Warren E. Burger: We will hear arguments next in University of Nevada against Hall. I think you may proceed when you are ready Mr. Dyer.
Michael Dyer: Mr. Chief Justice and may it please the court. The case at Bar results from an automobile accident, which occurred in the State of California. The driver of the automobile was an employee of the State of Nevada, whose presence in California resulted from his employment with the University of Nevada. Neither his status as an employee of the State of Nevada nor his status as being in the course of his employment were contested. There had never been an issue in this case. When the accident was initially filed, the State of Nevada moved to quash service of process on the basis of immunity from suit. The trail court granted that motion; it was upheld by the California Court of Appeals. The California Supreme Court in 1973 decision reported as Hall versus University of Nevada reversed the California Court of Appeals, remanded the matter to the trail court holding that sister States who engage in activities in the State of California have no immunity from suit. The State of Nevada requested certiorari. That request was denied and the matter was returned to the Superior Court for Alameda County, California. At the beginning of the trail, the State of Nevada requested an order limiting any damages which resulted to the statutory limitation contained in Nevada’s waiver sovereign immunity. That limitation being $25,000 per individual or per claimant or in the context of this action $50,000. That motion was denied and the jury returned to verdict of $1,150,000 as against the State of Nevada as a named defendant in this negligence action. The State of Nevada appealed to the California Court of Appeals. The California Court of Appeals sustained the trail court verdict and the jury verdict. The California Supreme Court denied hearing. Certiorari was requested and certiorari issued to the California Court of Appeals. In a capsule, the position of the State of Nevada is that unconcerning states may not be sued in any court in this nation and that where consent is given, the terms, conditions and limitations contained in that consent must be adhered to and that any action tried must proceed according to the terms and limitations of the consent. The holding of the California Court of Appeals is simply that sister States have no immunity from suit in the State of California.
Potter Stewart: As I was reading the briefs in this case, the question that kept recurring to me is; what is the federal issue here? What is the federal question? California has decided that as a matter of its State Law, that a State of the Union does not have sovereign immunity in the California Courts. What is the federal, what is -- why constitutionally, what is the claimant?
Michael Dyer: I would initially respond by first pointing out that this is not a conflicts case. Despite urgings of petitioners --
Potter Stewart: Now why is it just a matter of State Law?
Michael Dyer: The basic constitutional issue that this court must reach is, does one State have the right to determine that it may ignore the sovereign status of its sister States?
Potter Stewart: Now how the constitution would prevent it from doing that? That is my question.
Michael Dyer: The question may it please the court is, what in the constitution would enable it?
Potter Stewart: Well, that's never question. I mean a State can decide as a matter of State Law that its courts can decide or its legislature can decide that it does not have sovereign immunity. And so far as suits its State Courts can go against it, why can't it make the same sort of decision with respect to another state, when sued in its courts?
Michael Dyer: The states of the union would be free to do so; they will be free to make that determination if they are free to treat each other as independent nations. We urge that by entering the constitution, by forming a union, a sisterhood of states. The states gave away their ability to treat each other as independent nations and agreed to treat each other as sister states at all times, acknowledging the status other sisters are sovereign. That limitation is found in the Full Faith and Credit Clause and the decisions of this court, which have held that the Full Faith and Credit Clause apart from requiring Full Faith and Credit be given the judgments stood for the additional principle and I think perhaps more important principle of unifying the states of union.
Warren E. Burger: Well, ordinarily the Full Faith and Credit relates to acts and events, which have occurred within the state which is asking Full Faith and Credit be given to its law, not -- this is an extra territorial effect that you are asking for, it would appear of the Nevada Law.
Michael Dyer: We are not asking for an extra territorial effect in Nevada law. Our position in a nutshell is that any state must acknowledge the status of our sister states as a sovereign.
Warren E. Burger: What particular provision of the constitution, I think Mr. Justice Stewart was probing for that. What particular provision of the constitution tells us that?
Michael Dyer: The constitution, and I'm trying to ask the question Mr. Chief Justice and I'm not trying to side step, but I want to address this question, because I think it is perhaps the most important --
Warren E. Burger: Well, there is some other than the Full Faith and Credit Clause that you are relying on.
Michael Dyer: I think that what the court must keep in mind is that the constitution is a document by which the states granted limited powers to the federal government and agreed upon their relationship with their sister states. The Tenth Amendment to the constitution provided that all powers not granted or surrendered in the constitution would be retained to the states.
Byron R. White: But one of them wasn't immunity from federal suit was it.
Michael Dyer: The founding fathers thought that it was. The court in Chisholm versus Georgia felt that it wasn't.
Byron R. White: Well, no I mean immunity from the suit by the United States.
Michael Dyer: One of the specific powers granted in the constitution was the -- or one of the attributes of sovereignty surrendered was the ability of a state to be sued in the original jurisdiction of this court. That consent is specified in the constitution, there is nothing in the constitution that says the states agree to be sued in the trial court and negligence actions in the trail courts of the sister states. At the time of the formation of the constitution, all the founding fathers felt that the states had the power to be immune from suit. As a matter of fact, the case had been decided recently before that in one U.S was the case of Nathan v. Bradford, I believe is the correct citation. That case involved the State of Pennsylvania attempting to assert jurisdiction over a sister state. This was some two or three months before the constitutional convention and the case was dismissed on the holding that no state may assert jurisdiction over any other state.
William H. Rehnquist: Well, putting to one side the possible arguments you may make by implication from cases like that. Why can't California rely on the Tenth Amendment here just as well or perhaps better than Nevada saying that all power is not delegated somewhere else are reserved to it, so it didn't give up the power to adjudicate claims over other states when it entered the union and so that it's reserved that.
