FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DEL WEBB COMMUNITIES, INC., 

Plaintiff-Appellee, No. 10-15975

v. D.C. No.  2:08-cv-00571-RCJ- CHARLES LESLIE PARTINGTON, DBA GWF M.C. Mojave Construction; John

Wilson, OPINION

Defendants-Appellants. 

Appeal from the United States District Court

for the District of Nevada

Robert C. Jones, District Judge, Presiding

Argued and Submitted

May 13, 2011—San Francisco, California

Filed July 20, 2011

Before: Betty B. Fletcher and Sidney R. Thomas,

Circuit Judges, and Lee H. Rosenthal, District Judge.*

Opinion by Judge Rosenthal

*The Honorable Lee H. Rosenthal, District Judge for the U.S. District

Court for Southern Texas, Houston, sitting by designation. 

9939
COUNSEL

Michael J. Nunez and Edmund G. Farrell, Murchison & Cumming, LLP, Las Vegas, Nevada, for the defendants-appellants.

David N. Frederick, Todd M. Touton, and Jennifer L. Braster,

Lionel Sawyer & Collins, Las Vegas, Nevada, for the

plaintiff-appellee.

OPINION

ROSENTHAL, District Judge:

This is an appeal from an injunction against the owner and

operators of a Nevada company that inspected homes for construction defects and encouraged homeowners to file claims

against their builder under a Nevada statute. Del Webb Communities, Inc., the developer of a retirement community

where the company inspected many homes, sued, alleging that

the defendants’ business practices violated federal and state

law. The district court permanently enjoined the defendants

from “soliciting and/or performing residential inspections

and/or providing inspection reports in . . . Del Webb Nevada

developments, by means of illegal, unlicensed and false practices, such as the representations, express or implied, that

DEL WEBB COMMUNITIES v. PARTINGTON 9943
they, or any of them are (1) properly licensed under Nevada

law to perform structural inspections; (2) properly licensed

under Nevada law . . . to perform, provide or communicate

inspection reports; and/or (3) are acting as representatives or

agents under the authority of Del Webb . . . .” We conclude

that the general prohibition against operating “by means of

illegal, unlicensed and false practices” is too vague to stand.

We affirm the remaining provisions of the injunction but

reject the district court’s reliance on Nevada’s common law

of champerty to create a tort cause of action for which Del

Webb could obtain relief. We therefore vacate the injunction

in part and affirm in part. 

I. Background

M.C. Mojave Construction1 is a sole proprietorship operated by Charles Leslie Partington. Partington had a limited

Nevada B-2 contractor’s license but no structural inspection

license under Chapter 645D of the Nevada Revised Statutes.

John Wilson operated Mojave’s “Chapter 40 Claims Division” under a management and profit-sharing agreement with

Partington. Wilson held neither a contractor’s nor an inspector’s license. The claims division’s name refers to Chapter 40

of the Nevada Revised Statutes, which “governs actions

involving constructional defects.” Shuette v. Beazer Homes

Holdings Corp., 124 P.3d 530, 541 (Nev. 2005). The statute

allows a homeowner who has notified his builder of “constructional defects” to sue the builder for damages if the

builder does not repair the defects within a reasonable time.

See NRS 40.647; D.R. Horton Inc. v. District Court, 168 P.3d

731, 737 (Nev. 2007). Damages under Chapter 40 include the

cost of hiring an expert to “[a]scertain the nature and extent

of the constructional defects.” NRS 40.655(f). Instead of

charging homeowners directly for its inspections, Mojave

relied on this provision to obtain payment. Mojave’s contracts

required homeowners to submit invoices for the inspections to

1The appellants are collectively referred to as “Mojave.” 

9944 DEL WEBB COMMUNITIES v. PARTINGTON
the homebuilder and request payment and stated that Mojave

would collect its inspection fee “if or when” the builder reimbursed the homeowner. The contracts assigned Mojave the

“the right to recover any and all inspection fees from the

builder if the builder fails to pay all the inspection fees.” 

Mojave inspected many homes in Sun City Anthem, a Del

Webb retirement community in Henderson, Nevada.2 Mojave

distributed fliers door-to-door, posted placards, and advertised

through a website. Mojave’s fliers and placards included

statements that the home inspections were “FREE”; referred

to the inspections as “Builder inspections”; referred to the

inspectors as “representatives & experts from both MC

Mojave Construction & your Builder, his subcontractors and

agents”; and stated that it had a “Construction-Lic.” Mojave’s

various advertisements and solicitations also included statements that the inspections were done by both Mojave and the

“Builder’s inspection team” and that construction items

“found to be deficient” would be repaired “at no cost to the

homeowners.” Mojave’s advertisements and solicitations

encouraged homeowners to file Chapter 40 claims seeking

compensation for home repairs against Del Webb. 

