Franchise Tax Board of California v. Hyatt
Issues
Should Nevada v. Hall, which held that a sovereign state can be sued in another state’s courts without its consent, be overruled?
The Supreme Court will determine whether or not to overrule Nevada v. Hall, which held that states do not enjoy immunity from suit in the courts of their sister states. Petitioner Franchise Tax Board of California (“Franchise Tax Board” or “the Board”) contends that historical evidence and Hall’s inconsistency with the Court’s other precedent regarding sovereign immunity require that the Court overrule Hall. Franchise Tax Board further argues that preserving Hall’s holding, thereby allowing states to be sued in the courts of other states, infringes on state sovereignty and unfairly burdens state tax collection practices. Respondent Gilbert Hyatt (“Hyatt”) counters that the Constitution does not grant states sovereign immunity in each other’s courts and that Hall is consistent with the Court’s jurisprudence on sovereign immunity. Hyatt also asserts that states have a vested interest in protecting their citizens and providing them with a forum to vindicate their rights—if Hall were overruled, individuals similarly situated to Hyatt would have no means of litigating this type of dispute. From a policy perspective, this case is important because it will determine whether states can be sued in the courts of other states without their consent.
Questions as Framed for the Court by the Parties
Whether Nevada v. Hall, which permits a sovereign state to be hailed into another state’s courts without its consent, should be overruled.
Respondent Gilbert P. Hyatt filed suit against Petitioner Franchise Tax Board of California (“Franchise Tax Board”) in 1998, alleging that it had committed certain intentional torts, causing him damages, and claiming that its tax auditors acted in bad faith while auditing Hyatt’s 1991 and 1992 state tax returns.
Edited by
Additional Resources
- Constitutional Law: Franchise Tax Board v. Hyatt, Harvard Law Review (Nov. 10, 2016).
- Mina Capouet, Individual Income Insights: SCOTUS Grants Cert in California FTB v. Hyatt III, Bloomberg SALT Talk Blog (Jul. 31, 2018).