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Does the “case or controversy” requirement apply in Nevada? (Nov. 30, 2016)

A “testamentary” trust arises when the maker of the trust dies, as set forth in his or her will. The maker of the trust often wants to know, before he or she dies, how a court will construe the terms of the trust and whether the court will uphold the validity of the trust.[1]

Nevada is one of the few states that allows the maker of a testamentary trust to petition a court for a pre-death determination of the construction and validity of the trust.[2] The pre-death determination occurs under a state statute, the Nevada Declaratory Judgment Act.[3] But will that pre-death determination later be enforceable under the Nevada Constitution?

This raises the question of justiciability. Justiciability considers whether a court may exercise judicial power over a matter, and it encompasses constitutional and prudential doctrines like standing, ripeness, and mootness. Those issues are related but distinct. Whereas standing primarily focuses on “the party bringing the action,” ripeness and mootness focus on “the timing of the action”—whether it was brought too soon (not ripe) or too late (moot).[4]

As the Nevada Supreme Court recognized in Stockmeier v. Nevada Department of Corrections, standing and other justiciability doctrines arise from the “case or controversy” requirement of Article III of the U.S. Constitution.[5] This means, in simplified terms, that parties do not have standing to bring a matter before a federal court unless they have an actual case or controversy—a live dispute—between them. If no case or controversy exists, the federal court has no power to issue an advisory opinion, which is an opinion that merely advises parties who are not actively disputing anything.

This brings us back to our question whether, under Nevada law, a Nevada court’s pre-death determination of the construction and validity of a testamentary trust must present a justiciable case or controversy. In other words, is that court’s determination enforceable after the maker of the trust dies, even if no one disputed the construction or validity of the trust while the maker was still living? Does that court even have power to issue such a declaration where no case or controversy exists?

The Nevada Supreme Court’s decision in Stockmeier is somewhat instructive but left those questions largely unanswered.

In Stockmeier, a state agency held a closed session that denied Stockmeier, a convicted sex offender, of a psychological certification he needed for his release on parole. Stockmeier sought declaratory and injunctive relief that the agency’s closed session violated Nevada’s open-meeting statute. The trial court granted the agency’s motion to dismiss, partly on the ground Stockmeier did not have standing. The Nevada Supreme Court reversed and remanded, emphasizing that federal “standing requirements [that] arise from the ‘case or controversy’ requirement of the United States Constitution . . . do not necessarily provide the standing threshold for Nevada courts.”[6] The Nevada Supreme Court explained:

[S]tate courts are not required to comply with the federal “case or controversy” requirement. Standing is a self-imposed rule of restraint. State courts need not become enmeshed in the federal complexities and technicalities involving standing and are free to reject procedural frustrations in favor of just and expeditious determination on the ultimate merits. State courts are free to adopt a “case or controversy” justiciability requirement or open their courts to lawsuits that may not meet this requirement.[7]

The Nevada Supreme Court went on to explain that, although it has generally required a justiciable case or controversy, the Nevada legislature may, by statute, confer standing over certain cases that would otherwise not qualify as a justiciable case or controversy:

This court has a long history of requiring an actual justiciable controversy as a predicate to judicial relief. In cases for declaratory relief and where constitutional matters arise, this court has required plaintiffs to meet increased jurisdictional standing requirements. However, where the Legislature has provided the people of Nevada with certain statutory rights, we have not required constitutional standing to assert such rights but instead have examined the language of the statute itself to determine whether the plaintiff had standing to sue. To do otherwise would be to bar the people of Nevada from seeking recourse in state courts whenever the Legislature has provided statutory rights that are broader than constitutional standing would allow.[8]

With this background, the Nevada Supreme Court held that Stockmeier had standing to seek relief under the open-meeting statute:

NRS 241.037(2) provides that “[a]ny person denied a right conferred by [NRS Chapter 241] may sue.” The Legislature has indicated in the statute who has standing to sue. Therefore, we conclude that constitutional standing under [federal law] is not applicable to a person asserting injury under the open meeting law, and the correct inquiry to determine whether Stockmeier has standing to sue is whether he qualifies as “[a]ny person denied a right conferred by” the open meeting law.[9]

At first blush, this holding appears to suggest that Stockmeier had standing to seek both declaratory and injunctive relief. But the Nevada Supreme Court clarified, in a footnote, that it was holding only that Stockmeier had standing to seek injunctive relief, without deciding whether he also had standing to seek declaratory relief:

The [lower] court’s reliance on the standing requirements [under federal law] may stem from Stockmeier’s complaint seeking declaratory relief. However, declaratory relief is inapplicable to Stockmeier’s claims, as he is seeking (1) a remedy for violations of his rights that have already occurred, and (2) injunctive relief to address future violations. Therefore, we do not address declaratory relief.[10]

The Nevada Supreme Court therefore left open the question whether the Nevada legislature may override, by statute, the “increased jurisdictional standing requirements” that apply in cases for declaratory relief.[11] This matters here because a Nevada court’s pre-death determination of the construction or validity of a testamentary trust is a form of declaratory relief specifically sought under a state statute, the Nevada Declaratory Judgment Act.

Accordingly, although there may be good arguments for why such a pre-death determination should be enforceable in Nevada,[12] there can be no guarantee that it will be.

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[1] The maker of a trust is commonly known as the “settlor.” Where, as here, the trust is a testamentary trust, the settlor is generally referred to as the “testator.”

[2] See NRS 164.010(1)–(2)(d) (providing that, upon petition by the maker of the trust, a Nevada court has jurisdiction to consider “matters that might be addressed in a declaratory judgment relating to the trust under subsection 2 of NRS 30.040”).

[3] NRS 30.040(2) (“A maker or legal representative of a maker of a will, trust or other writings constituting a testamentary instrument may have determined any question of construction or validity arising under the instrument and obtain a declaration of rights, status or other legal relations thereunder.”).

[4] In re T.R., 80 P.3d 1276, 1279 (Nev. 2003) (emphasis added).

[5] 135 P.3d 220, 225 (Nev. 2006), abrogated on other grounds by Buzz Stew, LLC v. City of N. Las Vegas, 181 P.3d 670 (Nev. 2008). Article III of the U.S. Constitution extends judicial power only to certain “cases” and “controversies,” giving rise to what has been described as the “case or controversy” requirement for standing to bring a case before federal courts. See U.S. Const. art. III, § 2.

[6] 135 P.3d at 225.

[7] Id. (some internal quotation marks, alterations, and footnotes omitted).

[8] Id. at 225–26 (internal quotation marks and footnotes omitted; emphasis added).

[9] Id. at 226.

[10] Id. at 225 n.20 (emphases added).

[11] Id. at 225–26 (citing Doe v. Bryan, 728 P.2d 443, 444–45 (Nev. 1986) (per curiam)).

[12] For example, to invalidate such a pre-death determination made by a Nevada court under Nevada law “would be to bar the people of Nevada from seeking recourse in state courts [where] the Legislature has provided statutory rights that are broader than constitutional standing would allow”—what the Nevada Supreme Court specifically disapproved of in Stockmeier. Id. at 226.

I have made this blog available for educational purposes only, not to provide specific legal advice. By using this blog, you understand that there is no attorney–client relationship between you and me. This blog should not be used as a substitute for independent legal advice from a licensed professional attorney in your state.