Changes in Nevada’s Business CourtsWhat Business Owners Should Know About Litigating in Nevada

 

As Nevada’s business landscape expands, so do the opportunities to sue. While the awarded and experienced business attorneys across the state have watched their client lists grow, they still counsel owners to consider the long-term implications of going to court.

Taking Issue

Nevada’s diverse business environment breeds an equally diverse range of legal cases. “We are seeing growth in business here, a more mature business environment,” said John Desmond, an attorney with Dickinson Wright in northern Nevada. “As is typical, there are more cases involving non-competes, where an employee goes to a competing or different business. We also handle business torts, ‘you’re taking my customers, engaging in unfair competition,’ those kinds of issues.”

Some of these claims, like intellectual property and patents, may be heard by federal courts, depending on the law at issue. Similarly, bankruptcy cases in Nevada are generally handled by the United States Court of Appeals for the Ninth Circuit. Other issues, like some contract laws or claims particularly relate to state law, are heard by local district court judges.

Rabbit Holes

Identifying the jurisdiction is just one step in validating a claim – a complicated and lengthy journey. “The process is very foreign to most, other than attorneys or those who have been through litigation already,” Desmond said.

This lack of sophistication can blind a client from the reality of a case. “When you’re evaluating the issue, it may not be what the business owner wants to hear, but you need to set expectations early,” Desmond said. “The worst thing that can happen is you don’t have a discussion ahead of time, and then the business owner is surprised by the outcome.”

James Pisanelli, co-founder and partner at Pisanelli Bice, reminded attorneys to remember their role when going into client meetings. “​​I often point out to young lawyers considering a career in litigation that we are advocates,” he said.

Matthew Addison, a partner at McDonald Carano working on contractual disputes, said this skill is what makes good litigators stand out. “​​​​The key to being a very good litigator is to really thoroughly, carefully, and specifically analyze the risks and costs to find what would be a net win for the client,” Addison said. “This is regardless of whether the client is mostly responsible or not responsible at all.”

The misunderstanding of Nevada’s legal landscape is frequently what lands clients in hot water to begin with.

“What makes [this area] different, especially from a restructuring standpoint, is that while we’re a city of millions, we act much bigger than that,” said Samuel Schwartz, a principal at Schwartz Law who focuses on debt restructuring in southern Nevada. “As a result, we have businesses that get much larger here than they would anywhere else.”

Tourism and travel industries are often hotbeds for this situation. “Owners find themselves in the right place at the right time, and don’t necessarily have the proper training, experience, or professionals around them to manage their business at the level it’s grown to and end up having to do some form of restructuring,” he said. “You see more of that in Nevada on a per capita basis than you might in other places.”

Sometimes, it’s just natural growth that takes off a bit too rapidly. “[I see this often] in construction here – folks are good masons, plumbers, electricians, and when they’re small, they’re very successful because they’re doing all the work and they’re good at what they do,” Schwartz said.

Small businesses scaling up without assistance is when the red flags pop up. “The client has twice as many people as they need, three times more debt than they can manage, and no one is paying them back,” he said. “It’s the perfect storm.”

Trapped Facts

When it comes to debt restructuring, Schwartz said the faster an owner acts, the better. “The mistake that business owners make the most is waiting until they’re really out of money before seeking out counseling,” Schwartz said. “If you’re not going to make payroll in two weeks, there’s not a lot I can do for you.”

If an owner is out of money, Schwartz said liquidation is the play – “there isn’t a business to restructure.”

Early action is beneficial across all business disputes, Desmond explained. “It doesn’t hurt to consult an attorney early on,” he said. “Oftentimes, the attorney can put on their counselor hat and advise you on how to navigate through a dispute. The owner may be able to resolve the dispute on their own – it’s helpful to have input so you can make informed decisions.”

If a business owner has already signed something or agreed to a course of action, future paths are eliminated.

“In the course of litigation, we’re stuck with those facts,” Desmond said. “It’s best to have time and money well spent at the outset.”

Settle In

“As a business litigator, I have long been a believer that litigation should be an option of last resort,” said Pisanelli. “I think litigation should be considered necessary only when no options for resolution seem available.”

Pisanelli encourages other attempts at resolution first, whether face-to-face or formally with an arbitrator, before heading to court.

Addison recommends getting it in writing. “Enter into contracts which have mediation as a condition precedent to filing litigation,” he said. “Give yourself the very best opportunity to resolve things before you start spending real dollars on litigating.” He added, “real dollars” are easily in the millions.

“I tell potential clients, don’t talk to me about this if it’s worth less than $200,000, because you’ll be dissatisfied with legal fees and getting a potential net loss as a result.”

Alternatively, If the parties can sit down, Addison said disputes can usually be hashed out.

