Franchise Tax Board of California v. Hyatt

States retain sovereign immunity when suits are brought by private parties in courts of other States, overruling Nevada v. Hall, 440 U.S. 410 (1979).

Petitioner appealed Respondent’s verdict and damages award, arguing the Full Faith and Credit Clause (“FF&CC”) required Nevada courts to apply California law and to immunize Petitioner from tort liability. The Nevada Supreme Court affirmed, holding the general principles of comity entitled Petitioner only to the same immunity afforded to Nevada agencies. The United States Supreme Court affirmed, holding the FF&CC did not prohibit Nevada from applying its immunity law and remanded for damages. Upon remand, the Nevada Supreme Court declined to reduce the award to the tort liability statutory cap applicable to Nevada agencies.  Petitioner sought certiorari. The Court reversed, holding FF&CC required Nevada grant Petitioner the same immunity as Nevada agencies. The Nevada Supreme Court instructed the trial court to follow the statutory cap.  Petitioner sought certiorari a third time, solely on the question of overruling Nevada v. Hall, 440 U. S. 410 (1979), where the Court held the Constitution does not implicitly require States to adhere to sovereign immunity, reasoning the Framers assumed “prevailing notions of comity [provides] adequate protection against … courts of one State [asserting] jurisdiction over another.”  Id., at 419.  This Court overruled Hall, reasoning Hall misinterpreted historical record and Framers’ constitutional design of sovereign immunity; and while the Constitution assumes the States retain sovereign immunity, it also “fundamentally adjusts the States’ relationship with each other and curtails the States’ ability … to decline to recognize each other’s immunity in their own courts.”  REVERSED AND REMANDED.