Franchise Tax Bd. of Cal. v. Hyatt

130 Nev., Advance Opinion 71
IN THE SUPREME COURT OF THE STATE OF NEVADA

FRANCHISE TAX BOARD OF THE No. 53264
STATE OF CALIFORNIA,
Appellant/Cross-Respondent,
vs. FILED
GILBERT P. HYATT,
Respondent/Cross-Appellant. SEP 1 8 2014
s47, F..: Li , EM N
Ctl i'es
BY —

Ii!LF &EP

Appeal and cross-appeal from a district court juenient on a
jury verdict in a tort action and from a post-judgment order awarding
costs. Eighth Judicial District Court, Clark County; Jessie Elizabeth
Walsh, Judge.
Affirmed in part, reversed in part, and remanded.

Lemons, Grundy & Eisenberg and Robert L. Eisenberg, Reno; McDonald
Carano Wilson LLP and Pat Lundvall, Carla Higginbotham, and Megan L.
Stanch, Reno,
for Appellant/Cross-Respondent.

Kaempfer Crowell Renshaw Gronauer & Fiorentino and Peter C.
Bernhard, Las Vegas; Hutchison & Steffen, LLC, and Mark A. Hutchison
and Michael K. Wall, Las Vegas; Lewis Roca Rothgerber LLP and Daniel
F. Polsenberg, Las Vegas; Perkins Coie LLP and Donald J. Kula, Los
Angeles, California,
for Respondent/Cross-Appellant.

Catherine Cortez Masto, Attorney General, and C. Wayne Howle, Solicitor
General, Carson City,
for Amicus Curiae State of Nevada.

Dustin McDaniel, Attorney General, Little Rock, Arkansas,
for Amicus Curiae State of Arkansas.

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 John V. Suthers, Attorney General, Denver, Colorado,
for Amicus Curiae State of Colorado.

Joseph R. "Beau" Biden III, Attorney General, and Richard S. Gebelein,
Chief Deputy Attorney General, Wilmington, Delaware,
for Amicus Curiae State of Delaware.

Bill McCollum, Attorney General, Tallahassee, Florida,
for Amicus Curiae State of Florida.

Lawrence G. Wasden, Attorney General, Boise, Idaho,
for Amicus Curiae State of Idaho.

Shone T. Pierre, Baton Rouge, Louisiana,
for Amicus Curiae Louisiana Secretary and the Louisiana Department of
Revenue.

Janet T. Mills, Attorney General, Augusta, Maine,
for Amicus Curiae State of Maine.

Douglas F. Gansler, Attorney General, Baltimore, Maryland,
for Amicus Curiae State of Maryland.

Chris Koster, Attorney General, Jefferson City, Missouri,
for Amicus Curiae State of Missouri.

Anne Milgram, Attorney General, Trenton, New Jersey,
for Amicus Curiae State of New Jersey.

Donnita A. Wald, General Counsel, Bismarck, North Dakota,
for Amicus Curiae North Dakota State Tax Commissioner Cory Fong.

Richard Cordray, Attorney General, Columbus, Ohio,
for Amicus Curiae State of Ohio.

W.A. Drew Edmondson, Attorney General, Oklahoma City, Oklahoma,
for Amicus Curiae State of Oklahoma.

Robert E. Cooper, Jr., Attorney General and Reporter, Nashville,
Tennessee,
for Amicus Curiae State of Tennessee.
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 John Swallow, Attorney General, and Clark L. Snelson, Assistant
Attorney General, Salt Lake City, Utah,
for Amicus Curiae State of Utah.

William H. Sorrell, Attorney General, Montpelier, Vermont,
for Amicus Curiae State of Vermont.

William C. Mims, Attorney General, Richmond, Virginia,
for Amicus Curiae State of Virginia.

Robert M. McKenna, Attorney General, Olympia, Washington,
for Amicus Curiae State of Washington.

Shirley Sicilian, General Counsel, Washington, District of Columbia,
for Amicus Curiae Multistate Tax Commission.

BEFORE THE COURT EN BANC.'

OPINION

By the Court, HARDESTY, J.:
In 1998, inventor Gilbert P. Hyatt sued the Franchise Tax
Board of the State of California (FTB) seeking damages for intentional
torts and bad-faith conduct committed by FTB auditors during tax audits
of Hyatt's 1991 and 1992 state tax returns. After years of litigation, a jury
awarded Hyatt $139 million in damages on his tort claims and $250
million in punitive damages. In this appeal, we must determine, among
other issues, whether we should revisit our exception to government

'The Honorable Nancy M. Saitta, Justice, voluntarily recused
herself from participation in the decision of this matter.

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 immunity for intentional torts and bad-faith conduct as a result of this
court's adoption of the federal test for discretionary-function immunity,
which shields a government• entity or its employees from suit for
discretionary acts that involve an element of individual judgment or choice
and that are grounded in public policy considerations. We hold that our
exception to immunity for intentional torts and bad-faith conduct survives
our adoption of the federal discretionary-function immunity test because
intentional torts and bad-faith conduct are not based on public policy.
Because FTB cannot invoke discretionary-function immunity
to protect itself from Hyatt's intentional tort and bad-faith causes of
action, we must determine whether Hyatt's claims for invasion of privacy,
breach of confidential relationship, abuse of process, fraud, and intentional
infliction of emotional distress survive as a matter of law, and if so,
whether they are supported by substantial evidence. All of Hyatt's causes
of action, except for his fraud and intentional infliction of emotion distress
claims, fail as a matter of law, and thus, the judgment in his favor on
these claims is reversed.
As to the fraud cause of action, sufficient evidence exists to
support the jury's findings that FTB made false representations to Hyatt
regarding the audits' processes and that Hyatt relied on those
representations to his detriment and damages resulted. In regard to
Hyatt's claim for intentional infliction of emotional distress, we conclude
that medical records are• not mandatory in order to establish a claim for
intentional infliction of emotional distress if the acts of the defendant are
sufficiently severe. As a result, substantial evidence supports the jury's
findings as to liability, but evidentiary and jury instruction errors
committed by the district court require reversal of the damages awarded

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 for emotional distress and a remand for a new trial as to the amount of
damages on this claim only.
In connection with these causes of action, we must address
whether FTB is entitled to a statutory cap on the amount of damages that
Hyatt may recover from FTB on the fraud and intentional infliction of
emotional distress claims under comity. We conclude that Nevada's policy
interest in providing adequate redress to its citizens outweighs providing
FTB a statutory cap on damages under comity, and therefore, we affirm
the $1,085,281.56 of special damages awarded to Hyatt on his fraud cause
of action and conclude that there is no statutory cap on the amount of
damages that may be awarded on remand on the intentional infliction of
emotional distress claim.
We also take this opportunity to address as a matter of first
impression whether, based on comity, it is reasonable to provide FTB with
the same protection of California law, to the extent that it does not conflict
with Nevada law, to grant FTB immunity from punitive damages.
Because punitive damages would not be available against a Nevada
government entity, we hold, under comity principles, that FTB is immune
from punitive damages. Thus, we reverse that portion of the district
court's judgment awarding Hyatt punitive damages.
For the reasons discussed below, we affirm in part, reverse in
part, and remand this case to the district court for further proceedings.
FACTS AND PROCEDURAL HISTORY
California proceedings
In 1993, after reading a newspaper article regarding
respondent/cross-appellant Hyatt's lucrative computer-chip patent and the
large sums of money that Hyatt was making from the patent, a tax auditor
for appellant/cross-respondent FTB decided to review Hyatt's 1991 state
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 income tax return. The return revealed that Hyatt did not report, as
taxable income, the money that he had earned from the patent's licensing
payments and that he had only reported 3.5 percent of his total taxable
income for 1991. Hyatt's tax return showed that he had lived in California
for nine months in 1991 before relocating to Las Vegas, Nevada, but Hyatt
claimed no moving expenses on his 1991 tax return. Based on these
discrepancies, FTB opened an audit on Hyatt's 1991 state income tax
return.
The 1991 audit began when Hyatt was sent notice that he was
being audited This notification included an information request form that
required Hyatt to provide certain information concerning his connections
to California and Nevada and the facts surrounding his move to Nevada.
A portion of the information request form contained a privacy notice,
which stated in relevant part that "The Information Practices Act of 1977
and the federal Privacy Act require the Franchise Tax Board to tellS you
why we ask you for information. The Operations and Compliance
Divisions ask for tax return information to carry out the Personal Income
Tax Law of the State of California." Also included with the notification
was a document containing a list of what the taxpayer could expect from
FTB: "Courteous treatment by FTB employees[i Clear and concise
requests for information from the auditor assigned to your caseLl
Confidential treatment of any personal and financial information that you
provide to us [,] Completion of the audit within a reasonable amount of
time [.1"
The audit involved written communications and interviews.
FTB sent over 100 letters and demands for information to third parties
including banks, utility companies, newspapers (to learn if Hyatt had

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 subscriptions), medical providers, Hyatt's attorneys, two Japanese
companies that held licenses to Hyatt's patent (inquiring about payments
to Hyatt), and other individuals and entities that Hyatt had identified as
contacts. Many, but not all, of the letters and demands for information
contained Hyatt's social security number or home address or both. FTB
also requested information and documents directly from Hyatt.
Interviews were conducted and signed statements were obtained from
three of Hyatt's relatives—his ex-wife, his brother, and his daughter—all
of whom were estranged from Hyatt during the relevant period in
question, except for a short time when Hyatt and his daughter attempted
to reconcile their relationship. No relatives with whom Hyatt had good
relations, including his son, were ever interviewed even though Hyatt had
identified them as contacts. FTB sent auditors to Hyatt's neighborhood in
California and to various locations in Las Vegas in search of information.
Upon completion of the 1991 audit, FTB concluded that Hyatt
did not move from California to Las Vegas in September 1991, as he had
stated, but rather, that Hyatt had moved in April 1992. FTB further
concluded that Hyatt had staged the earlier move to Nevada by renting an
apartment, obtaining a driver's license, insurance, bank account, and
registering to vote, all in an effort to avoid state income tax liability on his
patent licensing. FTB further determined that the sale of Hyatt's
California home to his work assistant was a sham. A detailed explanation
of what factors FTB considered in reaching its conclusions was provided,
which in addition to the above, included comparing contacts between
Nevada and California, banking activity in the two states, evidence of
Hyatt's location in the two states during the relevant period, and
professionals whom he employed in the two states. Based on these

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 findings, FTB determined that Hyatt owed the state of California
approximately $1.8 million in additional state income taxes and that
penalties against Hyatt in the amount of $1.4 million were warranted.
These amounts, coupled with $1 2 million in interest, resulted in a total
assessment of $4.5 million.
The 1991 audit's finding that Hyatt did not move to Las Vegas
until April 1992 prompted FTB to commence a second audit of Hyatt's
1992 California state taxes. Because he maintained that he lived in
Nevada that tax year, Hyatt did not file a California tax return for 1992,
and he opposed the audit. Relying in large part on the 1991 audit's
findings and a single request for information sent to Hyatt regarding
patent-licensing payments received in 1992, FTB found that Hyatt owed
the state of California over $6 million in taxes and interest for 1992.
Moreover, penalties similar to those imposed by the 1991 audit were later
assessed.
Hyatt formally challenged the audits' conclusions by filing two
protests with FTB that were handled concurrently. Under a protest, an
audit is reviewed by FTB for accuracy, or the need for any changes, or
both. The protests lasted over 11 years and involved 3 different FTB
auditors. In the end, FTB upheld the audits, and Hyatt went on to
challenge them in the California courts. 2
Nevada litigation
During the protests, Hyatt filed the underlying Nevada
lawsuit in January 1998. His complaint included a claim for declaratory

