In the 2018 case Franchise Tax Board of California v. Hyatt, the U.S. Supreme Court ruled that states have sovereign immunity from private lawsuits filed in other state courts, overturning a previous decision made by Nevada's Supreme Court. The case originated when inventor Gilbert P. Hyatt sued the California Franchise Tax Board in Nevada after he was audited and accused of tax fraud for claiming residency in Nevada while still allegedly living in California. Initially, Hyatt won millions against the board but this amount was significantly reduced on appeal to $50,000 due to caps on damages against government agencies under Nevada law - a cap not recognized by California law which would have provided full immunity instead. In its ruling, however, SCOTUS decided 5-4 that states cannot be sued without their consent as per principles of sovereign immunity enshrined within common law tradition and affirmed by constitutional interpretation.

In the dissenting opinion for Franchise Tax Board of California v. Hyatt, Justice Stephen Breyer, joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan argued that there was no compelling reason to overrule Nevada v. Hall (1979), which had allowed a state to be sued in the courts of another state without its consent. The dissenters believed that this case did not meet the high bar necessary for overturning precedent; it neither involved an unworkable legal rule nor led to significant practical problems or injustice. They also expressed concern about how casually majority discarded stare decisis principles - respect for precedent - warning that such disregard could undermine public trust in judicial impartiality and encourage parties to seek reconsideration of settled precedents they dislike.