The Supreme Court of Nevada recently adopted the approach of Restatement of the Law Second, Torts § 46, Comments j and k, in Franchise Tax Board of California v. Hyatt, 401 P.3d 1110 (Nev. 2017). In that case, a taxpayer brought an action against the Franchise Tax Board of the State of California (FTB), which had determined that he owed the state millions, alleging that the FTB disclosed personal information and delayed resolution of his protests for 11 years, resulting in a daily interest charge of $8,000, that the imposition of tax assessments was the objective of the audits, and that an FTB auditor made disparaging remarks about him and his religion. The trial court entered judgment on a jury verdict for the plaintiff. The Supreme Court of Nevada affirmed in part, concluding that the defendant was not entitled to a statutory cap on damages that a similarly situated Nevada agency would be entitled to under similar circumstances. The United States Supreme Court vacated and remanded, holding that the Constitution did not permit Nevada to award damages against California agencies under Nevada law that were greater than it could award against Nevada agencies in similar circumstances. On remand, the Nevada Supreme Court affirmed in part, reversed in part, and remanded, holding, inter alia, that, even though the plaintiff did not present any medical evidence of severe emotional distress, “substantial evidence supports the jury’s findings as to liability and an award of damages up to the amount of Nevada’s statutory cap” for the plaintiff’s claim of intentional infliction of emotional distress (IIED). The court explained that Restatement Second of Torts § 46, Comments j and k “provide for a sliding-scale approach in which the increased severity of the conduct will require less in the way of proof that emotional distress was suffered.” The court determined that, in this case, the “facts support the conclusion that this case is at the more extreme end of the scale, and therefore less in the way of proof as to emotional distress suffered by [the plaintiff] is necessary,” “specifically adopt[ing] the sliding-scale approach to proving a claim for IIED.” The court also relied on §§ 652A, 652B, 652D, and 652E in examining the plaintiff’s invasion-of-privacy claims and adopting the tort of false-light invasion of privacy.
In 2DP Blanding, LLC v. Palmer, 2017 WL 3909824 (Sept. 6, 2017), the Supreme Court of Utah adopted the rule set forth in Restatement of the Law of Restitution § 74, Comment i. In that case, a third party that had purchased a parcel of real estate while the appeal of a trial court’s order authorizing the foreclosure sale of the parcel was pending, which later resulted in the reversal of that order, brought an action to quiet title. The trial court entered summary judgment for the plaintiff. Affirming, the Supreme Court of Utah held that “an appeal from an unstayed foreclosure order d[id] not create a cloud on title” and that the plaintiff did not take the property subject to the resolution of the case on appeal. Quoting Restatement of Restitution § 74, Comment i, the court explained that a purchaser is ‘“protected as a bona fide purchaser’ even if ‘he has knowledge that an appeal is pending or even that he has knowledge of the grounds for appeal, except where he knows that the judgment was obtained by fraud.’” In adopting this rule, the court explained that it cited “the First Restatement on this point because it is the clearest articulation of the rule of relevance to this case. But we view this statement of the rule to be consistent with the law as stated in many jurisdictions and in subsequent restatements of the law of restitution,” citing Restatement Third of Restitution and Unjust Enrichment § 18, Comment f.
The Institute is currently working on other portions of the Restatement Third of Torts—Restatement of the Law Third, Torts: Intentional Torts to Persons and Restatement of the Law Third, Torts: Liability for Economic Harm. Visit the Projects page to learn more.