Nevada v. Hall

Background

A California mother and her son sued after a severe car crash on a California highway when the other driver, a University of Nevada employee driving a state-owned car on official business, was killed. They named the estate administrator, the University, and the State of Nevada in San Francisco state court using California’s law for serving nonresident drivers. Nevada argued its own law limits state liability to $25,000, but California courts allowed the case to go to trial and a jury awarded $1,150,000.

Reasoning

The Supreme Court considered whether the Constitution bars one State’s courts from hearing suits against another State or requires those courts to honor the other State’s internal limits on damages. The majority examined the history of sovereign immunity and the Full Faith and Credit Clause and concluded that the Constitution does not forbid a sister State’s courts from exercising jurisdiction. The Court also held that California need not apply Nevada’s $25,000 statutory cap where doing so would clash with California’s policy of full recovery for injuries on its highways, and it affirmed the California judgment.

Real world impact

The decision means people injured in one State may be able to sue another State in the injured State’s courts and recover amounts beyond the defendant State’s internal damage limits. States remain free to grant comity or to respect one another’s limits, but they are not constitutionally required to do so. The ruling may prompt States to reconsider how they manage interstate activities, assets, and legal exposure, and it could increase interstate legal and financial friction.

Dissents or concurrances

Three Justices dissented, arguing the Constitution implicitly protects a State’s sovereign immunity from suit in sister-State courts and warning that allowing such suits threatens federalism and may provoke interstate retaliation.