US Supreme Court ruling that probably tanks this idea....
This won't look like it applies, until you read it.
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San Francisco Chronicle
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/04/24/BU284087.DTL
Nevada inventor can sue California
Justices rule protections don't apply in Nevada
Bob Egelko, Chronicle Staff Writer Thursday, April 24, 2003
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A Nevada inventor who has been fighting California for a decade over a multimillion-dollar tax bill can sue California's tax board for allegedly rummaging through his trash and invading his privacy, the U.S. Supreme Court ruled Wednesday.
A California law shields the Franchise Tax Board and its employees from lawsuits for actions while assessing or collecting a tax. But the high court ruled unanimously that Nevada is not required to follow that law in a suit by one of its residents, Gilbert Hyatt of Las Vegas.
Hyatt held one of the most important patents in the computer industry -- for the microprocessor chip at the heart of personal computers -- for six years in the 1990s, before the patent was largely revoked by a federal office. In 1991, he moved from California to Nevada, which has no state income tax, shortly before receiving $40 million in licensing fees.
The California Franchise Tax Board concluded he was still a California resident when he got the money, and billed him for taxes and penalties that now exceed $20 million, according to published reports. That dispute remains unresolved and was not before the high court, which instead addressed a separate suit by Hyatt.
In 1998, Hyatt sued the California board in Nevada, claiming that tax auditors engaged in various abusive practices, such as going through his mail and garbage and sharing confidential information with his competitors. That suit has been tied up in lengthy pretrial proceedings in Nevada courts over California's attempt to invoke its own state law, which would bar the suit in a California court. On Wednesday, the Supreme Court said the case could proceed.
Nevada does not shield its own agencies from damages for intentional wrongdoing and does not have to provide such protection to California agencies, the court said, upholding a ruling by the Nevada Supreme Court.
Although the U.S. Constitution requires states to honor each other's laws, a state is not required to violate its own "legitimate public policy" -- in this case, Nevada's policy of allowing suits that allege intentional misconduct by state officials, said Justice Sandra Day O'Connor. She rejected California's argument that the acts alleged in Hyatt's suit were part of the state's sovereign authority to enforce tax laws. [emphasis added by Jim]
The Franchise Tax Board and its chairman, state Controller Steve Westly, declined to comment on the ruling, and Hyatt's lawyer was not available. But the California Taxpayers Association, a business-sponsored group, said the ruling should encourage state tax officials to act with care when they venture into states with differing laws.
"This case was about defending the indefensible: California's immunity from suit for intentional torts," said the group's chief lawyer, Greg Turner. "Perhaps California needs to revisit its blanket immunity statute."
The case is Franchise Tax Board vs. Hyatt, No. 02-42.
E-mail Bob Egelko at
[email protected].
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Jim again. Does anybody here think that the courts won't label Illinois gun laws "legitimate public policy"?
. You know, that piece of crap can be challenged. It relies on Presser vs. Illinois and hence Cruikshank, a notoriously racist case that's now being discredited. See also:
