Franchise Tax Bd. of Cal. v. Hyatt
139 S. Ct. 1485
SCOTUS2019Background
- Gilbert Hyatt, a Nevada resident, sued the Franchise Tax Board of California (the Board) in Nevada state court for torts arising from a California tax audit alleging invasions of privacy and other misconduct.
- The Board argued it was immune under California law and that Nevada must apply California immunity under the Full Faith and Credit Clause. Nevada applied Nevada’s immunity rules instead; this Court in Hyatt I held Full Faith and Credit did not require California’s immunity to be applied.
- After a jury verdict and appellate proceedings, this Court in Hyatt II held Full Faith and Credit required Nevada to afford the Board the same immunity Nevada gives its own agencies (i.e., apply Nevada’s statutory cap on damages); the Court was divided on whether Nevada v. Hall should be overruled.
- On remand the Nevada Supreme Court applied Nevada’s cap; the Board sought certiorari solely on whether Nevada v. Hall (holding a State may be sued in another State’s courts) should be overruled.
- The Supreme Court (majority opinion by Justice Thomas) overruled Nevada v. Hall, holding the Constitution preserves interstate sovereign immunity and therefore a State cannot be sued in another State’s courts without consent.
- Justice Breyer dissented (joined by Justices Ginsburg, Sotomayor, and Kagan), defending Hall on historical, structural, and stare-decisis grounds.
Issues
| Issue | Plaintiff's Argument (Hyatt) | Defendant's Argument (Franchise Tax Board) | Held |
|---|---|---|---|
| Whether the Constitution prohibits a State from being sued in another State’s courts without its consent (interstate sovereign immunity) | Hall is wrong; no constitutional bar prevents a forum State from denying immunity—immunity is matter of comity | The Constitution preserves states’ sovereign immunity against private suits in sister-State courts; Hall should be overruled | Overruled Nevada v. Hall; States retain immunity from private suits in other States’ courts |
| Whether historical practice and the Constitution’s structure support interstate immunity | Founding-era practices do not create a constitutional prohibition on forum States denying immunity | Historical common-law and law-of-nations practice plus constitutional structure imply interstate immunity | Court finds historical record and constitutional design support immunity; Hall misread history |
| Whether stare decisis requires leaving Hall intact | Hall is incorrect and inconsistent with structure and precedent; reliance interests insufficient | Even if wrong, Hall is workable and reliance/stability argue for retention | Stare decisis rejected—decision overruled due to flawed reasoning and consistency with related precedent |
| Remedy for Hyatt’s suit after overruling Hall | (Implicit) argue for allowing suit to proceed under Nevada law | Board is immune; Nevada courts cannot entertain Hyatt’s private tort suit against California agency | Judgment against Board reversed; case remanded consistent with immunity ruling |
Key Cases Cited
- Chisholm v. Georgia, 2 U.S. 419 (1793) (early Article III interpretation prompting the Eleventh Amendment)
- McCulloch v. Maryland, 4 U.S. 316 (1819) (constitutional structure and federal supremacy principles)
- Schooner Exchange v. McFaddon, 7 U.S. 116 (1812) (foreign sovereign immunity as matter of host-nation consent)
- The Santissima Trinidad, 7 U.S. 283 (1822) (sovereign immunity rests on comity/consent)
- Hans v. Louisiana, 134 U.S. 1 (1890) (Eleventh Amendment and state sovereign immunity principles)
- Alden v. Maine, 527 U.S. 706 (1999) (state sovereign immunity as integral to constitutional structure)
- Federal Maritime Comm’n v. South Carolina Ports Authority, 535 U.S. 743 (2002) (state immunity in federal-admin forum and historical analysis)
- Franchise Tax Board of California v. Hyatt, 538 U.S. 488 (2003) (Hyatt I: Full Faith and Credit did not compel application of California immunity)
- Republic of Austria v. Altmann, 541 U.S. 677 (2004) (foreign sovereign immunity affirmed as matter of comity)
- Verlinden B. V. v. Central Bank of Nigeria, 461 U.S. 480 (1983) (forum State may decline to grant foreign sovereign immunity)