Michael Dyer: It did not give up the authority to adjudicate claims over other states, if in fact it has a right to treat other states as independent nations. It did give up the right to treat other states independent nations. Nowhere in the constitution does it say that State of California may not sue the United States government if one of their employees is involved in a motor vehicle accident. And yet the Tort Claims Immunity or the immunity to federal government, I think would go unquestioned. There is nothing in the constitution that says the states have the right to do that –-
William H. Rehnquist: This is not treated by removal basically. The authority of Congress over the federal courts and the right to remove when a federal officer named a defendant in the State Court.
Potter Stewart: Against the background of the Supremacy Clause.
Michael Dyer: Well, that would be correct, but the point I am trying to make is that there is nothing in the constitution that says that a state has authority to call her sister states to bar, in the very words of this Court and I am quoting from Cunningham versus Macon & Brunswick Railroad, it is 109 U. S. 446. These are the words of the court; it may be accepted as a point of departure unquestioned that neither a State nor the United States can be sued as defendant in any Court in this country without their consent. This position is being consistently followed, it was early enunciated the axiom that the sovereign at that, excuse me that a sovereign and the Court has consistently used the term a sovereign, may not be sued in any Court has been consistently followed. It was initially stated in the case of Beers versus Arkansas in 1857. It has been followed in Hans versus Louisiana, Ex parte Young, Parden v. Terminal Railway, Edelman versus Jordan even alludes the immunity of States from suit.
John Paul Stevens: General Dyer, may I ask you another question about your theory. Supposing instead of this being a tort action, it was a contract action. Say, your state agents had gone over to California and bought $0.5 million worth of the television sets for the use of their universities. Then they went back to Nevada and just decided they wouldn't pay. Could do that be sued?
Michael Dyer: If the contract initially of course --
John Paul Stevens: This was negotiated in California, they had sent people out with authority, issued by the Governor and the State Legislature to go to California and buy a lot of television sets. And they did it in California and then they just refused to pay.
Michael Dyer: Yes, I think they could be sued in that context. And I think they could be sued perhaps even under the Full Faith and Credit Clause, because we are then dealing with rights and obligations created on the laws of another state which the state knowingly entered into and intentionally entered into whereas the State of Nevada at that point would have intentionally and knowingly entered into an agreement in California.
John Paul Stevens: It is the –-
Michael Dyer: A contractual relationship and I think it's important to emphasize that perhaps there may be a distinction as the Court has noted between tort actions of the negligence character, non-intentional torts and other forms of actions. For instance, many of the cases cited by the California Supreme Court dealt with the question or dealt with the ownership of land in one state and the attempt to claim that one state owning land in a sister state and the land owning state trying to claim that they were exempt from taxation laws. And the holding of that entire line of cases is of course is that when a state leaves the area, which is normally the operation of the state. And enters into other functions, at that point, they agreed to be bound by the terms of the area which they have entered, that is when they enter into a proprietary situation they agree to be bound as any other proprietary.
Thurgood Marshall: But you don't argue the case and then say you don't infer the casting aside the sovereign immunity.
Michael Dyer: Perhaps the most leading --
Thurgood Marshall: You have to be rather specific on it.
Michael Dyer: Perhaps the most leading case and that is Kennecott Copper and it held in language that very analogist to Nevada statutory waiver that when a State had stated that we waive our immunity and we will be sued in any Court; that any Court did not mean any Court. Specifically it do not mean federal Courts. In any Court of that state and as the Court as pointed out, it is absolutely necessary that any waiver of immunity be made specifically. And I would urge that it also be made knowingly. And that is perhaps the distinction, because and I know this Court hears us more than we wish.
Thurgood Marshall: But in the contrary case, you said just by sending the man over there would be enough. You certainly don't mean that now, do you?
Michael Dyer: I believe the Court has misinterpreted my statement. I said that --
Thurgood Marshall: Not the Court, me at the behest of my intelligence.
Michael Dyer: Well, Mr. Justice, I believe that you may have misinterpreted my statement, because what I meant to reply for you talking about my response to Mr. Justice Steven's question, when the state enters into an area that is when the state engages in inter-state commerce as a common carrier where authority to regulate has been specifically delegated in entering into a proprietary function, then perhaps you'll say that knowingly, knowingly --
Thurgood Marshall: But the state didn't have anything to do with this car going out except the owner, is that your position?
Michael Dyer: No, our position is that Mr. Bam who was the driver of the car was routinely engaged in the performance of his duties with the University of Nevada; that in the course of those duties, he was requested to go into the State of California to pick up some parts, some television parts for the University of Nevada and that he was involved in an automobile accident. Now based upon that, the California Courts have held that the State of Nevada consented to be sued in unlimited liability. If the State of Nevada consented to be sued in any manner, we urge that we consented by our statutory waiver of sovereign immunity. That when we waived immunity by NRS: Chapter 41 and said we agreed to have our liability adjudicated in the same manner as private parties.
William J. Brennan, Jr.: Are you saying Mr. Dyer that the only -- after all what the Full Faith and Credit Clause says shall be given as to the public acts records and judicial proceedings. The only public act of Nevada that you urge has been denied Full Faith and Credit, is your waiver of sovereign immunity statute in the $25,000 limitation?
Michael Dyer: I think that would be a fair statement --
William J. Brennan, Jr.: That's the only one --
Michael Dyer: I believe that is the only Nevada statute drawn and issued.
