Franchise Tax Board of California v. Hyatt/Dissent
SUPREME COURT OF THE UNITED STATES
No. 17–1299
FRANCHISE TAX BOARD OF CALIFORNIA, PETITIONERS v. GILBERT P. HYATT
ON WRIT OF CERTIORARI TO THE SUPREME COURT OF NEVADA
[May 13, 2019]
Justice Breyer, with whom Justice Ginsburg, Justice Sotomayor, and Justice Kagan join, dissenting. Can a private citizen sue one State in the courts of another? Normally the answer to this question is no, because the State where the suit is brought will choose to grant its sister States immunity. But the question here is whether the Federal Constitution requires each State to grant its sister States immunity, or whether the Constitution instead permits a State to grant or deny its sister States immunity as it chooses. We answered that question 40 years ago in Nevada v. Hall, 440 U. S. 410 (1979). The Court in Hall held that the Constitution took the permissive approach, leaving it up to each State to decide whether to grant or deny its sister States sovereign immunity. Today, the majority takes the contrary approach—the absolute approach—and overrules Hall. I can find no good reason to overrule Hall, however, and I consequently dissent.
I
Hall involved a suit brought by a California resident against the State of Nevada in the California courts. We rejected the claim that the Constitution entitled Nevada to absolute immunity. We first considered the immunity that States possessed as independent sovereigns before the Constitution was ratified. And we then asked whether ratification of the Constitution altered the principles of state sovereign immunity in any relevant respect. At both steps, we concluded, the relevant history and precedent refuted the claim that States are entitled to absolute immunity in each other’s courts.
A
Hall first considered the immunity that States possessed before ratification. “States considered themselves fully sovereign nations” during this period, ante, at 6, and the Court in Hall therefore asked whether sovereign nations would have enjoyed absolute immunity in each other’s courts at the time of our founding.
The answer was no. At the time of the founding, nations granted other nations sovereign immunity in their courts not as a matter of legal obligation but as a matter of choice, i. e., of comity or grace or consent. Foreign sovereign immunity was a doctrine “of implied consent by the territorial sovereign… deriving from standards of public morality, fair dealing, reciprocal self-interest, and respect.” National City Bank of N. Y. v. Republic of China, 348 U. S. 356, 362 (1955). Since customary international law made the matter one of choice, a nation could withdraw that sovereign immunity if it so chose.
This Court took that view of foreign sovereign immunity in two founding-era decisions that forecast the result in Hall. In Schooner Exchange v. McFaddon, 7 Cranch 116 (1812), when considering whether an American citizen could impose a lien upon a French warship, Chief Justice John Marshall wrote for the Court that international law did not require the United States to grant France sovereign immunity. Any such requirement, he reasoned, “would imply a diminution” of American “sovereignty.” Id., at 136. Instead, Chief Justice Marshall observed that any “exceptions” to “the full and complete power of a nation within its own territories, must be traced up to the consent of the nation itself” and “can flow from no other legitimate source.” Ibid. (emphasis added).
The Court ultimately held in Schooner Exchange that the United States had consented implicitly to give immunity to the French warship. See id., at 147. But that was because “national ships of war, entering the port of a friendly power open for their reception, [we]re to be considered as exempted by the consent of that power from its jurisdiction.” Id., at 145–146. And the Chief Justice was careful to note that this implication of consent could be “destroy[ed]” in various ways, including by subjecting the foreign nation “to the ordinary tribunals.” Id., at 146.
Ten years later, in The Santissima Trinidad, 7 Wheat. 283 (1822), this Court unanimously reaffirmed Schooner Exchange’s conclusion that foreign sovereign immunity was not an absolute right. The Court in Santissima Trinidad was called upon to determine whether the cargo of an Argentine ship, found in Baltimore Harbor, was immune from seizure. The ship’s commander asserted that Argentina had an absolute right to immunity from suit, claiming that “no sovereign is answerable for his acts to the tribunals of any foreign sovereign.” Id., at 352. But Justice Joseph Story, writing for the Court, squarely rejected the “notion that a foreign sovereign had an absolute right, in virtue of his sovereignty, to an exemption of his property from the local jurisdiction of another sovereign, when it came within his territory.” Ibid. Rather, any exception to jurisdiction, including sovereign immunity, “stands upon principles of public comity and convenience, and arises from the presumed consent or license of nations.” Id., at 353. Accordingly, Justice Story explained, the right to assert sovereign immunity “may be withdrawn upon notice at any time, without just offence.” Ibid. (emphasis added). Justice Story then held that the Argentine ship’s cargo was not immune from seizure. Id., at 354.
