Nevada courts’ verdicts against California reflects policy of hostility: SC rules

Nevada courts’ verdicts against California reflects policy of hostility: SC rules

Nevada’s willingness to uphold big verdicts issued in favor of former California investors reflects a policy of hostility toward a sister state, Supreme Court Justice Stephen G. Breyer ruled.

Shielding California as well as its taxpayers from hostile juries in neighboring state, Justice Breyer noted that Nevada has been willing to hand over big verdicts on behalf of those who fled the Golden State to enjoy lower taxes.

In the 6-2 decision, the apex court slashed disgruntled inventor Gilbert Hyatt’s $500-million verdict against the Golden State tax collectors to $50,000 -- just 1 per cent of the original total.

Hyatt alleged that he was hounded and harassed by California state tax collectors after he left the Golden State in either 1991. But, California’s tax collectors argued that he didn’t move from the state until April 1992, and he owed the state $10 million in taxes and penalties.

Hyatt sued the Franchise Tax Board of California in a Nevada court, which issued a $500-million verdict against California on behalf of the disgruntled inventor.

Last year, lawyers for California argued in the apex court that the state should be immune from being sued in the courts of another state. They stressed that an earlier decision allowing such suits should be overruled.