Nevada Republican business tax lawsuit on hold
November 11, 2019
CARSON CITY, Nev. — The Republican lawsuit seeking to rule two tax bills passed by a simple majority unconstitutional is on hold until a judge decides whether LCB Legal can effectively represent the Democrats.
That issue will be argued before Carson District Judge Todd Russell November 19.
Until that question is resolved, both sides have agreed to stay further action in the case.
In the lawsuit filed in July, all eight Republican Senators charge that Democrats violated the Nevada Constitution by passing bills delaying a sunset that would reduce the Modified Business Tax and a similar sunset on the technology fee DMV is using to pay for a new computer system.
While the DMV fee is relatively small, keeping the higher MBT rate will generate generate more than $100 million Democrats and the governor dedicated to K-12 Education.
Article 4 of the Nevada Constitution says a two-thirds vote is required, “to pass any bill or joint resolution which creates, generates or increases any public revenue.”
SB551 and SB542 were passed 13-8 in the Senate, one short of that mark.
But progress toward a hearing on the issue came to a halt after Legislative Counsel Brenda Erdoes filed documents September 16 that the Republicans argue makes LCB the counsel for Senate Democrats.
That prompted an October 24 motion by the Republican plaintiffs to disqualify LCB Legal as counsel for Senate Democrats.
Republicans led by Minority Leader James Settelmeyer of Gardnerville argue LCB can’t represent one group of lawmakers against another.
“It is a violation of an attorney’s ethical duty to represent a client if a conflict of interest exists,” the motion to disqualify states. “LCB is statutorily required to represent the Legislature as a whole and members of the Legislature cannot represent one member of that legislative body against another in an adversarial action. LCB’s representation of defendants Cannizzaro and Clift is directly adverse to the Plaintiff senators in this action.”
They argue LCB Legal must be disqualified as counsel for the legislative defendants, “because a concurrent conflict of interest exists in violation of the Nevada Rules of Professional Conduct.”
LCB Chief Litigation Counsel Kevin Powers on November 6 officially filed a brief arguing that LCB has the absolute right to intervene on behalf of the Legislature.