The Court in Hall relied on this reasoning. See 440 U. S., at 416–417. Drawing on the comparison to foreign nations, the Court in Hall emphasized that California had made a sovereign decision not to “exten[d] immunity to Nevada as a matter of comity.” Id., at 418. Unless some constitutional rule required California to grant immunity that it had chosen to withhold, the Court “ha[d] no power to disturb the judgment of the California courts.” Ibid.
B
The Court in Hall next held that ratification of the Constitution did not alter principles of state sovereign immunity in any relevant respect. The Court concluded that express provisions of the Constitution—such as the Eleventh Amendment and the Full Faith and Credit Clause of Article IV.—did not require States to accord each other sovereign immunity. See id., at 418–424. And the Court held that nothing “implicit in the Constitution” treats States differently in respect to immunity than international law treats sovereign nations. Id., at 418; see also id., at 424–427.
To the contrary, the Court in Hall observed that an express provision of the Constitution undermined the assertion that States were absolutely immune in each other’s courts. Unlike suits brought against a State in the State’s own courts, Hall noted, a suit against a State in the courts of a different State “necessarily implicates the power and authority of” both States. Id., at 416. The defendant State has a sovereign interest in immunity from suit, while the forum State has a sovereign interest in defining the jurisdiction of its own courts. The Court in Hall therefore justified its decision in part by reference to “the Tenth Amendment’s reminder that powers not delegated to the Federal Government nor prohibited to the States are reserved to the States or to the people.” Id., at 425. Compelling States to grant immunity to their sister States would risk interfering with sovereign rights that the Tenth Amendment leaves to the States.
To illustrate that principle, Hall cited Georgia v. Chattanooga, 264 U. S. 472 (1924), which concerned condemnation proceedings brought by a municipality against property owned by a neighboring State. See Hall, 440 U. S., at 426, n. 29. The Court in Chattanooga held that one State (Georgia) that had purchased property for a railroad in a neighboring State (Tennessee) could not exempt itself from the eminent domain power of the Tennessee city in which the property was located. 264 U. S., at 480. The reason was obvious: “The power of eminent domain is an attribute of sovereignty,” and Tennessee did not surrender that sovereign power simply by selling land to Georgia. Ibid. In light of the competing sovereignty interests on both sides of the matter, the Court in Chattanooga found no basis to interpose a federally mandated resolution.
Similar reasoning applied in Hall. Mandating absolute interstate immunity “by inference from the structure of our Constitution and nothing else” would “intru[de] on the sovereignty of the States—and the power of the people—in our Union.” 440 U. S., at 426–427.
II
The majority disputes both Hall’s historical conclusion regarding state immunity before ratification and its conclusion that the Constitution did not alter that immunity. But I do not find the majority’s arguments convincing.
A
The majority asserts that before ratification “it was well settled that States were immune under both the common law and the law of nations.” Ante, at 9. The majority thus maintains that States were exempt from suit in each other’s courts.
But the question in Hall concerned the basis for that exemption. Did one sovereign have an absolute right to an exemption from the jurisdiction of the courts of another, or was that exemption a customary matter, a matter of consent that a sovereign might withdraw? As to that question, nothing in the majority’s opinion casts doubt on Hall’s conclusion that States—like foreign nations—were accorded immunity as a matter of consent rather than absolute right.
The majority refers to “the founding era’s foremost expert on the law of nations,” Emer de Vattel, who stated that a “sovereign is ‘exempt from all foreign jurisdiction.’” Ante, at 7 (quoting 4 E. de Vattel, The Law of Nations 486 (J. Chitty ed. 1883) (Vattel); alterations omitted). But Vattel made clear that the source of a sovereign’s immunity in a foreign sovereign’s courts is the “‘consen[t]’” of the foreign sovereign, which, he added, reflects a “‘tacit convention’” among nations. Schooner Exchange, 7 Cranch, at 143 (quoting 4 Vattel 472). And Schooner Exchange and Santissima Trinidad underscore that such a tacit convention can be rejected, and that consent can be “withdrawn upon notice at any time.” Santissima Trinidad, 7 Wheat., at 353.
