Before the Court en banc. Opinion by Justice Douglas.
In this appeal, the Court addressed the preclusive effect of a federal court’s dismissal without prejudice for failure to state a claim when the federal court is sitting in diversity. The Court recognized that its decision in Bower v. Harrah’s Laughlin, 125 Nev. 470, 215 P.3d 718 (2009), needed to be clarified to prevent a conflict with the United States Supreme Court’s decision in Semtek International Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001). The Court clarified that the rule in Bower applies only to decisions of federal courts exercising jurisdiction over federal questions. In cases of diversity jurisdiction, under the Semtek rule, “[d]ecisions rendered when the federal court is sitting in diversity . . . are to be accorded the same claim-preclusive effect as a state court decision in the state in which the federal court sits, unless the state law is ‘incompatible with federal interests.’” 129 Nev. Adv. Op. at 7 (quoting Semtek, 531 U.S. at 507, 508). Because Appellant’s first lawsuit was dismissed in federal court sitting in New Jersey, the Court determined that New Jersey issue-preclusion law should be applied to determine whether her claims in Nevada state court should be precluded. Although the Court determined that the district court erred by applying federal law, it agreed with the result and affirmed the decision pursuant Semtek, its clarification to Bower, and New Jersey law regarding issue preclusion. As an issue of interest to practitioners, the Court also agreed to address the issue of preclusion despite appellant’s failure to raise the issue below to clarify the legal issue raised. Affirmed. (David Stoft, Associate in the Las Vegas office of McDonald Carano Wilson.)
