Litigation

Want A Great Big Verdict Against The State of Califoria? Go to Nevada

By Bruce Nye

     I don't know how I missed this.  But Lawyers USA reports that the largest verdict in Nevada last year was against . . . the California Franchise Tax Board.  Under California law, the state and its agencies are immune from liability for tax collecting activities.  (They are also immune from punitive damages.)  In 2003, in Franchise Tax Board of California v. Hyatt (2003) 538 U.S. 488, the U.S. Supremes ruled that the Nevada courts did not have to extend full faith and credit to this statutory immunity.

    So this past August, after a four month trial, a Nevada jury awarded Gilbert Hyatt $388 million against the Franchise Tax Board for fraud, intentional infliction of emotional distress, abuse of process, breach of a confidential relationship and invasion of privacy.  Hyatt moved from California to Nevada before he began receiving millions of dollars in licensing fees from various inventions, but an allegedly over-zealous tax agent decided he still resided in California, vowed "to get that Jew bastard," went through his trash and mailbox, disclosed his Social Security and credit card information to third parties, etc.

    California has not had a balanced budget in nearly a year, and is getting ready to defer tax refunds and start paying creditors with IOU's.  So I suspect that Mr. Hyatt's collection efforts may stall for a bit.

Full post as published by CalBizLit on February 02, 2009 (boomark / email).