Creation of Nevada business court endorsed

Tuesday, Jan. 11, 2000 | 11:01 a.m.

CARSON CITY -- Special courts that would handle only business and contract disputes in Nevada could be another selling point to lure industry to the state.

The creation of such courts may not show any immediate benefits, but would help in the long run as the state seeks to diversify its economy away from gaming, witnesses told a legislative subcommittee looking for ways to encourage business to move to Nevada.

At least seven other states, including Delaware, New York and New Jersey have business courts.

Richard Morgan, dean of the William S. Boyd School of Law at UNLV, said a specialized court was "not a panacea that will attract large numbers of businesses to incorporate. But it's a step in the right direction."

The law school, he said could design a plan similar to Delaware but cautioned, "They are a couple of hundred years ahead of us."

The key to the success of such courts is to have high quality judges, he told the subcommittee, headed by Sen. Mark James, R-Las Vegas.

Establishment of a business court is only one of several ideas, such as tax breaks or economic incentives, that subcommittees are examining for recommendations to the 2001 Legislature.

Bob Shriver, director of the state Commission on Economic Development, said a special business court "goes hand-in-hand" with the present package of low taxes that attracts business. He suggested the court could assume leadership in the legal field of technology and telecommunications law and "may be able to take the thunder away" from other states.

Scott Anderson, deputy secretary of state for commercial recordings, said the creation of a business court has the support of Secretary of State Dean Heller. In some cases, he said, corporations have chosen to locate in Delaware over Nevada because of its business court.

One problem in creating a special court is that it would take at least five years to get a constitutional amendment through the Legislature and passed by the voters to put the system in place. James said he has been trying for eight years to get approval for establishment of a court of appeals.

Chief Justice Bob Rose of the Nevada Supreme Court said there may be ways to shorten that time. The Legislature could pass a law to create and finance business courts in Las Vegas and Reno.

One possible hurdle is that the state Constitution provides that all district judges must be able to handle both civil and criminal cases. The proposed law would have to be carefully crafted so as not to run afoul of the Constitution, Rose said.

Another way to create the court, Rose said, might be for the Legislature to approve a resolution endorsing the business court. Then the judiciary could provide the Legislature with the best plan.

He offered to establish a task force of district judges and civil attorneys to formulate a plan this year. James accepted the offer.

The task force could determine what cases would be assigned to the business courts and how district judges would be chosen for the cases. A plan must include assurance that cases will be promptly handled, and that, Rose said, must include funding for more judges.

Rose said in Delaware, a court hearing can be held in a matter of days on an urgent matter.

Charles Short, court administrator for the district court in Clark County, estimated in a letter to Rose there would be a need for five full-time district judges to create a business court.

In Clark County, there were 3,960 lawsuits filed in 1999 that might come under a business court's jurisdiction. But 30 percent of those were not answered. That means 1,190 cases would not go forward.

Rose said nothing would be accomplished if the state merely kept the same number of judges and assigned some of them to hear the business cases. "What would occur would be a business court that is as overworked as are the present district judges handling civil cases," the chief justice said.

"Reallocating the caseload now without additional judges would mean that a few judges would be handling the business-related cases," Rose said. "If the business court judges are as swamped as the civil court judges in Clark County, they will be unable to give the immediate attention or the elevated case management necessary in processing business cases."