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In these consolidated appeals, the Supreme Court addressed the appropriate legal standard for a district court’s consideration of a special litigation committee’s (SLC) recommendation that derivative claims should be dismissed because pursuing those claims would not be in the company’s best interest. In this case, the district court deferred to the SLC’s decision, dismissed the suit brought derivatively on behalf of DISH Network Corporation, and awarded costs to the SLC. The Supreme Court affirmed the district court’s order granting the SLC’s motion to defer and vacated the portion of the district court’s order awarding costs for teleconferences because it lacked justifying documentation, holding (1) courts should defer to the business judgment of an SLC that is empowered to determine whether pursuing a derivative suit is in the best interest of a company where the SLC is independent and conducts a good-faith, thorough investigation, see Auerbach v. Bennett 393 N.E.2d at 996 (N.Y. 1979); and (2) the district court did not abuse its discretion in determining that the SLC was independent and that the SLC conducted a good-faith and thorough investigation. View "In re Dish Network Derivative Litigation" on Justia Law

Posted in: Business Law

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This case provided the Supreme Court with the opportunity to clarify Cohen v. Mirage Resorts, Inc., 62 P.3d 720 (Nev. 2003), and distinguish between direct and derivative claims by adopting the direct harm test as articulated in Tooley v. Donaldson, Lufkin & Jenrette, Inc., 845 A.2d 1031, 1033 (Del. 2004), which allows a direct claim when a shareholder injury is independent from corporate injury. At issue in this case was whether shareholders lacked standing to sue a corporation and its directors because the shareholders’ claims were derivative, rather than claims asserting a direct injury. Applying Tooley’s direct harm test to the facts of this case, the Supreme Court held that the shareholders’ complaint alleged derivative dilution claims, not direct claims. The court thus instructed the district court to dismiss the complaint without prejudice to the shareholders’ ability to file an amended complaint. View "Parametric Sound Corp. v. Eighth Judicial District Court" on Justia Law

Posted in: Business Law

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The Supreme Court reversed the district court’s dismissal of the claims of Appellant, a Nevada inmate who follows the Thelemic faith. After the State denied his request for a religious diet, Appellant filed suit under the Religious Land Use and Institutionalized Persons Act (RLUIPA), the Free Exercise Clause of the First Amendment, and the Equal Protection Clause of the Fourteenth Amendment. In dismissing Appellant’s claims, the district court concluded as a matter of law that a religious diet is not central to the Thelemic faith. The Supreme Court reversed and remanded the case, holding (1) the district court erroneously used the centrality test rather than the sincerely held belief test in its analysis of Paliotta’s Free Exercise and RLUIPA claims; and (2) Appellant made a prima facie showing that his sincere religious beliefs may be entitled to protection under the Free Exercise Clause and RLUIPA. View "Paliotta v. State Department of Corrections" on Justia Law

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A homeowners association (HOA) is not limited to only one superpriority lien under the HOA lien statute, Nev. Rev. Stat. 116.3116, per parcel of property forever. In this case arising from conflicting claimed interests in real property located in Las Vegas, Appellant challenged the district court’s order granting summary judgment in favor of Respondents. The Supreme Court reversed and remanded the matter for further proceedings, holding (1) when an HOA rescinds a superpriority lien on property, the HOA may assert a separate superpriority lien on the same property based on monthly assessments, and any maintenance and nuisance abatement charges, accruing after the rescission of the previous superpriority lien; and (2) an HOA lien survives bankruptcy even though the homeowner’s personal obligation is extinguished upon a Chapter 7 discharge. View "Property Plus Investments, LLC v. Mortgage Electronic Registration Systems, Inc." on Justia Law

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In this insurance policy cancellation dispute, the Supreme Court (1) reversed the district court’s grant of summary judgment for the insurance company and remanded the case so that the insured may pursue its claims against the insurer, and (2) affirmed summary judgment in favor of the broker against the insured. The court held (1) Nev. Rev. Stat. 687B.360 requires strict compliance, and therefore, without an express statement of a policyholder’s right to request additional information about the reasons for a policy’s cancellation, the cancellation notice is ineffective; and (2) the relationship between an insurance broker who obtained an insurance policy for a client and the insured client in this case did not give rise to a duty to monitor the client’s premium payments and to alert the client when the policy is about to be canceled for nonpayment of premiums. View "O.P.H. of Las Vegas, Inc. v. Oregon Mutual Insurance Co." on Justia Law