2 Atthe time of this appeal, Hyatt was still challenging the audits'
conclusions in California courts.

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 relief concerning the timing of his move from California to Nevada and a
claim for negligence. The complaint also identified seven intentional tort
causes of action allegedly committed by FTB during the 1991 and 1992
audits: invasion of privacy—intrusion upon seclusion, invasion of
privacy—publicity of private facts, invasion of privacy—false light,
intentional infliction of emotional distress, fraud, breach of confidential
relationship, and abuse of process. Hyatt's lawsuit was grounded on his
allegations that FTB conducted unfair audits that amounted to FTB
"seeking to trump up a tax claim against him or attempt Ling] to extort
him," that FTB's audits were "goal-oriented," that the audits were
conducted to improve FTB's tax assessment numbers, and that the
penalties FTB imposed against Hyatt were intended "to better bargain for
and position the case to settle."
Early in the litigation, FTB filed a motion for partial summary
judgment challenging the Nevada district court's jurisdiction over Hyatt's
declaratory relief cause of action. The district court agreed on the basis
that the timing of Hyatt's move from California to Nevada and whether
FTB properly assessed taxes and penalties against Hyatt should be
resolved in the ongoing California administrative process. Accordingly,
the district court granted FTB partial summary judgment. 3 As a result of
the district court's ruling, the parties were required to litigate the action
under the restraint that any determinations as to the audits' accuracy
were not part of Hyatt's tort action and the jury would not make any

3 That ruling was not challenged in this court, and consequently, it is
not part of this appeal.

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 findings as to when Hyatt moved to Nevada or whether the audits'
conclusions were correct.
FTB also moved the district court for partial summary
judgment to preclude Hyatt from seeking recovery for alleged economic
damages. As part of its audit investigation, FTB sent letters to two
Japanese companies that had licensing agreements with Hyatt requesting
payment information between Hyatt and the companies. Included with
the letters were copies of the licensing agreements between Hyatt and the
Japanese companies. Hyatt asserted that those documents were
confidential and that when FTB sent the documents to the companies, the
companies were made aware that Hyatt was under investigation. Based
on this disclosure, Hyatt theorized that the companies would have then
notified the Japanese government, who would in turn notify other
Japanese businesses that Hyatt was under investigation. Hyatt claimed
that this ultimately ended Hyatt's patent-licensing business in Japan.
Hyatt's evidence in support of these allegations included the fact that FTB
sent the letters, that the two businesses sent responses, that Hyatt had no
patent-licensing income after this occurred, and expert testimony that this
chain of events would likely have occurred in the Japanese business
culture. FTB argued that Hyatt's evidence was speculative and
insufficient to adequately support his claim. Hyatt argued that he had
sufficient circumstantial evidence to present the issue to the jury. The
district court granted FTB's motion for partial summary judgment,
concluding that Hyatt had offered no admissible evidence to support that
the theorized chain of events actually occurred and, as a result, his
evidence was too speculative to overcome the summary judgment motion.

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 One other relevant proceedingS that bears discussion in this
appeal concerns two original writ petitions filed by FTB in this court in
2000. In those petitions, FTB sought immunity from the entire underlying
Nevada lawsuit, arguing that it was entitled to the complete immunity
that it enjoyed under California law based on either sovereign immunity,
the Full Faith and Credit Clause, or comity. This court resolved the
petitions together in an unpublished order in which we concluded that
FTB was not entitled to full immunity under any of these principles. But
we did determine that, under comity, FTB should be granted partial
immunity equal to the immunity a Nevada government agency would
receive. In light of that ruling, this court held that FTB was immune from
Hyatt's negligence cause of action, but not from his intentional tort causes
of action. The court concluded that while Nevada provided immunity for
discretionary decisions made by government agencies, such immunity did
not apply to intentional torts or bad-faith conduct because to allow it to do
so would "contravene Nevada's policies and interests in this case."
This court's ruling in the writ petitions was appealed to and
upheld by the United States Supreme Court. Franchise Tax Bd. of Cal. v.
Hyatt, 538 U.S. 488 (2003). In Hyatt, the Supreme Court focused on the
issue of whether the Full Faith and Credit Clause of the federal
constitution required Nevada to afford FTB the benefit of the full
immunity that California provides FTB. Id. at 494. The Court upheld
this court's determination that Nevada was not required to give FTB full
immunity Id. at 499. The Court further upheld this court's conclusion
that FTB was entitled to partial immunity under comity principles,
observing that this court "sensitively applied principles of comity with a
healthy regard for California's sovereign status, relying on the contours of

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 Nevada's own sovereign immunity from suit as a benchmark for its
analysis." Id. The Supreme Court's ruling affirmed this court's limitation
of Hyatt's case against FTB to the intentional tort causes of action.
Ultimately, Hyatt's case went to trial before a jury. The trial
lasted approximately four months. The jury found in favor of Hyatt on all
intentional tort causes of action and returned special verdicts awarding
him damages in the amount of $85 million for emotional distress, $52
million for invasion of privacy, $1,085,281.56 as special damages for fraud,
and $250 million in punitive damages. Following the trial, Hyatt sought
prejudgment interest and moved the district court for costs. The district
court assigned the motion to a special master who, after 15 months of
discovery and further motion practice, issued a recommendation that
Hyatt be awarded approximately $2.5 million in costs. The district court
adopted the master's recommendation.
FTB appeals from the district court's final judgment and the
post-judgment award of costs. Hyatt cross-appeals, challenging the
district court's partial summary judgment ruling that he could not seek, as
part of his damages at trial, economic damages for the alleged destruction
of his patent-licensing business in Japan. 4
DISCUSSION
We begin by addressing FTB's appeal, which raises numerous
issues that it argues entitle it to either judgment as a matter of law in its

4 This
court granted permission for the Multistate Tax Commission
and the state of Utah, which was joined by other states (Arkansas,
Colorado, Delaware, Florida, Idaho, Louisiana, Maine, Maryland,
Missouri, New Jersey, North Dakota, Ohio, Oklahoma, Tennessee,
Vermont, Virginia, and Washington) to file amicus curiae briefs.

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 favor or remand for a new trial. As a threshold matter, we address
discretionary-function immunity and whether Hyatt's causes of action
against FTB are barred by this immunity, or whether there is an
exception to the immunity for intentional torts and bad-faith conduct.
Deciding that FTB is not immune from suit, we then consider FTB's
arguments as to each of Hyatt's intentional tort causes of action. We
conclude our consideration of FTB's appeal by discussing Nevada's
statutory caps on damages and immunity from punitive damages. As for
Hyatt's cross-appeal, we close this opinion by considering his challenge to
the district court's partial summary judgment in FTB's favor on Hyatt's
damages claim for economic loss.
FTB is not immune from suit under comity because discretionary-function
immunity in Nevada does not protect Nevada's government or its employees
from intentional torts and bad-faith conduct
Like most states, Nevada has waived traditional sovereign
immunity from tort liability, with some exceptions. NRS 41.031. The
relevant exception at issue in this appeal is discretionary-function
immunity, which provides that no action can be brought against the state
or its employee 'based upon the exercise or performance or the failure to
exercise or perform a discretionary function or duty on the part of the
State .. . or of any.... employee ... , whether or not the discretion
involved is abused." NRS 41.032(2). By adopting discretionary-function
immunity, our Legislature has placed a limit on its waiver of sovereign
immunity. Discretionary-function immunity is grounded in separation of
powers concerns and is designed to preclude the judicial branch from
"second-guessing," in a tort action, legislative and executive branch
decisions that are based on "social, economic, and political policy."
Martinez v. Maruszczak, 123 Nev. 433, 446, 168 P.3d 720, 729 (2007)

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 (internal quotations omitted); see also Bailey v. United States, 623 F.3d
855, 860 (9th Cir. 2010). FTB initially argues on appeal that immunity
protects it from Hyatt's intentional tort causes of action based on the
application of discretionary-function immunity and comity as recognized
in Nevada.
Comity is a legal principle whereby a forum state may give
effect to the laws and judicial decisions of another state based in part on
deference and respect for the other state, but only so long as the other
state's laws are not contrary to the policies of the forum state. Mianecki v.
Second Judicial Dist. Court, 99 Nev. 93, 98, 658 P.2d 422, 424-25 (1983);
see also Solomon v. Supreme Court of Fla., 816 A.2d 788, 790 (D.C. 2002);
Schoeberlein v. Purdue Univ., 544 N.E.2d 283, 285 (Ill 1989); McDonnell
v. III., 748 A.2d 1105, 1107 (N.J. 2000); Sam v. Estate of Sam, 134 P.3d
761, 764-66 (N.M. 2006); Hansen v. Scott, 687 N.W.2d 247, 250, 250 (N.D.
2004). The purpose behind comity is to "foster cooperation, promote
harmony, and build good will" between states. Hansen, 687 N.W.2d at 250
(internal quotations omitted). But whether to invoke comity is within the
forum state's discretion. Mianecki, 99 Nev. at 98, 658 P.2d at 425. Thus,
when a lawsuit is filed against another state in Nevada, while Nevada is
not required to extend immunity in its courts to the other state, Nevada
will consider extending immunity under comity, so long as doing so does
not violate Nevada's public policies. Id. at 98, 658 P.2d at 424-25. In
California, FTB enjoys full immunity from tort actions arising in the
context of an audit. Cal. Gov't Code § 860.2 (West 2012). FTB contends
that it should receive the immunity protection provided by California
statutes to the extent that such immunity does not violate Nevada's public
policies under comity.

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 Discretionary-function immunity in Nevada
This court's treatment of discretionary-function immunity has
changed over time. In the past, we applied different tests to determine
whether to grant a government entity or its employee discretionary-
function immunity See, e.g., Arnesano v. State ex rel. Dep't of Transp., 113
Nev. 815, 823-24, 942 P.2d 139, 144-45 (1997) (applying planning-versus-
operational test to government action), abrogated by Martinez, 123 Nev. at
443-44, 168 P.3d at 726-27; State v. Silva, 86 Nev. 911, 913-14, 478 P.2d
591, 592-93 (1970) (applying discretionary-versus-ministerial test to
government conduct), abrogated by Martinez, 123 Nev. at 443-44, 168 P.3d
at 726-27. We also recognized an exception to discretionary-function
immunity for intentional torts and bad-faith conduct. Falline v. GNLV
Corp., 107 Nev. 1004, 1009 & n.3, 823 P.2d 888, 892 & n.3 (1991)
(plurality opinion). More recently, we adopted the federal two-part test for
determining the applicability of discretionary-function immunity.
Martinez, 123 Nev. at 444-47, 168 P.3d at 727-29 (adopting test named
after two United States Supreme Court decisions: Berkovitz v. United
States, 486 U.S. 531 (1988), and United States v. Gaubert, 499 U.S. 315
(1991)). Under the Berkovitz-Gaubert two-part test, discretionary-function
immunity will apply if the government actions at issue "(1) involve an
element of individual judgment or choice and (2) [are] based on
considerations of social, economic, or political policy." Martinez, 123 Nev.
at 446-47, 168 P.3d at 729. When this court adopted the federal test in
Martinez, we expressly dispensed with the earlier tests used by this court
to determine whether to grant a government entity or its employee
immunity, id. at 444, 168 P.3d at 727, but we did not address the Falline
exception to immunity for intentional torts or bad-faith misconduct.

