Could a business court help Nevada compete with Delaware?

Now, an effort moving through the Legislature hopes to attract even more.

Assembly Joint Resolution 8 seeks to expand Nevada’s legal infrastructure and cut into Delaware’s dominance in the corporate filings market. It proposes amending the Nevada Constitution to establish a special court dedicated to cases involving shareholder rights, mergers and acquisitions and other business-related matters.

Assembly member Joe Dalia, D-Henderson, said the new court could offer “greater legal predictability and efficiency” for businesses who call Nevada their home — at least on paper.

Benjamin Edwards, a UNLV corporate law professor working with Dalia on the resolution, said it represents a long-held belief by some in the legal and corporate worlds that Nevada could attract more business incorporations if it had the systems to handle related legal matters.

Currently, district courts in Washoe and Clark counties handle business disputes, but judges with a mix of criminal, civil and business cases on their dockets can get bogged down, Edwards said.

An aggressive effort for the ‘golden goose’

The courts could help Nevada as it gets more attention from corporations looking to move their legal headquarters out of Delaware, where a vast majority of Fortune 500 companies are incorporated. Such a switch does not require a physical move.

“It is really remarkable how many (businesses) have picked Nevada,” Edwards said. “And if that trend continues, then we could potentially have a golden goose here that’s going to lay a lot of gold eggs.”

Secretary of State Cisco Aguilar has been quick to point this out — even on a national stage via op/ed in the Wall Street Journal. In an interview with the Las Vegas-Review Journal about AJR 8, Aguilar said the bigger picture was about making Nevada a national competitor.

“My whole goal here is to take away market share from Delaware,” Aguilar, a Democrat, said.

Delaware makes about $2 billion in incorporation-related revenue annually, according to data from the Blue Hen State. Meanwhile, Nevada brought in about $235 million in commercial and incorporation fees, Aguilar said.

“If we took 5 percent of Delaware’s market share, that’s another $100 million we can put into the general fund that we can then invest back into Nevada,” he said.

Texas, another state eyeing Delaware’s lead in corporate governance, established a business court in 2024.

Appointment concerns

The proposed new section of the Nevada Constitution would require the Legislature to create a business court of at least three appointed judges who would be nominated by what it called a “Special Nominating Commission” and then appointed by the governor to six-year terms.

Lawmakers questioned the structure of the nominating commission during a May 1 hearing in the Senate Legislative Operations and Elections committee. State Sen. Skip Daly, D-Sparks, asked why the judges had to be appointed instead of elected.

“This reduces a friction point,” Dalia said during the meeting. “If we want to get the right people on a court, a number of those people are only going to be willing to do it if it’s through this appointment system.”

Dalia declined to make additional comments for the article.

Appointments were also a concern of the sole opposition testimony in both the Assembly and Senate hearings on AJR 8. Douglas Herndon, chief justice of the Nevada Supreme Court, told lawmakers in the May 1 hearing that he would rather see more resources going to existing courts, where there was already support staff and facilities.

Herndon said he was concerned the Legislature’s involvement on the nominating commission could give way to, or create the appearance of, political motivations. The commission as described in the resolution includes the Assembly speaker and Senate majority leader, as well as the chief justice of the Supreme Court and several district court judges.

AJR 8 would require judges appointed to the business court to seek re-election through a “retention vote,” the bill’s backers said. If they do not receive 55 percent or more or choose not to “succeed himself or herself,” according to the bill language, then the position becomes vacant at the end of the term and must be filled by appointment.

Herndon also said he worried the “retention vote” system would create two tiers of judges in Nevada: those appointed to the business court and others who must be elected.

“We do want to work moving forward, but we think working within what we have now and improving it might be a better and more cost-efficient way to do it on behalf of our state,” he said.

The legislation still has a long journey. Because it would amend the Constitution, the resolution must pass the Legislature in two consecutive sessions before going to the voters for final approval.

Contact McKenna Ross at mross@reviewjournal.com. Follow @mckenna_ross_ on X.