William J. Brennan, Jr.: And that's the only extent to which you rely on the Full Faith and Credit Clause?
Michael Dyer: No, that's not correct; we also relied on the Full Faith and Credit Clause, as I stated earlier, because it's our understanding that Full Faith and Credit Clause that, that clause in addition to requiring, the judgments acquired in one state be given effect to another. Unify the states and substituted a command for the principles of comity that is, the clause abrogated the States' rights to treat each others independent nations.
William J. Brennan, Jr.: Well, except Mr. Dyer at least in words. Full Faith and Credit shall be given to each State to the public acts, records and judicial proceedings of every other state, that's the whole of the clause isn't it?
Michael Dyer: That is the entire language of the clause.
William J. Brennan, Jr.: Well, then how do we read into what you have just said?
Michael Dyer: This case, this Court has repeatedly held that the very purpose of the Full Faith and Credit Clause was to alter the status of the individual States' as independent foreign sovereignties. Each free to ignore the rights and proceedings of the other and to make each an integral part of a single nation. Now, so many cases along those lines are of Shea v. Shea or of United Commercial Travelers --
William J. Brennan, Jr.: Yes, but always in the context of whether or not, what we are dealing with the public acts, records and judicial proceedings have you ever stated in that?
Michael Dyer: I think that in addition, an important concept that we are dealing with is Union, sisterhood. Union can only work among individual states who under the Tenth Amendment have retained all their rights, which they had at the time --
William J. Brennan, Jr.: So, even if you didn't have your Sovereign Immunity Limitation Act, you will be making the argument with Full Faith and Credit Clause?
Michael Dyer: If we didn't have our immunity limitation, we would most likely be asserting that we could not be sued under the Doctrine of Sovereign Immunity in and of itself because of the Full Faith and Credit Clause.
William J. Brennan, Jr.: And that the Full Faith and Credit Clause --
Michael Dyer: Because the Full Faith. Yes, Your Honor.
William H. Rehnquist: That is simply because the Nevada Courts have held their sovereign immunity isn't it?
Michael Dyer: Immunity, sovereign immunity as we know it in the English System of jurisprudence does not require a holding by the Courts that exist. It cannot be conveyed by the citizens to the sovereign, it arises from the very nature of sovereignty.
William H. Rehnquist: Supposing that the Supreme Court of Nevada had said there is no longer any sovereign immunity in Nevada. You would not then be able go into California and say even though you can recover a million dollar judgment against the State of Nevada in the Nevada Courts. You can't sue us in California, would do?
Michael Dyer: That's correct. We would not be able to make that argument, but --
William H. Rehnquist: And it does, but so the facts you can make, it doesn't make any difference whether it's a statute or a decisional law in Nevada, does it.
Michael Dyer: Does it make any difference whether it was declared to be invalid by judicial interpretation or whether legislature waived it, except for one. And that is, that when the legislature waived sovereign immunity, they placed a condition on it. And under the decisions of this Court, if there is a condition placed upon the waiver that condition has to be given effect. In essence, our argument is if California attained jurisdiction over us, by our own waiver, they must apply their limitation contained in that waiver. If in fact, we had totally abrogated sovereign immunity, if in fact, the Nevada Supreme Court had held that the doctrine had no viability for the State of Nevada. We cannot argue that California cannot attain jurisdiction over us as any other tortfeasor, but at that point it would have been the Nevada Supreme Court or the Nevada Legislature that made that determination.
William H. Rehnquist: And it could have been that simply this -- I take it if there had been no waiver of sovereign immunity even pro tanto as there has been by the Nevada statute, but the Nevada Supreme Court had held that Nevada continued to adhere the rule of sovereign immunity, you would urge that as a Full Faith and Credit principle that had to apply in California too.
Michael Dyer: If I understand your question Mr. Justice, it's assuming that the Nevada Supreme Court had upheld the principle of sovereign immunity in total?
William H. Rehnquist: Right.
Michael Dyer: And there had been no waiver by the legislature.
William H. Rehnquist: Right.
Michael Dyer: We would at that time urge that the State of California must acknowledge our status as a sovereign and our determination that as a sovereign, we still retain sovereign immunity, it's the status question that's I think is very important in this case and I think the court should be aware that there at least in our mind is a great distinction between the status of a state as a sovereign and the ability to exercise sovereign power. We are not contending that we have the right to legislate the California citizens. We are not contending that we have the right to say that our laws have to be given extra territorial effect. What we are saying is that California as any state, any state must recognize our status as a sovereign that is that we have a sovereign status and that one of the attributes of that status is immunity and once they recognize our status, they must recognize our immunity. And if they obtain jurisdiction over it, it must be pursuant to our consent, which in this could have only been given by our statutory waiver of sovereign immunity and if that's the case, then they have got to give effect to the limitation contained in the statutory waiver.
Byron R. White: So what if there is judgment entered against the state. How would California collect it?
Michael Dyer: In this particular case, California would collect it by executing on our tax accounts, which we maintain in the State of California.
Byron R. White: So you've got money in California, property in California otherwise you could just protect yourself in our own courts.
Michael Dyer: That's exactly right, the only reason that we have property in State of California, I think this is important. Actually there are two reasons. One is because, we are a small state. The State of Nevada has 600,000 people; most of our major businesses are headquartered in our neighboring State of California. Those businesses don't even maintain large bank accounts in Nevada and rather they desire to collect their sales tax as it comes in and when they have to pay it on a quarterly basis, they pay it on a bank draft out of State of California. So, because of the size of the State of Nevada, because of our dependence in the modern business world upon tax revenues coming in from accounts that our businesses wish to maintain in another state. The other state has ability to execute against those accounts and we don't have the ability to rely upon our own courts to protect us. But I might point out to the court that if in fact the respondent's position is correct, it wouldn't make any difference. Whether we had the right protect ourselves, because under the respondents' version of the case, we can be sued as any other person in the State of California and when we are sued, we are subject to unlimited liability and under their theory, we would be required to give Full Faith and Credit to the California judgment not withstanding the fact that it is unequivocally opposed to our state policy.