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 In the earlier writ petitions filed by FTB in this court, we
relied on Falline to determine that FTB was entitled to immunity from
Hyatt's negligence cause of action, but not the remaining intentional-tort-
based causes of action. Because the law concerning the application of
discretionary-function immunity has changed in Nevada since FTB's writ
petitions were resolved, we revisit the application of discretionary-function
immunity to FTB in the present case as it relates to Hyatt's intentional
tort causes of action. Hsu v. Cnty. of Clark, 123 Nev. 625, 632, 173 P.3d
724, 730 (2007) (stating that "the doctrine of the law of the case should not
apply where, in the interval between two appeals of a case, there has been
a change in the law by. . . a judicial ruling entitled to deference" (internal
quotations omitted)).
FTB contends that when this court adopted the federal test in
Martinez, it impliedly overruled the Falline exception to discretionary-
function immunity for intentional torts and bad-faith misconduct. Hyatt
maintains that the Martinez case did not alter the exception created in
Falline and that discretionary immunity does not apply to bad-faith
misconduct because an employee does not have discretion to undertake
intentional torts or act in bad faith.
In Falline, 107 Nev. at 1009, 823 P.2d at 891-92, this court
ruled that the discretionary-function immunity under NRS 41.032(2) did
not apply to bad-faith misconduct. The case involved negligent processing
of a workers' compensation claim. Falline injured his back at work and
later required surgery. Falline, 107 Nev. at 1006, 823 P.2d at 890.
Following the surgery, while rising from a seated position, Falline
experienced severe lower-back pain. Id. at 1006-07, 823 P.2d at 890.
Falline's doctor concluded that Falline's back pain was related to his work

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 injury. Id. at 1007, 823 P.2d at 890. The self-insured employer, however,
refused to provide workers' compensation benefits beyond those awarded
for the work injury because it asserted that an intervening injury had
occurred. Id. After exhausting his administrative remedies, it was
determined that Falline was entitled to workers' compensation benefits for
both injuries. Id. He was nevertheless denied benefits. Id. Falline
brought suit against the employer for negligence and bad faith in the
processing of his workers' compensation claims. Id. at 1006, 823 P.2d at
889-90. The district court dismissed his causes of action, and Falline
appealed, arguing that dismissal was improper.
On appeal, after concluding that a self-insured employer
should be treated the same as the State Industrial Insurance System, this
court concluded that Falline could maintain a lawsuit against the self-
insured employer based on negligent handling of his claims. Id. at 1007-
09, 823 P.2d at 890-92. In discussing its holding, the court addressed
discretionary immunity and explained that "if failure or refusal to timely
process or pay claims is attributable to bad faith, immunity does not apply
whether an act is discretionary or not." Id. at 1009, 823 P.2d at 891. The
court reasoned that the insurer did not have discretion to act in bad faith,
and therefore, discretionary-function immunity did not apply to protect
the insurer from suit. Id. at 1009, 823 P.2d at 891-92.
The Falline court expressly addressed NRS 41.032(2)'s
language that there is immunity "whether or not the discretion involved is
abused." Falline, 107 Nev. at 1009 n.3, 823 P.2d at 892 n.3. The court
determined that bad faith is different from an abuse of discretion, in that
an abuse of discretion occurs when a person acts within his or her
authority but the action lacks justification, while bad faith "involves an

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 implemented attitude that completely transcends the circumference of
authority granted" to the actor. Id. Thus, the Falline court viewed the
exception to discretionary immunity broadly.
Following Falline, this court adopted, in Martinez, the federal
test for determining whether discretionary-function immunity applies.
123 Nev. at 446, 168 P.3d at 729. Under the two-part federal test, the first
step is to determine whether the government conduct involves judgment
or choice. Id. at 446-47, 168 P.3d at 729. If a statute, regulation, or policy
requires the government employee to follow a specific course of action for
which the employee has no option but to comply with the directive, and
the employee fails to follow this directive, the discretionary-immunity
exception does not apply to the employee's action because the employee is
not acting with individual judgment or choice. Gaubert, 499 U.S. at 322.
On the other hand, if an employee is free to make discretionary decisions
when executing the directives of a statute, regulation, or policy, the test's
second step requires the court to examine the nature of the actions taken
and whether they are susceptible to policy analysis. Martinez, 123 Nev. at
445-46, 168 P.3d at 729; Gaubert, 499 U.S. at 324. "[E]ven assuming the
challenged conduct involves an element of judgment [or choice]," the
second step requires the court to determine "whether that judgment for
choice] is of the kind that the discretionary function exception was
designed to shield." Gaubert, 499 U.S. at 322-23. If "the challenged
actions are not the kind of conduct that can be said to be grounded in the
policy of the regulatory regime," discretionary-function immunity will not
bar the claim. Id. at 324-25. The second step focuses on whether the
conduct undertaken is a policymaking decision regardless of the

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 employee's subjective intent when he or she acted. Martinez, 123 Nev. at
445, 168 P.3d at 728.
FTB argues that the federal test abolished the Falline
intentional tort or bad-faith misconduct exception to discretionary-
function immunity because the federal test is objective, not subjective.
Hyatt asserts that an intentional or bad-faith tort will not meet the two-
part discretionary-immunity test because such conduct cannot be
discretionary or policy-based.
Other courts addressing similar questions have reached
differing results, depending on whether the court views the restriction
against considering subjective intent to apply broadly or is limited to
determining if the decision is a policymaking decision. Some courts
conclude that allegations of intentional or bad-faith misconduct are not
relevant to determining if the immunity applies because courts should not
consider the employee's subjective intent at all. Reynolds v. United States,
549 F.3d 1108, 1112 (7th Cir. 2008); Franklin Say. Corp. v. United States,
180 F.3d 1124, 1135 (10th Cir. 1999); see also Sydnes v. United States, 523
F.3d 1179, 1185 (10th Cir. 2008). But other courts focus on whether the
employee's conduct can be viewed as a policy-based decision and hold that
intentional torts or bad-faith misconduct are not policy-based acts.
Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 475 (2d Cir. 2006);
Palay v. United States, 349 F.3d 418, 431-32 (7th Cir. 2003); Coulthurst v.
United States, 214 F.3d 106, 109 (2d Cir. 2000). 5 These courts bar the

5 Coulthurst
is affirmatively cited by the Seventh Circuit Court of
Appeals in Palay v. United States, 349 F.3d 418, 431-32 (7th Cir. 2003).
Although the Seventh Circuit in Reynolds, 549 F.3d at 1112, stated the
continued on next page . . .
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 application of discretionary-function immunity in intentional tort and bad-
faith misconduct cases when the government action involved is "unrelated
to any plausible policy objective[ ]." Coulthurst, 214 F.3d at 111. A closer
look at these courts' decisions is useful for our analysis.
Courts that decline to recognize bad-faith conduct that calls for an
inquiry into an employee's subjective intent
In Franklin Savings Corp. v. United States, 180 F.3d at 1127,
1134-42, the Tenth Circuit Court of Appeals addressed the specific issue of
whether a claim for bad faith precludes the application of discretionary-
function immunity. In that case, following the determination that the
Franklin Savings Association was not safe or sound to conduct business, a
conservator was appointed. Id. at 1127. Thereafter, plaintiffs Franklin
Savings Association and its parent company filed suit against defendants
the United States government and the conservator to have the
conservatorship removed. Id. Plaintiffs alleged that the conservator
intentionally and in bad faith liquidated the company instead of
preserving the company and eventually returning it to plaintiffs to
transact business. Id. at 1128.

• . . continued
proposition that claims of malicious and bad-faith conduct were not
relevant in determining discretionary immunity because the courts do not
look at subjective intent, the Palay court specifically held that
discretionary immunity can be avoided if the actions were the result of
laziness or carelessness because such actions are not policy-based
decisions. Palay, 349 F.3d at 431-32. Reynolds was published after Palay,
and while it cites to Palay for other unrelated issues, it does not address
its holding in connection with the holding in Palay.

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 On appeal, the Franklin Savings court explained that
plaintiffs did not dispute that the conservator had the authority and
discretion to sell assets, but the argument was whether immunity for
decisions that were discretionary could be avoided because plaintiffs
alleged that the conduct was intentionally done to achieve an improper
purpose—to deplete capital and retroactively exculpate the conservator's
appointment. Id. at 1134. Thus, the court focused on the second part of
the federal test. In considering whether the alleged intentional
misconduct barred the application of discretionary-function immunity
under the federal test, the Franklin Savings court first noted that the
United States Supreme Court had "repeatedly insisted ... that [tort]
claims are not vehicles to second-guess policymaking." Id. The court
further observed that the Supreme Court's modification to Berkovitz, in
Gaubert, to include a query of whether the nature of the challenged
conduct was "susceptible to policy analysis[,] . .. served to emphasize that
courts should not inquire into the actual state of mind or decisionmaking
process of federal officials charged with performing discretionary
functions." Id. at 1135 (internal quotations omitted). The Franklin
Savings court ultimately concluded that discretionary-function immunity
attaches to bar claims that "depend[ ] on an employee's bad faith or state
of mind in performing facially authorized acts," id. at 1140, and to
conclude otherwise would mean that the immunity could not effectively
function. Id. at 1140-41.
Notwithstanding its conclusion, the Franklin Savings court
noted that such a holding had "one potentially troubling effect"; it created
an "irrebuttable presumption" that government employees try to perform
all discretionary functions in good faith and that the court's holding would

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 preclude relief in cases where an official committed intentional or bad-
faith conduct. Id. at 1141. Such a result was necessary, the court
reasoned, because providing immunity for employees, so that they do not
have to live and act in constant fear of litigation in response to their
decisions, outweighs providing relief in the few instances of intentionally
wrongful conduct. Id. at 1141-42. Thus, the Franklin Savings court
broadly applied the Supreme Court rule that an actor's subjective intent
should not be considered. This broad application led the court to conclude
that a bad-faith claim was not sufficient to overcome discretionary-
function immunity's application.
Courts that consider whether an employee subjectively intended to
further policy by his or her conduct
Other courts have come to a different conclusion. Most
significant is Coulthurst v. United States, 214 F.3d 106, in which the
Second Circuit Court of Appeals addressed the issue of whether the
inspection of weightlifting equipment by prison officials was grounded in
policy considerations. In Coulthurst, an inmate in a federal prison was
injured while using the prison's exercise equipment. Id. at 107. The
inmate filed suit against the United States government, alleging
"negligence and carelessness" and a "Tarn -Lire] to diligently and
periodically inspect" the exercise equipment. Id. at 108. The lower court
dismissed the complaint, reasoning that the decisions that established the
procedures and timing for inspection involved "elements of judgment or
choice and a balancing of policy considerations," such that discretionary-
function immunity attached to bar liability. Id. at 109. Coulthurst
appealed.
In resolving the appeal, the Court of Appeals concluded that
the complaint could be read to mean different types of negligent or
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 careless conduct. Id. The court explained that the complaint asserting
negligence or carelessness could legitimately be read to refer to how
frequently inspections should occur, which might fall under discretionary-
function immunity. Id. But the same complaint, the court noted, could
also be read to assert negligence and carelessness in the failure to carry
out prescribed responsibilities, such as prison officials failing to inspect
the equipment out of laziness, haste, or inattentiveness. Id. Under the
latter reading, the court stated that
the official assigned to inspect the machine may in
laziness or haste have failed to do the inspection
he claimed (by his initials in the log) to have
performed; the official may have been distracted or
inattentive, and thus failed to notice the frayed
cable; or he may have seen the frayed cable but
been too lazy to make the repairs or deal with the
paperwork involved in reporting the damage.
Id. The court concluded that such conduct did not involve an element of
judgment or choice nor was it based on policy considerations, and in such
an instance, discretionary-function immunity does not attach to shield the
government from suit. Id. at 109-11. In the end, the Coulthurst court held
that the inmate's complaint sufficiently alleged conduct by prison officials
that was not immunized by the discretionary-function immunity
exception, and the court vacated the lower court's dismissal and remanded
the case for further proceedings. Id.
The difference in the Franklin Savings and Coulthurst
approaches emanates from how broadly those courts apply the statement
in Gaubert that "[Ole focus of the inquiry is not on the agent's subjective
intent in exercising the discretion conferred . . . , but on the nature of the
actions taken and on whether they are susceptible to policy analysis." 499
U.S. at 325. Franklin Savings interpreted this requirement expansively to
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 preclude any consideration of whether an actor's conduct was done
maliciously or in bad faith, whereas Goulthurst applied a narrower view of
subjective intent, concluding that a complaint alleging a nondiscretionary
decision that caused the injury was not grounded in public policy. Our
approach in Falline concerning immunity for bad-faith conduct is
consistent with the reasoning in Coulthurst that intentional torts and bad-
faith conduct are acts "unrelated to any plausible policy objective[ 1" and
that such acts do not involve the kind of judgment that is intended to be
shielded from "judicial second-guessing." 214 F.3d at 111 (internal
quotations omitted). We therefore affirm our holding in Falline that NRS
41.032 does not protect a government employee for intentional torts or
bad-faith misconduct, as such misconduct, "by definition, [cannot] be
within the actor's discretion." Falline, 107 Nev. at 1009, 823 P.2d at 891-
92.
In light of our conclusion, we must now determine whether to
grant, under comity principles, FTB immunity from Hyatt's claims.
Because we conclude that discretionary-function immunity under NRS
41.032 does not include intentional torts and bad-faith conduct, a Nevada
government agency would not receive immunity under these
circumstances, and thus, we do not extend such immunity to FTB under
comity principles, as to do so would be contrary to the policy of this state.
Hyatt's intentional tort causes of action
Given that FTB may not invoke immunity, we turn next to
FTB's various arguments contesting the judgment in favor of Hyatt on

