Page 11 - Delaware Lawyer - Issue 3 - 2024

judicial scrutiny standards as an oppor-
tunity to differentiate. Where Delaware
imposes rigorous accountability, Ne-
vada law was entered to provide more
protection from liability.
Thus, Nevada did not create an inde-
pendent balance; rather, it designed its
corporate law to offer protections where
Delaware applies scrutiny. In critical ar-
eas like self-dealing, takeover defenses
and board oversight — where Delaware
enforces heightened scrutiny through
doctrines such as entire fairness, inter-
mediate standards (Unocal and Revlon)
and the concept of conscious disregard
— Nevada imposes a lower threshold, if
it applies scrutiny at all.
Moreover, Nevada’s approach in-
cludes extensively codifying corporate
law, minimizing the role of fiduciary
duties, and reducing opportunities for
judicial interpretation. This strategy is
also rooted in competitive consider-
ations. Delaware’s specialized judicia-
ry, which has a significant advantage
in interpreting nuanced corporate
cases, is difficult to replicate. Nevada
instead relies on codification, reduc-
ing the reliance on judicial oversight
and reinforcing its identity as a lower-
scrutiny jurisdiction.
NOTES
1. See Brief of the State of Nevada, ex rel.
Francisco V. Aguilar, Secretary of State of
Nevada, in his Official Capacity, as Amicus
Curiae, Supporting Appellant and Reversal
Maffei v. Palkon, C.A. NO. 125, 2024.
2. See Michal Barzuza, Market Segmenta-
tion: The Rise of Nevada as a Liability Free
Jurisdiction, 98 VA. L. REV. 935 (2012);
Michal Barzuza & David C. Smith, What
Happens in Nevada? Self-Selecting into Lax
Law, 27 REV. FIN. STUD. 3593 (2014); Mi-
chal Barzuza, Nevada v. Delaware: The New
Market for Corporate Law (2024).
3. Hearing on S.B. 46 Before the S. Comm.
on Judiciary, 1987 LEG., 64TH SESS. (Nev.
1987).
4. Letter from S. Craig Tompkins, a di-
rector of a number of public companies, in
support of S.B. 577, Hearing on S.B. 577
Before A. Comm. on Judiciary, 2001 LEG.,
71TH SESS. (Nev. 2001) (Exhibit J).
5. Hearing on S.B. 577 Before the A.
Comm. on Judiciary, 2001 LEG., 71TH
SESS. (Nev. 2001).
6. See e.g., Guzman v. Johnson, 137 Nev.
126, 483 P.3d 531 (2021) (deciding that
NRS 78.138(7) precludes the inherent
fairness standard); McFarland v. Long, No.
216CV00930RFBPAL, 2017 WL 4582268
(D. NEV. OCT. 7, 2017); Jacobi v. Ergen,
No. 212CV02075JADGWF, 2016 WL
1089232, at *7 (D. Nev. Mar. 17, 2016)
(“Ezcorp would not change the outcome of
this case because it is nonbinding and ap-
plies Delaware's entire-fairness standard, a
standard that has not been adopted by the
Nevada Supreme Court”).
7. McFarland v. Long, No.
216CV00930RFBPAL, 2017 WL 4582268
(D. NEV. OCT. 7, 2017).
8. See also Chur v. Eighth Judicial Dist.
Court, 458 P.3D 336, 342 (Nev. 2020).
9. See Why Nevada? Legal Advantages:
A Comparison with Delaware and Califor-
nia, Lionel Sawyer & Collins and Parsons
Behle & Latimer Law Firms (August 15,
2012). https://www.nvsilverflume.gov/
documents/CorporateLawComparison.pdf
ISSUE 3 2024 DELAWARE LAWYER 9