Posted in: Insurance Law

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The district court lacks the authority to extend the deadline for filing the opening brief in a petition for judicial review of a public utilities commission. Rural Telephone Company (Appellant) filed an application with Public Utilities Commission of Nevada (PUCN) seeking a change in its telephone service rates and charges. PUCN denied the requested changes. Appellant then filed a timely petition for judicial review in the district court and subsequently requested an extension of time to file its opening memorandum of points and authorities. The district court denied the motion for an extension and dismissed the petition. The Supreme Court affirmed, holding that the district court lacked statutory authority to grant Appellant an extension of time to file its opening memorandum of points and authorities. View "Rural Telephone Co. v. Public Utilities Commission of Nevada" on Justia Law

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Pursuant to Nev. Rev. Stat. 86.371 and 86.381, a member of a limited limitability company (LLC) cannot be personally responsible for the LLC’s liabilities solely by virtue of being a member. Plaintiffs filed suit against an LLC (the water park) and two of its managing members (the member-LLCs) claiming that the negligence of the water park and member-LLCs contributed to their son’s injuries because of the water parks’ inadequate staffing of lifeguards. The district court granted summary judgment for the member-LLCs and dismissed the member-LLCs as improper parties pursuant to section 36.381. The Supreme Court affirmed, holding that the district court did not err in dismissing the member-LLCs as improper defendants as a matter of law. View "Gardner v. Henderson Water Park, LLC" on Justia Law

Posted in: Personal Injury

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Certain real property was sold in violation of an automatic stay from the homeowners’ bankruptcy proceedings. Because the property was situated in Nevada, and the bankruptcy proceedings commenced in Texas, the Supreme Court was presented with a purported conflict of laws issue. Appellant sought to quiet title in the district court. Respondent disputed the validity of the sale by filing a complaint in intervention. The district court granted summary judgment for Respondent, concluding that the United States Court of Appeals for the Ninth Circuit applied, Respondent had standing as a creditor enforce the automatic stay in the homeowners’ bankruptcy, and the foreclosure sale was void due to the violation of the automatic stay. On appeal, Appellant argued that the United States Court of Appeals for the Fifth Circuit law applied. The Supreme Court affirmed, holding that summary judgment was proper because, under both the Ninth and Fifth Circuits, a sale conducted during an automatic stay in bankruptcy proceedings is invalid. View "LN Management LLC Series 5105 Portraits Place v. Green Tree Loan Servicing LLC" on Justia Law

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The Supreme Court reversed the district court’s order granting a writ mandating disclosure of public records. The public records sought were copies of the business licenses of persons operating medical marijuana establishments (MME) in the City of Sparks. The City produced the business licenses but redacted the licensees’ identifies from the documents. Respondent filed a petition for a writ of mandamus to compel the City to disclose the redacted information. The district court granted the petition, concluding that the City’s duty under the Nevada Public Records Act to disclose the identities of the business was not exempted by Nev. Admin. Code 453A.714’s confidentiality provision. The City appealed, arguing that a petition for a writ of mandamus was not the appropriate means of seeking judicial relief when challenging an administrative code and that section 453A.714 rendered confidential the identifying information of MME business license holders. The Supreme Court affirmed in part and reversed in part, holding (1) Respondent’s petition for a writ of mandamus was a procedurally proper means for seeking the disclosure of public records; but (2) the identifying information of MME business license holders was confidential under section 453A.714 and thus was exempt from disclosure. View "City of Sparks v. Reno Newspapers, Inc." on Justia Law

Posted in: Health Law

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South California Edison (Edison) was not due a refund of use tax paid to Nevada because it did not demonstrate the existence of substantially similar entities that gained an unfair tax advantage because of the unconstitutional tax, and Edison was not owed a tax credit in an amount equal to the transaction privilege tax (TPT) levied by Arizona because the TPT did not qualify as a sales tax paid by Edison within the meaning of Nev. Admin. Code 372.055. Edison filed a claim with the State Department of Taxation for a refund of the use tax it paid between 1998 and 2000. The Department and Nevada Tax Commission denied the requested refund. Edison then filed an independent action in the district court seeking a refund of the taxes it paid. The district court concluded that, while the negative implications of the dormant Commerce Clause rendered Nev. Rev. Stat. 372.270 (the use tax exemption) unconstitutional, Edison was not entitled to a refund because it did not have favored competitors that benefitted from the discriminatory taxation scheme. The Supreme Court affirmed for the reasons set forth above. View "Southern California Edison v. State Department of Taxation" on Justia Law