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 each of his causes of action.° Hyatt brought three invasion of privacy
causes of action—intrusion upon seclusion, publicity of private facts, and
false light—and additional causes of action for breach of confidential
relationship, abuse of process, fraud, and intentional infliction of
emotional distress. We discuss each of these causes of action below.
This court reviews questions of law de novo. Martinez, 123
Nev. at 438, 168 P.3d at 724. A jury's verdict will be upheld if it is
supported by substantial evidence. Prabhu v. Levine, 112 Nev. 1538,
1543, 930 P.2d 103, 107 (1996). Additionally, we "will not reverse an order
or judgment unless error is affirmatively shown." Schwartz v. Estate of
Greenspun, 110 Nev. 1042, 1051, 881 P.2d 638, 644 (1994).
Invasion of privacy causes of action
The tort of invasion of privacy embraces four different tort
actions: "(a) unreasonable intrusion upon the seclusion of another; or (b)
appropriation of the other's name or likeness; or (c) unreasonable publicity
given to the other's private life; or (d) publicity that unreasonably places
the other in a false light before the public." Restatement (Second) of Torts
§ 652A (1977) (citations omitted); PETA v. Bobby Berosini, Ltd., 111 Nev.
615, 629, 895 P.2d 1269, 1278 (1995), overruled on other grounds by City of
Las Vegas Downtown Redev. Agency v. Hecht, 113 Nev. 644, 650, 940 P.2d
134, 138 (1997). At issue in this appeal are the intrusion, disclosure, and
false light aspects of the invasion of privacy tort. The jury found in

6 We reject Hyatt's contention that this court previously determined
that each of his causes of action were valid as a matter of law based on the
facts of the case in resolving the prior writ petitions. To the contrary, this
court limited its holding to whether FTB was entitled to immunity, and
thus, we did not address the merits of Hyatt's claims.

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 Hyatt's favor on those claims and awarded him $52 million for invasion of
privacy damages. Because the parties' arguments regarding intrusion and
disclosure overlap, we discuss those privacy torts together, and we follow
that discussion by addressing the false light invasion of privacy tort.
Intrusion upon seclusion and public disclosure of private facts
On appeal, Hyatt focuses his invasion of privacy claims on
FTB's disclosures of his name, address, and social security number to
various individuals and entities. FTB contends that Hyatt's claims fail
because the information disclosed had been disseminated in prior public
records, and thus, could not form the basis of an invasion of privacy claim.
Intrusion upon seclusion and public disclosure of private facts
are torts grounded in a plaintiff's objective expectation of privacy. PETA,
111 Nev. at 630, 631, 895 P.2d at 1279 (recognizing that the plaintiff must
actually expect solitude or seclusion, and the plaintiffs expectation of
privacy must be objectively reasonable); Montesano v. Donrey Media Grp.,
99 Nev. 644, 649, 668 P.2d 1081, 1084 (1983) (stating that the public
disclosure of a private fact must be "offensive and objectionable to a
reasonable person of ordinary sensibilities"); see also Restatement
(Second) of Torts § 652B, 652D (1977). One defense to invasion of privacy
torts, referred to as the public records defense, arises when a defendant
can show that the disclosed information is contained in a court's official
records. Montesano, 99 Nev. at 649, 668 P.2d at 1085. Such materials are
public facts, id., and a defendant cannot be liable for disclosing
information about a plaintiff that was already public. Restatement
(Second) of Torts § 652D cmt. b (1977).
Here, the record shows that Hyatt's name, address, and social
security number had been publicly disclosed on several occasions, before
FTB's disclosures occurred, in old court documents from his divorce
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 proceedings and in a probate case. Hyatt also disclosed the information
himself when he made the information available in various business
license applications completed by Hyatt. Hyatt maintains that these
earlier public disclosures were from long ago, and that the disclosures
were only in a limited number of documents, and therefore, the
information should not be considered as part of the public domain. Hyatt
asserts that this results in his objective expectation of privacy in the
information being preserved.
This court has never limited the application of the public
records defense based on the length of time between the public disclosure
and the alleged invasion of privacy. In fact, in Montesano, 99 Nev. 644,
668 P.2d 1081, we addressed disclosed information contained in a public
record from 20 years before the disclosure at issue there and held that the
protection still applied. Therefore, under the public records defense, as
delineated in Montesano, Hyatt is precluded from recovering for invasion
of privacy based on the disclosure of his name, address, and social security
number, as the information was already publicly available, and he thus
lacked an objective expectation of privacy in the information. 7

7 Beyond his name, address, and social security number, Hyatt also
alleged improper disclosures related to the publication of his credit card
number on one occasion and his licensing contracts on another occasion.
But this information was only disclosed to one or two third parties, and it
was information that the third parties already had in their possession
from prior dealings with Hyatt. Thus, we likewise conclude that Hyatt
lacked an objective expectation of privacy as a matter of law. PETA, 111
Nev. at 631, 895 P.2d at 1279; Montesano, 99 Nev. at 649, 668 P.2d at
1084.

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 Because Hyatt cannot meet the necessary requirements to
establish his invasion of privacy causes of action for intrusion upon
seclusion and public disclosure of private facts, we reverse the district
court's judgment based on the jury verdict as to these causes of action. 8
False light invasion of privacy
Regarding Hyatt's false light claim, he argues that FTB
portrayed him in a false light throughout its investigation because FTB's
various disclosures portrayed Hyatt as a "tax cheat." FTB asserts that
Hyatt failed to provide any evidence to support his claim. Before reaching
the parties' arguments as to Hyatt's false light claim, we must first
determine whether to adopt this cause of action in Nevada, as this court
has only impliedly recognized the false light invasion of privacy tort. See
PETA, 111 Nev. at 622 n.4, 629, 895 P.2d at 1273 n.4, 1278. "Whether to
adopt [this tort] as [a] viable tort claim1 ] is a question of state law."
Denver Publ'g Co. v. Bueno, 54 P.3d 893, 896 (Colo. 2002).
Adopting the false light invasion of privacy tort
Under the Restatement, an action for false light arises when
[o]ne who gives publicity to a matter concerning
another that places the other before the public in a
false light .. . if

8 Hyatt also argues that FTB violated his right to privacy when its
agents looked through his trash, looked at a package on his doorstep, and
spoke with neighbors, a postal carrier, and a trash collector. Hyatt does
not provide any authority to support his assertion that he had a legally
recognized objective expectation of privacy with regard to FTB's conduct in
these instances, and thus, we decline to consider this contention. See
Edwards v. Emperor's Garden Rest., 122 Nev. 317, 330 n.38, 130 P.3d
1280, 1288 n.38 (2006) (explaining that this court need not consider claims
that are not cogently argued or supported by relevant authority).

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 (a) the false light in which the other was placed
would be highly offensive to a reasonable person,
and
(b) the actor had knowledge of or acted in reckless
disregard as to the falsity of the publicized matter
and the false light in which the other would be
placed.
Restatement (Second) of Torts § 652E (1977). The greatest constraint on
the tort of false light is its similarity to the tort of defamation.
A majority of the courts that have adopted the false light
privacy tort have done so after concluding that false light and defamation
are distinct torts. 9 See Welling v. Weinfeld, 866 N.E.2d 1051 (Ohio 2007)
(explaining the competing views); West v. Media Gen. Convergence, Inc., 53
S.W.3d 640 (Tenn. 2001) (same). For these courts, defamation law seeks
to protect• an objective interest in one's reputation, "either economic,
political, or personal, in the outside world." Crump v. Beckley Newspapers,
Inc., 320 S.E.2d 70, 83 (W. Va. 1984) (internal quotations omitted). By
contrast, false light invasion of privacy protects one's subjective interest in
freedom from injury to the person's right to be left alone. Id. Therefore,
according to these courts there are situations (being falsely portrayed as a
victim of a crime, such as sexual assault, or being falsely identified as
having a serious illness, or being portrayed as destitute) in which a person
may be placed in a harmful false light even though it does not rise to the

9 This court, in PETA, while not reaching the false light issue,
observed that 'Mlle false light privacy action differs from a defamation
action in that the injury in privacy actions is mental distress from having
been exposed to public view, while the injury in defamation actions is
damage to reputation.'" 111 Nev. at 622 n.4, 895 P.2d at 1274 n.4 (quoting
Rinsley v. Brandt, 700 F.2d 1304, 1307 (10th Cir. 1983)).

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 level of defamation. Welling, 866 N.E.2d at 1055-57; West, 53 S.W.3d at
646. Without recognizing the separate false light privacy tort, such an
individual would be left without a remedy. West, 53 S.W.3d at 646.
On the other hand, those courts that have declined to adopt
the false light tort have done so based on its similarity to defamation. See,
e.g., Sullivan v. Pulitzer Broad. Co., 709 S.W.2d 475 (Mo. 1986); Renwick
v. News & Observer Pubrg Co., 312 S.E.2d 405 (N.C. 1984); Cain v. Hearst
Corp., 878 S.W.2d 577 (Tex. 1994). "The primary objection courts level at
false light is that it substantially overlaps with defamation, both in
conduct alleged and interests protected." Denver Pubrg Co., 54 P.3d at
898. For these courts, tort law serves to deter "socially wrongful conduct,"
and thus, it needs "clarity and certainty." Id. And because the
parameters defining the difference between false light and defamation are
blurred, these courts conclude that "such an amorphous tort risks chilling
fundamental First Amendment freedoms." Id. In such a case, a media
defendant would have to "anticipate whether statements are 'highly
offensive' to a reasonable person of ordinary sensibilities even though their
publication does no harm to the individual's reputation." Id. at 903.
Ultimately, for these courts, defamation, appropriation, and intentional
infliction of emotional distress provide plaintiffs with adequate remedies.
Id. at 903.
Considering the different approaches detailed above, we, like
the majority of courts, conclude that a false light cause of action is
necessary to fully protect privacy interests, and we now officially recognize
false light invasion of privacy as a valid cause of action in connection with
the other three privacy causes of action that this court has adopted.
Because we now recognize the false light invasion of privacy cause of

