January 9, 2019
WRIT OF CERTIORARI TO THE SUPREME COURT OF NEVADA
Hyatt sued petitioner Franchise Tax Board of California
(Board) in Nevada state court for alleged torts committed
during a tax audit. The Nevada Supreme Court rejected the
Board's argument that the Full Faith and Credit Clause
required Nevada courts to apply California law and immunize
the Board from liability. The court held instead that general
principles of comity entitled the Board only to the same
immunity that Nevada law afforded Nevada agencies. This Court
affirmed, holding that the Full Faith and Credit Clause did
not prohibit Nevada from applying its own immunity law. On
remand, the Nevada Supreme Court declined to apply a cap on
tort liability applicable to Nevada state agencies. This
Court reversed, holding that the Full Faith and Credit Clause
required Nevada courts to grant the Board the same immunity
that Nevada agencies enjoy. The Court was equally divided,
however, on whether to overrule Nevada v. Hall, 440
U.S. 410, which held that the Constitution does not bar suits
brought by an individual against a State in the courts of
another State. On remand, the Nevada Supreme Court instructed
the trial court to enter damages in accordance with
Nevada's statutory cap. The Board sought certiorari a
third time, raising only the question whether Nevada v.
Hall should be overruled.
Nevada v. Hall is overruled; States retain their
sovereign immunity from private suits brought in courts of
other States. Pp. 4-18.
(a) The Hall majority held that nothing
"implicit in the Constitution" requires States to
adhere to the sovereign immunity that prevailed at the time
of the founding. 440 U.S., at 417-418, 424-427. The Court
concluded that the Founders assumed that "prevailing
notions of comity would provide adequate protection against
the unlikely prospect of an attempt by the courts of one
State to assert jurisdiction over another."
Id., at 419. The Court's view rested primarily
on the idea that the States maintained sovereign immunity
vis-a-vis each other in the same way that foreign nations do.
(b) Hall's determination misreads the historical
record and misapprehends the constitutional design created by
the Framers. Although the Constitution assumes that the
States retain their sovereign immunity except as otherwise
provided, it also fundamentally adjusts the States'
relationship with each other and curtails the States'
ability, as sovereigns, to decline to recognize each
other's immunity in their own courts. Pp. 5-16.
(1) At the time of the founding, it was well settled that
States were immune from suit both under the common law and
under the law of nations. The States retained these aspects
of sovereignty, "except as altered by the plan of the
Convention or certain constitutional Amendments."
Aldenv. Maine, 527 U.S. 706, 713. Pp. 6-9.
(2) Article III abrogated certain aspects of the States'
traditional immunity by providing a neutral federal forum in
which the States agreed to be amenable to suits brought by
other States. And in ratifying the Constitution, the States
similarly surrendered a portion of their immunity by
consenting to suits brought against them by the United States
in federal courts. When this Court held in Chisholm v.
Georgia, 2 Dall. 419, that Article III extended the
federal judicial power over controversies between a State and
citizens of another State, Congress and the States acted
swiftly to draft and ratify the Eleventh Amendment, which
confirms that the Constitution was not meant to "rais[e]
up" any suits against the States that were
"anomalous and unheard of when the Constitution was
adopted," Hans v. Louisiana, 134 U.S. 1, 18.
The "natural inference" from the Amendment's
speedy adoption is that "the Constitution was
understood, in light of its history and structure, to
preserve the States' traditional immunity from private
suits." Alden, supra, at 723-724. This view of
the States' sovereign immunity accorded with the
understanding of the Constitution by its leading advocates,
including Hamilton, Madison, and Marshall, when it was
ratified. Pp. 9-12.
(3) State sovereign immunity in another State's courts is
integral to the structure of the Constitution. The problem
with Hyatt's argument-that interstate sovereign immunity
exists only as a matter of comity and can be disregarded by
the forum State-is that the Constitution affirmatively
altered the relationships between the States so that they no
longer relate to each other as true foreign sovereigns.
Numerous provisions reflect this reality. Article I divests
the States of the traditional diplomatic and military tools
that foreign sovereigns possess. And Article IV imposes
duties on the States not required by international law. The
Constitution also reflects alterations to the States'
relationships with each other, confirming that they are no
longer fully independent nations free to disregard each
other's sovereignty. See New Hampshire v.
Louisiana, 108 U.S. 76, 90. Hyatt's argument is
precisely the type of "ahistorical literalism" this
Court has rejected when "interpreting the scope of the
States' sovereign immunity since the discredited decision
in Chisholm." Alden, supra, at 730. Moreover,
his argument proves too much. Many constitutional doctrines
not spelled out in the Constitution are nevertheless implicit
in its structure and supported by historical practice,
e.g., judicial review, Marbury v. Madison,
1 Cranch 137, 176-180. Pp. 12-16.
(c) Stare decisis is" 'not an inexorable
command, '" Pearson v. Cal-lahan, 555 U.S.
