Franchise Tax Board of California v. Hyatt: Difference between revisions
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'''''Franchise Tax Board of California v. Hyatt''''' (short: '''''Franchise Tax Bd. of Cal. v. Hyatt'''''), 587 U.S. ___ (2019), was a [[Supreme Court of the United States|United States Supreme Court]] case in which the Court held that states have [[Sovereign immunity in the United States|sovereign immunity]] from [[Lawsuit|private suits]] against them in courts of other states without their consent, overruling the 1979 case ''[[Nevada v. Hall]]''. It was the third time that the [[litigant]]s had presented their case to the Court, as the Court had already ruled on the issue in 2003 and 2016. The liberal bloc of the Court dissented, warning for the willingness of the conservative bloc to overrule [[precedent]], saying that the "decision can only cause one to wonder which cases the court will overrule next", |
'''''Franchise Tax Board of California v. Hyatt''''' (short: '''''Franchise Tax Bd. of Cal. v. Hyatt'''''), 587 U.S. ___ (2019), was a [[Supreme Court of the United States|United States Supreme Court]] case in which the Court held that states have [[Sovereign immunity in the United States|sovereign immunity]] from [[Lawsuit|private suits]] against them in courts of other states without their consent, overruling the 1979 case ''[[Nevada v. Hall]]''. It was the third time that the [[litigant]]s had presented their case to the Court, as the Court had already ruled on the issue in 2003 and 2016. The liberal bloc of the Court dissented, warning for the willingness of the conservative bloc to overrule [[precedent]], saying that the "decision can only cause one to wonder which cases the court will overrule next", possibly referring to the Court's [[Abortion_in_the_United_States#Current_legal_status|past rulings on abortion]] (such as ''[[Roe v. Wade]]''). As a result of this ruling, Gilbert Hyatt does not receive $100,000 in [[damages]] from [[California]]. He was originally granted close to $500 million in damages by a [[Nevada]] jury, though this was limited to $100,000 due to rulings by the [[Nevada Supreme Court]] and the U.S. Supreme Court. |
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== Background == |
== Background == |
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Revision as of 00:42, 11 June 2019
| Franchise Tax Bd. of Cal. v. Hyatt | |
|---|---|
 | |
| Argued January 9, 2019 Decided May 13, 2019 | |
| Full case name | Franchise Tax Board of California, Petitioner v. Gilbert P. Hyatt |
| Docket no. | 17-1299 |
| Citations | 587 U.S. ___ (more) |
| Argument | Oral argument |
| Decision | Opinion |
| Case history | |
| Prior | Various cases, in both federal and state courts, including two prior rulings by the U.S. Supreme Court.[n 1] |
| Holding | |
| States have sovereign immunity from private suits against them in courts of other states without their consent. | |
| Court membership | |
| |
| Case opinions | |
| Majority | Thomas, joined by Roberts, Alito, Gorsuch, Kavanaugh |
| Dissent | Breyer, joined by Ginsburg, Sotomayor, Kagan |
| Laws applied | |
| U.S. Const. Amend. XI | |
This case overturned a previous ruling or rulings | |
| Nevada v. Hall (1979) | |
Franchise Tax Board of California v. Hyatt (short: Franchise Tax Bd. of Cal. v. Hyatt), 587 U.S. ___ (2019), was a United States Supreme Court case in which the Court held that states have sovereign immunity from private suits against them in courts of other states without their consent, overruling the 1979 case Nevada v. Hall. It was the third time that the litigants had presented their case to the Court, as the Court had already ruled on the issue in 2003 and 2016. The liberal bloc of the Court dissented, warning for the willingness of the conservative bloc to overrule precedent, saying that the "decision can only cause one to wonder which cases the court will overrule next", possibly referring to the Court's past rulings on abortion (such as Roe v. Wade). As a result of this ruling, Gilbert Hyatt does not receive $100,000 in damages from California. He was originally granted close to $500 million in damages by a Nevada jury, though this was limited to $100,000 due to rulings by the Nevada Supreme Court and the U.S. Supreme Court.
