Nevada Supreme Court: LCB Legal can represent Dems in business tax case

In a 5-2 ruling, the Nevada Supreme Court on Friday ruled that the Legislative Counsel Bureau’s legal division can represent the Democrats in the case challenging the constitutionality of their vote to eliminate the sunset that would have lowered the Modified Business Tax.

Senate Democrats voted to lift the sunset automatically reducing the MBT to generate some $400 million to balance the budget over this biennium. But they did so on a party line vote that was one short of the two-thirds majority Nevada’s constitution demands for any legislation that increases or generates revenue.

The eight Republican senators sued to overturn the legislation as unconstitutional.

Friday’s ruling, however, deals solely with whether LCB Legal can represent Democratic Majority Leader Nicole Cannizzaro in the case.

Republicans argued that would be a conflict of interest since LCB is supposed to represent all members of the Legislature.

Carson District Judge Todd Russell earlier ruled the LCB could not represent one group of legislators against another and disqualified LCB. He said representing Cannizzaro is directly adverse to the eight Republican senators who are also LCB clients

LCB Legal appealed that decision.

The opinion by Justice Elissa Cadish says in defending Cannizzaro, LCB is acting on behalf of the Legislature.

“But in challenging the legislation, the senator plaintiffs are not similarly acting on the Legislature’s behalf and, thus, they are not considered LCB Legal’s client in this situation,” the opinion says.

It states that those Republican senators, “do not have an attorney-client relationship with LCB Legal other than in their roles as duly authorized members of the Legislature acting on the Legislature’s behalf.”

So saying, the court ruled that the plaintiffs are suing Cannizzaro for actions taken in her official capacity on behalf of the Legislature. She was joined by justices Mark Gibbons, Jim Hardesty, Ron Parraguirre and Lidia Stiglich.

Chief Justice Kris Pickering and Justice Abbi Silver dissented saying the Rules of Professional Conduct don’t permit lawyers to represent one client against another client and that all of the senators involved are clients of LCB Legal. They argued that, the district court did not “manifestly abuse its discretion” in disqualifying LCB and that only when the district court clearly abused its discretion should a disqualification order be overturned.

In this case, the dissent argues the district court found a conflict of interest exists under the Nevada Rules of Professional Conduct because LCB’s representation of Cannizzaro will be “directly adverse to another client.”

“Absent consent, a lawyer may not act as an advocate in one matter against a person the lawyer represents in some other matter, even when the matters are wholly unrelated,” the dissent states.

It says all the senators involved in the dispute are current clients of LCB Legal. The dissent points out that, nothing in statute or existing rules of conduct says that LCB Legal can represent one member of the legislature against another in litigation.