Byron R. White: Not if you decided that by your own law they had no jurisdiction.
Michael Dyer: Your Honor, I would agree with that statement, but I'm saying that I think respondents urged the opposite. Again, we are back to the key issue in the case and that's consent. Does one state have to consent to be sued by her sister states or can the state simply treat other in any manner which they choose. If they were independent nations under the recent developments in the law of independent nations they could do just that.
Byron R. White: General Dyer, I asked you before about a contract action, you said that would be different. Supposing this were a willful, wonton and malicious tort; would you take the same position?
Michael Dyer: Initially, I would say Mr. Justice that if this were a willful, wonton and malicious tort, it would not be in the course of the employee's employment. And I can't conceive of any such tort, which the State of Nevada could be sued as defendant under the doctrine of respondent's superior on that basis, but if in fact it were a willful, wonton malicious tort, I don't think that fact should be determined to it. If in fact, the State of Nevada could be sued in that theory --
Byron R. White: The State of Nevada sense that is a state militia and take over a part of somebody's private property in the other state, so that would be immune under your theory.
Michael Dyer: That would be incorrect.
Byron R. White: You rely on the dignity of the sovereign not to do anything like that of course.
Michael Dyer: Well, that would be correct, but I might also point out that speaking of the state militia, each year when the State of Nevada National Guard goes to summer camp, we don't have any army basis in our State. Our national guard has to go out to other states, to Washington; to California we take all of our heavy equipment, our tanks.
Byron R. White: They can chop down all the trees and dig up the roads and that will be immune from liability.--
Michael Dyer: Well, what happens if one of those tanks runs into an automobile?
Byron R. White: Was that your view that they could, that the state --
Thurgood Marshall: You are upset that you are not in the State's army --
Michael Dyer: I think that --
Byron R. White: We are simply right --
Michael Dyer: I think the answer to your question Mr. Justice is that if we sent our militia, the State of Nevada sent our militia or our national guard, in the State of California to seize property that would be an act against a state of the union. Albeit, immediately affecting a private land owner, it would be an act against the sovereignty of a sister state and it would first of all be cognizable in this court under the original jurisdiction, it would in fact be an act of war.
Byron R. White: I'm just assuming individual not to the other state, just you go and chop down a lot of trees and hollow away the wood or something like that.
Michael Dyer: If in fact we direct our employees to go in and commit an intentional tort and we have not waived sovereign immunity, it would be our position that --
Potter Stewart: Excuse me.
Michael Dyer: It would be our position that California would be required to recognize our sovereignty that any rights that they might have would be -- had to be taken by the State of the California under the Parens Patriae Doctrine on behalf of their citizens against us in this Court. With the court's permission, I want to reserve the remaining of my time for rebuttal.
William J. Brennan, Jr.: I'd just like to ask you a question for my own, so I can understand it before you sit down Mr. Dyer. How far does your argument go today that there couldn't be a suit at all that any suit would have had to have been brought by the California Plaintiff in RSB County Nevada, since that was the extent of the waiver of sovereignty or sovereignty immunity. Do you take that position?
Michael Dyer: The essence of our position today is that at the time of this action, our waiver was intended to be limited to Courts of the State of Nevada, but if the Court should construe otherwise as the result of the language --
William J. Brennan, Jr.: No, I'm not asking you to talk about what the court might hold, what the court's position might be. I'm asking you your position?
Michael Dyer: Our initial position is that statutory waiver under the Kennecott decision did not constitute jurisdiction or excuse me waiver of immunity in other states but simply in our own courts.
William J. Brennan, Jr.: In RSB County Nevada for a limit of $25,000 period.
Michael Dyer: That would be correct.
William J. Brennan, Jr.: Is that it, that's your position.
Michael Dyer: Yes, sir.
William J. Brennan, Jr.: You got quite a part from the alleged waiver in the California Court.
Michael Dyer: Quite a part from that, that's our initial position.
William J. Brennan, Jr.: All right. I just want to be sure I understood.
Warren E. Burger: Mr. Rowe.
Everett Rowe: Thank you. Mr. Chief Justice. I have a little difficulty in understanding petitioner's position, but I thought what I should do at the outset of my argument is to go through what I think is not involved in this particular case and then get to what I think are really the issues that are involved -- I think first of all.
Warren E. Burger: Let me ask you this before you get launched into it, because it may be relevant. Could you have got jurisdiction of the State of Nevada or its instruments, expect by their consent and their waiver?
Everett Rowe: I think in this particular case, we could have by a reason of this fact and this is one of the theories that we have set forth in the brief that we feel that a sovereignty of the state, its sovereign powers are co-extensive with the geographical limitations of that state and then when that state goes outside of its state and entertains and engages in activities in another sovereign state. In this case California, where the California sovereignty is supreme, that they do not bring with them the prerogatives of a sovereign that Nevada when they come in under those circumstances operate an automobile on the California highway do not have the prerogatives of a sovereign and that therefore they do not have this attribute as he quotes, “The Attribute of Immunity”.
