After arguments, decision likely coming soon on long-simmering payroll tax, DMV fee lawsuit filed by GOP senators

Photo of the top front of the building with the words Supreme Court of Nevada

After more than 650 days, state lawmakers will soon get an answer from the state Supreme Court as to whether decisions extending two expiring tax sources in the waning hours of the 2019 Legislature were constitutionally valid — with potential major budget implications for the 2021 session on the line.

Attorneys representing both sides tangled before the seven members of the state’s highest court on Monday over the merits of a lawsuit filed more than 21 months ago by state Senate Republicans.

Justices made no ruling on Monday, but beyond the constitutional questions, a decision to uphold the District Court’s ruling last September in favor of Senate Republicans could have major implications for lawmakers crafting the state budget this session. The extended payroll tax rate being challenged in the lawsuit brings in tens of millions of dollars in state tax revenue — meaning legislators could soon be facing a large budget hole with just weeks left in the session.

The lawsuit was filed by eight state Senate Republicans in July 2019 over a pair of bills — one removing a scheduled decrease in a payroll tax and another extending a $1 per transaction DMV technology fee — passed during the 2019 Legislature with less than a two-thirds majority, constitutionally required for any tax increase. 

Legislative Counsel Bureau General Counsel Kevin Powers argued Monday that proponents of the 1990s initiative requiring a two-thirds vote in the Legislature for any tax increase back then had the general goal of requiring a higher bar for legislation that would increase or expand different forms of tax revenue, but that the intent was “never to hamstring the government and impair existing revenues.”

“Both of these bills are consistent with the intent that the voters understood, that existing revenues will not be impaired,” he said. “Simply, the burden on the fee-payer or the taxpayer has remained the same. There has no been no change from one fiscal year to the next fiscal year.”

Justices peppered both Powers and state Deputy Solicitor General Craig Newby (representing the governor’s office and state DMV) with questions about why the actions taken by the 2019 Legislature didn’t meet the constitutional threshold (and two-thirds requirement) of a bill that “creates, generates, or increases any public revenue in any form.”

Justice Douglas Herndon asked why similar “sunset” tax bills from the 2011, 2013 and 2015 sessions required a two-thirds vote. Powers replied that the Legislature's legal division changed its mind in 2019 after researching the issue.

Justice Elissa Cadish asked Newby why the 2019 legislation extending the DMV technology fee — a move that brought the agency an approximate $7 million in additional revenue — shouldn’t count as creation of new revenue, and whether defendants were asking the court to certify that any tax bill with an expiration date could be extended “in perpetuity” with a simple majority.

“Certainly, there could be some negative policy consequences that result from that type of interpretation in terms of the Legislature going forward,” Newby replied. “But that is a decision that the Legislature undertook on the advice of counsel to proceed that way. And, ultimately, this very well may not be the preferred interpretation...but under the circumstances, it is a reasonable interpretation. There is ambiguity within the term ‘increase.’”

Karen Peterson, representing the plaintiff Republican state senators, said that attorneys for the defendants were asking the court to “blindly defer” to the legislative branch and ignore a plain reading of the state Constitution and two-thirds provision. 

“The words used in the constitutional provision are plain, they're ordinary, they're easy to understand and they're unambiguous,” she said. “And the fact that there's another party that has a different interpretation of that constitutional provision doesn't mean that the constitutional provision is ambiguous.”

She also warned that reversing the District Court’s decision and allowing simple majorities to extend expiring tax rates would begin “chipping away” at the ability of legislators to negotiate, compromise, and “fashion a piece of legislation that they can all live with so that they could get their two-thirds vote.”

However, justices appeared skeptical of Peterson’s request for attorney’s fees from defendants in the case — Justice James Hardesty said it seemed a “dangerous and very slippery slope” by asking the courts to determine the behavior of public officials in their official capacity to see if they stepped out of bounds and warranted the awarding of attorney’s fees.

“I fear this would be a never ending legal process where some legislators sue other legislators because they think they stepped out of constitutional bounds and now they're seeking attorneys fees,” he said.

The court’s decision could have a substantial effect on the roughly 22,000 state businesses that pay the Modified Business Tax, a 1.475 percent payroll tax assessed on businesses with more than $50,000 in taxable wages per financial quarter. Businesses in the finance and mining industries pay a 2 percent rate. 

The current tax rate was set in 2015 through former Gov. Brian Sandoval’s efforts to raise more than $1.1 billion in new and extended taxes for K-12 education funding, but included a provision to automatically lower the tax rate if revenue exceeded projections set by the state Economic Forum.

That tax rate “buy-down” was triggered in late 2018 and was set to take effect in July 2019, but Gov. Steve Sisolak and legislative Democrats moved to keep the higher tax rates in place as a way to retain tens of millions of dollars in tax revenue. Attorneys with the Legislative Counsel Bureau issued an opinion in early May stating a two-thirds majority was not required to nix the scheduled payroll tax decrease.

The lawsuit also challenged an extension of a $1 per transaction “technology fee” assessed by the state DMV, initially approved in 2015 to help the agency pay for a system modernization project, but that was extended out to 2022 during the 2019 Legislature without a two-thirds majority vote. The DMV is asking lawmakers this session to extend the fee through 2026, following past complications and delays with the system modernization plan.

The decision is coming later than either side likely expected — Republicans initially said they hoped for a decision before October 2019, and Democratic legislative leadership wanted “clarity” on the matter before the start of the 2021 session. Republican Senate Minority Leader James Settelmeyer said in a statement Monday that he was “confident the Supreme Court will recognize the historical significance of this provision and uphold the District Court ruling.”

Monday wasn’t the first time the case had gone to the state Supreme Court — the state’s highest court actually issued an important procedural ruling in mid-2020 allowing attorneys with the Legislative Counsel Bureau to represent defendants in the case, even though the plaintiffs were also state lawmakers.

