U.S. Supreme Court

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On Monday, the U.S. Supreme overruled precedent and held 5-4 that, absent consent, states can’t be sued by private parties in the courts of another state.

Justice Clarence Thomas wrote the majority opinion overruling the 1979 Supreme Court decision Nevada v. Hall. “Stare decisis does not compel continued adherence to this erroneous precedent,” Thomas wrote.

Writing in dissent, Justice Stephen G. Breyer argued that overturning well-reasoned decisions undermines stability in the law and “can only cause one to wonder which cases the court will overrule next.”

Thomas’ opinion was joined by Chief Justice John G. Roberts Jr. and Justices Samuel A. Alito Jr., Neil M. Gorsuch and Brett M. Kavanaugh.

The court ruled against microchip inventor Gilbert Hyatt, who had sued the Franchise Tax Board of California in a Nevada court. Hyatt had sued for alleged torts by tax personnel who questioned the timing of his move to Nevada, where there is no state income tax. Hyatt had alleged that investigators harassed him by peering through his windows and examining his trash.

Hyatt had argued that no specific provision in the Constitution explicitly grants states sovereign immunity in another state’s courts. Thomas termed the argument “ahistorical literalism” that ignores constitutional structure and historical understanding.

Nevada v. Hall is contrary to our constitutional design and the understanding of sovereign immunity shared by the states that ratified the Constitution,” Thomas said.

Breyer’s dissent was joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan.

A good argument that the high court got the precedent wrong is by itself not reason enough to scrap settled precedent, Breyer argued. When a decision is not obviously wrong, a court is obviously wrong to overrule it, he wrote.

“To overrule a sound decision like Hall is to encourage litigants to seek to overrule other cases; it is to make it more difficult for lawyers to refrain from challenging settled law; and it is to cause the public to become increasingly uncertain about which cases the court will overrule and which cases are here to stay,” Breyer wrote.

The dispute is on a return trip to the Supreme Court. The Supreme Court ruled in 2003 that Nevada is not required to give full faith and credit to California statutes providing the tax board with immunity from suit. On the case’s second trip to the Supreme Court in 2016, the justices split 4-4 on whether to overrule Nevada v. Hall but decided a second issue concerning a cap on damages. On remand, Hyatt was awarded $100,000 in damages on two claims, considerably less than the $389 million in damages he was initially awarded.

The case is Franchise Tax Board of California v. Hyatt.

See also:

ABAJournal.com: “Chemerinsky: What SCOTUS rulings are we still waiting for?”