Warren E. Burger: Reference tells us that when Nevada consented when waived, you took the bitter with the sweet that is you took the jurisdiction with the limitation, which Nevada has prescribed.
Everett Rowe: That's his argument, we don't accept that argument, but we feel that if the argument has any basis at all that our state courts would still have their constitutional power of choice of law and similar to the Pearson case, which he cited as authority, which is really directly opposite to his view in the Pearson case, the New York case, they discussed that state has a choice of constitutional right of choice of law and that they may choose certain portions of a statute and reject others in that case, they rejected the Massachusetts limitation of $15,000 on recovery for debt action, and they took other portions of this statute. That is our position here that the constitutional right of choice of law of the State of California would allow them to reject, if you accepted his argument that this is required, would allow California to reject the monitory limitation.
Warren E. Burger: Your client couldn't have sued the State of Nevada in the United States District Court for the Eastern District of California, could it?
Everett Rowe: No, I think that under the present law, as I have been reading these law reviews on both sides and I have been following the arguments, which is a very important constitutional debate that is going on before this Court now with reference to the Eleventh Amendment and Article IV of the Constitution. It would appear that the Federal Court would be precluded from taking jurisdiction.
William H. Rehnquist: Do you see anomaly there in a Federal union that the Courts of the Union are not allowed to assert jurisdiction over the State of Nevada in the situation, but the Courts of a sisters State like California are?
Everett Rowe: Well, I think it's a problem that has arisen by reason of the passage of the Eleventh Amendment and the problems that the Courts have had in dealing with the Eleventh Amendment, but here we are not seeking to federal jurisdiction here this -- I think it is a different case, because this state of Nevada is coming into California outside of its own sovereign jurisdiction and is operating an automobile picking up television parts.
William H. Rehnquist: But presumably it is in the federal jurisdiction whether it's in Nevada or in California.
Everett Rowe: It could be absent -- any restrictions in the constitution to entertain jurisdiction.
Warren E. Burger: Are you content at all that they were not performing a sovereign function when they came into the state of California.
Everett Rowe: Of course picking up television parts as -–
Warren E. Burger: For what purpose -–
Everett Rowe: For a purpose of university or school, I think most cases have held that I won't call it a sovereign activity, I will call it; it could be a governmental function. Usually education has been deemed to be -- an educational function is governmental in nature.
Warren E. Burger: How do you distinguish governmental from sovereign functions?
Everett Rowe: Well, I would make the distinction because I don't think that when Nevada is in California, when it is outside of that area where there is a relationship between governed and governor, that they actually are in the nature of a sovereign.
Warren E. Burger: In other words, they drop their cloak when they crossed the border.
Everett Rowe: Correct and are of course precedent for that in other aspects of case mainly not dealing with motor vehicle accident cases, but dealing with property exemption from taxation. There is the Minnesota case that I have cited in the brief, State versus Hudson where the state –- and this was a governmental function, it was in one case a toll bridge, which was being operated for the highway system, which certainly could be a governmental function. And they claimed that they should be exempt from taxation, because it was a governmental function, however that relief was denied, they say that when that state came into the other state and was present there, then they are no longer -- they lose the cloak of sovereignty, and they are to be treated as any other person within that State. So, I think that is our analysis of the situation.
Byron R. White: Mr. Rowe there aren't very many cases involving the fact situations of this type, are they?
Everett Rowe: I could find none.
Byron R. White: Are you relying on the policy case in anyway, the North Dakota case of some years ago. The California Court cited but you don't cite it in you brief?
Everett Rowe: They cited that -- the District Court of Appeals cited against me, but I always thought that the case actually was in my favor, because it actually gave the right of choice of law in that particular case that dealt with an anchor workman's compensation claim. The District Court of Appeal took great delight in citing that case against me even though I didn't have a chance to argue against it at that time, because it was really submitted without too much oral argument and the Court didn't even ask me about the case at that time. No, I think the Paulus case is indicative of the line of argument that I have regarding constitutional right of the State of California and its choice of law.
Byron R. White: It seems to me to come as post -- factually as any case there is, but you can't really on it very much, you don't cite it.
Everett Rowe: Well, I didn't think it was entirely on point, because it was one of those cases involving workman's compensation laws and you have the Alaska Packers case and the others.
Byron R. White: I guess your opponent doesn't cite it either.
Everett Rowe: No, he doesn't though I won't think he would. Although the Court relied on it in the Court of Appeals, and that's why I had a petition for a hearing in the Supreme Court of the State of California. Another point that I'd like to make –-
Thurgood Marshall: Your theory is that this respondent who was playing it below can get more money in a California Court from Nevada, then Nevada would give him in Nevada.
Everett Rowe: Correct.
Thurgood Marshall: Doesn't that strike you as funny?
Everett Rowe: No, I don't think it really does, because I can see if the x --
Thurgood Marshall: Can you imagine anything like it?
Everett Rowe: Pardon me.
Thurgood Marshall: Can you imagine anything like it?
Everett Rowe: If the accident had happened in Nevada and we had California residence.
Thurgood Marshall: No, no I said if the accident happened in California and you sued Nevada in Nevada.
Everett Rowe: Right.
Thurgood Marshall: You would get $25,000.
Everett Rowe: I think --
Thurgood Marshall: And if you sued in California, you would get the moon.
Everett Rowe: Well, I don't think -- I wouldn't characterize it as the moon, because this young boy suffered severe brain damage and is retarded for the rest of his life.
Thurgood Marshall: To me it is the moon, I don't know, well you are wealthy.
Everett Rowe: Well, I would like -- I'm not even sure that today what Nevada's position is and I duly -–
Thurgood Marshall: Well, as I understand their position.