NV Supreme Court denies Trump campaign lawsuit seeking overturn of presidential election

The Nevada Supreme Court has ruled unanimously to dismiss an appeal filed by President Donald Trump’s campaign seeking to overturn the state’s presidential election results.

Members of the court wrote in a 6-0 opinion published late Tuesday that the Trump campaign had failed to show any serious errors or flaws in Carson City District Court Judge James Russell’s order last week that would warrant a reversal. Russell’s order denied the campaign’s election contest lawsuit amid findings that the campaign had not backed up its claims of mass voter fraud throwing the state’s presidential election results into doubt.

The three page order states that the Trump campaign failed to identify any direct “unsupported factual findings” in Russell’s order that it wished to challenge under the appeal, and the court itself has “identified none.”

"To prevail on this appeal, appellants must demonstrate error of law, findings of fact not supported by substantial evidence, or an abuse of discretion in the admission or rejection of evidence by the district court,” members of the court wrote in their order. “We are not convinced they have done so."

Though the Trump campaign can still appeal the decision to the U.S. Supreme Court, Tuesday’s decision is yet another blow to the campaign’s multi-faceted and thus far failed effort to overturn the results of the presidential election in Nevada and a handful of other closely decided swing states where former Vice President Joe Biden prevailed over Trump. The campaign has filed a litany of unsuccessful lawsuits in other states including in Pennsylvania, where the U.S. Supreme Court earlier Tuesday denied a last-minute attempt to overturn results in that state.

Biden won a 33,596-vote victory over Trump in Nevada.

Any future appeals will face another burden — Tuesday marks what’s known as the “safe harbor” deadline, a federal election-related date by which states need to certify election results or resolve related litigation before members of the Electoral College meet to cast their votes for president on Dec. 14.

In a statement published after the ruling, the Nevada Republican Party said it was "extremely disappointed" in the court's decision and said it had "rushed to judgment in the same flawed manner" as the District Court.

"We were not afforded an opportunity to write our brief or argue the case in front of the Supreme Court," the party said in a statement. "Full denial of legitimate due process and appellate rights is truly unprecedented, shocking and extraordinary."

The Trump campaign announced that it would file a lawsuit seeking to overturn the state’s election results in mid-November during a press conference in which campaign attorney Jesse Binnall flatly declared that Trump had won the state but was thwarted by mass voter fraud. It sought to have a judge either award the state’s electoral college votes to Trump, or prevent the state from casting its six electoral votes.

The lawsuit recycled claims that Clark County’s use of an automated signature verification machine was unlawful and allowed fraudulent ballots to be counted (a claim rejected in pre-election litigation also brought by the campaign) and claimed that tens of thousands of votes were cast by improper voters, including the deceased, non-state residents and noncitizens. The campaign also submitted depositions from anonymous whistleblowers who made outlandish claims about vote totals on machines changing overnight and a pro Biden-Harris bus arriving at an early vote site in which workers were said to have filled out dozens mail ballots.

The Trump campaign requested that most of its evidence be filed under seal, meaning much of the evidence isn’t publicly viewable.

But Russell, who was assigned to the case in Carson City District Court, summarily dismissed its claims of voter fraud and request for an overturn of election results in a ruling on Friday, writing that the campaign’s evidence provided “little to no value” based on questionable or “unsound” methodology, adding that the evidence failed to show any “credible or reliable evidence that the 2020 General Election in Nevada was affected by fraud.”

The Trump campaign nonetheless appealed the decision to the state Supreme Court on Monday, saying in filings that the court failed to take into account “expert” testimony provided by the campaign and applied a higher evidentiary standard than required to prove sufficient voter fraud had occurred.

“The massive scale of illegal and improper ballots that were counted casts reasonable doubt on the outcome of the election and requires the statutory remedy of nullification,” attorneys for the campaign wrote in a supplemental filing late Tuesday.

But the order filed Tuesday by the state Supreme Court states that the Trump campaign did not demonstrate any “legal error” in Judge Russell’s application of the state’s election law contest, and that Russell did not err in applying a higher burden of proof (noting that Russell still opted to consider the evidence and reject it even under a lesser standard.)

Democrats filed the motion on Monday asking the court to dismiss the suit and certify the state’s election results, writing in a supplemental brief on Tuesday that the Trump campaign had failed to provide “even a shred of credible evidence” and that the appeal should be considered “frivolous in light of the thoroughness of their defeat and the extraordinary high bar they must satisfy to overturn the district court’s fact-bound determinations.”

“Contestants have thus far identified no legal error committed by the district court and instead offer an improper invitation to this Court to invade the factfinding ambit of the district court, reweigh the evidence, and ignore the conspicuous logical and evidentiary gaps littered throughout the record,” attorneys for the Democrats wrote in the filing.

Prior to the decision, the Trump campaign also filed a motion seeking to disqualify Justice James Hardesty from the case, stating that the judge demonstrated “actual bias or prejudice” for one of the candidates because he congratulated the state’s Republican Secretary of State Barbara Cegavske last month for “carrying out an extraordinarily successful election.” Hardesty is a registered Democrat, but the seven members of the state Supreme Court run for office without party affiliation.

Attorneys for the president’s campaign argued that those comments essentially equated to Hardesty casting judgement on the election results, and that overseeing a case seeking to overturn the results would run afoul of rules against bias. 

Hardesty said in a written response that his comments were “an appropriately courteous and professional response and in no way reflects any predisposition or opinion by me,” and did not reflect any engagement of a judicial function or demonstrate his views regarding the facts of the case.

Other members of the Court agreed, saying in a unanimous opinion denying the challenge that they “find no basis for Justice Hardesty’s disqualification.”

