The Franchise Tax Board’s battle against Gilbert Hyatt continues in Las Vegas. Mr. Hyatt, as you may recall, moved from California to Las Vegas in the early 1990s a few months before he received a patent settlement in the millions. The FTB conducted a residency audit and found he was still a resident of Nevada. Mr. Hyatt sued the FTB in Nevada; the FTB fought the lawsuit claiming immunity from being sued. That case went all the way to the US Supreme Court, and the Court ruled that the FTB could be sued.
Last year Mr. Hyatt finally won his case, and he won big. He won $396.08 million. Over the last week Judge Jessie Walsh denied the FTB’s motion for a new trial. She also told the FTB that they must post a bond if they wish to appeal. Somehow, Judge Walsh doesn’t think California’s credit is good. I believe (but am not certain) that a 10% bond must be posted, so that would mean about $39 million.
What is thoroughly annoying to me is that the tactics that a California resident cannot sue the FTB even if the FTB were to use the same tactics as they used against Mr. Hyatt. The FTB does enjoy sovereign immunity in California.
Further motions are scheduled to be heard on March 11th. Presumably if these motions are denied the next step is for the FTB to file an appeal.
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