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Business litigation attorneys in Nevada challenge discriminatory laws

January 6, 2014

Private investigator businesses operating in Nevada faced stringent legislation last year, when the state began to require that such operations maintain a physical place of business within state lines. Allegedly protecting the interests of instate PIs, some business litigation attorneys in Nevada representing clients like Troy Castillo are suggesting something else, according to this article in Business Week online. Castillo is a resident of Palm Springs, California, only a few hours from the Nevada border, and until last year worked as a private detective out of his home. A retired police detective, Castillo and attorneys are arguing that Nevada’s legislation violates constitutional doctrines preventing states from discriminating against out-of-state businesses and individuals.

Business litigation attorneys in Nevada like Robert A. Ryan assert that the licensing law could even threaten free speech and open the definition of “private investigator” to a confusing and potentially threatening reality. Because private investigators are understood as someone paid to find information and pass it along to a client, the Nevada legislation as currently on the books could end up affecting reporters, genealogists, and teachers (among others) to become licensed – and open a PI’s office – before finding and relaying information.

Some attorneys are scoffing at this idea, saying it’s far-fetched and without precedent, but Castillo’s lawyers insist that the possibility shouldn’t be ignored. Castillo’s lawyers “don’t believe that the government should be in licensing at all,” which may give us some insight into his position in taking up Castillo’s case. Like-minded business litigation attorneys in Nevada often jump into regulatory disputes to bring lawsuits against the state on behalf of small business owners, for which Castillo reports he is grateful. Similar suits nationwide have consisted of litigation to allow Benedictine monks to sell low-cost coffins without certification by the state of Louisiana and protests against regulation in the teeth-whitening business nationwide.

The Nevada requirement for private investigators to operate within state lines finds justification in the argument that regulators need to be able to visit PI offices to inspect files, but Castillo’s attorneys suspect that the real rationalization of the law comes with the intent to prevent PI firms that specialize in providing security data from crossing state lines and taking work from businesses based in Nevada. But what about online businesses? Or mobile sites that don’t utilize property for business purposes? Business litigation attorneys in Nevada representing clients whose main investigative services tend toward background checks or human resources verifications argue that their firms don’t need offices, and the legislation is unjustly discriminatory and burdensome.

Requiring businesses to operate from physical locations may have some implications in real estate and tax law, too, Nevada attorneys like Ryan caution. It’s not just about entrepreneurship of PIs and freedom of enterprise—even large corporate firms in investigations operate out of scattered satellite offices consisting of individual’s homes that shouldn’t be based on a physical location requirement. Castillo and his attorneys agree, and he reports that he spends 95% of his time working in the field or from home, and that the pressure to alter his business model is unconstitutional.

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