Justice Elissa Cadish, who is also a registered Democrat, voluntarily recused herself from the case on Monday, saying in a disclosure that her “impartiality might reasonably be questioned based on my personal relationships with several of the named respondents.”

Updated at 10:53 p.m. to add a statement from the Nevada Republican Party.

Trump campaign files appeal to state Supreme Court in election lawsuit seeking to block presidential race results; Dems ask for dismissal

The front of the Nevada Supreme Court Building

President Donald Trump’s re-election campaign has filed an appeal with the state Supreme Court for reconsideration of an election contest lawsuit tossed by a lower-court judge last week, seeking to block confirmation of Nevada’s six electoral votes or to have them awarded to the president’s campaign.

The appeal notice was filed Monday afternoon before the state’s highest court and marks the likely last chance for the president’s campaign to challenge election results in Nevada, as Tuesday marks a federal “safe harbor” election deadline where states must certify election results or resolve litigation before members of the Electoral College meet to cast their votes for president by Dec. 14.

The campaign is asking for an expedited process and decision from the state’s highest court in asking for an appeal from Carson City Judge James Russell’s order on Friday denying the campaign’s claims of mass voter fraud and request to overturn the results of the election.

Russell wrote in his order that the Trump campaign had failed to provide any backing evidence to support the claims of mass-level voter fraud that the campaign alleged brought the results of the presidential election into question. He declared in the order that many of the depositions and examples of evidence provided by the Trump campaign were “unsound,” and found “no credible or reliable evidence that the 2020 General Election in Nevada was affected by fraud.”

The appeal itself argues that Russell ignored “substantial evidence” that tens of thousands of illegal votes were cast, and erred by using “judicial gloss” in raising the standard of proof needed for the campaign to demonstrate sufficient evidence that there were enough fraudulent votes cast to provide “reasonable doubt” as to the results of the election.

“It is clear from the record that there is sufficient evidence of illegal and improper votes cast and counted in Nevada in an amount sufficient to overturn or annul the results of the election,” attorneys for the campaign wrote in a filing.

Attorneys representing state and national Democrat Party groups also filed a motion for summary affirmance with the state’s highest court on Monday, essentially a legal request for the court to immediately deny the appeal, affirm Russell’s initial decision and agree to certify the state’s election results by the “safe harbor” deadline of Tuesday.

The motion called the appeal a “frivolous” filing that had no chance to succeed given the campaign’s failure to prove any of its “farfetched claims of fraud” at the District Court level, and that the court had a responsibility to finalize election results ahead of the Tuesday deadline.

“Immediate resolution of the appeal is needed to bring certainty and stability to the people of Nevada — and the entire nation — in advance of pending deadlines related to the casting and counting of votes by presidential electors,” attorneys wrote in the motion.

On Monday evening, the Court issued a procedural schedule instructing the Trump campaign to respond to the motion filed by attorneys for the Democrats by 2 p.m. on Tuesday, while also instructing attorneys for the Democrats to respond to the Trump campaign's motion by the same deadline.

Election results certified by the state Supreme Court last month gave former Vice President Joe Biden a final 33,596-vote win over Trump in Nevada. The state’s six electors and all electors nationwide are scheduled to meet on Dec. 14 to cast official ballots for president and vice president.

Also on Monday, Justice Elissa Cadish (a Democrat), voluntarily recused herself from the case, saying that her “impartiality might reasonably be questioned based on my personal relationships with several of the named respondents.”

Updated at 5:01 p.m. to include additional information about the campaign's appeal, which was filed after this story was first published. Updated again at 5:14 p.m. to include information on a procedural schedule set by the Court.

Nevada Supreme Court accepts the results of the 2020 general election in the Silver State

The Nevada Supreme Court accepted the results of the 2020 general election on Tuesday, making official the results of a contentious election that has sparked numerous legal challenges seeking to cast doubt on the integrity of the electoral process in the Silver State.

The seven Supreme Court justices, who met in both Las Vegas and Carson City, formally signed the canvass of votes after a brief presentation from Secretary of State Barbara Cegavske. Several of the justices lauded Cegavske, a Republican, and her staff for running a fair and transparent election despite significant challenges amid the ongoing coronavirus pandemic.

“I just want to commend the secretary of state and her office for the extraordinary work they did under very difficult circumstances,” Justice James Hardesty said during the canvass of votes. “They’re to be congratulated for carrying out his extraordinarily successful election.”

Associate Chief Justice Mark Gibbons described the election as “incredibly trying” and said the fact that it ran “as smooth as it did” was “incredible.” Justice Elissa Cadish thanked Cegavske and her office for running the election “properly, reliably and with integrity.”

Cegavske, presenting the results of the election to the Supreme Court, acknowledged the challenges the state faced in running elections in the middle of a pandemic, from conducting an all-mail primary election in June to a “hybrid” general election in November. All active registered voters in Nevada were mailed a ballot this fall and given the opportunity to either fill it out and send it back or participate in person, either early or on Election Day, as usual.

Cegavske said the state saw a record 1,407,754 ballots cast this year, meaning that 77.3 percent of all active registered voters participated in the electoral process. Of those ballots, 49.2 percent were cast by mail, 41 percent during early voting and 9.7 percent on Election Day.

“I'd like to thank all of Nevada's election officials for their dedication and commitment to providing a transparent legal and fair election,” Cegavske said.

Per state law, Gov. Steve Sisolak is now required to issue certificates of election to the winners of the election and issue proclamations declaring the election of each individual. Sisolak, in a statement Tuesday afternoon, said he will be submitting a certification of ascertainment to the federal government in the coming days certifying that Joe Biden’s presidential electors received the highest number of votes in Nevada and will be issuing certificates of election to the winning candidates in the coming weeks.

