Supreme Court Overturns 40-Year Precedent in Two-State Dispute

May 13, 2019 by Dan McCue

A divided U.S. Supreme Court Monday overturned a 40-year precedent, ruling one state cannot be sued in the courts of another without its consent.

The decision ends a long-running tax dispute between California officials and a Nevada inventor named Gilbert Hyatt.

Hyatt, a former California resident, had sued the state’s tax agency for what he claimed were its overzealous efforts to collect back taxes from him.

Hyatt won a judgment against the California agency in Nevada courts.

But Justice Clarence Thomas, writing for the court majority, held that state’s retain their sovereign immunity from private lawsuits brought in courts from other states, overturning Nevada v. Hall, a 1979 case in which the high court said exactly the opposite.

Justice Stephen Breyer filed a dissenting opinion, in which Justices Ruth Bader Ginsburg, Sonia Sotomayor, and Elena Kagan joined.The case is Franchise Tax Bd. of Cal. v. Hyatt, U.S., No. 17-1299.

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