(The Return of) Ignatz, by Sam Heldman

Thursday, February 20, 2003

Supreme Court prediction
The second case for Mon. Feb. 24 is Franchise Tax Bd. v. Hyatt. Hyatt used to live in California, til he moved to Nevada. The California tax authorities – the Franchise Tax Board, they call it there – followed him and kept at him for back taxes, auditing him and hitting him with penalties and so forth. Hyatt then sued the Franchise Tax Board in Nevada state court, contending that it had committed various intentional torts (and also the tort of negligence). The Franchise Tax Board, naturally, says "hey, but a California statute gives us complete immunity from lawsuits like this!" And the Nevada Supreme Court says, "sorry, Toto, you're not in California anymore. You're in Nevada, and you're not immune from suits for intentional torts in our courts. Negligence, you can be immune from – but not the intentional mean stuff."

Is it possible that Nevada still holds a grudge from the last time a somewhat similar issue was before the Supreme Court? That was Nevada v. Hall (1979), where the Court held that California state courts could pop the State of Nevada – without regard to Nevada's statute limiting its liability – for a car accident involving a Nevada state employee driving in California. Maybe Nevada thinks that turnabout is fair play.

But Nevada will lose, I think, and the Court will REVERSE. I think that the Court will either say "we were wrong in Nevada v. Hall (note that Chief Justice Rehnquist dissented there, and his old dissents on federalism issues have the habit of becoming majority opinions these days) or at least say "tax is not like car wrecks – this statutory immunity for California's tax authorities is so integral to California's sovereignty that Nevada must not be allowed to override it."

posted by sam 6:46 AM 0 comments


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