“The process for the Governor to issue the certificates of the election and commissions to the winners — as declared by the justices of the Supreme Court — will likely take a significant period of time following today’s Supreme Court canvass,” he said.

The canvass of the votes comes amid ongoing legal challenges in Nevada and other battleground states over the results of the 2020 general election, all of which have so far been unsuccessful. 

Multiple legal challenges in Nevada were on court calendars on Tuesday, including a lawsuit by President Donald Trump’s campaign seeking to overturn the results of the election in Nevada, which he lost by about 34,000 votes, or 2.39 percentage points. The next hearing is scheduled for Dec. 3.

The Trump campaign has claimed without direct evidence that identified irregularities in the electoral process will be enough to overturn Joe Biden’s victory in Nevada.

Adelsons pour $500K into group backing Republican-aligned state Supreme Court candidate, other judicial candidates

The front of the Nevada Supreme Court Building

Billionaire casino owner Sheldon Adelson and his physician wife Miriam have contributed a combined half a million dollars to a new political action committee involved in several judicial races, including a contentious fight for a state Supreme Court seat.

According to a campaign finance report filed last week, the Adelsons — who made news last week amid disclosure that they poured $75 million into a pro-President Trump Super PAC — each contributed $250,000 in mid-September to a new political action committee called “Judge the Judges.”

So far, the PAC has started a TV advertising campaign aimed at boosting the candidacy of state Supreme Court candidate Douglas Herndon, an Eighth Judicial District Court judge running against Democratic Assemblyman and attorney Ozzie Fumo for the open seat on the seven-member court. Herndon’s political affiliation is described as “Republican” by the Reno Gazette-Journal.

But a spokesman for the PAC says it has plans beyond just the involvement in the state Supreme Court race. He said it’s already created a website with basic information on judicial races in Clark County, and has endorsed and begun running radio ads on behalf of four additional judicial candidates (of both major political parties) running for seats on the Clark County District Court.

“The PAC has a growing coalition that includes Dr. Miriam and Sheldon Adelson, the Nevada Builders Alliance, the Franchised Auto Dealers and additional companies to be named soon,” spokesman Mike Draper said in an email. “While the PAC is engaged in a handful of select races this cycle, the goal is for it to be an ongoing resource in future election cycles to provide more information about our elected judges.”

According to the new PAC’s campaign finance report, the Adelsons contributed the lion’s share of the $507,000 in reported contributions, with $2,000 coming from the Nevada Builders Alliance and $5,000 coming from the state auto dealers association. It reported spending just over $21,000 through the end of September. 

Nevada caps political contribution amounts from a single individual or entity at $10,000 per election cycle, but there are no contribution limits related to political action committees. A spokesperson for the Las Vegas Sands said the Adelsons declined to comment.

The PAC’s main advertising thrust thus far has focused on the state Supreme Court race. Though judicial races in Nevada are nonpartisan, meaning candidates don’t list party affiliation on the ballot, Herndon’s campaign has been backed by numerous Republican-aligined groups and individuals, while Fumo has been endorsed by a slew of liberal and progressive groups and served two terms in the Assembly as a Democrat. 

The PAC began running a television ad last week that hits Fumo for a “lack of experience on the bench,” saying that “The Nevada Supreme Court is no place for beginners.” It also highlights a promise made by Fumo during the summer special legislative sessions to recuse himself on certain issues that might come before the court, and says he’s “distorting” Herndon’s record.

Races for seats on the Nevada Supreme Court have in the past included some partisan tinges — Justice Elissa Cadish won endorsements from multiple union groups in her 2018 race, while her opponent, Court of Appeals Justice Jerome Tao, was endorsed by Republican figures and groups, including the National Rifle Association.

Though the court rarely rules along party lines, the Las Vegas Review-Journal reported in 2018 that at least four of the court’s seven members — Justices Mark Gibbons, Abbi Silver, Kris Pickering and Ron Parraguirre — are either registered Republicans or “lean” Republican. Justices James Hardesty, Lidia Stiglich and Cadish are Democrats.

Herndon — a sitting judge on the Eighth Judicial District Court in Clark County — has outraised Fumo throughout the campaign. He reported raising more than $340,000 over the last three months and spending more than $207,000 over that time frame — compared to $110,000 raised and $137,000 spent by Fumo in that same time period.

Herdon’s campaign has also spent more on television advertising, according to a tally by Kantar Media/CMAG. Fumo’s campaign has spent an estimated $91,000 on television advertising as of Oct. 19, compared to $150,000 spent by Herdon’s campaign and $15,000 by the “Judge the Judges” PAC.

In the state’s June primary election, Herdon won about 45 percent of votes cast, coming ahead of Fumo — who won about 35.6 percent — and ahead of former Republican Assemblyman Erv Nelson, who brought in about 10.3 percent of the vote. For judicial races, a candidate who wins more than 50 percent of the vote in the primary election automatically wins the seat, but if no candidate cracks that threshold, then the top two vote-getters proceed to the general election.

The PAC is also running radio ads in support of Herndon and four other endorsed candidates for District Court seats in Clark County, including:

Nevada Supreme Court says state cannot change water rights for 'public trust,' a loss for environmentalists, county seeking to bring more water to Walker Lake

A photo of the Walker River

The Nevada Supreme Court ruled Thursday that the state cannot reshuffle existing water rights to prevent environmental damage, despite recognizing a legal principle that requires the government to preserve natural resources for future generations.

Instead, the court ruled that principle, known as the public trust doctrine, is recognized in existing law. The Nevada court, in a 4-2 decision, separated itself from the California Supreme Court, which reached the opposite conclusion in a landmark 1980s case.

