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Interstate law

By: Derek Hawkins//April 28, 2016//

Interstate law

By: Derek Hawkins//April 28, 2016//

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Case Name: Franchise Tax Bd. Of Cal. V. Hyatt

Case No.: 14-1175

 

The constitution does not permit the State of Nevada to apply a rule of Nevada law that awards damages against California that are greater than it could award against Nevada in similar circumstances.

 

“A statute is a “public Act” within the meaning of the Full Faith and Credit Clause. While a State is not required “to substitute for its own statute . . . the statute of another State reflecting a conflicting and opposed policy,” Carroll v. Lanza, 349 U. S. 408, 412, a State’s decision to decline to apply another State’s statute on this ground must not embody a “policy of hostility to the public Acts” of that other State, id., at 413. Using this approach, the Court found no violation of the Clause in Carroll v. Lanza or in Franchise Tax Bd. the first time this litigation was considered. By contrast, the rule of unlimited damages applied here is not only “opposed” to California’s law of complete immunity; it is also inconsistent with the general principles of Nevada immunity law, which limit damages awards to $50,000. Nevada explained its departure from those general principles by describing California’s own system of controlling its agencies as an inadequate remedy for Nevada’s citizens. A State that disregards its own ordinary legal principles on this ground employs a constitutionally impermissible “ ‘policy of hostility to the public Acts’ of a sister State.” 538 U. S., at 499. The Nevada Supreme Court’s decision thereby lacks the “healthy regard for California’s sovereign status” that was the hallmark of its earlier decision. Ibid. This holding does not indicate a return to a complex “balancing-of-interests approach to conflicts of law under the Full Faith and Credit Clause.” Id., at 496. Rather, Nevada’s hostility toward California is clearly evident in its decision to devise a special, discriminatory damages rule that applies only to a sister State.”

 

Vacated and Remanded

Concurring: ALITO

Dissenting: ROBERTS, THOMAS


Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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