Mojave provided homeowners with engagement letters for

several law firms to begin Chapter 40 actions based on defects

listed in the inspection reports that Mojave generated. The

engagement letters required the homeowners to pay all litigation costs if the homeowners terminated the attorney-client

relationship but obtained home repairs. One of the law firms,

Angius & Terry, paid Mojave $500 when a homeowner

signed an engagement letter and $1,300 more if the Chapter

40 action succeeded. This law firm sent Del Webb letters

instructing it to communicate only with the law firm, not the

homeowners, about the homeowners’ claimed construction

2The district court described the extent of the defendants’ activities by

noting their assertion that they were “owed receivables” of over $900,000

for 486 inspections performed, mostly in Del Webb properties. 

DEL WEBB COMMUNITIES v. PARTINGTON 9945
defects, even though Del Webb provided ten-year warranties

for its homes beginning in 2001. 

Del Webb sued Partington d/b/a Mojave and Wilson in

Nevada federal court, seeking damages and injunctive relief.

The district court preliminarily enjoined Mojave from conducting further inspections. In ruling on summary judgment

motions, the district court held that Mojave’s agreements violated Nevada’s common-law prohibition against champerty

and maintenance, based on Mojave’s use of its own funds and

resources to instigate and prosecute Chapter 40 actions in

which it had no interest and based on the requirement in

Mojave’s contracts with homeowners that they pay Mojave’s

fees from the amounts obtained from Del Webb. The district

court also held that Mojave was required to have a Chapter

645D license to perform its inspections and that Mojave had

falsely represented in its advertising and solicitations that it

had such a license. 

The district court issued a permanent injunction. The

court’s findings of fact and conclusions of law included that

Mojave committed a tort by violating Nevada’s common-law

prohibition against champerty; violated the Nevada Deceptive

Trade Practices Act by performing inspections without the

license required under Chapter 645D; violated both the

Nevada Deceptive Trade Practices Act and the Lanham Act

by representing that the home evaluations were free and that

Mojave was affiliated with Del Webb; and tortiously interfered with Del Webb’s warranty contracts with homeowners

by instructing Del Webb to communicate only with the lawyers filing the Chapter 40 action. The permanent injunction

provided: 

IT IS HEREBY ORDERED that Mojave, Partington,

Wilson, and their affiliates and others acting in concert with Defendants, are enjoined from soliciting

and/or performing residential inspections and/or providing inspection reports in Sun City Anthem, or any

9946 DEL WEBB COMMUNITIES v. PARTINGTON
other Del Webb Nevada developments, by means of

illegal, unlicensed and false practices, such as the

representations, express or implied, that they, or any

of them are (1) properly licensed under Nevada law

to perform structural inspections; (2) properly

licensed under Nevada law to . . . perform, provide

or communicate inspection reports; and/or (3) are

acting as representatives or agents under the authority of Del Webb . . . . 

The parties resolved the damages claim and stipulated that

the permanent injunction was the final judgment. Mojave

timely appealed.

II. Jurisdiction and Standard of Review

We have jurisdiction under 28 U.S.C. § 1292(a)(1). Lonberg v. City of Riverside, 571 F.3d 846, 847-48 (9th Cir.

2009). We will reverse an order of injunction only if the district court abused its discretion. Perfumebay.com Inc. v. eBay,

Inc., 506 F.3d 1165, 1173 (9th Cir. 2007). We review factual

findings for clear error and legal conclusions de novo. Id.

III. Analysis

A. The General Prohibition Against “Illegal, 

Unlicensed and False Practices”

[1] Rule 65(d) requires an injunction to “state its terms

specifically” and “describe in reasonable detail . . . the act or

acts restrained.” Fed. R. Civ. P. 65(d)(1) (B)-(C). “The benchmark for clarity and fair notice is not lawyers and judges, who

are schooled in the nuances of [the] law,” but instead the “lay

person, who is the target of the injunction.” Reno Air Racing

Ass’n, Inc. v. McCord, 452 F.3d 1126, 1134 (9th Cir. 2006);

see also Schmidt v. Lessard, 414 U.S. 473, 476 (1974) (“[T]he

specificity provisions of Rule 65(d) are no mere technical

requirements. The Rule was designed to prevent uncertainty

DEL WEBB COMMUNITIES v. PARTINGTON 9947
and confusion on the part of those faced with injunctive

orders, and to avoid the possible founding of a contempt citation on a decree too vague to be understood.”). 

