Paws Up Ranch, LLC v. Martin, 463 F.Supp.3d 1160

Background:

Plaintiffs (Paws Up Ranch, LLC and related entities) employed Defendant Jonathan Martin under an Employment Agreement and a separate Confidentiality, Non‑Solicitation and Non‑Compete Agreement effective December 22, 2015.
The noncompete barred employment with hospitality organizations within 300 miles of Missoula County, Montana for three years after termination.
Martin left Paws Up in April 2017 and later began working at The Ranch (within ~50 miles), prompting Plaintiffs to seek enforcement and injunctive relief.
Nevada enacted NRS 613.195 (including §613.195(5), the "blue‑pencil" provision) effective June 3, 2017, which directs courts to revise and enforce unreasonable noncompetes rather than void them.
Plaintiffs asked the federal court to certify questions about §613.195(5)'s timing/retroactivity to the Nevada Supreme Court; the district court denied certification and held §613.195(5) cannot be applied to this pre‑enactment noncompete because such application would be impermissibly retroactive; the court lifted the discovery stay and permitted expedited dispositive briefing.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether NRS 613.195(5) applies to noncompetes entered before June 3, 2017 when enforcement occurs after enactment	§613.195(5) is remedial; it applies when enforcement is sought after enactment, so statute governs	Applying the statute to a pre‑enactment agreement would be retroactive and impermissible	Applying §613.195(5) to this 2015 agreement would be retroactive; court refuses to apply it because Legislature did not clearly intend retroactivity
Whether §613.195(5) is remedial (procedure) or substantive (creates new right/duty)	The statute is procedural/remedial—allows courts to effectuate parties' intent, not create substantive rights	The statute creates a new judicial duty/right to rewrite and enforce covenants, so it is substantive	Court finds the statute creates a substantive change (a new duty/right to revise covenants), supporting conclusion of retroactive effect
Applicability of Golden Rd. (whether an overbroad noncompete is wholly unenforceable)	Golden Rd. does not prevent blue‑penciling under the statute; the instant covenant is reasonable or, if not, §613.195(5) permits revision	Golden Rd. controls for pre‑statute agreements: an unreasonable provision renders the whole covenant unenforceable; statute cannot be used to save it	Court assumed arguendo the covenant might be unreasonable but held §613.195(5) cannot be used to save a pre‑enactment covenant; thus Golden Rd. would render it unenforceable if unreasonable
Whether to certify questions to the Nevada Supreme Court	Certification appropriate because Nevada law on retroactivity/§613.195(5) is outcome determinative	Certification unnecessary; Nevada precedent controls and issue may be moot or fact‑specific	Court denied certification — found existing Nevada precedent provided adequate guidance and certification was unnecessary

Key Cases Cited

Golden Rd. Motor Inn, Inc. v. Islam, 376 P.3d 151 (Nev. 2016) (Nevada Supreme Court held an unreasonable provision renders a noncompete wholly unenforceable)
Sandpointe Apts. v. Eighth Jud. Dist. Ct., 313 P.3d 849 (Nev. 2013) (framework for assessing whether a statute operates retroactively and presumption against retroactivity)
Holdaway‑Foster v. Brunell, 330 P.3d 471 (Nev. 2014) (distinguishes substantive statutes from remedial/procedural ones for retroactivity analysis)
Public Emps.' Benefits Program v. Las Vegas Metro. Police Dep't, 179 P.3d 542 (Nev. 2008) (endorses a commonsense, reliance‑focused approach to retroactivity)
Birth Mother v. Adoptive Parents, 59 P.3d 1233 (Nev. 2002) (no relief may be granted on an agreement that is unenforceable)
Landgraf v. USI Film Prods., 511 U.S. 244 (1994) (federal retroactivity framework considering vested rights, reliance, and fair notice)
Application of Filippini, 202 P.2d 535 (Nev. 1949) (defines vested rights for retroactivity analysis)