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 action, we address FTB's substantive arguments regarding Hyatt's false
light claim.
Hyatt's false light claim
The crux of Hyatt's false light invasion of privacy claim is that
FTB's demand-for-information letters, its other contact with third parties
through neighborhood visits and questioning, and the inclusion of his case
on FTB's litigation roster suggested that he was a "tax cheat," and
therefore, portrayed him in a false light. On appeal, FTB argues that
Hyatt presented no evidence that anyone thought that he was a "tax
cheat" based on the litigation roster or third-party contacts.
FTB's litigation roster was an ongoing monthly litigation list
that identified the cases that FTB was involved in. The list was available
to the public and generally contained audit cases in which the protest and
appeal process had been completed and the cases were being litigated in
court. After Hyatt initiated this litigation, FTB began including the case
on its roster, which Hyatt asserts was improper because the protests in his
audits had not yet been completed. FTB, however, argues that because
the lawsuit was ongoing, it did not place Hyatt in a false light by including
him on the roster. Further, FTB argues that the litigation roster that
Hyatt relied on was not false. When FTB began including Hyatt on the
litigation roster, he was not falsely portrayed because he was indeed
involved in litigation with FTB in this case. Hyatt did not demonstrate
that the litigation roster contained any false information. Rather, he only
argued that his inclusion on the list was improper because his audit cases
had not reached the final challenge stage like other cases on the roster.
FTB's contacts with third parties' through letters, demands for
information, or in person was not highly offensive to a reasonable person

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 and did not falsely portray Hyatt as a "tax cheat." In contacting third
parties, FTB was merely conducting its routine audit investigations.
The record before us reveals that no evidence presented by
Hyatt in the underlying suit supported the jury's conclusion that FTB
portrayed Hyatt in a false light. See Prabhu, 112 Nev. at 1543, 930 P.2d
at 107. Because Hyatt has failed to establish a false light claim, we
reverse the district court's judgment on this claim. 10
Having addressed Hyatt's invasion of privacy causes of action,
we now consider FTB's challenges to Hyatt's remaining causes of action
for breach of confidential relationship, abuse of process, fraud, and
intentional infliction of emotional distress.
Breach of confidential relationship
A breach of confidential relationship cause of action arises "by
reason of kinship or professional, business, or social relationships between
the parties." Perry v. Jordan, 111 Nev. 943, 947, 900 P.2d 335, 337 (1995).
On appeal, FTB contends that Hyatt could not prevail as a matter of law
on his claim for breach of a confidential relationship because he cannot
establish the requisite confidential relationship. In the underlying case,
the district court denied FTB's motion for summary judgment and its
motion for judgment as a matter of law, which presented similar
arguments, and at trial the jury found FTB liable on this cause of action.
Hyatt argues that his claim for breach of confidentiality falls within the
parameters of Perry because FTB promised to protect his confidential

mBased on this resolution, we need not address the parties'
remaining arguments involving this cause of action.

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 information and its position over Hyatt during the audits established the
necessary confidential relationship.n
In Perry, this court recognized that a confidential relationship
exists when a party gains the confidence of another party and purports to
advise or act consistently with the other party's interest. Id. at 947, 900
P.2d at 338. In that case, store owner Perry sold her store to her neighbor
and friend, Jordan, knowing that Jordan had no business knowledge, that
Jordan was buying the store for her daughters, not for herself, and that
Jordan would rely on Perry to run the store for a contracted one-year
period after the sale was complete. Id. at 945-46, 900 P.2d at 336-37. Not
long after the sale, Perry stopped running the store, and the store
eventually closed. Id. at 946, 900 P.2d at 337. Jordan filed suit against
Perry for, among other things, breach of a confidential relationship. Id. A
jury found in Jordan's favor and awarded damages. Id. Perry appealed,
arguing that this court had not recognized a claim for breach of a
confidential relationship. Id.
On appeal, this court ruled that a breach of confidential
relationship claim was available under the facts of the case. Id. at 947,
900 P.2d at 338. The court noted that Perry "held a duty to act with the
utmost good faith, based on her confidential relationship with Jordan[,
and that the] duty requires affirmative disclosure and avoidance of self
dealing." Id. at 948, 900 P.2d at 338. The court explained that "[w]hen a

11 FTB initially argues that Hyatt attempts to blend the cause of
action recognized in Perry with a separate breach of confidentiality cause
of action that, while recognized in other jurisdictions, has not been
recognized by this court. We reject this contention, as the jury was
instructed based on the cause of action outlined in Perry.

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 confidential relationship exists, the person in whom the special trust is
placed owes a duty to the other party similar to the duty of a fiduciary,
requiring the person to act in good faith and with due regard to the
interests of the other party." Id. at 947, 900 P.2d at 338.
FTB contends that the relationship between a tax auditor and
the person being audited does not create the necessary relationship
articulated in Perry to establish a breach of confidential relationship cause
of action. In support of this proposition, FTB cites to Johnson v. Sawyer,
which was heard by the Fifth Circuit Court of Appeals. 47 F.3d 716 (5th
Cir. 1995) (en bane). In Johnson, the plaintiff sought damages from press
releases by the Internal Revenue Service (IRS) based on a conviction for
filing a fraudulent tax return. Id. at 718. Johnson was criminally charged
based on erroneous tax returns. Id. at 718-19. He eventually pleaded
guilty to a reduced charge as part of a plea bargain. Id. at 718-20.
Following the plea agreement, two press releases were issued that
contained improper and private information about Johnson. Id. at 720-21.
Johnson filed suit against the IRS based on these press releases, arguing
that they cost him his job and asserting several causes of action, one being
breach of a confidential relationship. Id. at 718, 725, 738. On appeal, the
Fifth Circuit Court of Appeals affirmed the district court's ruling that a
breach of a confidential relationship could not be maintained based on the
relationship between Johnson and the IRS, as it was clear that the two
parties "stood in an adversarial relationship." Id. at 738 n.47.
Hyatt rejects FTB's reliance on this case, arguing that the
Johnson ruling is inapposite to the present case because, here, FTB made
express promises regarding protecting Hyatt's confidential information
but then failed to keep those promises. Hyatt maintains that although

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 FTB may not have acted in his best interest in every aspect of the audits,
as to keeping his information confidential, FTB affirmatively undertook
that responsibility and breached that duty by revealing confidential
information.
But in conducting the audits, FTB was not required to act
with Hyatt's interests in mind; rather, it had a duty to proceed on behalf of
the state of California's interest. Johnson, 47 F.3d at 738 n.47. Moreover,
the parties' relationship was not akin to a family or business relationship.
Perry, 111 Nev. at 947, 900 P.2d at 337-38. Hyatt argues for a broad
range of relationships that can meet the requirement under Perry, but we
reject this contention. Perry does not provide for so expansive a
relationship as Hyatt asks us to recognize as sufficient to establish a claim
for a breach of confidential relationship. 12 Thus, FTB and Hyatt's
relationship cannot form the basis for a breach of a confidential
relationship cause of action, and this cause of action fails as a matter of
law. The district court judgment in Hyatt's favor on this claim is reversed.
Abuse of process
A successful abuse of process claim requires -(1) an ulterior
purpose by the defendants other than resolving a legal dispute, and (2) a
willful act in the use of the legal process not proper in the regular conduct
of the proceeding." LaMantia v. Redisi, 118 Nev. 27, 30, 38 P.3d 877, 879

12Further, we note that the majority of cases that Hyatt cites as
authority for a more expansive viewpoint of a confidential relationship
involve claims arising from a doctor-patient confidentiality privilege,
which does not apply here. See, e.g., Doe v. Medlantic Health Care Grp.,
Inc., 814 A.2d 939, 950-51 (D.C. 2003); Humphers v. First Interstate Bank
of Or., 696 P.2d 527, 533-35 (Or. 1985).

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 (2002) (quoting Posadas v. City of Reno, 109 Nev. 448, 457, 851 P.2d 438,
444-45 (1993)). Put another way, a plaintiff must show that the defendant
"willfully and improperly used the legal process to accomplish" an ulterior
purpose other than resolving a legal dispute. Id. at 31, 38 P.3d at 880
(emphasis added).
FTB asserts that it was entitled to judgment as a matter of
law on Hyatt's abuse of process cause of action because it did not actually
use the judicial process, as it never sought to judicially enforce compliance
with the demand-for-information forms and did not otherwise use the
judicial process in conducting its audits of Hyatt. In response, Hyatt
argues that FTB committed abuse of process by sending demand-for-
information forms to individuals and companies in Nevada that are not
subject to the California law cited in the form.
Because FTB did not use any legal enforcement process, such
as filing a court action, in relation to its demands for information or
otherwise during the audits, Hyatt cannot meet the requirements for
establishing an abuse of process claim. LaMantia, 118 Nev. at 31, 38 P.3d
at 880; ComputerXpress, Inc. v. Jackson, 113 Cal. Rptr. 2d 625, 644 (Ct.
App. 2001) (explaining that abuse of process only arises when there is
actual "use of the machinery of the legal system for an ulterior motive"
(internal quotations omitted)); see also Tuck Beckstoffer Wines L.L.C. v.
Ultimate Distribs., Inc., 682 F. Supp. 2d 1003, 1020 (N.D. Cal. 2010). On
this cause of action, then, FTB is entitled to judgment as a matter of law,
and we reverse the district court's judgment.
Fraud
To prove a fraud claim, the plaintiff must show that the
defendant made a false representation that the defendant knew or
believed was false, that the defendant intended to persuade the plaintiff to
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36
 act or not act based on the representation, and that the plaintiff had
reason to rely on the representation and suffered damages. Bulb man, Inc.
v. Nev. Bell, 108 Nev. 105, 111, 825 P.2d 588, 592 (1992). It is the jury's
role to make findings on the factors necessary to establish a fraud claim.
Powers v. United Servs. Auto, Ass'n, 114 Nev. 690, 697-98, 962 P.2d 596,
600-01 (1998). This court will generally not disturb a jury's verdict that is
supported by substantial evidence. Taylor v. Thunder, 116 Nev. 968, 974,
13 P.3d 43, 46 (2000). Substantial evidence is defined as "evidence that a
reasonable mind might accept as adequate to support a conclusion."
Wine/tell v. Schiff, 124 Nev. 938, 944, 193 P.3d 946, 950 (2008) (internal
quotations omitted).
When Hyatt's 1991 audit began, FTB informed him that
during the audit process Hyatt could expect FTB employees to treat him
with courtesy, that the auditor assigned to his case would clearly and
concisely request information from him, that any personal and financial
information that he provided to FTB would be treated confidentially, and
that the audit would be completed within a reasonable time. FTB
contends that its statements in documents to Hyatt, that it would provide
him with courteous treatment and keep his information confidential, were
insufficient representations to form a basis for a fraud claim, and even if
the representations were sufficient, there was no evidence that FTB knew
that they were false when made. In any case, FTB argues that Hyatt did
not prove any reliance because he was required to participate in the audits
whether he relied on these statements or not. Hyatt asserts that FTB
knowingly misrepresented its promise to treat him fairly and impartially
and to protect his private information. For the reasons discussed below,

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 we reject FTB's argument that it was entitled to judgment as a matter of
law on Hyatt's fraud claim.
The record before us shows that a reasonable mind could
conclude that FTB made specific representations to Hyatt that it intended
for Hyatt to rely on, but which it did not intend to fully meet. FTB
represented to Hyatt that it would protect his confidential information and
treat him courteously. At trial, Hyatt presented evidence that FTB
disclosed his social security number and home address to numerous people
and entities and that FTB revealed to third parties that Hyatt was being
audited. In addition, FTB sent letters concerning the 1991 audit to
several doctors with the same last name, based on its belief that one of
those doctors provided Hyatt treatment, but without first determining
which doctor actually treated Hyatt before sending the correspondence.
Furthermore, Hyatt showed that FTB took 11 years to resolve Hyatt's
protests of the two audits. Hyatt alleged that this delay resulted in $8,000
in interest per day accruing against him for the outstanding taxes owed to
California. Also at trial, Hyatt presented evidence through Candace Les, a
former FTB auditor and friend of the main auditor on Hyatt's audit,
Sheila Cox, that Cox had made disparaging comments about Hyatt and his
religion, that Cox essentially was intent on imposing an assessment
against Hyatt, and that FTB promoted a culture in which tax assessments
were the end goal whenever an audit was undertaken. Hyatt also testified
that he would not have hired legal and accounting professionals to assist
in the audits had he known how he would be treated. Moreover, Hyatt
stated that he incurred substantial costs that he would not otherwise have
incurred by paying for professional representatives to assist him during
the audits.