Effectively, the court found that the system that underpins Nevada’s water law, known as the doctrine of prior appropriation, is meant to take the public interest into account by defining how water can be used and by placing guardrails to prevent waste or overuse in times of scarcity. Allowing reallocation, the court said, “would create uncertainties for future development.”

The decision deals with litigation on the Walker River, which rises in eastern California and flows into western Nevada, ending at Walker Lake, a terminal desert lake in Mineral County. Along the way, water is removed from the river for farming and ranching operations. As more and more water was used over the past century, the lake shrunk and its water chemistry changed. 

Walker Lake became increasingly inhospitable for fishing, boating and recreation, harming the local economy of Hawthorne, the small Mineral County town located near the lake. In 1994, the county took the issue to court. It intervened in an ongoing case to assert a “public trust” claim, asking the court to do what existing water law had not: require that a minimum flow reach the lake.

“The public trust doctrine is something that transcends statutory law,” said Simeon Herskovits, an attorney for the Walker Lake Working Group, an organization of Mineral County residents.

Although the opinion recognizes that the public trust doctrine applies “to all waters of the state, whether navigable or non-navigable,” it says the state cannot reshuffle existing water rights to meet its responsibilities. Those responsibilities are instead met through existing statute.

“We recognize the tragic decline of Walker Lake,” Justice Lidia Stiglich wrote. “But while we are sympathetic to the plight of Walker Lake and the resulting negative impacts on the wildlife, resources, and economy in Mineral County, we cannot use the public trust doctrine as a tool to uproot an entire water system, particularly where finality is firmly rooted in our statutes.”

Justices Elissa Cadish, Mark Gibbons and James Hardesty joined the majority opinion. Justice Ron Parraguirre voluntarily recused himself from the decision. 

The ruling marks a significant loss for environmentalists who view the public trust doctrine as a pathway for carving out greater protections for the environment and recreation in a legal system where water is often appropriated to private interests with little left to spare for anything else.

“This says we’ve got a public trust doctrine and it applies everywhere,” said Bret Birdsong, an environmental law professor at UNLV who filed a brief in the case. “Only it means nothing.”

The decision, Birdsong argued, relegated the public trust doctrine, what is meant to be a broad legal principle, to a set of statutory tools that have not always protected resources long-term. 

“It’s a bad decision for the environment,” he added.

In a dissent, Chief Justice Kristina Pickering criticized the majority interpretation, writing that it could mean “there is no remedy or action to be taken to protect from the irreversible depletion of this state’s most precious natural resource,” as long as the state engineer fulfills his statutory role.

Justice Abbi Silver joined Pickering in the dissent.

The issue came before the Nevada Supreme Court after the 9th Circuit Court of Appeals was weighing Mineral County’s public trust claim. In 2018, the appellate court asked the Nevada Supreme Court to define the scope of the public trust doctrine as it is applied to the state’s water rights system. The case then became about much more than Walker Lake.

Water users across the state — cities, counties and tribes — became involved, filing briefs with the Supreme Court. Industry groups for miners, ranchers and farmers similarly filed briefs. Most argued against the reallocation of existing water rights, considered a property right.

On Thursday, the court ruled that water rights cannot be reallocated unless provided by statute. 

Rod Walston, an attorney for Lyon County and Centennial Livestock, applauded the ruling and noted that it could have broader implications for other Western states, where courts are still weighing the scope of the public trust doctrine in the context of existing water allocations. 

“Until this decision today, only one [state] Supreme Court had dealt with this,” Walston said. 

In a 1983 case involving the Los Angeles Department of Water and Power’s diversion of water away from Mono Lake, the California Supreme Court affirmed that the public trust doctrine can affect existing water rights. Nevada’s recent decision marks a stark contrast to that ruling.

Pickering’s dissent, which cited the Mono Lake case, argued that the public trust doctrine was a distinct element of law that evolved separate from statute and should be considered in balance.

The statutory framework, Pickering said, does not always fully account for public trust values.

“For example, while it could theoretically be in the public interest to allocate water rights to facilitate cattle grazing, increase herd size, and ultimately reduce the price of beef for dinner, if done without regard to the deleterious impacts of unsustainable water and grazing on Nevada's natural resources, such action could also be entirely inconsistent with public trust principles,” she wrote.

She added that Mineral County’s public trust claim might not necessarily affect existing rights. The county sought “a range of relief” that could “take a number of different forms,” including irrigation efficiency, a state-led plan and changing how water is managed in wet years.

“Crediting Mineral County’s position with respect to the public trust doctrine does not require that the decree court revoke senior adjudicated Walker Basin water rights,” Pickering wrote.

In a footnote, the majority disagreed with this interpretation of the case. The footnote argued that “the underlying dispute involves demands for over-appropriated resources that require determining whether water rights may be reallocated from current rights holders.”

Herskovits said the decision could make it harder to bring a public trust claim in the future.

"The majority opinion creates a precedent that will make it extremely difficult for any individual citizens or citizens organizations to bring an action challenging whether or not the public trust duty or obligation has been fulfilled by the state," Herskovits said in a phone interview. 

“It is very significant and it has tremendous implications for the state,” he added.

Nevada Supreme Court will allow legislative lawyers to participate in major payroll tax case

Photo of the top front of the building with the words Supreme Court of Nevada

The Nevada Supreme Court has issued a ruling allowing Legislative Counsel Bureau attorneys to represent lawmakers and staff named in a major lawsuit filed by Republican state senators challenging an extension of the state’s payroll tax rates.

The 5-2 decision, which was published on Friday, will allow attorneys for the nonpartisan legal division of the Legislature to represent Senate Majority Leader Nicole Cannizzaro and Senate Secretary Claire Clift in a lawsuit challenging the constitutionality of an extended payroll tax (about $100 million over two years) approved in the 2019 legislative session without a two-thirds vote normally required for any tax increase.

