Nevada’s Top Judge Calls for Plan to Craft Business Court Rules

The chief justice of the Nevada Supreme Court advocated Tuesday to create a dedicated business court to attract more Delaware companies to reincorporate there.

The high court held a brief hearing in Las Vegas for public comments on Chief Justice Douglas Herndon’s petition to appoint a commission to review proposed rules for the business court. He’s said that it could start hearing cases in 2026. Two law professors spoke in support of the proposal.

“The idea was to use the collective wisdom of judges, of legislative leaders, of representatives from the governor’s office, our Secretary of State, attorneys who practice primarily or exclusively in the business arena, as well as business leaders, to find ways to improve the manner in which we adjudicate business law cases in this state,” Herndon said.

Both Nevada and Texas are attempting to siphon corporate business away from Delaware and its preeminent Chancery Court with promises of a legal landscape more hospitable to Big Tech and controlling shareholders. Creation of a business-only Nevada tribunal would enable the Silver State to draw even with its Lone Star rival, which made that move last year.

Herndon petitioned the court to set up the commission after Nevada lawmakers initiated a state constitutional amendment to create a business court with judges appointed by the governor. That process, however, would take years and require voter approval before such a bench could start hearing cases.

“What we can do now, with some immediacy, is create a better mousetrap in terms of how we adjudicate business law cases, and provide more benefits to the business community, regardless of whether they are brought into court as plaintiffs for defendants, as well as provide a good warehouse of data moving forward that would help inform policy for the legislature,” Herndon said.

Under the proposed rules for the business court in Herndon’s petition, its judges would be selected for four-year terms by the chief justice of Nevada’s seven-member high court from a list of applicants vetted by a nominating committee.

Currently, Nevada funnels business cases through two state district courts in Las Vegas and Reno. At least two judges in each district are assigned to the business court dockets, but they also have to hear other civil and criminal matters.

The chief judges of those district courts support the commission doing “whatever they need to do, reassignment of cases, and assignment of judges’ caseloads, to accommodate this,” Herndon said.

Jury trials are permitted in the current business court dockets. However, Nevada lawmakers this year approved statutory changes allowing companies to include a provision in their articles of incorporation requiring a waiver of jury trials—bringing the state in line with Delaware Chancery Court procedures.

Corporate Competition

Venture capital firm Andreessen Horowitz, media company AMC Networks Inc., and other companies have said this year they’re leaving Delaware to reincorporate in Nevada.

The Delaware Chancery Court has long been the nation’s premier venue for corporate legal disputes. The court’s seven judges, appointed by the governor to 12-year terms, are regarded as business law experts who hear cases without juries. But some major companies have complained that some of the court’s judges are biased against controlling stockholders and technology companies.

Delaware lawmakers rewrote corporate statutes over the last few years in response to unpopular rulings. Addressing criticism that some corporate litigants keep running into the same unfriendly judges, the Chancery Court announced plans to incorporate a rotation for case assignments into its electronic filing system.

Texas has emerged as a strong alternative to Delaware or Nevada, particularly because Elon Musk moved Tesla Inc. there. The Texas business court is less than a year old and hit a milestone in June with its first final judgment, resolving a case that had been lingering in a state district court for two years.

The Texas court also allows juries to decide some cases. Its judges are appointed by the governor to two-year terms.

The commission, if approved, would include Herndon and Justice Lidia S. Stiglich, four judges from the district courts currently handling business cases, four representatives from the legislature and the governor’s office, and 11 attorneys from across Nevada. Herndon adjourned the hearing without the court issuing any administrative order.