Everett Rowe: They have done away with --
Thurgood Marshall: They said if you want them to give up their sovereignty, they would give it up on their terms. But, I had terms of 25,000.
Everett Rowe: But I would like to refer to the case that I mailed the letter to the Court about the Turner versus Stags case. And, if one can really see any implicit basic policy that the State of Nevada now has. It seems that they interpreted their statute to have a purpose of putting governmental tortfeasors and non-governmental tortfeasors on the same footing as the language of the Supreme Court of Nevada. They threw out their claim statute, they didn't throw out specifically the limitation on damages, but they threw out the claim statute, the requirements filing a claim, and the basis for the Supreme Court of Nevada doing that was they said that it is not a reasonable classification to -- between government -- to make a distinction between government tortfeasors and non-government tortfeasors. To make a distinction between victims of government torts and victims of non-government torts. Now, that's their policy and in a brief filed with the Supreme Court of the United States, in that case of Turner, the attorney for the -- representing the interest of the political subdivision of the State of Nevada in his brief, in his petition for certiorari and that was 73-489 where this Court denied certiorari. They argued from page eight of the petition for certiorari in that case right in out of the tuner case. More importantly however, the constitutional rationale employed below that's the Supreme Court of the State of Nevada draws into serious question, the constitutionality of the related statutes aimed limiting actions against the state and its political subdivision. Should private and governmental tortfeasors be unconditionally placed on equal footing as determined by the Court by the Supreme Court of Nevada. Statute setting recovery limits, prohibiting punitive damage or exempting from liability actions by the State militia would for the same reason necessarily be found to be repugnant to Equal Protection clause.
William H. Rehnquist: Of course, that isn't the reason relied on by the Supreme Court of California, is it that Nevada itself had abandoned sovereignty.
Everett Rowe: No, I think the basis of their opinion is the basis that I'm arguing here.
Potter Stewart: Mr. Rowe, I understand you to say you had written a letter to the Court about some case?
Everett Rowe: I was going to use that particular case in oral argument, yes. It wasn't delivered.
Potter Stewart: Wasn't delivered?
Everett Rowe: Yeah, I had it delivered to the Court through Federal Express from Santa Fe.
Potter Stewart: I don't seem to have a copy of it.
William H. Rehnquist: You have been reading the ads.
Everett Rowe: Yeah, well he either loses his job, but I relied upon them, and they were supposed to have sent it. It was just a letter that I was going to refer to the case and I can cite it to you again. I sent a copy to counsel, Turner versus Stag -- which -- the Supreme Court of Nevada opinion.
Warren E. Burger: What is the citation?
Everett Rowe: I'll get it for you here. That's Turner versus Staggs, 510 P. 2d. 879. Certiorari denied 414 U.S. 1079.
Potter Stewart: 510 P. 2d. 879.
Everett Rowe: Right. And that case held that the stated object of the Nevada legislation, which was 43-031 that is their basic liability tort claim section, was to put governmental units on equal footing with private tortfeasors. The Supreme Court of Nevada adopting language from Reich versus State Highway Department a Michigan case; stated that this diverse treatment of members of a class along the lines of governmental or private tortfeasors bears no reasonable relationship under today's circumstances to the recognized purposes of the act.
William H. Rehnquist: Mr. Rowe could I ask you a question. Following up on my brother Marshall's question to you. This lawsuit was originally filed in Placer County wasn't it?
Everett Rowe: Well, actually it started in San Francisco with the administrator being appointed in San Francisco of the deceased employee. Then they raised questions concerning the administrator so it was then in Placer County. And under the Nevada statute, their venue statute says that the action may be commenced in the County where the accident occurred and the --
William H. Rehnquist: Under the Nevada venues?
Everett Rowe: Yes, yes it does and then on the appendix.
William H. Rehnquist: Only in Ormsby County if it's --
Everett Rowe: No, there is a sub-division two, it's in the appendix Your Honor. The Nevada statute says that the action has to be instituted in the county in which the accident happened not in the --
Potter Stewart: Even though it is against the state?
Everett Rowe: Even though it is against the state, it is their own provision.
William H. Rehnquist: You felt bound suing in California and going against their principle of sovereign immunity to nonetheless follow the Nevada venue provision.
Everett Rowe: I wasn't -- we were not bound by it, but the case was in the county in which the accident happened until we got a change of venue based upon the convenience of witnesses to Alameda County.
William H. Rehnquist: Which is Oakland?
Everett Rowe: Pardon.
William H. Rehnquist: Which is Oakland?
Everett Rowe: Oakland.
William H. Rehnquist: And I suppose verdicts tend to be higher in Oakland than they do in Placer.
Everett Rowe: Well, I don't know if there is been any statistical study of that but --
William H. Rehnquist: Would you need one?
