On Monday, the Nevada legislature commenced its 81st session. The legislature meets biennially in odd numbered years. The Session is limited to 120 days. Nev. Const. Art. 4, § 2. Yesterday, Senator James Ohrenschall introduced SB 95 which would make numerous significant changes to Nevada's private corporation law.
Among other things, SB 95 would amend NRS 78.046 to permit a Nevada corporation's articles or bylaws to require that "concurrent jurisdiction actions" be brought solely or exclusively in the court(s) specified in the articles or bylaws. The bill defines "concurrent jurisdiction action" as any action, suit or proceeding against the corporation or any of its directors or officers, that:
- Asserts a cause of action under the laws of the United States;
- Could be properly commenced in either a federal forum or a forum of this State or any other state; and
- Is brought by or in the name or on behalf of:
- The corporation;
- Any stockholder of the corporation; or
- Any subscriber for, or purchaser or offeree of, any shares or other securities of the corporation.
If this seems less than pellucid, it apparently is an attempt to allow the articles or bylaws to require that actions brought under the Securities Act of 1933 to be brought exclusively in the federal courts. The Securities Act provides for concurrent jurisdiction of the federal and state courts, but this was brought into question following the enactment of the Securities Litigation Uniform Standards Act. In 2018, the U.S. Supreme Court decided that a class action alleging only violations of the federal Securities Act of 1933 could be brought in either state or federal court. Cyan, Inc. v. Beaver Cty. Emples. Ret. Fund, 138 S. Ct. 1061 (2018). See Cyan And The California Company.