On August 15, 2024, the Nevada Supreme Court issued a pivotal ruling in Adkins v. Union Pacific Railroad, affecting the statute of limitations for latent defect claims with ambiguous factual circumstances. The Court in Adkins held that the statute of limitations is tolled, or paused, “until the injured party discovers or reasonably should have discovered the facts supporting” their claims even if a plaintiff merely states they were told the product has “no problems.” This principle, known as the “discovery rule,” can substantially extend the timeframe a plaintiff can pursue legal action against a company for an alleged latent defect in any product including a vehicle.
Case Background
In Adkins, the plaintiffs initiated a personal injury and wrongful death lawsuit against several defendants, including manufacturers of polychlorinated biphenyls (PCBs) and entities associated with the CalNev Pipeline and the City of Las Vegas Downtown Redevelopment Agency. The plaintiffs alleged that workers at the Clark County Government Center (CCGC) saw black soot coming from the building’s air vents in 1995 but were allegedly told by Clark County that “there was no problem with the property.” Plaintiffs argued that information about PCBs at the site was deliberately concealed for decades, which hindered their ability to file timely legal claims.
Based on that allegation, the Nevada Supreme Court applied the discovery rule to plaintiffs’ claims, holding they were “reasonably diligent” in trying to identify the existence of a claim. The court further held the discovery rule should be applied to the statute of limitations, “even in the absence of express language incorporating that rule into the [applicable] statute.” The Court stated that “Nevada case law does not require a plaintiff to plead the facts supporting discovery-rule tolling with specificity,” and the application of the discovery rule can be resolved later during discovery if evidence found proves the date a plaintiff discovered the facts giving rise to their allegations.
Implications of the Ruling
Creative plaintiffs' attorneys may strategically invoke the discovery rule to file lawsuits long after the statute of limitations, arguing that plaintiffs were initially assured the product was safe at the time of use. With the statute of limitations tolled until the injured party discovers or reasonably should have discovered facts associated with their allegations, companies could see an increase in the number of claims filed and face ongoing scrutiny over an extended period. In light of this ruling, companies should consider reassessing their legal strategies and risk management practices. Specifically, companies should:
- proactively review and strengthen legal strategies to address potential allegations;
- enhance risk management practices to identify and mitigate any extended legal exposure; and,
- monitor legal developments to stay ahead of evolving interpretations of the discovery rule.
By taking these steps, companies can better navigate the evolving legal environment effectively.
Nevada Licensed Attorneys
- Jessica E. Brown, Associate, Las Vegas
- Curtis J. Busby, Partner, Phoenix
- Paul G. Cereghini, Firm Chair, Phoenix
- Bard D. Borkon, Partner, Minneapolis
- Richard Stuhlbarg, Partner, Los Angeles
- Thomas C. Howard, Partner, Phoenix