Judicial Review as a “Special Proceeding” under NRS 18.020(4): Recoverability, Apportionment, and Cost Accrual

Introduction

In In re: D.O.T. Litigation, the Supreme Court of Nevada considered whether costs could be awarded to successful defendants in consolidated challenges to the Nevada Department of Taxation’s recreational cannabis licensing decisions. Appellants Rural Remedies LLC and Clark Natural Medicinal Solutions LLC, who had unsuccessfully applied for licenses, sued DOT under the Nevada Administrative Procedure Act. Respondents Wellness Connection of Nevada, LLC and Deep Roots Harvest, Inc. were successful applicants later joined to the action. After trial, the district court awarded costs against the losing plaintiffs and in favor of all defendants under NRS 18.020. This opinion addresses (1) whether judicial review actions qualify as “special proceedings” under NRS 18.020(4), (2) parties’ preservation of apportionment arguments, and (3) the date from which costs begin to accrue for cross-appellant Deep Roots.

Summary of the Judgment

The Supreme Court affirmed that NRS 18.020(4) authorizes cost awards in “special proceedings,” which include judicial review under NRS 233B.130.
Both Rural Remedies and Clark Natural failed to preserve their arguments that costs should have been apportioned between Phase 1 (judicial review) and Phase 2 (merits) of the litigation.
On cross-appeal, the Court held that Deep Roots’ costs must be calculated from the date it was first named in the operative complaint (January 4, 2019), not from the date it filed its answer.
The decision was affirmed in part, reversed in part, and remanded for recalculation of Deep Roots’ costs.

Analysis

1. Precedents Cited

The Court’s analysis drew on several key precedents:

Las Vegas Metro. Police Dep’t v. Blackjack Bonding, Inc. (131 Nev. 80, 343 P.3d 608 (2015)): Established that an award of costs under NRS 18.020 is reviewed for abuse of discretion.
In re DOT (No. 86071, 2024 WL 4907111): Held that judicial review claims under the Administrative Procedure Act are “special proceedings” because they did not exist at common law.
Foley v. Kennedy (110 Nev. 1295, 885 P.2d 588 (1994)): Defined “special proceedings” as those not under common law or chancery practice.
Smuth v. Bayer Corp. (564 U.S. 299 (2011)): Supported the principle that a defendant becomes a party when formally named in the complaint, dictating cost-accrual dates.
In re Ray’s Estate (68 Nev. 492, 236 P.2d 300 (1951)): Held that only “aggrieved” parties may appeal.
Old Aztec Mine, Inc. v. Brown (97 Nev. 49, 623 P.2d 981 (1981)): Confirmed that issues not raised below are deemed waived.
Nev. Pol’y Rsch. Inst., Inc. v. Miller (140 Nev., Adv. Op. 69, 558 P.3d 319 (2024)): Reiterated the party-presentation doctrine—courts rely on parties to frame issues.

2. Legal Reasoning

The Court began by confirming its earlier holding in In re DOT that actions for judicial review under NRS 233B.130 are statutory remedies unavailable at common law and therefore qualify as “special proceedings” under NRS 18.020(4). As prevailing parties in a special proceeding, Wellness and Deep Roots were entitled to recover costs.

Turning to apportionment, both Rural and Clark Natural argued they should not reimburse costs for Phase 2, which neither participated in. The Court found neither preserved this argument because:

They did not timely file proper motions to retax costs post-memorandum, as required by NRS 18.110(4).
They failed to submit standalone memoranda of points and authorities when joining other plaintiffs’ motions, in violation of EDCR 2.20(d).

Under the party-presentation doctrine, the arguments were waived.

Finally, on cross-appeal, Deep Roots challenged that costs were awarded only from its answer date. Relying on In re DOT and Smuth v. Bayer, the Court held that costs accrue from the date Deep Roots was first named in the operative complaint. The matter was remanded to recalculate accordingly.

3. Impact

This decision has several implications for Nevada practice:

It reaffirms that judicial review under the Administrative Procedure Act is a “special proceeding” for cost-award purposes.
Litigants must strictly comply with the timing and form requirements of NRS 18.110 and EDCR 2.20 when challenging cost awards; failure to do so results in waiver.
Cost accrual dates are tied to when a party is formally sued, not when it enters an appearance, ensuring fairness in calculating recoverable expenses.

Complex Concepts Simplified

Special Proceeding: A case arising by statute, not by common-law action or chancery, e.g., administrative appeals.
Prevailing Party: The side that wins the litigation or substantially all claims.
Costs: Statutorily recoverable fees and expenses (e.g., filing fees, service of process, transcript costs).
Retax/Motion to Retax Costs: A post-judgment motion asking the court to review and reduce (re-tax) the cost schedule filed by the prevailing party.
Party-Presentation Doctrine: Courts will not consider arguments or issues not timely and properly raised by the litigants.
Cost Accrual Date: The date from which a party may begin to recover costs—here, when first joined in the complaint.

Conclusion

In re: D.O.T. Litigation clarifies three critical points in Nevada civil practice:

Judicial review under the APA is a special proceeding under NRS 18.020(4), entitling prevailing parties to costs.
Procedural rules governing motions to retax and joinders (NRS 18.110; EDCR 2.20) must be followed precisely or cost-related arguments are waived.
Costs accrue from the date a party is first named in a lawsuit, not merely when it files an answer.

These holdings will guide litigants and trial courts in structuring and challenging cost awards in administrative and multi-phase litigation going forward.