The majority also draws on statements of the Founders concerning the importance of sovereign immunity generally. But, as Hall noted, those statements concerned matters entirely distinct from the question of state immunity at issue here. Those statements instead “concerned questions of federal-court jurisdiction and the extent to which the States, by ratifying the Constitution and creating federal courts, had authorized suits against themselves in those courts.” 440 U. S., at 420–421 (emphasis added). That issue was “a matter of importance in the early days of independence,” for it concerned the ability of holders of Revolutionary War debt owed by States to collect that debt in a federal forum. Id., at 418. There is no evidence that the Founders who made those statements intended to express views on the question before us. And it seems particularly unlikely that John Marshall, one of those to whom the Court refers, see ante, at 10–11, would have held views of the law in respect to States that he later repudiated in respect to sovereign nations.
The majority cites Nathan v. Virginia, 1 Dall. 77, n. (C. P. Phila. Cty. 1781). As the majority points out, that case involved a Pennsylvania citizen who filed a suit in Pennsylvania’s courts seeking to attach property belonging to Virginia. The Pennsylvania Court of Common Pleas accepted Virginia’s claim of sovereign immunity and dismissed the suit. But it did so only after “delegates in Congress from Virginia… applied to the supreme executive council of Pennsylvania” for immunity, and Pennsylvania’s Attorney General, representing its Executive, asked the court to dismiss the case. Id., at 78, n. The Pennsylvania court thus granted immunity only after Virginia “followed the usual diplomatic course.” Pfander, Rethinking the Supreme Court’s Original Jurisdiction in State-Party Cases, 82 Cal. L. Rev. 555, 585 (1994). Given the participation of Pennsylvania’s Executive in this diplomatic matter, the case likely involved Pennsylvania’s consent to a claim of sovereign immunity, rather than a view that Virginia had an absolute right to immunity.
B
The majority next argues that “the Constitution affirmatively altered the relationships between the States” by giving them immunity that they did not possess when they were fully independent. Ante, at 13. The majority thus maintains that, whatever the nature of state immunity before ratification, the Constitution accorded States an absolute immunity that they did not previously possess.
The most obvious problem with this argument is that no provision of the Constitution gives States absolute immunity in each other’s courts. The majority does not attempt to situate its newfound constitutional immunity in any provision of the Constitution itself. Instead, the majority maintains that a State’s immunity in other States’ courts is “implicit” in the Constitution, ante, at 16, “embed[ded]… within the constitutional design,” ante, at 13, and reflected in “‘the plan of the Convention,’” ante, at 9. See also Hall, 440 U. S., at 430 (Blackmun, J., dissenting) (arguing that immunity in this context is found “not in an express provision of the Constitution but in a guarantee that is implied as an essential component of federalism”).
I agree with today’s majority and the dissenters in Hall that the Constitution contains implicit guarantees as well as explicit ones. But, as I have previously noted, concepts like the “constitutional design” and “plan of the Convention” are “highly abstract, making them difficult to apply”—at least absent support in “considerations of history, of constitutional purpose, or of related consequence.” Federal Maritime Comm’n v. South Carolina Ports Authority, 535 U. S. 743, 778 (2002) (Breyer, J., dissenting). Such concepts “invite differing interpretations at least as much as do the Constitution’s own broad liberty-protecting phrases” such as “‘due process’” and “‘liberty,’” and “they suffer the additional disadvantage that they do not actually appear anywhere in the Constitution.” Ibid.
At any rate, I can find nothing in the “plan of the Convention” or elsewhere to suggest that the Constitution converted what had been the customary practice of extending immunity by consent into an absolute federal requirement that no State could withdraw. None of the majority’s arguments indicates that the Constitution accomplished any such transformation.