[2] The permanent injunction prohibits the defendants

from “soliciting and/or performing residential inspections

and/or providing inspection reports . . . by means of illegal,

unlicensed and false practices.” The order identifies three prohibited practices as examples — “such as” — of “illegal, unlicensed and false practices”: (1) falsely representing that the

defendants are “properly licensed under Nevada law to perform structural inspections; (2) properly licensed under

Nevada law to . . . perform, provide or communicate inspection reports; and/or (3) are acting as representatives or agents

or under the authority of Del Webb.” Even with these examples, the general prohibition against using “illegal, unlicensed

and false practices” is too vague to be enforceable. The examples of prohibited past conduct do not sufficiently define what

additional future conduct will be covered.3

3

See Union Pac. R.R. Co. v. Mower, 219 F.3d 1069, 1072-73, 1077 (9th

Cir. 2000) (invalidating an injunction preventing the defendant “from disclosing or revealing to any person any information or communication of

a confidential nature, including the information and communications

described in the accompanying findings of fact and conclusions of law,

that he acquired, learned, or helped to generate during his employment by

. . . or while he was a consultant for plaintiff” because it did “not even

come close to satisfying Rule 65’s specificity requirements”); Thomas v.

Cnty. of Los Angeles, 978 F.2d 504, 506, 509 (9th Cir. 1992) (holding that

an injunction requiring the sheriff’s department to “[f]ollow the Department’s own stated policies and guidelines regarding the use of force and

procedures for conducting searches” was too vague); Fed. Election

Comm’n v. Furgatch, 869 F.2d 1256, 1263-64 (9th Cir. 1989) (holding

that an injunction’s vague prohibition could not be upheld even if construed to apply only to “similar violations” of the law, because “we would

have no way of specifying which factual similarities the district court

regarded as relevant”); 11A CHARLES ALAN WRIGHT, ARTHUR R. MILLER, &

MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE § 2955, at 308-09 &

n.25 (2d ed. 1995) (collecting cases). 

9948 DEL WEBB COMMUNITIES v. PARTINGTON
The broad prohibition against “soliciting and/or performing

residential inspections and/or providing inspection reports . . .

by means of illegal, unlicensed and false practices” is vacated.

We next consider the injunction’s specific prohibitions. 

B. The Specific Prohibitions Against Misrepresentations

1. Misrepresenting Mojave’s Affiliation With Del

Webb

During argument, Mojave clarified that it does not challenge the injunction’s prohibition on representing that it is

affiliated with Del Webb or its parent, Pulte. That portion of

the injunction is affirmed. 

2. Misrepresenting Mojave’s License

[3] Mojave does challenge the injunction against representing that it was properly licensed under Nevada law to conduct

its inspections. The district court held that Chapter 645D of

the Nevada Revised Statutes requires a license for the inspections Mojave conducted, and that NRS 41.600 gave Del Webb

standing to challenge Mojave’s practices. 

Nevada statutes are interpreted according to their plain

meaning “unless it clearly appears that the Legislature did not

intend such a meaning.” City of Reno v. Bldg. & Constr.

Trades Council of N. Nev., 251 P.3d 718, 722 (Nev. 2011).

We must not interpret a statute to “render words or phrases

superfluous or make a provision nugatory.” S. Nev. Homebuilders Ass’n v. Clark Cnty., 117 P.3d 171, 173 (Nev. 2005)

(internal quotations omitted). 

[4] The text of Chapter 645D makes its application to

Mojave’s inspections clear. Chapter 645D requires “[a]ny person who . . . engages in the business of, acts in the capacity

of, or advertises or assumes to act as an inspector” to obtain

DEL WEBB COMMUNITIES v. PARTINGTON 9949
a certificate from the State of Nevada. NRS 645D.160(1). An

“inspector” is “a person who examines any component of a

structure and prepares or communicates an inspection report.”

NRS 645D.080. An “inspection report” is “an analysis, opinion or conclusion, regarding the condition of a structure, that

is . . . [p]rovided after an inspection, in a written report, for

or with the expectation of receiving compensation for the

report; and . . . [d]esigned to describe and identify the

inspected systems or structural components of the structure,

their physical condition, any material defect and any recommendation for evaluation by another person.” NRS 645D.070.

Mojave’s argument that it did not provide inspection

reports “with the expectation of receiving compensation for

the report,” see NRS 645D.070(1), is unpersuasive. Mojave

acknowledged that its business plan was to be paid for its

inspection work through the proceeds that homeowners

received from the Chapter 40 claims. Mojave’s contracts

required the homeowner to pay its fees and expenses out of

the Chapter 40 payments received from the homebuilder. The

contracts assigned the homeowners’ right to those payments

to Mojave if the homeowners were unable to collect the full

cost of inspection. Mojave did, therefore, expect ultimately to

receive compensation for its inspection reports. 