The decision is a major procedural win for Democratic lawmakers and the LCB’s legal division, which was barred from participation in the case by a Carson City District Court judge last year over issues with the group representing one group of lawmakers against legal action brought by another group.

Writing for the majority, Justice Elissa Cadish wrote that the lower court erred in disqualifying the legal division because they did not violate rules of professional conduct in representing potentially adverse parties. She wrote that it was “unfair and unsupported” to say that LCB attorneys were picking sides in the case, given that they were fulfilling their duty to represent the official interests of the Legislature.

“LCB Legal does not have a disqualifying conflict of interest that prevents it from defunding such a lawsuit because its only client is the Legislature acting through its duly authorized constituents, and LCB Legal only represents individual senators to the extent they are acting on the Legislature’s behalf,” she wrote.

The court’s decision stems from a lawsuit filed by all eight state Senate Republicans in July 2019 over a pair of bills — one removing a scheduled decrease in a payroll tax and another extending a $1 per transaction DMV technology fee — passed during the 2019 Legislature with less than a two-thirds majority, constitutionally required for any tax increase. 

Legislative Democrats, in part relying on a legal opinion from Legislative Counsel Bureau lawyers, argued that removing a scheduled decrease in a tax rate was not the same as voting to raise an existing tax or enact a new one.

In November, Carson City Judge James Russell ruled that attorneys employed by the LCB could not represent Cannizzaro or Clift in the case owing to the nature of the case, with one group of legislators suing another group of elected lawmakers. LCB Attorney Kevin Powers warned that such a decision could wreak havoc on the normal function of the nonpartisan legal division, which provides guidance and bill-writing duties for lawmakers, though Republicans said such fears were overblown.

Justices Abbie Silver and Kristina Pickering dissented, writing that they believe the legal division was violating rules of professional conduct by representing adverse parties in the case.

The case will now move back to Carson City District Court and resume over the merits and legality of approving the tax extension without a two-thirds vote. The current payroll tax rate, as compared to the level it would have otherwise been reduced to without the vote, was expected to bring in about $98 million over the two years of the budget cycle.

20-23754 by Riley Snyder on Scribd

20-23754 by Riley Snyder on Scribd

Tarkanian libel lawsuit against Jacky Rosen, 2016 opponent, blocked by Nevada Supreme Court

Danny Tarkanian and an attorney sitting together

Perennial Republican candidate Danny Tarkanian will not be allowed to proceed with a libel case against his 2016 opponent, now-Sen. Jacky Rosen, after a three-year court battle that ended with the state Supreme Court order dismissing the case.

The order issued Thursday by the Nevada Supreme Court reverses a Clark County District Court’s decision and ends the possibility that Tarkanian, the son of legendary UNLV basketball coach Jerry Tarkanian, could again win damages from a political opponent over ads accusing him of setting up “13 fake charities that preyed on vulnerable seniors.”

The case decided by the Supreme Court was not over whether Rosen’s 2016 congressional campaign committed libel or defamation against Tarkanian, but instead was over a motion filed by attorneys for Rosen to preliminarily dismiss the lawsuit through the state’s anti-Strategic Lawsuit Against Public Participation (anti-SLAPP) laws — designed to defend free speech that may be the target of censorship by long and costly litigation.

In the order, which was authored by Justice James Hardesty, the court found that the language in the advertisements produced by Rosen’s campaign had the ‘gist or sting’ of truthfulness, and that Tarkanian’s issue with her ad accusing him of “setting up” the fraudulent charities were “substantially true.”

“Under this standard, it is clear from the evidence in the record that Rosen sufficiently demonstrated that the statements were made in "good faith" under the anti-SLAPP statute because the "gist or sting of the statements was substantively true,” Hardesty wrote in the order.

The court also found that Tarkanian was unlikely to prove actual malice — acting with a reckless disregard for the truth, a standard established by the landmark New York Times v. Sullivan case — in order to prevail in any defamation lawsuit, given his status as a public figure.

“Even if there is a material difference between stating that Tarkanian ‘set up’ the fraudulent telemarketing corporations and stating that he ‘worked for those corporations,’ Tarkanian cannot prove that Rosen made her statements with reckless disregard for their truth,” the order stated.

Tarkanian launched the lawsuit after the election in November 2016, accusing Rosen’s campaign of disseminating political advertising that contained false and defamatory statements about Tarkanian’s legal work for telemarketing companies later found to be fraudulent. Tarkanian has acknowledged his role in setting up the companies but said he did not know of their operations or any illegal activity.

Similar accusations around his work with those companies have dogged Tarkanian’s repeated political bids, though he successfully sued and won $150,000 in damages from then-state Sen. Mike Schneider for using the claims in their 2004 race. 

Tarkanian lost the 2016 race for the state’s 3rd Congressional District by fewer than 5,000 votes, and lost another bid for the seat in 2018 to Democrat Susie Lee by a wider margin — nearly 26,000 votes. Tarkanian also ran unsuccessfully for state Senate in 2004, for secretary of state in 2006, for a U.S. Senate seat in 2010 and for the state’s Fourth Congressional District in 2012. 

In oral arguments from March, attorneys for Rosen acknowledged that even though political ads could be “slanted and hyperbolic,” the remedy was not in defamation or libel lawsuits but in “more speech.” Marc Elias, a prominent attorney for Democrats nationwide, told the court that denying the anti-SLAPP motion would open the floodgates by allowing much more political speech to be subjected to lawsuits.

A dissenting opinion, authored by Justices Mark Gibbons and Kristina Pickering, took issue with the fact that Rosen herself did not submit an affidavit stating she believed the claims in the ads were true, and said that the court discounted Tarkanian’s past success in a defamation lawsuit on the same topic in assessing his chances to prevail.

