Document: 538 U.S. 488 FRANCHISE TAX BOARD OF CALIFORNIAv.HYATT ET AL. No. 02-42. Supreme Court of United States. Argued February 24, 2003. Decided April 23, Respondent Hyatt's (hereinafter respondent) "part-year" 1991 California income-tax return represented that he had ceased to be a resident and become Nevada in October 1991, shortly before received substantial licensing fees. Petitioner Franchise Tax Board (CFTB) determined was until 1992, accordingly issued notices proposed assessments for 1992 imposed civil fraud penalties. filed suit against CFTB state court, alleging directed numerous contacts at committed negligence intentional torts during the course its audit respondent. In motion summary judgment or dismissal, argued court lacked subject matter jurisdiction because full faith credit other legal principles required apply law immunizing from suit. Upon denial motion, petitioned writ mandamus ordering dismissal. The latter ultimately granted petition part denied it part, holding lower should have declined exercise over underlying claim under comity principles, but tort claims could proceed trial. Among things, noted immunizes agencies suits discretionary acts not within scope employment held affording statutory immunity with respect would contravene Nevada's interest protecting citizens injurious bad by sister States' government employees. Held: Full Faith Credit Clause, U. S. Const., Art. IV, § 1, does require give California's statutes providing tax agency command "is exacting" final rendered adjudicatory authority persons governed judgment, Baker v. General Motors Corp., 522 222, 233, is less demanding choice laws. Clause compel State substitute States own dealing concerning which competent legislate. E. g., Sun Oil Co. Wortman, 486 717, 722. undoubtedly legislate alleged here, which, claimed, injured one borders. argues unpersuasively this adopt "new rule" mandating extend State's statutorily recaptured sovereign when refusal do so interfere capacity fulfill responsibilities. has, past, appraised balanced interests invoking resolve conflicts between overlapping laws coordinate See, e. Bradford Elec. Light Clapper, 286 145. However, balancing-of-interests approach quickly proved unsatisfactory abandoned it, Allstate Ins. Hague, 449 302, 308, n. 10, 322, 6, 339, recognizing, instead, frequently case can lawfully either contrary another, supra, 727. has already ruled forum where such application violate legitimate public policy. Hall, 440 410, 424. There no constitutionally significant distinction degree allegedly tortious here Hall are related core function. sovereignty foreign command, presented exhibited "policy hostility Acts" State. Carroll Lanza, 349 408, 413. sensitively applied healthy regard status, relying on contours as benchmark analysis Pp. 494-499. Affirmed. O'CONNOR, J., delivered opinion unanimous Court. CERTIORARI TO THE SUPREME COURT NEVADA. Felix Leatherwood, Deputy Attorney California, cause petitioner. With him briefs were Bill Lockyer, General, Manuel M. Medeiros, Solicitor, David Chaney, Senior Assistant William Dean Freeman, Lead Supervising General. H. Bartow Farr III respondents. brief Peter C. Bernhard Donald J. Kula.* JUSTICE O'CONNOR 1 We certiorari whether Court's statute collection violates Article Constitution. conclude not, we therefore affirm 2 * Gilbert P. Hyatt income 1991. App. Pet. Cert. 54. return, respondent Nevada. 1993, petitioner commenced an determine underpaid taxes. Ibid. focused respondent's changed residency receiving fees certain patented inventions computer technology. 3 At conclusion audit, 3, taxes Id., 56-57, 58-59. protested penalties through CFTB's administrative process. See Cal. Rev. & Tax. Code Ann. §§ 19041, 19044-19046 (West 1994). 4 On January 1998, protest ongoing lawsuit Clark County District alleges "numerous continuous ... Nevada" several including invasion privacy, outrageous conduct, abuse process, fraud, negligent misrepresentation. 51-52, seeks punitive compensatory damages. 51-52. He also sought declaratory "confirm[ing] [his] status effective September 26, 1991," id., 51, dismissed lack 16, 1999, 93-95. 5 During discovery phase lawsuit, mandamus, alternative, prohibition, challenging orders. While pending, or, dismissal jurisdiction. immunity, credit, law, comity, exhaustion all which: "Neither entity nor employee liable injury caused by: 6 "(a) Instituting any judicial proceeding action incidental assessment [or] 7 "(b) An act omission interpretation relating tax." Govt. 860.2 1995). 8 prompting file second This case, prohibition limiting arising out conduct occurred 9 June 13, 2001, petition, first moot, ordered enter favor CFTB. 38-43. 4, 2002, however, rehearing, vacated prior ruling, part. 5-18. "should principles" 7. 10 both generally waived their "have extended waivers employees except expressly provide immunity." 9-10 (citing Nev. Stat. 41.031 (1996); 5; 820 1995)). Whereas conferred employment, acknowledged "California provided [CFTB] complete 1995) Mitchell Board, 183 3d 1133, 228 Rptr. 750 (1986)). To apply, comity. 11 Though recognized doctrine "an accommodation policy, courts voluntarily effect decisions another deference respect, promote harmonious interstate relations," duty "would policies interests," giving "due duties, obligations, rights convenience citizens." 