NRS 645D.100 contains eight express exceptions. Mojave

relies on the exception for any “person who provides an estimate of cost, repair or replacement of any improvements upon

real estate.” NRS 645D.100(6). Mojave argues that the “[c]ost

of repair or replacement estimates in construction defect

claims were all Mojave’s reports ultimately were used for, if

they were used at all.” Mojave’s argument is not supported by

the language of the exception, which focuses on the person

who provided the inspection report and not on how the report

was ultimately used. Nor is Mojave’s argument supported by

the record, which shows that the inspection reports identified

structural deficiencies but did not provide cost estimates to

9950 DEL WEBB COMMUNITIES v. PARTINGTON
repair or replace them. The exception under section

645D.100(6) does not apply. 

[5] Mojave’s remaining arguments have no basis in Chapter 645’s text. Mojave first contends that Chapter 645D

applies only to inspections conducted for real-estate sales.

The statute explicitly excepts certain inspections unrelated to

real estate sales, which would be unnecessary if the statute

covered only sales-related inspections.4 Mojave next argues

that licensed general contractors’ building-code inspections

do not require a Chapter 645D license. Chapter 645D explicitly excepts from its licensing requirement individuals holding

licenses under Chapters 645, 645C, and 684A. NRS

645D.100(4). There is no exception for general contractors

licensed under Chapter 624. Cramer v. Nev. Dep’t of Motor

Vehicles, 240 P.3d 8, 11-12 (Nev. 2010) (refusing to recognize an unenumerated exception when the statute contained

enumerated exceptions).5 Mojave’s final argument is that

Chapter 645D does not apply to inspections used in Chapter

4For example, NRS 645.100(4) excepts any “person licensed, certified

or registered pursuant to . . . 684A of NRS while performing an act within

the scope of his or her license, certification or registration.” Chapter 684A

addresses licensing requirements for insurance adjusters. Insurance adjustment is not typically performed in conjunction with the sale of property.

5Mojave argues that Chapter 645D must be read in pari materia with

Chapter 624, which regulates general contractors, and with the assumption

that general contractors and not home inspectors usually do building-code

inspections. Section 624.215(5) provides: “This section does not prevent

the Board from establishing, broadening, limiting or otherwise effectuating classifications in a manner consistent with established custom, usage

and procedure found in the building trades.” The section establishes three

classifications of contractors: “general building,” “general engineering,”

and “specialty.” NRS 624.215 (2)-(4). The subsection (5) reference to

“classifications” is to these three classifications and the “Board” is the

State Contractors’ Board. See NRS 624.040. Mojave has not identified any

relevant regulation of general contractors. Mojave’s argument that we

should read Chapter 645D in pari materia with NRS 624.215 provides no

support for excepting general contractors from the licensing requirements

of Chapter 645D. 

DEL WEBB COMMUNITIES v. PARTINGTON 9951
40 actions because the Nevada legislature did not intend

homeowners to pay fees out-of-pocket for inspections to use

in Chapter 40 actions. But Chapter 645D does not regulate the

fees that inspectors charge homeowners or how those fees are

paid. NRS 645D.070, the only provision that mentions compensation, simply states that Chapter 645D’s requirements

apply only to those inspections for which compensation is

expected. The district court correctly Nevada law required

Mojave to obtain licenses under Chapter 645D to perform its

inspections and that Mojave misrepresented that it had the

required license. 

3. Standing

[6] Mojave’s argument that Del Webb lacked standing to

challenge its practices is also unpersuasive. NRS 41.600(1)

provides that “[a]n action may be brought by any person who

is a victim of consumer fraud.” Nev. Power Co. v. District

Court, 102 P.3d 578, 583 n.7 (Nev. 2004) (per curiam). NRS

41.600(2)(e) includes in the definition of “consumer fraud” a

“deceptive trade practice as defined in NRS 598.0915 to

598.0925, inclusive.” NRS 598.0923(1) makes it a deceptive

practice knowingly to conduct one’s “business or occupation

without all required state, county or city licenses.” 

[7] Mojave argues that Del Webb was not “a victim of

consumer fraud” because Del Webb is neither a consumer of

Mojave’s services nor a business competitor. The statute does

not support this argument. The statute allows “any person”

who is a “victim of consumer fraud” to sue. NRS 41.600(1).

The word “consumer” modifies “fraud,” but does not limit

“any person” or “victim.” See W. Surety Co. v. ADCO Credit,

Inc., 251 P.3d 714, 716-18 (Nev. 2011) (declining to limit

“any person” in another Nevada statutory private right of

action for similar reasons). NRS 41.600(2) defines the kinds

of actions that constitute “consumer fraud” not by referring to

a certain type of victim, but by cross-referencing other NRS

9952 DEL WEBB COMMUNITIES v. PARTINGTON
sections defining deceptive trade practices and other offenses.

See NRS 41.600(2). 

Mojave acknowledges that a “victim of consumer fraud”

need not be a “consumer” of the defendant’s goods or services. See S. Serv. Corp. v. Excel Bldg. Servs., 617 F. Supp.