Background
When Gilbert P. Hyatt started earning large sums of money thanks to a computer technology patent,[3] he sold his California house and started renting an apartment in Nevada, a state with no state income tax.[4] Both his 1991 and 1992 tax returns claimed that his primary residence was Nevada. The California Franchise Tax Board ("FTB") completed an audit in 1993 and claimed that Hyatt's primary residence was California in 1991 and 1992, ruling that he owed California $13.3 million in taxes and fraud penalties.[5]
Hyatt filed a protest but after 11 years of administrative proceedings, it was upheld. An appeal is still pending. Hyatt also sued the FTB in Nevada, alleging that he was harassed by the FTB and became subject to unconstitutional invasions of privacy. California's lawyers argued that in accordance with the Full Faith and Credit Clause, Nevada state courts could not hold its tax collectors liable because California law immunizes their tax collectors from liability. The Nevada Supreme Court rejected this argument, citing Nevada v. Hall, and this judgement was affirmed by the U.S. Supreme Court in 2003.[1] Hyatt was then awarded over $490 million in damages by a Nevada jury,[6] which was reduced over the course of several appeals. After this case came before the U.S. Supreme Court again in 2016, the Court split 4-4 on the question if Nevada v. Hall should be overruled, effectively upholding it. The Court did rule that, because Nevada law limits the liability of its state agencies to $50,000 per violation of the law, Nevada state courts could not award Hyatt more than $50,000 per violation, as that would violate the Full Faith and Credit Clause.[2] Consequently, the Nevada Supreme Court held that a new trial was unnecessary, and simply reduced the damages granted to Hyatt to the maximum of $100,000.[4][5][7]
Supreme Court
On March 12, 2018, California lawyers filed a petition for a writ of certiorari, presenting the question:[7]
Whether Nevada v. Hall, 440 U.S. 410 (1979), which permits a sovereign State to be haled into another State's courts without its consent, should be overruled.
The petitioners argued that, because in the 2016 Franchise Tax Bd. of Cal. v. Hyatt case, four justices already voted to overrule Nevada v. Hall (ending in a 4-4 split), the Court should have a new opportunity to review the issue, because it now has nine justices.[7] The Court granted the petition on June 28, 2018. Indiana, together with 44 other states,[n 2] filed an amicus curiae brief in support of the FTB.[8]
Majority opinion
Justice Clarence Thomas wrote the majority opinion, joined by Chief Justice John Roberts, and justices Samuel Alito, Neil Gorsuch and Brett Kavanaugh. He starts by discussing the history of state sovereign immunity. The first point he makes herein is that the Constitution's use of the word "State" reflects certain immunities and that the Founding Fathers have been heard supporting absolute state immunity. He also states that, after the Supreme Court restricted state sovereignty in its Chisholm v. Georgia ruling, there was backlash causing the Eleventh Amendment to be passed.[n 3] From these facts, Thomas concluded that it would make "little sense" if sovereign immunity was not extended to state courts.[9][10] With this conclusion, the Court overruled the 1979 case Nevada v. Hall,[11] in which the Court came to the opposite conclusion.[12]
Some legal experts have criticized the opinion, saying that the foundation of the ruling directly conflicts with the originalist point of view Thomas has expressed throughout the years.[10][13][14]
Dissent
Justice Stephen Breyer wrote a dissenting opinion, joined by justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan. In his dissent, Breyer disputed the historical record set up by Thomas in the majority opinion. He furthermore discussed the importance of precedent, saying that by overruling cases, "the Court produces increased uncertainty", and he also cited Planned Parenthood v. Casey on this topic. He also found that there was not enough reliance on the case to warrant an overruling. Additionally, he sent out a warning, saying: "Today's decision can only cause one to wonder which cases the Court will overrule next", likely referring to past rulings on abortion, which were under pressure now that the Court had a conservative majority.[15][16][12][4][10]
See also
- List of United States Supreme Court cases, volume 587
- Hollingsworth v. Virginia, a decision which held that the Eleventh Amendment is retroactive.
- Hans v. Louisiana, a decision which re-affirmed state immunity in federal courts.
Notes
- ^ In 2003[1] and 2016[2].
- ^ Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
- ^ The Eleventh Amendment only restricts the ability of individuals to bring suit against states in federal court.
References
- ^ a b Franchise Tax Bd. of Cal. v. Hyatt, 538 U.S. 488 (2003).
- ^ a b Franchise Tax Bd. of Cal. v. Hyatt, No. 14-1175, 578 U.S. ___, 136 S. Ct. 1277 (2016).
- ^ Ritter, Ken (March 23, 2014). "Inventor battling U.S. over patents from '70s". USA Today. ISSN 0734-7456. OCLC 556952094. Archived from the original on May 17, 2019. Retrieved May 17, 2019.
