I a short order of affirmance issued last week, the Nevada Supreme Court affirmed a basic requirement of derivative litigation. J. McDonald Co. v. Tropical & Losee, LLC, 2022 WL 6833521 (Nev. Oct. 11, 2022). The case involved an attempt by J. McDonald Co., Inc. , a Texas corporation, to assert derivative claims on behalf of a Nevada limited liability company. While one of the members of the LLC was J. McDonald Co., Inc., that corporation was a Nevada corporation whose charter had lapsed. Because the Texas corporation by the same name had not been a member of the LLC, it lacked standing to pursue derivative claims on the LLC's behalf. This seemingly should have been clear to the plaintiff because NRS 86.485 provides: "In a derivative action, the plaintiff must be a member at the time of the transaction of which the plaintiff complains."
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