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 The evidence presented sufficiently showed FTB's improper
motives in conducting Hyatt's audits, and a reasonable mind could
conclude that FTB made fraudulent representations, that it knew the
representations were false, and that it intended for Hyatt to rely on the
representations. 13 What's more, the jury could reasonably conclude that
Hyatt relied on FTB's representations to act and participate in the audits
in a manner different than he would have otherwise, which resulted in
damages. Based on this evidence, we conclude that substantial evidence
supports each of the fraud elements and that FTB is not entitled to
judgment as a matter of law on this cause of action. 14

13 FTB's argument concerning government agents making
representations beyond the scope of law is without merit.

14 FTB further argues that several evidentiary errors by the district
court warrant a new trial. These errors include admitting evidence
concerning whether the audit conclusions were correct and excluding
FTB's evidence seeking to rebut an adverse inference for spoliation of
evidence. FTB also asserts that the district court improperly instructed
the jury by permitting it to consider the audit determinations. Although
we agree with FTB that the district court abused its discretion in these
evidentiary rulings and in its jury instruction number 24, as discussed
more fully below in regard to Hyatt's intentional infliction of emotional
distress claim, we conclude that these errors were harmless as to Hyatt's
fraud claim because sufficient evidence of fraud existed for the jury to find
in Hyatt's favor on each required element for fraud. See Cook v. Sunrise
Hosp. & Med. Ctr., L.L.C., 124 Nev. 997, 1006, 194 P.3d 1214, 1219 (2008)
(holding that when there is error in a jury instruction, "prejudice must be
established in order to reverse a district court judgment," and this is done
by "showing that, but for the error, a different result might have been
reached"); El Cortez Hotel, Inc. v. Coburn, 87 Nev. 209, 213, 484 P.2d 1089,
1091 (1971) (stating that an evidentiary error must be prejudicial in order
to warrant reversal and remand).

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 Fraud damages
Given our affirmance of the district court's judgment on the
jury verdict in Hyatt's favor on his fraud claim, we turn to FTB's challenge
as to the special damages awarded Hyatt on his fraud claim. 16 In doing so,
we address whether FTB is entitled to statutory caps on the amount of
damages recoverable to the same extent that a Nevada government
agency would receive statutory caps under principles of comity. 16 NRS
41.035 provides a statutory cap on liability damages in tort actions
"against a present or former officer or employee of the State or any
political subdivision." FTB argues that because it is immune from liability
under California law, and Nevada provides a statutory cap on liability
damages, it is entitled to the statutory cap on its liability to the extent
that the law does not conflict with Nevada policy. Hyatt asserts that
applying the statutory caps would in fact violate Nevada policy because
doing so would not sufficiently protect Nevada residents. According to
Hyatt, limitless compensatory damages are necessary as a means to

16 The jury verdict form included a separate damage award for
Hyatt's fraud claim. We limit our discussion of Hyatt's fraud damages to
these special damages that were awarded. To the extent that Hyatt
argues that he is entitled to other damages for his fraud claim beyond the
special damages specified in the jury verdict form, we reject this argument
and limit any emotional distress damages to his recovery under his
intentional infliction of emotional distress claim, as addressed below.

16 FTB argues that under the law-of-the-ease doctrine, comity applies
to afford it a statutory cap on damages and immunity from punitive
damages based on this court's conclusions in the earlier writ petitions.
But this court did not previously address these issues and the issues are
different, thus, law of the case does not apply. Dictor v. Creative Mgmt.
Servs., 126 Nev. 41, 44-45, 223 P.3d 332, 334-35 (2010).

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 control non-Nevada government actions. Hyatt claims that statutory caps
for Nevada government actions work because Nevada can control its
government entities and employees through other means, such as
dismissal or other discipline, that are not available to control an out-of-
state government entity. Additionally, Hyatt points out that there are
other reasons for the statutory caps that are specificS only to Nevada, such
as attracting state employees by limiting potential liability. Therefore,
Hyatt argues that FTB is not entitled to statutory caps under comity
because it would violate Nevada's superior policy of protecting its
residents from injury.
The parties base their arguments on precedent from other
courts that have taken different approaches to the issue. FTB primarily
relies on a New Mexico Supreme Court case, Sam v. Estate of Sam, 134
P.3d 761 (N.M. 2006), and Hyatt supports his arguments by mainly
relying on Faulkner v. University of Tennessee, 627 So. 2d 362 (Ala. 1992).
In Sam, an employee of an Arizona government entity
accidentally backed over his child while driving his employer's vehicle at
his home in New Mexico. 134 P.3d at 763. In a lawsuit arising out of this
accident, the issue before the Sam court was whether Arizona's one-year
statute of limitation for government employees, or New Mexico's two-year
statute of limitation for government employees or three-year general tort
statute of limitation law should apply. Id. at 764. The court discussed the
comity doctrine and concluded that New Mexico's two-year statute of
limitations for government employees applied because by doing so it was
recognizing Arizona's law to the extent that it did not conflict with New
Mexico's law. Id. at 764-68.

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 In reaching this conclusion, the Sam court relied on the
United States Supreme Court's holdings in Nevada v. Hall, 440 U.S. 410
(1979), and Franchise Tax Board of California v. Hyatt, 538 U.S. 488
(2003). Sam, 134 P.3d at 765-66. The Sam court stated that "Lbloth these
cases stand for the principle that a forum state is not required to extend
immunity to other states sued in its courts, but the forum state should
extend immunity as a matter of comity if doing so will not violate the
forum state's public policies." Id. at 765. Based on this framework for
comity, the Sam court concluded that Arizona should be entitled to the
statute of limitations for government agencies that New Mexico would
provide to its government agencies. Most courts appear to follow FTB's
argument regarding how comity applies and that a state should recognize
another state's laws to the extent that they do not conflict with its own.
See generally Solomon v. Supreme Court of Fla., 816 A.2d 788, 790 (D.C.
2002); Schoeberlein v. Purdue Univ., 544 N.E.2d 283, 285 (Ill. 1989);
McDonnell v. Illinois, 748 A.2d 1105, 1107 (N.J. 2000); Sam, 134 P.3d at
765; Hansen v. Scott, 687 N.W.2d 247, 250 (N.D. 2004).
In Faulkner, the plaintiff filed a lawsuit against the
University of Tennessee after it threatened to revoke plaintiffs doctoral
degree. 627 So. 2d at 363-64. The issue in Faulkner was whether the
University of Tennessee (UT) was entitled to discretionary immunity
under comity, when both Tennessee and Alabama had similar
discretionary-immunity provisions for their states' government entities.
Id. at 366. Considering the policy of allowing residents legal redress,
compared to the immunity policies that both states had, the Faulkner
court observed that
[wile cannot, absent some overriding policy, leave
Alabama residents without redress within this
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 State, relating to alleged acts of wrongdoing by an
agency of another State, where those alleged acts
are associated with substantial commercial
activities in Alabama. We conclude that comity is
not such an overriding policy in this instance.
Id. The court rejected the argument that granting comity would not
violate Alabama policy because its residents were used to Alabama
government entities receiving immunity:
Agencies of the State of Alabama are subject to
legislative control, administrative oversight, and
public accountability in Alabama; UT is not.
Actions taken by an agency or instrumentality of
this state are subject always to the will of the
democratic process in Alabama. UT, as an
instrumentality of the State of Tennessee,
operates outside such controls in this State.
Id, The Faulkner court ultimately declined to grant UT immunity under
comity. We are persuaded by the Faulkner court's reasoning.
This state's policy interest in providing adequate redress to
Nevada citizens is paramount to providing FTB a statutory cap on
damages under comity. Therefore, as we conclude that allowing FTB a
statutory cap would violate this state's public policy in this area, comity
does not require this court to grant FTB such relief. Id.; Sam, 134 P.3d at
765 (recognizing that a state is not required to extend immunity and
comity only dictates doing so if it does not contradict the forum state's
public policy). As this is the only argument FTB raised in regard to the
special damages awarded under the fraud cause of action, we affirm the
amount of damages awarded for fraud. The prejudgment interest awarded
is vacated and remanded to the district court for a recalculation based on
the damages for fraud that we uphold. In light of our ruling that only the
special award of damages for fraud is affirmed, FTB's argument that

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 prejudgment interest is not allowed because future damages were
interwoven with past damages is moot.
Intentional infliction of emotional distress
During discovery in the underlying case, Hyatt refused to
disclose his medical records. As a result, he was precluded at trial from
presenting any medical evidence of severe emotional distress.
Nevertheless, at trial, Hyatt presented evidence designed to demonstrate
his emotional distress in the form of his own testimony regarding the
emotional distress he experienced, along with testimony from his son and
friends detailing their observation of changes in Hyatt's behavior and
health during the audits. Based on this testimony, the jury found in
Hyatt's favor on his intentional infliction of emotional distress (TIED)
claim and awarded him $82 million for emotional distress damages.
To recover on a claim for TIED, a plaintiff must prove "(1)
extreme and outrageous conduct on the part of the defendant; (2) intent to
cause emotional distress or reckless disregard for causing emotional
distress; (3) that the plaintiff actually suffered extreme or severe
emotional distress; and (4) causation." Miller v. Jones, 114 Nev. 1291,
1299-1300, 970 P.2d 571, 577 (1998); see also Bannettler u. Reno Air, Inc.,
114 Nev. 441, 447, 956 P.2d 1382, 1386 (1998). A plaintiff must set forth
"objectively verifiable indicia" to establish that the plaintiff "actually
suffered extreme or severe emotional distress." Miller, 114 Nev. at 1300,
970 P.2d at 577.
On appeal, FTB argues that Hyatt failed to establish that he
actually suffered severe emotional distress because he failed to provide
any medical evidence or other objectively verifiable evidence to establish
such a claim. In response, Hyatt contends that the testimony provided by
his family and other acquaintances sufficiently established objective proof
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 of the severe and extreme emotional distress he suffered, particularly in
light of the facts of this case demonstrating the intentional harmful
treatment he endured from FTB. Hyatt asserts that the more severe the
harm, the lower the amount of proof necessary to establish that he
suffered severe emotional distress. While this court has held that
objectively verifiable evidence is necessary in order to establish an TIED
claim, id., we have not specifically addressed whether this necessarily
requires medical evidence or if other objective evidence is sufficient.
The Restatement (Second) of Torts § 46 (1977), in 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 in order to establish an TIED claim. Restatement (Second) of
Torts § 46 cmt. j (1977) ("The intensity and the duration of the distress are
factors to be considered in determining its severity. Severe distress must
be proved; but in many cases the extreme and outrageous character of the
defendant's conduct is in itself important evidence that the distress has
existed."); Restatement (Second) of Torts § 46 cmt. k (1977) (stating that
"if the enormity of the outrage carries conviction that there has in fact
been severe emotional distress, bodily harm is not required"). This court
has also impliedly recognized this sliding-scale approach, although stated
in the reverse. Nelson v. City of Las Vegas, 99 Nev. 548, 665 P.2d 1141
(1983). In Nelson, this court explained that "Wile less extreme the
outrage, the more appropriate it is to require evidence of physical injury or
illness from the emotional distress." Id. at 555, 665 P.2d at 1145.
Further, other jurisdictions that require objectively verifiable
evidence have determined that such a mandate does not always require
medical evidence. See Lyman v. Hither, 10 A.3d 707 (Me. 2010) (stating