2d 1097, 1100 (D. Nev. 2007) (allowing a business competitor to sue under NRS 41.600). Mojave argues that Southern

Service limits NRS 41.600 standing to consumers and business competitors. Southern Service holds that a business competitor has standing to sue under NRS 41.600 but does not

state that only consumers of a good or service or competitors

providing such a good or service have standing. There is no

basis in the text of NRS 41.600 or in Southern Service to limit

standing to a group broader than consumers but no broader

than business competitors. 

[8] The standing issue turns on whether Mojave’s business

practices “directly harmed” Del Webb. S. Serv. Corp., 617 F.

Supp. 2d at 1099-1100. The district court found that Mojave’s

“illegal structural inspections and provision of reports based

thereon and misrepresentations of authority to perform such

services and of a relationship with Del Webb in dealing with

the public has damaged Del Webb’s relationship with consumers and threatens to continue to harm Del Webb’s business, reputation and good will and to exposure to Chapter 40

litigation based on illegal inspections and inspection reports.”

Neither in its briefing nor at oral argument did Mojave challenge this finding or explain why it was insufficient to establish the direct injury needed to give Del Webb standing to sue.6

6Mojave contends that even if it violated Nevada law, the injunction is

an unconstitutional prior restraint because the inspection reports were

truthful. The challenged portion of the injunction does not prohibit Mojave

from performing inspections or issuing reports. It prohibits Mojave from

representing that it had a license under Chapter 645D when it did not. The

First Amendment does not prohibit such an injunction. See United States

v. Estate Pres. Servs., 202 F.3d 1093, 1106 (9th Cir. 2000); see also Va.

DEL WEBB COMMUNITIES v. PARTINGTON 9953
Because Nevada law provides a basis for the specific prohibitions Mojave challenges, it is unnecessary to address

whether the Lanham Act provides an additional and similar

statutory basis for granting the same relief.7 But the district

court’s reliance on Nevada’s common law of champerty as a

separate basis for the injunction does merit discussion. 

C. Champerty and Maintenance

[9] “Champerty” generally refers to an agreement in which

“ ‘a person without interest in another’s litigation undertakes

to carry on the litigation at his own expense, in whole or in

part, in consideration of receiving, in the event of success, a

part of the proceeds of the litigation.’ ” Schwartz v. Eliades,

939 P.2d 1034, 1036 (Nev. 1997) (per curiam) (quoting Martin v. Morgan Drive Away, Inc., 665 F.2d 598, 603 (5th Cir.

1982)). “Maintenance” refers to a person assisting in litigation

in which he has no interest. Vosburg Equip. v. Zupancic, 737

P.2d 522, 523 (Nev. 1987); see also In re Primus, 436 U.S.

412, 424 n.15 (1978) (“Put simply, maintenance is helping

another prosecute a suit [and] champerty is maintaining a suit

in return for a financial interest in the outcome . . . .” ). The

law on champerty and maintenance begins in antiquity with

the Greek view that even a party’s advocate should have a

personal interest in the litigation, such as family ties. Max

Radin, Maintenance by Champerty, 24 CAL. L. REV. 48, 48-49

(1935).8 In feudal England, clerical opposition to litigation,

State Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S.

748, 771-72 (1976) (“Untruthful speech, commercial or otherwise, has

never been protected for its own sake . . . . The First Amendment . . . does

not prohibit the State from insuring that the stream of commercial information flow cleanly as well as freely.”). 

7The Nevada legislature recently amended NRS 41.600(2), explicitly

allowing a court to grant “[a]ny equitable relief that the court deems

appropriate.” Act of May 19, 2011, § 10, 2011 Nev. Laws Ch. 60. The

amendment took effect July 1, 2011. Del Webb has not argued that NRS

41.600 did not already provide for injunctive relief. 

8

See generally 4 WILLIAM BLACKSTONE, COMMENTARIES, *149-51 (discussing the doctrines in his chapter on “offences against public justice”);

9954 DEL WEBB COMMUNITIES v. PARTINGTON
especially in secular courts; fear that lords would purchase

land with clouded title to aggrandize their estates; and concerns that the wealthy would purchase meritorious claims for

insignificant amounts from plaintiffs too poor to prosecute

them drove royal regulation of champerty and maintenance.

Id. at 64-66. In this country, champerty and maintenance exist

under the law of many states, but the doctrines are “most visible” as a contract defense. See Paul Bond, Comment, Making

Champerty Work: An Invitation to State Action, 150 U. PA. L.

REV. 1297, 1304 (2002) (conducting a fifty-state survey). 

[10] Del Webb did not assert champerty as a contract

defense. Nor is Del Webb a party to the allegedly champertous agreements between Mojave and its homeowners. The

district court nonetheless held that under Nevada common

law, Del Webb had a valid tort claim for champerty and maintenance for which damages and equitable relief could be

awarded. 