223, 233, and is "at its weakest" when interpreting
the Constitution, Agostini v. Felton, 521 U.S. 203,
235. The Court's precedents identify, as relevant here,
four factors to consider: the quality of the decision's
reasoning, its consistency with related decisions, legal
developments since the decision, and reliance on the
decision. See Janus v. State, County, and Municipal
Employees, 585 U.S., - The first three factors support
As to the fourth, case-specific reliance interests are not
sufficient to persuade this Court to adhere to an incorrect
resolution of an important constitutional question. Pp.
133 Nev., 407 P.3d 717, reversed and remanded.
THOMAS, J., delivered the opinion of the Court, in which
ROBERTS, C. J., and ALITO, GORSUCH, and KAVANAUGH, JJ.,
joined. BREYER, J., filed a dissenting opinion, in which
GINSBURG, SOTOMAYOR, and KAGAN, JJ., joined.
case, now before us for the third time, requires us to decide
whether the Constitution permits a State to be sued by a
private party without its consent in the courts of a
different State. We hold that it does not and overrule our
decision to the contrary in Nevada v. Hall, 440 U.S.
early 1990s, respondent Gilbert Hyatt earned substantial
income from a technology patent for a computer formed on a
single integrated circuit chip. Although Hyatt's claim
was later canceled, see Hyatt v. Boone, 146 F.3d
1348 (CA Fed. 1998), his royalties in the interim totaled
millions of dollars. Prior to receiving the patent, Hyatt had
been a long-time resident of California. But in 1991, Hyatt
sold his house in California and rented an apartment,
registered to vote, obtained insurance, opened a bank
account, and acquired a driver's license in Nevada. When
he filed his 1991 and 1992 tax returns, he claimed
Nevada-which collects no personal income tax, see Nev.
Const., Art. 10, §1(9)-as his primary place of
Petitioner Franchise Tax Board of California (Board), the
state agency responsible for assessing personal income tax,
suspected that Hyatt's move was a sham. Thus, in 1993,
the Board launched an audit to determine whether Hyatt
underpaid his 1991 and 1992 state income taxes by
misrepresenting his residency. In the course of the audit,
employees of the Board traveled to Nevada to conduct
interviews with Hyatt's estranged family members and
shared his personal information with business contacts. In
total, the Board sent more than 100 letters and demands for
information to third parties. The Board ultimately concluded
that Hyatt had not moved to Nevada until April 1992 and owed
California more than $10 million in back taxes, interest, and
penalties. Hyatt protested the audit before the Board, which
upheld the audit after an 11-year administrative proceeding.
The appeal of that decision remains pending before the
California Office of Tax Appeals.
1998, Hyatt sued the Board in Nevada state court for torts he
alleged the agency committed during the audit. After the
trial court denied in part the Board's motion for summary
judgment, the Board petitioned the Nevada Supreme Court for a
writ of mandamus ordering dismissal on the ground that the
State of California was immune from suit. The Board argued
that, under the Full Faith and Credit Clause, Nevada courts
must apply California's statute immunizing the Board from
liability for all injuries caused by its tax collection. See
U.S. Const., Art. IV, §1; Cal. Govt. Code Ann.
§860.2 (West 1995). The Nevada Supreme Court rejected
that argument and held that, under general principles of
comity, the Board was entitled to the same immunity that
Nevada law afforded Nevada agencies-that is, immunity for
negligent but not intentional torts. We granted certiorari
and unanimously affirmed, holding that the Full Faith and
Credit Clause did not prohibit Nevada from applying its own
immunity law to the case. Franchise Tax Bd. of Cat. v.
Hyatt, 538 U.S. 488, 498-499 (2003) (Hyatt I).
Because the Board did not ask us to overrule Nevada v.
Hall, supra, we did not revisit that decision. Hyatt
I, supra, at 497.
remand, the trial court conducted a 4-month jury trial that
culminated in a verdict for Hyatt that, with prejudgment
interest and costs, exceeded $490 million. On appeal, the
Nevada Supreme Court rejected most of the damages awarded by
the lower court, upholding only a $1 million judgment on one
of Hyatt's claims and remanding for a new damages trial
on another. Although the court recognized that tort liability
for Nevada state agencies was capped at $50, 000 under state
law, it nonetheless held that Nevada public policy precluded
it from applying that limitation to the California agency in
this case. We again granted certiorari and this time
reversed, holding that the Full Faith and Credit Clause
required Nevada courts to grant the Board the same immunity
that Nevada agencies enjoy. Franchise Tax Bd. of Cal. v.