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 that medical testimony is not mandatory to establish an TIED claim,
although only in rare, extreme circumstances); Buckman-Peirson v.
Brannon, 822 N.E.2d 830, 840-41 (Ohio Ct. App. 2004) (stating that
medical evidence is not required, but also holding that something more
than just the plaintiffs own testimony was necessary); see also Dixon v.
Denny's, Inc., 957 F. Supp. 792, 796 (E.D. Va. 1996) (stating that plaintiff
failed to establish an TIED claim because plaintiff did not provide objective
evidence, such as medical bills "or even the testimony of friends or
family"). Additionally, in Farmers Home Mutual Insurance Co. v. Fiscus,
102 Nev. 371, 725 P.2d 234 (1986), this court upheld an award for mental
and emotional distress even though the plaintiffs' evidence did not include
medical evidence or testimony. Id. at 374-75, 725 P.2d at 236. While not
specifically addressing an TIED claim, the Fiscus court addressed the
recovery of damages for mental and emotional distress that arose from an
insurance company's unfair settlement practices when the insurance
company denied plaintiffs' insurance claim after their home had flooded.
Id. at 373, 725 P.2d at 235. In support of the claim for emotional and
mental distress damages, the husband plaintiff testified that he and his
wife lost the majority of their personal possessions and that their house
was uninhabitable, that because the claim had been rejected they lacked
the money needed to repair their home and the house was condemned, and
after meeting with the insurance company's representative the wife had
an emotional breakdown. Id. at 374, 725 P.2d at 236. This court upheld
the award of damages, concluding that the above evidence was sufficient
to prove that plaintiffs had suffered mental and emotional distress. Id. at
374-75, 725 P.2d at 236. In so holding, this court rejected the insurance
company's argument that there was insufficient proof of mental and

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 emotional distress because there was no medical evidence or independent
witness testimony. Id.
Based on the foregoing, we now specifically adopt the sliding-
scale approach to proving a claim for TIED. Under this sliding-scale
approach, while medical evidence is one acceptable manner in establishing
that severe emotional distress was suffered for purposes of an TIED claim,
other objectively verifiable evidence may suffice to establish a claim when
the defendant's conduct is more extreme, and thus, requires less evidence
of the physical injury suffered.
Turning to the facts in the present case, Hyatt suffered
extreme treatment from FTB. As explained above in discussing the fraud
claim, FTB disclosed personal information that it promised to keep
confidential and delayed resolution of Hyatt's protests for 11 years,
resulting in a daily interest charge of $8,000. Further, Hyatt presented
testimony that the auditor who conducted the majority of his two audits
made disparaging remarks about Hyatt and his religion, was determined
to impose tax assessments against him, and that FTB fostered an
environment in which the imposition of tax assessments was the objective
whenever an audit was undertaken. These 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 Hyatt is necessary.
In support of his TIED claim, Hyatt presented testimony from
three different people as to the how the treatment from FTB caused Hyatt
emotional distress and physically affected him. This included testimony of
how Hyatt's mood changed dramatically, that he became distant and much
less involved in various activities, started drinking heavily, suffered
severe migraines and had stomach problems, and became obsessed with

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 the legal issues involving FTB. We conclude that this evidence, in
connection with the severe treatment experienced by Hyatt, provided
sufficient evidence from which a jury could reasonably determine that
Hyatt suffered severe emotional distress. 17 Accordingly, we affirm the
judgment in favor of Hyatt on this claim as to liability. As discussed
below, however, we reverse the award of damages on this claim and
remand for a new trial as to damages on this claim only.
A new trial is warranted based on evidentiary and jury
instruction errors18
Early in this case, the district court granted FTB partial
summary judgment and dismissed Hyatt's declaratory relief cause of
action concerning when he moved from California to Nevada. The district
court reached this conclusion because the audits were still under review in
California, and therefore, the Nevada court lacked jurisdiction to address
whether the audits' conclusions were accurate. The partial summary
judgment was not challenged by Hyatt at any point to this court, and thus,
the district court's ruling was in effect throughout the trial. Consequently,
whether the audits' determinations were correct was not an issue in the
Nevada litigation.

13 Tothe extent FTB argues that it was prejudiced by its inability to
obtain Hyatt's medical records, we reject this argument as the rulings
below on this issue specifically allowed FTB to argue to the jury the lack of
any medical treatment or evidence by Hyatt.

18 While we conclude, as discussed below, that evidentiary and jury
instruction errors require a new trial as to damages on Hyatt's TIED
claim, we hold that sufficient evidence supports the jury's finding as to
liability on this claim regardless of these errors. Thus, these errors do not
alter our affirmance as to liability on this claim.

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 On appeal, FTB argues that the district court erroneously
allowed evidence and a jury instruction that went directly to whether the
audits were properly determined. FTB frames this issue as whether the
district court exceeded thefl case's jurisdictional boundaries, but the issue
more accurately involves the admissibility of evidence and whether a jury
instruction given by the district court was proper in light of the
jurisdictional ruling. We review both the admissibility of evidence and the
propriety of jury instructions for an abuse of discretion. See Hansen v.
Universal Health Servs., 115 Nev. 24, 27, 974 P.2d 1158, 1160 (1999)
(evidence); Allstate Ins. Co. v. Miller, 125 Nev. 300, 319, 212 P.3d 318, 331
(2009) (jury instruction).
Evidence improperly permitted challenging audits'
conclusions
FTB argues that the district court violated its jurisdictional
restriction governing this case, because by allowing Hyatt's claims to go
forward based on the evidence presented at trial, the jury was in effect
required to make findings on Hyatt's residency and whether he owed
taxes. FTB points to the testimony of a number of Hyatt's witnesses that
focused on whether the audits' results were correct: (1) Hyatt's tax
accountant and tax attorney, who were his representatives during the
audits, testified to their cooperation with FTB and that they did not
attempt to intimidate the auditor to refute two bases for the imposition of
penalties by FTB for lack of cooperation and intimidation; (2) an expert
tax attorney witness testified about Hyatt's representatives' cooperation
during the audits to refute the lack of cooperation allegation; (3) an expert
witness testified as to the lifestyles of wealthy people to refute the
allegation that Hyatt's actions of living in a low-income apartment
building in Las Vegas and having no security were "implausible
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 behaviors"; and especially, (4) expert testimony of former FTB agent
Malcom Jumulet regarding audit procedures, and Jumulet's testimony as
to how FTB analyzed and weighed the information obtained throughout
the audits as challenging the results of the audits reached by FTB.
Further, FTB points to Hyatt's arguments regarding an alleged
calculation error as to the amount of taxable income, which FTB argues is
an explicit example of Hyatt challenging the conclusions of the audits.
Hyatt argues that all the evidence he presented did not challenge the
audits, but was proffered to demonstrate that the audits were conducted
in bad faith and in an attempt to "trump up a case against Hyatt and
extort a settlement."
While much of the evidence presented at trial would not
violate the restriction against considering the audits' conclusions, there
are several instances in which the evidence does violate this ruling. These
instances included evidence challenging whether FTB made a
mathematical error in the amount of income that it taxed, whether an
auditor improperly gave credibility to certain interviews of estranged
family members, whether an auditor appropriately determined that
certain information was not credible or not relevant, as well as the
testimony outlined above that Hyatt presented, which challenged various
aspects of the fraud penalties.
The expert testimony regarding the fraud penalties went to
the audits' determinations and had no utility in showing any intentional
torts unless it was first concluded that the audits' determinations were
incorrect. For example, the expert testimony concerning typical lifestyles
of wealthy individuals had relevance only to show that FTB erroneously
concluded that Hyatt's conduct, such as renting an apartment in a low-

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 income complex, was fraudulent because he was wealthy and allegedly
only rented the apartment to give the appearance of living in Nevada.
Whether such a conclusion was a correct determination by FTB is
precisely what this case was not allowed to address. The testimony does
not show wrongful intent or bad faith without first concluding that the
decisions were wrong, unless it was proven that FTB knew wealthy
individuals' tendencies, that they applied to all wealthy individuals, and
that FTB ignored them. None of this was established, and thus, the
testimony only went to the audits' correctness, which was not allowed.
These are instances where the evidence went solely to challenging
whether FTB made the right decisions in its audits. As such, it was an
abuse of discretion for the district court to permit this evidence to be
admitted. Hansen, 115 Nev. at 27, 974 P.2d at 1160.
Jury instruction permitting consideration of audits'
determinations
FTB also argues that the district court wrongly instructed the
jury. Specifically, it asserts that the jury instruction given at the end of
trial demonstrates that the district court allowed the jury to improperly
consider FTB's audit determinations. Hyatt counters FTB's argument by
relying on an earlier instruction that was given to the jury that he argues
shows that the district court did not allow the jury to determine the
appropriateness of the audits' results, as it specifically instructed the jury
not to consider the audits' conclusions.
As background, before trial began, and at various times during
the trial, the district court read an instruction to the jury that it was not
to consider whether the audits' conclusions were correct:
Although this case arises from the residency
tax audit conducted by FTB, it is important for
you to understand that you will not be asked, nor
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e) 51
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 will you be permitted to make any determinations
related to Mr. Hyatt's residency or the correctness
of the tax assessments, penalties and interest
assessed by FTB against Mr. Hyatt. Thus,
although you may hear evidence during the course
of this trial that may be related to the
determinations and conclusions reached by FTB
regarding Mr. Hyatt's residency and tax
assessments, you are not permitted to make any
determinations regarding Mr. Hyatt's residency
such as when he became or did not become a
resident of Nevada.
When jury instructions were given, this instruction was intended to be
part of the jury instructions, but somehow the instruction was altered and
a different version of this instruction was read as Jury Instruction 24. To
correct the error, the district court read a revised Jury Instruction 24:
You have heard evidence during the course
of this trial that may be related to the
determinations and conclusions reached by FTB
regarding Mr. Hyatt's residency and tax
assessments. You are not permitted to make any
determinations regarding Mr. Hyatt's residency,
such as when he became or did not become a
resident of Nevada. Likewise, you are not
permitted to make any determinations related to
the propriety of the tax assessments issued by
FTB against Mr. Hyatt, including but not limited
to, the correctness or incorrectness of the amount
of taxes assessed, or the determinations of FTB to
assess Mr. Hyatt penalties and/or interest on
those tax assessments.
The residency and tax assessment
determinations, and all factual and legal issues
related thereto, are the subject matter of a
separate administrative process between Mr.
Hyatt and FTB in the State of California and will
be resolved in that administrative process. You
are not to concern yourself with those issues.
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 Counsel for the FTB read and presented
argument from the inaccurate Jury Instruction
No. 24. To the extent FTB's counsel's arguments
cited and relied on statements that are not
contained in the correct Jury Instruction No. 24,
they are stricken and you must disregard them.
You are not to consider the stricken statements
and arguments in your deliberations. There is
nothing in the correct Jury Instruction No. 24 that
would prevent you during your deliberations from
considering the appropriateness or correctness of
the analysis conducted by the FTB employees in
reaching its residency determination and
conclusion. There is nothing in Jury Instruction
No. 24 that would prevent Malcolm Jumulet from
rendering an opinion about the appropriateness or
correctness of the analysis conducted by FTB
employees in reaching its residency determinations
and conclusions.
(Emphasis added.) Based on the italicized language, FTB argues that the
district court not only allowed, but invited the jury to consider whether the
FTB's audit conclusions were correct.
Jury Instruction 24 violated the jurisdictional limit that the
district court imposed on this case. The instruction specifically allowed
the jury to consider the "appropriateness or correctness of the analysis
conducted by the FTB employees in reaching its residency determination
and conclusion." As a result, the district court abused its discretion in
giving this jury instruction. Allstate Ins. Co., 125 Nev. at 319, 212 P.3d at
331.
Exclusion of evidence to rebut adverse inference
FTB also challenges the district court's exclusion of evidence
that it sought to introduce in an effort to rebut an adverse inference
sanction for spoliation of evidence. The evidentiary spoliation arose when
FTB changed its e-mail server in 1999, and it subsequently destroyed
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 backup tapes from the old server. Because the server change occurred
during the pendency of this litigation, FTB sent multiple e-mails to its
employees, before the change, requesting that they print or otherwise save
any e-mails related to Hyatt's case. Backup tapes containing several
weeks' worth of e-mails were made from the old system to be used in the
event that FTB needed to recover the old system. FTB, at some point,
overwrote these tapes, however, and Hyatt eventually discovered the
change in e-mail servers and requested discovery of the backup tapes,
which had already been deleted. Because FTB had deleted the backup
tapes, Hyatt filed a pretrial motion requesting sanctions against FTB.
The district court ruled in Hyatt's favor and determined that it would give
an adverse inference jury instruction. An adverse inference allows, but
does not require, the jury to infer that evidence negligently destroyed by a
party would have been harmful to that party. See, e.g., Bass-Davis v.
Davis, 122 Nev. 442, 446, 452, 134 P.3d 103, 106, 109 (2006).
At trial, FTB sought to introduce evidence explaining the
steps it had taken to preserve any relevant e-mails before the server
change. Hyatt challenged this evidence, arguing that it was merely an
attempt to reargue the evidence spoliation. The district court agreed with
Hyatt and excluded the evidence. FTB does not challenge the jury
instruction, but it does challenge the district court's exclusion of evidence
that it sought to present at trial to rebut the adverse inference.
On this point, FTB argues that it was entitled to rebut the
adverse inference, and therefore, the district court abused its discretion in
excluding the rebuttal evidence. Hyatt counters that it is not proper
evidence because in order to rebut the inference FTB had to show that the