[11] “The task of a federal court in a diversity action is to

approximate state law as closely as possible in order to make

sure that the vindication of the state right is without discrimination because of the federal forum.” Gee v. Tenneco, Inc.,

615 F.2d 857, 861 (9th Cir. 1980). Federal courts should “hesitate prematurely to extend the law . . . in the absence of an

indication from the [state] courts or the [state] legislature that

such an extension would be desirable.” Torres v. Goodyear

Tire & Rubber Co., 867 F.2d 1234, 1238 (9th Cir. 1989) (certifying a products liability question to the Arizona Supreme

Court while recognizing the modern trend favoring expansion

of products liability); see also Ryan v. Royal Ins. Co. of Am.,

916 F.2d 731, 744 (1st Cir. 1990) (“[L]itigants who reject a

state forum in order to bring suit in federal court under diverPercy H. Winfield, The History of Maintenance and Champerty, 35 L.Q.

REV. 50 (1919) (providing a historical overview of the doctrines). 

DEL WEBB COMMUNITIES v. PARTINGTON 9955
sity jurisdiction cannot expect that new trails will be

blazed.”). 

[12] We conclude that there was no secure basis for the

district court to predict that the Nevada Supreme Court would

recognize a common-law tort cause of action for damages or

equitable relief asserted by a stranger to an allegedly champertous agreement.9

 The Nevada Supreme Court stated a century ago that “[t]he great weight of authority is to the effect

. . . that the rule rendering contracts void for champerty, cannot be invoked except between the parties to the champertous

agreement in cases where such contract is sought to be

enforced.” Prosky v. Clark, 109 P. 793, 794 (Nev. 1910).

None of the Nevada Supreme Court’s cases recognize champerty and maintenance as a tort. William Lyon Homes, Inc. v.

Partington, No. 2:09-CV-0473-KJD-GSF, 2010 WL

1292296, at *1 (D. Nev. Mar. 30, 2010) (“[T]here are no

reported cases supporting [champerty’s] application to tort

claims or other affirmative relief . . . .” ).10

9Del Webb filed a notice of supplemental authority to bring to our attention Incline Energy, LLC v. Penna Grp., LLC, ___ F. Supp. 2d ___, 2011

WL 1304710 (D. Nev. Apr. 1, 2011). The Incline Energy court explained,

in dicta, that “[i]n addition to providing a cause of action to the target of

a lawsuit that is moved by a champertous agreement, champerty may be

raised as a defense to a contract.” Id. at *1 n.2 (emphasis added). This

decision was issued by the same court whose decision we now review and

rests on the same grounds. For the same reasons set out below, we find

the analysis unpersuasive. 

10Two Nevada Supreme Court cases suggest that champerty may have

a somewhat wider application than Prosky indicates. In Gruber v. Baker,

23 P. 858 (Nev. 1890), the Nevada Supreme Court suggested that champerty provides a defense by a party sued for fraud when the plaintiff’s

interest in the suit arises from a champertous agreement. Id. at 862. But

twenty years later, in Prosky, the Nevada Supreme Court cautioned against

reading Gruber as a champerty case, noting that the rule against transferring fraud claims “is applied even in jurisdictions which do not recognize

the common-law doctrine of champerty and maintenance,” and that “the

great weight of authority” recognizes champerty only as a defense to a suit

to enforce a champertous agreement. Prosky, 109 P. at 794; see also

9956 DEL WEBB COMMUNITIES v. PARTINGTON
The district court concluded that NRS 1.030, which provides that “[t]he common law of England, so far as it is not

repugnant to or in conflict with the Constitution and the laws

of the United States, or the constitution and laws of this state,

shall be the rule of decision in all courts of this state,”

requires the application of the common law of champerty as

it existed before July 3, 1776 unless the Nevada Supreme

Court had expressly rejected it. NRS 1.030 does not call for

the rigid application of common law as it existed before July

3, 1776. Rather, courts must interpret the common law in light

of relevant conditions, which “are not the conditions which

Castleman v. Redford, 124 P.2d 293, 295 (Nev. 1942) (relying on Prosky’s

characterization of Gruber as holding that “a right of action based on fraud

was not assignable” and allowing a plaintiff to sue to collect assigned

accounts). Cases citing Gruber’s discussion of champerty have only considered it as a contract defense. Schwartz, 939 P.3d at 1036; Vosburg

Equip., 737 P.2d at 523; Lum v. Stinnett, 488 P.2d 347, 350 (Nev. 1971).