Hyatt, 578 __ U.S.__, __ -__ (2016) (slip op., at 4-9)
(Hyatt II). Although the question was briefed and
argued, the Court was equally divided on whether to overrule
Hall and thus affirmed the jurisdiction of the
Nevada Supreme Court. Hyatt II, supra, at __(slip
op., at 1). On remand, the
Supreme Court instructed the trial court to enter damages in
accordance with the statutory cap for Nevada agencies. 133
Nev., 407 P.3d 717 (2017).
granted, for a third time, the Board's petition for
certiorari, 585 U.S. (2018). The sole question presented is
whether Nevada v. Hall should be
v. Hall is contrary to our constitutional design and the
understanding of sovereign immunity shared by the States that
ratified the Constitution. Stare decisis does not
compel continued adherence to this erroneous precedent. We
therefore overrule Hall and hold that States retain
their sovereign immunity from private suits brought in the
courts of other States.
held that the Constitution does not bar private suits against
a State in the courts of another State. 440 U.S., at 416-421.
The opinion conceded that States were immune from such
actions at the time of the founding, but it nonetheless
concluded that nothing "implicit in the
Constitution" requires States "to adhere to the
sovereign-immunity doctrine as it prevailed when the
Constitution was adopted." Id., at 417-418,
424-427. Instead, the Court concluded that the Founders
assumed that "prevailing notions of comity would provide
adequate protection against the unlikely prospect of an
attempt by the courts of one State to assert jurisdiction
over another." Id., at 419. The Court's
view rested primarily on the idea that the States maintained
sovereign immunity vis-a-vis each other in the same way that
foreign nations do, meaning that immunity is available only
if the forum State "voluntarily]" decides "to
respect the dignity of the [defendant State] as a matter of
comity." Id., at 416; see also id., at
Hall majority was unpersuaded that the Constitution
implicitly altered the relationship between the States. In
the Court's view, the ratification debates, the Eleventh
Amendment, and our sovereign-immunity precedents did not bear
on the question because they "concerned questions of
federal-court jurisdiction." Id., at 420. The
Court also found unpersuasive the fact that the Constitution
delineates several limitations on States' authority, such
as Article I powers granted exclusively to Congress and
Article IV requirements imposed on States. Id., at
425. Despite acknowledging "that ours is not a union of
50 wholly independent sovereigns," Hall
inferred from the lack of an express sovereign immunity
granted to the States and from the Tenth Amendment that the
States retained the power in their own courts to deny
immunity to other States. Ibid.
Justice Burger, Justice Blackmun, and Justice Rehnquist
determination that the Constitution does not contemplate
sovereign immunity for each State in a sister State's
courts misreads the historical record and misapprehends the
"implicit ordering of relationships within the federal
system necessary to make the Constitution a workable
governing charter and to give each provision within that
document the full effect intended by the Framers."
Id., at 433 (Rehnquist, J., dissenting). As Chief
Justice Marshall explained, the Founders did not state every
postulate on which they formed our Republic-"we must
never forget, that it is a constitution we are
expounding." McCulloch v. Maryland, 4 Wheat.
316, 407 (1819). And although the Constitution assumes that
the States retain their sovereign immunity except as
otherwise provided, it also fundamentally adjusts the
States' relationship with each other and curtails their
ability, as sovereigns, to decline to recognize each
independence, the States considered themselves fully
sovereign nations. As the Colonies proclaimed in 1776, they
were "Free and Independent States" with "full
Power to levy War, conclude Peace, contract Alliances,
establish Commerce, and to do all other Acts and Things which
Independent States may of right do." Declaration of
Independence ¶4. Under international law, then,
independence "entitled" the Colonies "to all
the rights and powers of sovereign states."
Mcllvaine v. Coxe's Lessee, 4 Cranch 209,
integral component" of the States' sovereignty was
"their immunity from private suits." Federal
Maritime Comm'n v. South Carolina Ports Authority,
535 U.S. 743, 751-752 (2002); see Alden v. Maine,
527 U.S. 706, 713 (1999) ("[A]s the Constitution's
structure, its history, and the authoritative interpretations
by this Court make clear, the States' immunity from suit
is a fundamental aspect of the sovereignty which the States
enjoyed before the ratification of the Constitution, and
which they retain today . . ."). This fundamental aspect
of the States' "inviolable sovereignty" was
well established and widely accepted at the founding. The
Federalist No. 39, p. 245 (C. Rossiter ed. 1961) (J.
Madison); see Alden, supra, at 715-716 ("[T]he
doctrine that a sovereign could not be sued without its
consent was universal in the States when the Constitution was
drafted and ratified"). As Alexander Hamilton explained:
"It is inherent in the nature of sovereignty not to be
amenable to the suit of an individual without its consent.
This is the general sense and the general practice of
mankind; and the exemption, as one of the attributes of
sovereignty, is now enjoyed by the government of every State