Articles Posted in Supreme Court of Nevada

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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

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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

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Wynn Resorts filed a lawsuit against Kazuo Okada, a former member of the board of directors of Wynn Resorts. As part of the discovery process, Wynn Resorts noticed Okada’s deposition for over the course of ten days in Las Vegas even though Okada resides in Hong Kong and owns businesses in Tokyo, Japan. Okada filed a motion for a protective order, asserting that his deposition should presumptively be conducted in Hong Kong or in Tokyo and that the deposition should not exceed three days. The district court denied his motion. Okada filed this writ petition, contending that the district court ignored a common-law presumption that his deposition should take place where he resides that that the district court erred in departing from Nev. R. Civ. P. 30(d)(1)’s presumption that depositions should be limited to one day. The Supreme Court denied Okada’s request for writ relief, holding that the district court did not abuse its discretion in (1) rejecting Okada’s argument regarding the common-law presumption and in determining that Okada failed to demonstrate good cause for having his deposition moved to a location other than Las Vegas; and (2) departing from Rule 30(d)(1)’s presumptive one-day time frame and adopting Wynn Resorts’ ten-day proposal. View "Okada v. Eighth Judicial Dist. Court" on Justia Law