Franchise Tax Board v. Hyatt

The Supreme Court’s exception to immunity for intentional torts and bad-faith conduct survives its adoption of the federal discretionary-function immunity test.Plaintiff sued Franchise Tax Board of the State of California (FTB) seeking damages for intentional torts and bad-faith conduct committed by FTB auditors. A jury awarded Plaintiff $139 million in damages on his tort claims and $250 million in punitive damages. The United States Supreme Court vacated the Supreme Court’s decision, holding that the Constitution does not permit Nevada to award damages against California agencies under Nevada law that are greater than it could award against Nevada agencies in similar circumstances. On remand, the Supreme Court held (1) FTB cannot invoke discretionary-function immunity to protect itself from Plaintiff’s intentional tort and bad-faith causes of action; (2) all of Plaintiff’s causes of action, except for his fraud and intentional infliction of emotional distress (IIED) claims, failed; (3) in regard to the IIED claim, substantial evidence supported the jury’s findings as to liability and an award of damages up to the amount of Nevada’s statutory cap; (4) FTB was entitled to the $50,000 statutory cap on Plaintiff’s IIED and fraud claims; and (5) FTB was immune from punitive damages because punitive damages would not be available against a Nevada government entity. View "Franchise Tax Board v. Hyatt" on Justia Law