Everett Rowe: I would think, now the basis for the move and it was very well documented was by reason of convenience of witness, because all of the doctors and witnesses treating this brain damaged child were in the Bay Area and for that reason rather than having them all come from Oakland, San Francisco and that area to Placer County and Auburn, the Court thought that the venue change should be granted. There is another question concerning the -- that the Court is raised -- I was going to start at my very beginning before I -- to try to talk about what is not involved. I don't feel that there is any real constitutional issue involved in this case. We don't have a legislative power of Congress to impose suability against states involved here, which has been a question before this Court and which has caused a great deal of law review articles and interests throughout the nation. And we don't have the question of the amenability of the Federal Government to suits by States that was raised as a specter by petitioner saying that California, if this case was upheld would then be suing the United States Government, because we do have a Supremacy cause of the United States constitution Article VI Section 1 and 2. And I don't think that we are involved here and it's not involved in this case, the question of the judicial power of the Federal Courts vis-à-vis the Eleventh Amendment and the many cases that this Court has dealt with which surround that particular issue. What we think is involved is basically a Full Faith and Credit question at most as raised by the other side. But I think under if you even assume that to be an issue, the place of the tort was State of California. The forum, the law of a forum was California, so we don't have the problem of selecting between the forum and the place of the tort, because they are one in the same. We don't see any State of California, we feel as the constitutional power as I pointed out developed their own conflictive laws doctrine. And that was cited in the Pearson case, which was relied on by counsel or petitioner. I think what he did is he read the old opinion that was later then reversed and then judge Kauffmann wrote with the I think five other judges assenting with him, a new opinion, but I think petitioner misquoted the case saying that we could not base the obligation upon a foreign statute and then only take parts of it, because that was precisely the hearing and the holding on Pearson. They said the state under its constitutional power of choice of law had the right to reject the Massachusetts limitation of damages which was $15,000. So, we think that refusal to apply the limitation on recovery is an exercise of that constitutional right. And as I have discussed before, I don't think there is any compelling state interest demonstrated by Nevada to require California to apply its laws, because one of the Turner versus Staggs case which certainly puts a serious question on the policy of the State of Nevada with regard to treatment of governmental tortfeasors and victims of governmental torts. And also the Nevada constitutional Article IV Section 22 does waive the immunity; it authorizes the legislature to enact laws to allow them to be sued. So, I don't think that he can really argue the fact that this problem of sovereign immunity, because of the waiver in the constitution.
William H. Rehnquist: Well, we could decide the case in your favor by saying that there is no constitutional limitation on the right of California to assert jurisdiction in situations like this. But if we were to conclude along the lines that you have just stated that may be Nevada public policy isn't all that different from the Supreme Court of California. We couldn't affirm the judgment of the Supreme Court of California for the reasons it gave, could we? Because it didn't purport to consider Nevada public policy.
Everett Rowe: Well, I don't know what the basis of affirming, I think that the Supreme Court of California did not discuss Nevada policy. You are correct. It based its opinion upon the fact, the theory that the territory that the action of Nevada outside of its own territories involved in motor vehicle accidents. Driving a motor vehicle on the California State Highways gave the California Court sufficient jurisdiction under their long-arm statute. And there are other cases of course that have held that in the -- with reference to the statutes which of course this Court is familiar with would say that the state certainly has that under its police power the right to enact such a statute. And, I think that one of the questions of the Justice's was, “Well did this man knowingly come in, he was directed to drive into California”. Nevada knew of the statutes of California, which operation of a motor vehicle on their highways constituted an appointment of the Secretary of State of being a person who could be served with process against the defendant.
Thurgood Marshall: Mr. Rowe suppose Nevada just stayed patent and not waived any of its immunity, you couldn't have sued at all, could you?
Everett Rowe: I think we could have because of my theory that when -- and the theory of the Supreme Court of the State of California that when Nevada came into California and conducted operations in the State of California, they no longer had the protection or the status of a sovereign. And without the status of a sovereign, they cannot then raise the concept of sovereign immunity, since only a sovereign can --
Thurgood Marshall: How would they come in as a sovereign, with a crown on as sovereign meeting?
Everett Rowe: Well –-
Thurgood Marshall: We are talking about today.
Everett Rowe: We are talking about today and I think that the cases that I've cited in the brief which discussed that.
Thurgood Marshall: We are talking about where they had no -- they haven't waived their sovereignty by statute of anything.
Everett Rowe: Right and they drive into California.
Thurgood Marshall: Yeah.
Everett Rowe: My theory –
Thurgood Marshall: Your theory is that California drove in -- I mean that the Nevada drove in, but that's not a bad theory but we will go your theory that Nevada drove the car.
Everett Rowe: They came into California once they came into California.
Thurgood Marshall: They waived their sovereign immunity.
Everett Rowe: They didn't even have a status as a sovereign and therefore they didn't have any immunity which they could waive.
Thurgood Marshall: How do you sue them? As soon as you say State of Nevada, you say sovereignty don't you?
Everett Rowe: Well of course they have that --
Thurgood Marshall: Don't you?
Everett Rowe: They have a description.
Thurgood Marshall: Don't you?
Everett Rowe: They have to sue somebody.
Thurgood Marshall: In the state of sovereignty?
Everett Rowe: State is sovereign in Nevada.
Thurgood Marshall: So you sue the sovereignty, don't you?
Everett Rowe: Well, we sue a political entity called --
Thurgood Marshall: You sued Nevada (Inaudible).
Potter Stewart: I think your point is that Nevada is a sovereign within its own and over its own territory, right period.
Everett Rowe: Certainly. It has a right to have its constitution. It has a right to either waive or not waive immunity. It has a right to setup its statutory scheme of waiver, but that's a relationship between the governed and the governor.
Thurgood Marshall: And it is still in high school and yet today. If they waive sovereign immunity isn't it generally understood that you waived it on your own terms.
Everett Rowe: That would be -- I would accept that within the State of Nevada.
Thurgood Marshall: As a general statement.
Everett Rowe: Within the State of Nevada only. Outside of Nevada, I think that the general rules of choice of law of the other state. And its constitutional right of choice of law would apply, because it is not the same situation.
Thurgood Marshall: I understand, your point is they could sue without this statute. They could sue Nevada without the statute.
Everett Rowe: Certainly could, right.