The second case is Lum v. Stinnett, in which the Nevada Supreme Court

ordered a new trial for a defendant based on a champertous settlement

agreement between the insurers of two codefendants and the plaintiff. 488

P.2d at 350. The settling codefendants remained in the case and the trial,

which focused on the nonsettling defendant’s liability, resulted in a verdict

against that defendant in an amount that relieved the settling defendants

of any obligation to pay the plaintiff. Id. at 348-49. The Nevada Supreme

Court has since clarified that the Lum court was “primarily concerned

about the secret and collusive nature of the agreement.” Norton Co. v. Fergestrom, No. 35719, 2001 WL 1628302, at *2 (Nev. Nov. 9, 2001) (per

curiam) (unpublished); accord In re MGM Grand Hotel Fire Litig., 570

F. Supp. 913, 932 (D. Nev. 1983) (“[T]he court in Lum was concerned

with the collusion at trial . . . .” ). Nevada law no longer prevents insurers

from funding litigation to avoid liability. Norton, 2001 WL 1628302, at *2

(citing NAD, Inc. v. District Court, 976 P.2d 994, 997 (Nev. 1999)). 

Neither Lum nor Gruber recognized a tort claim for champerty and

maintenance. Subsequent case law developments make them poor support

for expanding the doctrines. Other Nevada Supreme Court cases on champerty have not addressed whether it gives rise to a tort cause of action. See

Schwartz, 939 P.2d at 1036-37 (holding that the challenged agreement was

not champertous because the plaintiff had an interest in the suit); Vosburg

Equip., 737 P.2d at 523-24 (same); Aeroville Corp. v. Lincoln Cnty. Power

Dist. No. 1, 290 P.2d 970, 972 (Nev. 1955) (same). 

DEL WEBB COMMUNITIES v. PARTINGTON 9957
existed when the United States Constitution was adopted, or

when Nevada gained statehood, or even when NRS 1.030 was

first enacted, but conditions which exist today.” Rupert v.

Stienne, 528 P.2d 1013, 1017 (Nev. 1974). 

Nevada courts have long recognized that many of the conditions recognized as the basis for champerty and maintenance regulation no longer exist. The first Nevada Supreme

Court case considering champerty acknowledged that the

“English doctrine of maintenance arose from causes peculiar

to the state of society in which it was established,” and that

although once “rigorously enforced, . . . this rigor has . . .

been relaxed [because] . . . [t]he apprehension that justice

would be trodden down if property in action should be transferred is no longer entertained.” Gruber, 23 P. at 862. The

Prosky court similarly recognized that “[t]he reason for the

enactment of the English statutes of champerty and maintenance ha[d] very largely ceased to exist.” Prosky, 109 P. at

794. The Prosky court explained, as noted above, that “the

great weight of authority” recognizes champerty and maintenance only as a defense to enforcing a champertous agreement. Id.

The Gruber court noted that legal reforms such as the statute of frauds and statute of limitations “have all taken place

since the law of maintenance was enacted; and all these have

contributed to prevent groundless and vexatious litigation.”

Gruber, 23 P. at 862. Nevada has enacted statutes, rules, and

codes of conduct that serve purposes previously addressed by

the doctrines of champerty and maintenance. See NEV. R. CIV.

P. 11; NEV. R. PROF’L CONDUCT 3.1 (requiring attorneys not to

“defend a proceeding, or assert or controvert an issue therein,

unless there is a basis in law and fact for doing so that is not

frivolous”); D.R. Horton, Inc. v. Green, 96 P.3d 1159, 1162

(Nev. 2004) (recognizing unconscionability as a bar to a contract’s enforcement). Other state courts have relied on similar

developments to abolish champerty and maintenance altogeth9958 DEL WEBB COMMUNITIES v. PARTINGTON
er.11 These developments make it even more difficult to predict that the Nevada Supreme Court would recognize

champerty as an affirmative tort. 

[13] The consistent trend across the country is toward limiting, not expanding, champerty’s reach.12 See, e.g., Toste

Farm Corp. v. Hadbury, Inc., 798 A.2d 901, 905 (R.I. 2002)

(collecting cases).13 Some states have squarely rejected tort

claims based on champerty.14 Other states have refused to recognize champerty as anything more than a defense by a party

to enforcement of the allegedly champertous agreement,

implicitly rejecting a broader tort remedy.15 “Only a handful

11See, e.g., Osprey, Inc. v. Cabana L.P., 532 S.E.2d 269, 277 (S.C.

2000) (“We are convinced that other well-developed principles of law can

more effectively accomplish the goals of preventing speculation in

groundless lawsuits and the filing of frivolous suits than dated notions of

champerty.”); Saladini v. Righellis, 687 N.E.2d 1224, 1226-27 (Mass.