The majority argues that the Constitution sought to preserve States’ “equal dignity and sovereignty.” Ante, at 13. That is true, but tells us nothing useful here. When a citizen brings suit against one State in the courts of another, both States have strong sovereignty-based interests. In contrast to a State’s power to assert sovereign immunity in its own courts, sovereignty interests here lie on both sides of the constitutional equation.
The majority also says—also correctly—that the Constitution demanded that States give up certain sovereign rights that they would have retained had they remained independent nations. From there the majority infers that the Constitution must have implicitly given States immunity in each other’s courts to provide protection that they gave up when they entered the Federal Union.
But where the Constitution alters the authority of States vis-à-vis other States, it tends to do so explicitly. The Import–Export Clause cited by the majority, for example, creates “harmony among the States” by preventing them from “burden[ing] commerce… among themselves.” Michelin Tire Corp. v. Wages, 423 U. S. 276, 283, 285 (1976). The Full Faith and Credit Clause, also invoked by the majority, prohibits States from adopting a “policy of hostility to the public Acts” of another State. Franchise Tax Bd. of Cal. v. Hyatt, 578 U. S. ___, ___ (2016) (slip op., at 2). By contrast, the Constitution says nothing explicit about interstate sovereign immunity.
Nor does there seem to be any need to create implicit constitutional protections for States. As the history of this case shows, the Constitution’s express provisions seem adequate to prohibit one State from treating its sister States unfairly—even if the State permits suits against its sister States in its courts. See id., at ___ (slip op., at 4) (holding that the Full Faith and Credit Clause prohibits Nevada from subjecting the Board to greater liability than Nevada would impose upon its own agency in similar circumstances).
The majority may believe that the distinction between permissive and absolute immunity was too nuanced for the Framers. The Framers might have understood that most nations did in fact allow other nations to assert sovereign immunity in their courts. And they might have stopped there, ignoring the fact that, under international law, a nation had the sovereign power to change its mind.
But there is simply nothing in the Constitution or its history to suggest that anyone reasoned in that way. No constitutional language supports that view. Chief Justice Marshall, Justice Story, and the Court itself took a somewhat contrary view without mentioning the matter. And there is no strong reason for treating States differently than foreign nations in this context. Why would the Framers, silently and without any evident reason, have transformed sovereign immunity from a permissive immunity predicated on comity and consent into an absolute immunity that States must accord one another? The Court in Hall could identify no such reason. Nor can I.
III
In any event, stare decisis requires us to follow Hall, not overrule it. See Planned Parenthood of Southeastern Pa. v. Casey, 505 U. S. 833, 854–855 (1992); see also Kimble v. Marvel Entertainment, LLC, 576 U. S. ___, ___–___ (2015) (slip op., at 7–8). Overruling a case always requires “‘special justification.’” Kimble, 576 U. S., at ___ (slip op., at 8). What could that justification be in this case? The majority does not find one.
The majority believes that Hall was wrongly decided. But “an argument that we got something wrong—even a good argument to that effect—cannot by itself justify scrapping settled precedent.” Kimble, 576 U. S., at ___ (slip op., at 8). Three dissenters in Hall also believed that Hall was wrong, but they recognized that the Court’s opinion was “plausible.” 440 U. S., at 427 (opinion of Blackmun, J.). While reasonable jurists might disagree about whether Hall was correct, that very fact—that Hall is not obviously wrong—shows that today’s majority is obviously wrong to overrule it.
The law has not changed significantly since this Court decided Hall, and has not left Hall a relic of an abandoned doctrine. To the contrary, Hall relied on this Court’s precedent in reaching its conclusion, and this Court’s subsequent cases are consistent with Hall. As noted earlier, Hall drew its historical analysis from earlier decisions such as Schooner Exchange, written by Chief Justice Marshall. And our post-Hall decisions regarding the immunity of foreign nations are consistent with those earlier decisions. The Court has recently reaffirmed “Chief Justice Marshall’s observation that foreign sovereign immunity is a matter of grace and comity rather than a constitutional requirement.” Republic of Austria v. Altmann, 541 U. S. 677, 689 (2004). And the Court has reiterated that a nation may decline to grant other nations sovereign immunity in its courts. Verlinden B. V. v. Central Bank of Nigeria, 461 U. S. 480, 486 (1983).