“Ninety-eight percent of cases get settled somewhere along the way to the courtroom,” Addison said. Even the remaining two percent get some benefit from mediation.

“The worst that can happen in mediation is that the case isn’t resolved,” said Desmond. “But even then, you may learn a little bit more about the other side’s position – it gives you a candid assessment of your case against theirs.”

Litigation is the process of resolving a dispute formally, through the court system.

“Despite the benefits of settling outside of court, litigation is inevitable in some cases, where the parties have had protracted discussions that get nowhere,” Desmond said.
If a conflict reaches this ‘inevitable’ point, clients should keep close watch of two points: fees and years.

Footing the Bill

“[Litigation] is similar to the construction of a home,” Addison said. “‘I want that swimming pool’ or ‘I want that tile,’ adding things to the list, and they haven’t realized how deeply they’ve gotten in terms of increased costs. People do that with attorneys: ‘Matt, you need to hire an expert on this, you need this or that to win.’” Soon, the fees take on new life.

“They’ve just bought themselves a three-times more expensive home than they had set out for, and then they say to you as the attorney, ‘Gee, I didn’t realize it was going to cost me this much,’” Addison said. “No, you were involved all along, and my hourly rate never changed.”

Litigation also comes with a new risk: the opposition’s fees. “Our business court judges are more inclined to award attorney’s fees to the prevailing party,” Addison said.

A winning case is a slam dunk, but a losing case can be devastating to a business.

“It makes attorneys serious about objectively analyzing their cases, because the losing party will pay the consequences,” he said.

Clock’s Ticking

Perhaps even more distressing than the bill attached to litigation is the time lost. “A typical reorganization case is between 10 and 11 months,” Schwartz said. “In litigation, that’s fast.”

This timeline begins once a client is actually out of bankruptcy and has money or assets to distribute to creditors and owners.

“You can be in the Ninth Circuit for a year getting a client out of bankruptcy, and then, once out, you start your claims analysis – of which you could have hundreds.”

The total amount of time Schwartz spends on a case? “As long as it takes,” he said. “You are in litigation until there’s a decision on the table or a claim expires.” And that’s if the courts are responsive.

“In my experience, litigation is getting longer and longer,” Addison said. “The courts are very busy.”

In northern Nevada, particularly in Washoe County Courts where Addison primarily operates, there are only three business court judges.

“If we had double, or even nine or 10 court judges, we could get through cases a lot more quickly,” he said.

Pisanelli has had similar experiences in southern Nevada. “Unfortunately, cases in the judicial system (which I believe to be the best in the world) do not necessarily have a hard end date,” Pisanelli said. “I have been involved in some litigation, after multiple appeals and three separate trials, that lasted in excess of 15 years.”

While an outlier, Pisanelli points to this experience as a cautionary tale. It’s not just years passing, but time that could be allocated to growing the business – or living a life.

“For both the attorney and client, litigation can become an all-consuming endeavor, in particular during times of intense discovery (including depositions) and naturally, during trial,” he said.
Addison said great attorneys want to get clients back in the present as soon as possible – a task litigation makes difficult.

“If you’re litigating, you’re focused on the past,” Addison said. “You’re grudgingly spending time unwinding a dispute as opposed to being out there, selling more products, expanding facilities, whatever you do.”

Expanding the Courts

While Nevada has judges experienced with business cases, there is no dedicated business court where district court judges hear only business cases. “Business court expansion is long overdue for our system,” Addison said.

He pointed to Delaware, known as “the Corporate Capital,” where more than half of the publicly traded companies in the U.S. are chartered.

“Their courts are very equipped, and have sophisticated judges who can handle complicated business disputes,” he said. “We need to catch up.”

Desmond said courts are a public investment as much as roads or other infrastructure.

“With the growth in population, the growth in business, it puts a strain on the courts just as it does on our roads and schools,” he said. “You might not think of courts as part of the community, but they are. They feel the same pressures.”

Expansion has been on the state docket for a while. In mid-2025, plans to develop a business court with judges exclusively assigned was announced. Such a court could be operational before the end of the year.

“A construction dispute like many of the ones we deal with can be so scientifically driven,” Addison said. “What caused delays, what is actually defective work versus ‘up to standard’ care – it’s my world so I know these terms, but with the sophisticated companies with huge internal legal teams moving into Nevada, we need these judges who not only know what we’re talking about, but have the experience.”

In the meantime, Pisanelli said Nevada is better off than many other states with similarly competitive business environments.

“I have often remarked that a career on the bench is a higher calling with few accolades,” he said. “I am often amazed at the volume of work our judges get through on a daily basis. So, when I face clients who are frustrated by the timing of the system, I am quick to offer comparisons to other jurisdictions where the wait times are substantially, if not exponentially, longer.”