1997) (“We also no longer are persuaded that the champerty doctrine is

needed to protect against the evils once feared: speculation in lawsuits, the

bringing of frivolous lawsuits, or financial overreaching by a party of

superior bargaining position. There are now other devices that more effectively accomplish these ends.”); McCullar v. Credit Bureau Sys., 832

S.W.2d 886, 887 (Ky. 1992) (“Modern remedies for damages are to be

pursued through such tort actions as malicious prosecution, abuse of process, or wrongful initiation of litigation. The champerty doctrine remains

viable only as a defense in contract actions.”). 

12See Prosky, 109 P. at 794 (looking to other jurisdictions to determine

the scope of champerty); cf. State v. Weddell, 43 P.3d 987, 992 (Nev.

2002) (construing a statute in light of the court’s “concern that the rationale for the rule at common law no longer exists” and “the abandonment

of this common law rule in other states”). 

13In Toste Farm, the Rhode Island Supreme Court left it to the legislature to overrule previous decisions defining the scope of champerty. Toste

Farm, 798 A.2d at 905-06. We are aware of no recent case that has

enlarged champerty’s role beyond that already accepted in the jurisdiction.

14E.g., Alexander v. Unification Church of Am., 634 F.2d 673, 678 (2d

Cir. 1980), abrogation on other grounds recognized by PSI Metals, Inc.

v. Firemen’s Ins. Co., 839 F.2d 42, 43 (2d Cir. 1988) (per curiam); Sec.

Underground Storage, Inc. v. Anderson, 347 F.2d 964, 969 (10th Cir.

1965); Tosi v. Jones, 685 N.E.2d 580, 583 (Ohio Ct. App. 1996). 

15Sneed v. Ford Motor Co., 735 So. 2d 306, 315 (Miss. 1999) (“It is the

champertous contract and not the right of action itself which the contract

DEL WEBB COMMUNITIES v. PARTINGTON 9959
of cases have applied maintenance and champerty as torts in

the United States in the last one hundred years.” VICKI WAYE,

TRADING IN LEGAL CLAIMS 14 (2008). Even those cases have

sharply limited the scope of the tort they recognized. Under

North Carolina law, for example, an assignment of a claim is

not champertous unless the assigned claim is a tort claim; the

assignment gives a stranger to the claim control of that claim,

not merely the right to any proceeds; and the purpose, not

merely the effect, of the stranger’s involvement is to stir up

litigation. See Charlotte–Mecklenburg Hosp. Auth. v. First of

Ga. Ins. Co., 455 S.E.2d 655, 657 (N.C. 1995); Odell v. Legal

Bucks, LLC, 665 S.E.2d 767, 775 (N.C. Ct. App. 2008). “[A]n

outsider’s involvement in a lawsuit does not constitute champerty or maintenance merely because the outsider provides

financial assistance to a litigant and shares in the recovery.”

Odell, 665 S.E.2d at 775. Illinois law requires the allegedly

improper agreement to have caused meritless litigation.

Medallion Prods., Inc. v. H.C.T.V., Inc., No. 06 C 2597, 2007

WL 1022010, at *4 (N.D. Ill. Mar. 29, 2007) (citing Weigel

Broad. Co. v. Topel, No. 83 C 7921, 1985 WL 2360, at *6

(N.D. Ill. Aug. 21, 1985)). As noted, no Nevada state court

has recognized even such a limited tort. The district court’s

approach nonetheless predicts that the Nevada Supreme Court

would recognize a tort action for champerty that would be

among the country’s most expansive. 

[14] There was no adequate basis, in short, for the federal

district court, applying Nevada law, to recognize a tort claim

avoids, and, therefore, defendant cannot avail himself of the champertous

agreement as a defense to the action.” (quoting Calhoun Cnty. v. Cooner,

118 So. 706, 707 (Miss. 1928))); Robertson v. Town of Stonington, 750

A.2d 460, 463 (Conn. 2000) (citing Perry v. M.M. Puklin Co., 123 A. 28,

30 (Conn. 1923)); Rolleston v. Cherry, 487 S.E.2d 354, 359 (Ga. Ct. App.

1997) (citing Ellis v. Smith & Bussey, 37 S.E. 739, 742 (Ga. 1900)); Agar

Sch. Dist. No. 58-1 Bd. of Educ. v. McGee, 527 N.W.2d 282, 288 (S.D.

1995); Mitchell v. Amerada Hess Corp., 638 P.2d 441, 445 (Okla. 1981)

(citing Aaronson v. Smiley, 285 P. 59, 61 (Okla. 1929)). 

9960 DEL WEBB COMMUNITIES v. PARTINGTON
for champerty as a basis for issuing the injunction in this case.

Although the injunction is affirmed in part, that affirmance is

not based on the district court’s conclusion that the common

law of champerty supported this relief. 

The district court’s injunction is VACATED in part and

AFFIRMED in part. 

Each party will bear its own costs on appeal.

DEL WEBB COMMUNITIES v. PARTINGTON 9961