{{cite news}}: Unknown parameter|dead-url=ignored (|url-status=suggested) (help) - ^ a b c Savage, David G. (May 13, 2019). "California wins in Supreme Court after 28-year fight with inventor". Los Angeles Times. ISSN 2165-1736. OCLC 3638237. Archived from the original on May 15, 2019. Retrieved May 16, 2019.
{{cite news}}: Unknown parameter|dead-url=ignored (|url-status=suggested) (help) - ^ a b Cadei, Emily (May 13, 2019). "California wins last round of $25 million, 26-year tax fight with wealthy inventor". The Sacramento Bee. ISSN 0890-5738. OCLC 37706143. Archived from the original on May 16, 2019. Retrieved May 17, 2019.
{{cite news}}: Unknown parameter|dead-url=ignored (|url-status=suggested) (help) - ^ "Franchise Tax Board of California v. Hyatt | Oyez". Oyez. Archived from the original on May 14, 2019. Retrieved May 15, 2019.
{{cite web}}: Unknown parameter|dead-url=ignored (|url-status=suggested) (help) - ^ a b c Waxman, Seth P. (March 12, 2018), Petition for a writ of certiorari (PDF), archived from the original (PDF) on May 14, 2019, retrieved March 17, 2019
{{citation}}: Unknown parameter|dead-url=ignored (|url-status=suggested) (help)
This article incorporates public domain material from this U.S government document.
- ^ "Franchise Tax Board of California v. Hyatt". SCOTUSblog. OCLC 983462082. Archived from the original on January 14, 2019. Retrieved May 17, 2019.
{{cite web}}: Unknown parameter|dead-url=ignored (|url-status=suggested) (help) - ^ Franchise Tax Bd. of Cal. v. Hyatt, No. 17-1299, 587 U.S. ___ (2019).
- ^ a b c Re, Richard M. (May 14, 2019). "Opinion analysis: Hyatt fulfills expectations in a surprising way". SCOTUSblog. OCLC 983462082. Archived from the original on May 17, 2019. Retrieved May 17, 2019.
{{cite news}}: Unknown parameter|dead-url=ignored (|url-status=suggested) (help) - ^ Nevada v. Hall, 440 U.S. 410 (1979).
- ^ a b Liptak, Adam (May 13, 2019). "Justices Split Over the Power of Precedent". The New York Times (published May 14, 2019). p. A14. ISSN 0362-4331. OCLC 1645522. Archived from the original on May 14, 2019. Retrieved May 16, 2019.
{{cite news}}: Unknown parameter|dead-url=ignored (|url-status=suggested) (help) - ^ Marty Lederman [@marty_lederman] (May 13, 2019). "The hue & cry of apostasy from the new originalists/textualists should be coming any moment now . . " (Tweet). Retrieved May 17, 2019 – via Twitter.
- ^ Michaelson, Jay (May 14, 2019). "Clarence Thomas Shows How the Supreme Court Would End Roe v. Wade". The Daily Beast. OCLC 907084203. Archived from the original on May 15, 2019. Retrieved May 17, 2019.
{{cite news}}: Unknown parameter|dead-url=ignored (|url-status=suggested) (help) - ^ Barnes, Robert (May 13, 2019). "Supreme Court's conservatives overturn precedent as liberals ask 'which cases the court will overrule next'". The Washington Post (published May 14, 2019). p. A2. ISSN 0190-8286. OCLC 2269358. Archived from the original on May 16, 2019. Retrieved May 17, 2019.
{{cite news}}: Unknown parameter|dead-url=ignored (|url-status=suggested) (help) - ^ Ebeling, Ashlea (May 13, 2019). "Supreme Court Shows It's Ready To Overrule Precedent, Dissent Sounds Alarm In California V. Hyatt". Forbes. ISSN 0015-6914. OCLC 421861393. Archived from the original on May 14, 2019. Retrieved May 15, 2019.
{{cite news}}: Unknown parameter|dead-url=ignored (|url-status=suggested) (help)
Further reading
- Gutoff, Jonathan M. (2017). "Franchise Tax Board of California v. Hyatt: A Split Court, Full Faith and Credit, and Federal Common Law". Roger Williams University Law Review. 22: 248.
- Baude, William (March 2017). "Sovereign Immunity and the Constitutional Text". Virginia Law Review. 103: 1.
- Borchers, Patrick J. (2016). "Is the Supreme Court Really Going to Regulate Choice of Law Involving States". Creighton Law Review. 50: 7.
External links
- Text of Franchise Tax Board of California v. Hyatt, 587 U.S. ___ (2019) is available from: Justia Oyez (oral argument audio) Supreme Court (slip opinion)