California Franchise Tax Board v. Hyatt

Whether states have immunity when being sued in another state’s court and whether Nevada v. Hall was wrongly decided by not extending sovereign immunity to sister states.

Petitioner,Franchise Tax Board of the State of California, a state agency, audited Respondent’s 1991 tax return for California after Respondent had moved to Nevada. Respondent sued Petitioner in Nevada state court for intentional torts committed during the audit. Respondent was successful and recovered a judgment of nearly $500 million in damages. Petitioner appealed to the Nevada Supreme Court which refused to grant Petitioner immunity that would have shielded the State of Nevada.

The Supreme Court has granted certiorari to determine if Petitioner should be shielded from suit in the same manner as a local state agency. Petitioner argues the Nevada Supreme Court violated full faith and credit by not granting Petitioner equal protection under Nevada law as given the local State agencies. Alternatively, Petitioner requests that the Supreme Court overturn its decision in Nevada v. Hall, which does not extend sovereign immunity to a State when being sued in another State’s court.