Nor has our understanding of state sovereign immunity evolved to undermine Hall. The Court has decided several state sovereign immunity cases since Hall, but these cases have all involved a State’s immunity in a federal forum or in the State’s own courts. Compare Federal Maritime Comm’n, 535 U. S., at 769 (state immunity in a federal forum); Seminole Tribe of Fla. v. Florida, 517 U. S. 44, 47 (1996) (same); Blatchford v. Native Village of Noatak, 501 U. S. 775, 782 (1991) (same), with Alden v. Maine, 527 U. S. 706, 715 (1999) (state immunity in a State’s “own courts”); Will v. Michigan Dept. of State Police, 491 U. S. 58, 67 (1989) (same). None involved immunity asserted by one State in the courts of another. And our most recent case to address Hall in any detail endorses it. See Alden, 527 U. S., at 739–740 (noting that Hall’s distinction “between a sovereign’s immunity in its own courts and its immunity in the courts of another sovereign” is “consistent with, and even support[s],” modern cases).
The dissenters in Hall feared its “practical implications.” 440 U. S., at 443 (opinion of Rehnquist, J.). But I can find nothing in the intervening 40 years to suggest that this fear was well founded. The Board and its amici have, by my count, identified only 14 cases in 40 years in which one State has entertained a private citizen’s suit against another State in its courts. See Brief for Petitioner 46–47; Brief for State of Indiana et al. as Amici Curiae 13–14. In at least one of those 14 cases, moreover, the state court eventually agreed to dismiss the suit against its sister State as a matter of comity. See Montaño v. Frezza, 2017–NMSC–015, 393 P. 3d 700, 710. How can it be that these cases, decided over a period of four decades, show Hall to be unworkable?
The Hall issue so rarely arises because most States, like most sovereign nations, are reluctant to deny a sister State the immunity that they would prefer to enjoy reciprocally. Thus, even in the absence of constitutionally mandated immunity, States normally grant sovereign immunity voluntarily. States that fear that this practice will be insufficiently protective are free to enter into an interstate compact to guarantee that the normal practice of granting immunity will continue. See Cuyler v. Adams, 449 U. S. 433, 440 (1981).
Although many States have filed an amicus brief in this case asking us to overturn Hall, I can find nothing in the brief that indicates that reaffirming Hall would affront “the dignity and respect due sovereign entities.” Federal Maritime Comm’n, 535 U. S., at 769. As already explained, sovereign interests fall on both sides of this question. While reaffirming Hall might harm States seeking sovereign immunity, overruling Hall would harm States seeking to control their own courts.
Perhaps the majority believes that there has been insufficient reliance on Hall to justify preserving it. But any such belief would ignore an important feature of reliance. The people of this Nation rely upon stability in the law. Legal stability allows lawyers to give clients sound advice and allows ordinary citizens to plan their lives. Each time the Court overrules a case, the Court produces increased uncertainty. To overrule a sound decision like Hall is to encourage litigants to seek to overrule other cases; it is to make it more difficult for lawyers to refrain from challenging settled law; and it is to cause the public to become increasingly uncertain about which cases the Court will overrule and which cases are here to stay.
I understand that judges, including Justices of this Court, may decide cases wrongly. I also understand that later-appointed judges may come to believe that earlier-appointed judges made just such an error. And I understand that, because opportunities to correct old errors are rare, judges may be tempted to seize every opportunity to overrule cases they believe to have been wrongly decided. But the law can retain the necessary stability only if this Court resists that temptation, overruling prior precedent only when the circumstances demand it. *** It is one thing to overrule a case when it “def[ies] practical workability,” when “related principles of law have so far developed as to have left the old rule no more than a remnant of abandoned doctrine,” or when “facts have so changed, or come to be seen so differently, as to have robbed the old rule of significant application or justification.” Casey, 505 U. S., at 854–855. It is far more dangerous to overrule a decision only because five Members of a later Court come to agree with earlier dissenters on a difficult legal question. The majority has surrendered to the temptation to overrule Hall even though it is a well-reasoned decision that has caused no serious practical problems in the four decades since we decided it. Today’s decision can only cause one to wonder which cases the Court will overrule next. I respectfully dissent.