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Lyle Denniston on Franchise Tax Board of California v. Hyatt
Michael Ramsey

Lyle Denniston at SCOTUSblog has an analysis of Franchise Tax Board of California v. Hyatt, an interesting federalism case that has not received much attention.  He explains:

Except for the fact that no one was wearing buckled shoes, knee breeches, and lace cuffs, an argument in the Supreme Court Monday might have been a reenactment of a day at the Constitutional Convention in Philadelphia 228 years ago.  It was all about what the states gave up, and did not give up, as part of the bargaining over a new Constitution.

That is what has become of the case of Franchise Tax Board of California v. Hyatt, a prolonged, multi-million-dollar tax fight between California authorities and a Nevada inventor.  It took the Court and the lawyers back to constitutional basics, because the California agency is trying to gain immunity as a “sovereign state” from being sued in Nevada state court by the wealthy inventor, Gilbert P. Hyatt.

One heard frequently about how the states, fretting over being haled into court to pay off their debts from the Revolutionary War, wanted assurances that that would not happen.  And one heard just as often about how the states still had plenty of opportunity, as part of the Union, to protect their own interests by making compacts among themselves to respect each other’s sovereignty.

Which, the Justices and lawyers pondered, was the “plan of the Convention”?  Not what the Founders would say if they were in the courtroom today, but what did they actually say that still rings true? ...