“Without a supporting affidavit, Rosen failed to demonstrate by a preponderance of the evidence that she made the statements in good faith,” the dissent states. “Even if she had met her burden, considering Tarkanian's evidence in a light most favorable to him, he made a prima facie showing of his claims.”

Two members of the court — Justices Elissa Cadish and Abbi Silver — voluntarily recused themselves from the case (Cadish because of her friendship with Rosen). They were replaced by Churchill County District Court Judge Thomas Stockard and Washoe County District Court Judge Barry Breslow.

Rosen Tark Order by Riley Snyder on Scribd

Nevada Supreme Court backlog of cases remains high; Court may ask for expanded appeals court in 2021

The front of the Nevada Supreme Court Building

In spite of a higher number of resolved cases, the Nevada Supreme Court and Court of Appeals still have a backlog of more than 2,000 unresolved cases — the second-highest total of this decade.

According to the Nevada Judiciary’s 2019 annual report, which was released Thursday, the state’s two highest courts had 2,042 appealed cases pending at the end of the 2019 fiscal year — a slight decrease from last year’s record-high backlog of 2,201 pending cases.

Supreme Court Chief Justice Mark Gibbons said that although the court has increased its clearance rate — more than 3,100 cases disposed of through orders, opinions and denials in 2019 — the growing number of appealed cases may make it necessary to request an increase in size to the three-member Court of Appeals in the 2021 legislative session.

“By the number of cases we have, we are the busiest appellate court in the United States,” he said. “Iowa was a state we modeled our Court of Appeals after, they have (9) Court of Appeals judges. We have three. So the workload per appellate judge is massive.”

Voters in 2014 approved the addition of a statewide Court of Appeals in the Constitution, in part because of arguments that it would help alleviate the then-overwhelming backlog of cases facing the seven state Supreme Court Justices. The appeals court operates on a “push-down” model, where all cases are first screened by the Supreme Court and then transferred to the appellate court if warranted. 

Although the appellate court helped drop the number of pending cases from 1,985 in 2014 to a little more than 1,600 in 2016, the backlog has continued to creep up — sitting at 1,822 in the Supreme Court and 220 cases in the Court of Appeals for a total of 2,201 unresolved cases at the end of the 2019 fiscal year.

Although the three-member appellate court has taken on a substantial part of the court’s workload (nearly 1,100 cases were assigned to the court in 2019), the backlog of unresolved cases has continued to rise, in part because of a growing number of cases filed.

In 2019, more than 2,980 cases were filed before the Supreme Court, including more than 1,200 civil appeals, roughly 1,100 criminal appeals and hundreds of other proceedings, bar matters and other petitions for review. The 2,982 cases filed in the 2019 fiscal year was slightly higher than the mark set last year, 2,935, and remains hundreds of cases larger than the totals filed in 2016 and earlier years.

As Gibbons said in an interview last year, the backlog was a combination of structural issues including the state’s universal right to appeal, a growing population and more cases being appealed from lower courts. He said it was unlikely that the transition of two new members of the appeals court (Justices Elissa Cadish and Abbi Silver) to the high court had contributed to the backlog, given that both had extensive past judicial experience.

Although the backlog remains high, the courts actually saw an increase in the total number of cleared cases: “disposed” cases dealt with by order or opinion rose to more than 3,150 in 2019, or nearly more than 460 cases cleared than in the previous fiscal year.

That jump is largely because of the court filing a larger number of orders, which are shorter, typically authored by three-judge panels and typically don’t set the kind of legal precedent of longer opinions, which tend to be decided by all seven members of the court. Between the Supreme Court and Court of Appeals, close to 3,000 cases were decided by order in the 2019 fiscal year, compared to just 81 cases decided by written opinion.

Gibbons said the reason the court is relying more heavily on orders as opposed to written opinions is twofold: a change made several years ago allowing Supreme Court orders, not just opinions, to be cited as precedent in lower court cases, and a desire to quickly resolve sensitive cases dealing with custody or other time-sensitive matters.

“The sooner we get it out, it's better, so that parties can get along with their life and deal with that,” he said.

He emphasized that the state’s universal right to appeal meant that the court didn’t have much say in what cases it ended up before it, so the number of “opinion-worthy” cases can ebb and flow every year.

“We get whatever comes in here, then we have to decide (between) opinions versus unpublished orders that are citable but aren't published,” he said. “And it changes year to year. Next year, maybe those double. I don't know. We'll just see what happens.”

Gibbons said he didn’t foresee the Legislature increasing the size of the seven-member Supreme Court, but was still weighing whether to ask for the funding and creation of additional members to Nevada’s Court of Appeals. 

Although Nevada is tied with Alaska and North Dakota for the smallest number of justices (3) of any of the 41 states with intermediate appellate courts, Gibbons said any request to expand the Court of Appeals would depend on the status of the pending case backlog at the end of the 2020 fiscal year and on whether funding for a new position was available in the consistently cash-hungry state budget.

“The money's limited,” he said. “It's available for expansion of the court and for different issues. So we have to weigh what's the fiscal situation as a state, what are the priorities?”

Barbs exchanged as public defenders, prosecutors argue cash bail case before Nevada Supreme Court

Lady Justice perched atop the Nevada Supreme Court building

An hour of combative and at-times feisty oral arguments between public defenders and prosecutors played out before the Nevada Supreme Court on Wednesday in a case that could have major implications for the use of cash bail in the state.

Attorneys for the Clark County public defender’s office faced off with their counterparts in the Clark County district attorney’s office in Carson City over a pair of consolidated cases that public defenders hope to use to set a major precedent and add substantial restrictions on the use of cash bail for pretrial detention.