11. "An investigation considered function," observed, "and provides [own] performance function even if discretion abused." 12. "[A]ffording acts," concluded, "does case." "the district jurisdiction" torts, "affording Because allow taken faith, employment," "Nevada's states' employees" accorded greater weight "than policy favoring taxation agency." 12-13. 12 Constitution requires suit, 537 946 (2002), now affirm. II 13 Constitution's provides: "Full shall given each Acts, Records, Proceedings every And Congress may general Laws prescribe Manner Records proved, Effect thereof." 1. As explained, "[o]ur precedent differentiates owed (legislative measures common law) judgments." 232 (1998). "[a] judgment," "`a states legislate.'" 722 (1988) (quoting Pacific Employers Industrial Accident Comm'n, 306 493, 501 (1939)). 14 "competent legislate" "`[F]or substantive selected permissible manner, must contact aggregation contacts, creating interests, neither arbitrary fundamentally unfair.'" Phillips Petroleum Shutts, 472 797, 818 (1985) 312-313 (1981) (plurality opinion)); see S., 822-823. Such manifest case: plaintiff suffered while there; undisputed least some Nevada, Brief 33-34, 16. 413 (1955) ("The occurs certainly concern problems following wake injury"); 503 ("Few matters deemed more appropriately [an] completely power"). 15 contend otherwise. Instead, urges "interfer[e] responsibilities." (internal quotation marks omitted). 16 have, 145 (1932) (holding federal sitting New Hampshire Vermont workers' compensation brought administrator worker killed Hampshire). balancing unsatisfactory. Compare Alaska Packers Assn. Comm'n Cal., 294 532, 550 (1935) State, place hiring claimant's domicile, compensate accident "[n]o persuasive reason" shown requiring occurred), 504-505 need domicile employer employee). Justice Robert Jackson, recounting these cases, aptly "it [is] difficult point field demonstrated candidly confessed guiding standards character than trying what Constitution." — Lawyer's Constitution, 45 Colum. L. (1945). 17 light experience, Clause. opinion); (STEVENS, concurring judgment); (Powell, dissenting). recognized, another." thus "substitute legislate." 501; 232; 722; 818-819. Acknowledging shift, contends demonstrates new rule will protect "core sovereignty" expressed delineating 13. 18 disagree. confronted question recognize legislatively once before. 410 (1979), University involved automobile residents, who named defendant. refused capped damages ground "to surrender limit respondents' recovery $25,000 maximum obnoxious based nonresident motorists recovery." 19 affirmed, holding, first, confer 414-421. ask us reexamine decline invitation petitioner's amici States, Florida et al. Amici Curiae 2, so. Rule 14.1(a); Mazer Stein, 347 201, 206, (1954) ("We reach constitutional questions raised parties"). 20 instead implicates Hall's holding: did observed footnote: 21 "California's poses threat our system cooperative federalism. Suits involving traffic accidents occurring outside hardly occasion, consider different policies, might result." 424, 24. 22 asserts lawsuit's effects lead result: avoid interference "sovereign responsibility" enforcing 23 Our past experience appraising counsels adopting rule. Having "necessarily power authority" sovereigns, 416, weighty easily answered. Yet elevate above those deem rejected "unsound principle unworkable practice" regulation Tenth Amendment turned particular "integral" "traditional." Garcia San Antonio Metropolitan Transit Authority, 469 528, 546-547 (1985). convinced relative soundness practicality similar here. 24 Even inclined embark competing present occasion principled university employee's accident, issue agency's audit. sure, promulgate enforce essential attribute sovereignty. Bd. Postal Service, 467 512, 523 (1984) ("`[T]axes life-blood government'" Bull 295 247, 259-260 (1935))). But educational mission described. Cf. Brown Education, 483, 493 ("[E]ducation perhaps most important local governments"). 25 If compare function, left ponder relationship educating, hand, intrusions collecting taxes, other. discern relationships. extent complains burdens expense out-of-state litigation, diversion resources away functions, distinguish agencies. 26 command. analysis. 10-13. 27 short, heed lessons learned result (1932), progeny. Without rudder steer us, 28 affirmed. 29 It ordered. Notes: Briefs ofamici curiae urging reversal Richard Dornan, Florida, Jonathan A. Glogau, Barbara Ritchie, Acting Alaska, Thomas R. Keller, Hawaii, Attorneys respective jurisdictions follows: Ken Salazar Colorado, Blumenthal Connecticut, Jane Brady Delaware, James Ryan Illinois, Steve Carter Indiana, G. Steven Rowe Maine, Joseph Curran, Jr., Maryland, Jennifer Granholm Michigan, Mike Moore Mississippi, McGrath Montana, Wayne Stenehjem North Dakota, Betty D. Montgomery Ohio, Anabelle Rodríguez Puerto Rico, Mark Shurtleff Utah, Sorrell Vermont, Jerry W. Kilgore Virginia, Darrell V. McGraw, West Virginia; Multistate Commission Frank Katz; National Governors Association Ruda I. Crowley. Sharon Browne Legal Foundation amicus affirmance.

Category: 10