of the safety checks, and found that indeed. there were problems. She brought in an out-of-state expert engineer, and had the ibeams xrayed, and discovered they were faulty, and that, had they not been faulty, they would not have given under the stresses of the earthquake. With this information, and after two years of work, Ms. Wawa went public with the information.

In the meantime, the law suits were moving along very slowly. At the outset, there had been motions for dismissal for failure to state a claim by the defendants, their theory being that the plaintiffs had no legal theory since these were Acts of God. The Court ruled against them. The defendants then answered each, which contained the same allegations, simply denying everything in each of the thirty paragraphs of the complaints by reciting the number of the paragraph, and saying "general denial" to each. The cases then went into discovery, where they wallowed for two years.

At that point, in 1998, two years after filing, the lawyers for plaintiffs got a call from one of the plaintiffs who had seen the Wawa tv news show, 21st Century, and knew about the claim of faulty ibeams. The lawyers then called Ms. Wawa who informed them about Mr. Proppenheim. As a result, the lawyers were given copies of the enginering report, the tv tapes, the x-rays, and were able to conduct an interview with Mr. Proppenheim who confirmed everything. At this point, the plaintiffs' lawyers made a motion to amend their complaints to add a claim of violation of the building and safety codes, to drop the Center as defendant, and to add a party, Deano Keno, individually to the complaint. The defendants opposed the motion, but the Court ruled against them. Defendants then sought discovery from plaintiffs of tile materials which plaintiffs had obtained from Ms. Wawa and Mr. Proppenheim, but the Court ruled against them again. At this point the defendants sought to amend their answer to seek a jury trial, and again the court ruled against them. Defendants then sought to end the action since Plaintiffs had not joined the contractors in the action, and again the court ruled against them, saying that the contractors were not important.

The case then went to trial before the state court judge. On trial before the court, the trial judge granted a motion by the defendant at the end of plaintiffs' case for nonsuit, based on the fact that the trial judge believed that the ibeams were not that important, it was an act of God, and defendants lacked foreseeability. The plaintiffs, at that time strapped for money, did not appeal. However, hearing about the case on tv, a local lawyer contacted plaintiffs' attorneys saying that she believed there might be liability on the part of the Minnesota contractors , and that there was a ten year statute of limitations on contractor building violations.

Suit was then brought as a class action by one of the Nevada plaintiffs for damages on behalf of all others, in Nevada state court, against the contractors. The defendants promptly answered claiming res judicata as to the plaintiffs' claim. Defendants also counterclaimed as to defamation, and sought to use collateral estoppel to prove the ibeams were safe. The trial court certified the class as a "no notice required" class, and, prior to trial, ruled against defendants' use of res judicata and collateral estoppel, and, when the case went to trial, plaintiffs won on everything, obtaining substantial damages, and defendants appealed.

You are a clerk for the Nevada Appellate Court, which wants a memo as to certain issues. Assume the federal rules apply and discuss, in order:

1. the ruling regarding amendment to the complaint;

2. the ruling regarding the class;

3. the ruling regarding res judicata

4. the ruling regarding collateral estoppel