The cases revolve around the pretrial detention of two men: 58-year-old Jose Valdez-Jimenez, accused of stealing thousands of dollars worth of merchandise from several Las Vegas Victoria’s Secret stores in 2018, and Aaron Frye, a California man charged with several counts of armed robbery after an alleged bank robbery in 2018.

Both men were assessed cash bail as a condition of pretrial release ($40,000 for Valdez-Jimenez and $250,000 for Frye), and neither have been able to pay, meaning both have been detained in the Clark County Detention Center since their arrest last year.

Although both men have recently reached plea deals with prosecutors, their pretrial detainment and assessed cash bail were the subject of the oral arguments before the seven-member court on Wednesday. 

Nancy Lemke, a public defender and attorney for Valdez-Jimenez and Frye, told the judges at the outset that her arguments were not aimed at convincing the court to find the cash bail system unconstitutional, but rather that she was asking the court to find that the use of cash bail in courtrooms throughout Clark County needs substantial restructuring and guidance from the state’s highest court — especially in cases where a grand jury returns an indictment and no modifications are made to bail settings. 

“It's a one-sided ex parte presentation as to the need for money bail and what the implications of that may or may not be,” she said. “(The) defendant’s not there, counsel is not there, there is no adversarial process.”

The scheduled hour of arguments centered around two topic areas defined by the court in an earlier order: whether due process and equal protection rights were violated through the use of an individualized bail hearing, and whether the initial bail settings were unconstitutional because they were made in the absence of Valdez-Jimenez and Frye without an adversarial hearing.

Lemke said that prosecutors in Clark County often begin detention hearings with a request for monetary bail that essentially functions as a “non-transparent, de facto detention order” issued by judges that did not, in certain circumstances, take into consideration the ability of the defendant to post bail or other factors for pretrial release. She said the ability of a wealthy person to more easily post money bail compared to indigent defendants raises questions about the constitutionality of the system.

“I’m not saying that you can’t use money bail; of course, you can use money bail,” she said. “But if it's going to be detention mechanism, it must be preceded by a request by a prosecutor for detention, and then a showing by the prosecutor that the detention is necessary to manage concerns of flight risk and community safety. And if that doesn’t happen...then we start talking about release conditions, of which money bail can be one."

“I can’t emphasize it enough,” she added. “I’m not talking about the merits of the underlying decision, I’m talking about the process by which it was decided.”

But Chief Deputy District Attorney Steven Owens pushed back forcefully on those arguments, saying the state believed that both defendants were given many opportunities to ask for changes in bail amounts throughout the process, from initial arraignment in Justice Court to the first court appearances in District Court after the return of a grand jury indictment.

He said the assertion that bail amounts were based only on a person’s ability to repay the amount was false, saying that initial bail amounts for both Valdez-Jimeniz and Frye deviated from standard bail schedule because of their risks to re-offend and pose a danger to the public.

“I couldn’t have asked for two better cases to emphasize to the court the risk and danger to the public, if ever there was grounds to have that criteria supersede the ability to pay,” he said. “These are the cases.”

Owens also defended allegations that bail was being used as a “de facto” detention order against those without the ability to pay, saying that judges had the ability to raise bail amounts for wealthy defendants as an assessment of their ability to post bail.

“You can have bail set at an unaffordable amount for a wealthy person the same as you can have for an indigent person,” he said. “I don’t see any equal protection clause argument here. There is no discriminatory purpose. There is a disparate impact because some people live their lives in a way that they can give assurances that they will be a good risk, that they’re released to society and will return to court. Other people do not live their life that way, and they represent a very poor risk.”

But Owens’s arguments drew some pushback from several of the judges on the court, notably in several exchanges with Justice Elissa Cadish, including a question about whether the case should be declared moot because the defendants had already pled guilty.

“The federal court didn’t hesitate to dismiss in a minute because the defendants pled guilty,” he said. “Which begs the question, why are we here today on this case? It’s a year old. Why has new life been breathed into it?”

“Respectfully, because we thought it was worth arguing over,” Cadish replied.

Owens also tangled with Justice James Hardesty, who asked the deputy district attorney to square some of his statements on bail with a 1927 state Supreme Court decision which in part stated that "bail must not be in a prohibitory amount, more than the accused can reasonably be expected under the circumstances to give.”

Owens said that particular case was not “well reasoned” or “reliable” and that most state courts relied on other jurisprudence from other courts that “excessive bail” was not directly linked to a person’s ability to pay and was conditioned on public safety and other factors.

Several judges also questioned the scope of what the plaintiffs were asking the court to do. Justice Kristina Pickering questioned the standing of the case, expressing concern that both plaintiffs had already pled guilty and that the court’s actions, as requested by the public defenders, could quickly lead the court to legislating from the bench as opposed to interpreting the constitutionality of laws or decisions by lower courts. 

“On this record, I’m concerned about being asked to kind of legislate or rule-draft rather than decide an individual live case,” she said. “The lawyer in me is concerned about that.”

Although they were not present at oral arguments, attorneys for Civil Rights Corp., a national civil rights and bail reform nonprofit, intervened in the case and helped arrange an amicus brief by several law professors. The group has intervened in several states and jurisdictions challenging use of cash bail for pretrial detention, including in Georgia, Illinois, California and Louisiana

The American Bail Association, a trade organization representing the bail bonds industry, submitted an amicus brief prior to the oral arguments in support of the district attorney’s office and the state’s use of bail.

The litigation filed on behalf of Valdez-Jimenez predates efforts by some criminal justice advocates (including the public defender’s office) to reform the use of cash bail in the 2019 Legislature, but which ultimately fell short. A last-minute bill (AB125) opposed by bail bonds agents, district attorneys, local governments and even some bail reform advocates failed to advance, with legislators ultimately only passing a resolution creating an interim study on pretrial release and the use of bail to be completed before the 2021 Legislature begins.

Mark Hernandez contributed to this story.