Byron R. White: And I take it, who you would limit in the California's right or your client's right to sue Nevada –- what would have been the case if you had sued California?
Everett Rowe: Could you repeat that question again Your Honor?
Byron R. White: Well, does Nevada have less sovereign immunity than the State of California?
Everett Rowe: No. It would be same as California has the same amount of sovereignty that Nevada has but, the question is where the action –-
Byron R. White: Could California say Nevada has no sovereign immunity in the State, although the State of California does. It has complete sovereignty.
Everett Rowe: There is a concept in the law that California has the supreme sovereignty when Nevada is engaging in activities within its state. And that any power of the State of Nevada would be severe.
Byron R. White: So, what if in the California courts you could sue California only for an amount up to $10,000, let's assume that?
Everett Rowe: For an accident happening in California.
Byron R. White: In California, now could Nevada be sued in the California Courts for more than that or could California decide that yes it could have an unlimited liability.
Everett Rowe: Well, it's an interesting question, we don't have before us.
Byron R. White: Well, I know, but didn't the California Court say that it shouldn't be any better offs in the State of California. So, I wonder what is the rule that California indicated.
Everett Rowe: Well, California of course has no limitation. I really don't know answer to what might happen under those circumstances, but I would and I don't want to hazard a guess because it's not really before us.
Byron R. White: And do you entertain suits by Nevada in the California Courts?
Everett Rowe: I don't know whether we do or not, I would certainly think with the attitude of the Supreme Court of California that they would have to –-
Byron R. White: You entertain suits to collect taxes by the State of Nevada in the California Court?
Everett Rowe: I don't know Your Honor.
Potter Stewart: Has this kind of a case ever risen in Nevada. Has California ever been sued in Nevada?
Everett Rowe: We have searched all of the cases and it seems to be and it's a very strange thing that this is a cause of first impressionist's type of an automobile accident case. I think there is a lot of historical things that I could go in, why it didn't originate in the early history but --
Byron R. White: Apart from automobiles, you do have Paulus-–
Everett Rowe: That's correct.
Byron R. White: And you sue the University of Nevada I take it.
Everett Rowe: Yes.
Byron R. White: And is there some policy in Nevada that by which state agencies pay the judgments for their negligent employees or do you not?
Everett Rowe: There is a section that they have cited in their -- that requires indemnification by the state of negligent acts of employees.
Byron R. White: So what was your problem then -- there wasn't any problem in collectability there?
Everett Rowe: Well, I don't think there will be a question of collectability.
Byron R. White: No, but I mean if you had just sued the employee?
Everett Rowe: Well, we could have done perhaps done that, but I don't know what the –-
Byron R. White: Well that's what people normally do, because they think sovereigns are immune. So why didn't you just -- did you sue the employee too.
Everett Rowe: I don't think that the -- yes we sued. What happened is that the employee died as a result of the accident. And the state was commenced within the State of the California, the place of his death, we filed a claim against the administrator and a complaint against the administrator of this State and judgment was rendered against him, which they -– even though they defended him never appealed and which is final and which –-
Byron R. White: Well, weren't they -- under the Nevada law, wouldn't Nevada have paid that judgment?
Everett Rowe: I'm not sure whether their indemnification provision was in effect at the time the accident happened. It is in their 1977 Amendments, which they have and I don't know whether that would have a retroactive effect.
Byron R. White: Well, you must have had some reason for suing the University other than bringing a case of first impression.
Everett Rowe: Well, we have the practice –- no I didn't want, we didn't want. We have the practice of suing -- the state owned the automobile. The driver was an employee of the University of Nevada. So, on the side of caution and through years of being exposed to having sued the wrong defendant, we sued all of the defendants. Thank you.
Warren E. Burger: Mr. Dyer do you have anything further.
Michael Dyer: Just a few comments Mr. Chief Justice. First of all, our indemnification clause was added by the 1977 Legislature, prior to that the only amount of indemnification that would have been received would be been under a special act of the legislature and even under our present indemnification it is limited to our liability limitation. I think the reason that the State of Nevada was sued is obvious; it was because of the deep pocket theory. With respect to Paulus, we did not cite Paulus because we do not view this case as a conflicts case. We feel it becomes a conflicts case only if you first determine that we can be sued without our consent, because if you determine that we have to have consented the suit, then it must go off on our limitation. If we can be sued without our consent, at that time it becomes a balancing of governmental interest, but I would point to the court that even in that situation, we have provided for California's interest to be protected by allowing recovery up to a specified limitation and I might also add that there was insurance on the automobile that was being driven in California. I think the judgment has already been satisfied to the extent of $110,000 or something like that. Turner v. Staggs which was cited by respondent's stands for the proposition or overrule of the requirement in Nevada that one had to first file a claim with a Nevada Secretary of State within six months of the action in order to maintain a preceding against the State of Nevada. It overruled NRS:41-039 which is one of 9 specific statutory sections dealing with our statutory limitations, it simply stands for the proposition that you cannot have a situation where private tortfeasors can sue without filing a claim and public tortfeasors are people who are torted by the public, by the government must first file a claim within six months after the accident happens. Who knows what the answer would have been if the statute of limitations had been in the time for filing the claim, but Turner v. Staggs did not reach a question about limitation on liability. And does not stand for the public policy that all tort victims should be treated the same. As a matter of fact that has been reiterated in the state case of Calio versus State, which I do not have a citation for and I apologize, but Calio versus State is a 1977 case that came down prior to this decision and I thank the Court for your time.
Warren E. Burger: Thank you gentlemen. The case is submitted.