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In More Bad News for Delaware, Nevada Legislature Proposes to Allow Jettisoning Jury Trials For "Internal Actions"
Friday, May 2, 2025

I have previously noted certain provisions of a bill amending Nevada's business entity statutes, AB239. See Nevada Bill Would Impose A Duty That Directors Be Informed and Nevada Bill Would Expressly Allow Directors To Approve Documents In "Preliminary Form". AB239 recently passed out of the Assembly on a 40-2 vote. A recent amendment to the bill addresses one concern that has been voiced by some about reincorporating in Nevada - the availability of jury trials. A big selling point for Delaware has been that trials are generally conducted without a jury (although an advisory jury is possible). As amended, the bill would amend NRS 78.046 to add a new subdivision (4):

The articles of incorporation of a corporation may require, to the extent not inconsistent with any applicable laws of the United States, that any, all or certain internal actions to be tried in any court of this State must be tried before the presiding judge as the trier of fact and not before a jury. Upon and during its effectiveness, any such requirement must conclusively operate as a waiver of the right to trial by jury by each party to any internal action to which such requirement applies. Nothing in this section or any such requirement shall be construed as to limit or otherwise affect any right to a jury trial in any action, suit or proceeding that is not an internal action.

An "internal action" is defined as:

[A]ny action, suit or proceeding:
(1) Brought in the name or right of the corporation or on its behalf, including, without limitation, any action subject to NRS 41.520;
(2) For or based upon any breach of any fiduciary duty owed by any director, officer [, employee] or [agent] controlling stockholder of the corporation in such capacity; or 
(3) Arising pursuant to, or to interpret, apply, enforce or determine the validity of, any provision of this title, the articles of incorporation, the bylaws or any agreement entered into pursuant to NRS 78.365 to which the corporation is a party or a stated beneficiary thereof.

Bracketed words are proposed to be deleted and the underlined words are proposed to be added.

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