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 destroyed evidence was not harmful and FTB's excluded evidence did not
demonstrate that the destroyed e-mails did not contain anything harmful.
This court has recognized that a district court may impose a
rebuttable presumption, under NRS 47.250(3), when evidence was
willfully destroyed, or the court may impose a permissible adverse
inference when the evidence was negligently destroyed. Bass-Davis, 122
Nev. at 447-48, 134 P.3d at 106-07. Under a rebuttable presumption, the
burden shifts to the spoliating party to rebut the presumption by showing
that the evidence that was destroyed was not unfavorable. 122 Nev. at
448, 134 P.3d at 107. If the party fails to rebut the presumption, then the
jury or district court may presume that the evidence was adverse to the
party that destroyed the evidence. Id. A lesser adverse inference, that
does not shift the burden of proof, is permissible. Id. at 449, 134 P.3d at
107. The lesser inference merely allows the fact-finder to determine,
based on other evidence, that a fact exists. Id.
In the present case, the district court concluded that FTB's
conduct was negligent, not willful, and therefore the lesser adverse
inference applied, and the burden did not shift to FTB. But the district
court nonetheless excluded the proposed evidence that FTB sought to
admit to rebut the adverse inference. The district court should have
permitted FTB to explain the steps that it took to collect the relevant e-
mails in an effort to demonstrate that none of the destroyed information
contained in the e-mails was damaging to FTB. Because the district court
did not allow FTB to explain the steps taken, we are not persuaded by
Hyatt's contention that FTB's evidence was actually only an attempt to
reargue the spoliation issue. To the contrary, FTB could use the proposed
evidence related to its efforts to collect all relevant e-mails to explain why

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 nothing harmful was destroyed. Therefore, we conclude that the district
court abused its discretion in excluding the evidence, and we reverse the
district court's ruling in this regard.
Other evidentiary errors
FTB additionally challenges the district court's exclusion of
evidence regarding Hyatt's loss of his patent through a legal challenge to
the validity of his patent and his being audited for his federal taxes by the
IRS, both of which occurred during the relevant period associated with
Hyatt's TIED claim. Hyatt asserts that the district court properly
excluded the evidence because it was more prejudicial than probative.
Under NRS 48.035(1), "[al lthough relevant, evidence is not
admissible if its probative value is substantially outweighed by the danger
of unfair prejudice. . . Hyatt argues that this provides a basis for the
district court's exclusion of this evidence. We conclude, however, that the
district court abused its discretion in excluding the evidence of Hyatt's
patent loss and federal tax audit on this basis. Although the evidence may
be prejudicial, it is doubtful that it is unfairly prejudicial as required
under the statute. And in any event, the probative value of this evidence
as to Hyatt's TIED claim, in particular in regard to damages caused by
FTB as opposed to other events in his life, is more probative than unfairly
prejudicial. Accordingly, the district court abused its discretion in
excluding this evidence.
Evidentiary and jury instruction errors warrant reversal
and remand for a new trial on damages only on the IIED
claim
Because the district court abused its discretion in making the
evidentiary and jury instruction rulings outlined above, the question
becomes whether these errors warrant reversal and remand for a new trial
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 on the TIED claim, or whether the errors were harmless such that the
judgment on the TIED claim should be upheld. See Cook v. Sunrise Hosp.
& Med. Ctr., L.L.C., 124 Nev. 997, 1006, 194 P.3d 1214, 1219 (2008)
(holding that when there is error in a jury instruction "prejudice must be
established in order to reverse a district court judgment," which can be
done by "showing that, but for the error, a different result might have
been reached"); El Cortez Hotel, Inc. v. Coburn, 87 Nev. 209, 213, 484 P.2d
1089, 1091 (1971) (stating that an evidentiary error must be prejudicial in
order to warrant reversal and remand). We hold that substantial evidence
exists to support the jury's finding as to liability against FTB on Hyatt's
TIED claim regardless of these errors, but we conclude that the errors
significantly affected the jury's determination of appropriate damages, and
therefore, these errors were prejudicial and require reversal and remand
for a new trial as to damages.
In particular, the record shows that at trial Hyatt argued that
FTB promised fairness and impartiality in its auditing processes but then,
according to Hyatt, proceeded to conduct unfair audits that amounted to
FTB "seeking to trump up a tax claim against him or attempt to extort
him." In connection with this argument, Hyatt asserted that the penalties
FTB imposed against Hyatt were done "to better bargain for and position
the case to settle." Hyatt also argued that FTB unfairly refused to correct
a mathematical error in the amount assessed against him when FTB
asserted that there was no error.
None of these assertions could be made without contesting the
audits' conclusions and determining that they were incorrect, which Hyatt
was precluded from doing. Further, excluding FTB's evidence to rebut the
adverse inference was prejudicial because Hyatt relied heavily on the

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 adverse inference, and it is unknown how much weight the jury gave the
inference in making its damages findings. The exclusion of evidence
concerning Hyatt's loss of his patent and his federal tax audit, both
occurring during the relevant period, relate to whether Hyatt's emotional
distress was caused by FTB's conduct or one of these other events. As for
the jury instruction, Instruction 24 gave the jury permission to consider
the audits' determinations, which the district court had previously
precluded it from reaching. As such, all of these errors resulted in
prejudice to FTB directly related to the amount of damages Hyatt may be
entitled to on his TIED claim. Therefore, a new trial as to the TIED
damages is warranted.
Recoverable damages on remand
As addressed above in regard to damages for Hyatt's fraud
claim, we reject FTB's argument that it should be entitled to Nevada's
statutory cap on damages for government entities under comity principles.
Based on our above analysis on this issue, we conclude that providing
statutory caps on damages under comity would conflict with our state's
policy interest in providing adequate redress to Nevada citizens. Thus,
comity does not require this court to grant FTB such relief. Faulkner v.
Univ. of Tenn., 627 So. 2d 362, 366 (Ala. 1992); see also Sam v. Estate of
Sam, 134 P.3d 761, 765 (N.M. 2006) (recognizing that a state is not
required to extend immunity and comity, and only dictating doing so if it
does not contradict the forum state's public policy). As a result, any
damages awarded on remand for Hyatt's TIED claim are not subject to any
statutory cap on the amount awarded. As to FTB's challenges concerning
prejudgment interest in connection with Hyatt's emotional distress
damages, these arguments are rendered moot by our reversal of the

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 damages awarded for a new trial and our vacating the prejudgment
interest award.
Punitive damages
The final issue that we must address in FTB's appeal is
whether Hyatt can recover punitive damages from FTB. The district court
allowed the issue of punitive damages to go to the jury, and the jury found
in Hyatt's favor and awarded him $250 million
Punitive damages are damages that are intended to punish a
defendant's wrongful conduct rather than to compensate a plaintiff for his
or her injuries. Bongiovi v. Sullivan, 122 Nev. 556, 580, 138 P.3d 433, 450
(2006). But "[t]he general rule is that no punitive damages are allowed
against a [government entity] unless expressly authorized by statute."
Long v. City of Charlotte, 293 S.E.2d 101, 114 (N.C. 1982) (emphasis
added). In Nevada, NRS 41.035(1) provides that "fain award for damages
[against a government entity] in an action sounding in tort .. . may not
include any amount as exemplary or punitive." Thus, Nevada has not
waived its sovereign immunity from suit for such damages.
FTB argues that it is entitled to immunity from punitive
damages based on comity because, like Nevada, California law has
expressly waived such damages against its government entities.
California law provides full immunity from punitive damages for its
government agencies. Cal. Gov't Code § 818 (West 2012). Hyatt
maintains that punitive damages are available against an out-of-state

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 government entity, if provided for by statute, and Nevada has a statute
authorizing such damages—NRS 42.005. 19
NRS 42.005(1) provides that punitive damages may be
awarded when a defendant "has been guilty of oppression, fraud or malice,
express or implied." Hyatt acknowledges that punitive damages under
NRS 42.005 are not applicable to a Nevada government entity based on
NRS 41.035(1), but he contends that because FTB is not a Nevada
government agency, the protection against punitive damages for Nevada
agencies under NRS 41.035(1) does not apply, and thus, FTB comes within
NRS 42.005's purview. FTB counters by citing a federal district court
holding, Georgia v. City of East Ridge, Tennessee, 949 F. Supp. 1571, 1581
(N.D. Ga. 1996), in which the court concluded that a Tennessee
government entity could not be held liable for punitive damages under
Georgia state law (which applied to the case) because, even though
Georgia law had a statute allowing punitive damages, Georgia did not
allow such damages against government entities. Therefore, the court
gave the Tennessee government entity the protection of this law. Id.

19 Hyatt also argues that punitive damages are proper because the
IRS is subject to punitive damages for conduct similar to that alleged here
under the IRS code, 26 U.S.C. § 7431(c)(1)(B)(ii) (2012), which allows for
punitive damages for intentional or grossly negligent disclosure of a
private taxpayer's information. Thus, Hyatt maintains that it is
reasonable to impose punitive damages against FTB when the federal law
permits punitive damages against the IRS for similar conduct. Id. But as
FTB points out, this argument fails because there is a statute that
expressly allows punitive damages against the IRS, and such a statute
does not exist here.

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 The broad allowance for punitive damages under NRS 42.005
does not authorize punitive damages against a government entity.
Further, under comity principles, we afford FTB the protections of
California immunity to the same degree as we would provide immunity to
a Nevada government entity as outlined in NRS 41.035(1). Thus, Hyatt's
argument that Nevada law provides for the award of punitive damages
against FTB is unpersuasive. Because punitive damages would not be
available against a Nevada government entity, we hold that under comity
principles FTB is immune from punitive damages. We therefore reverse
the portion of the district court's judgment awarding punitive damages
against FTB.
Costs
Since we reverse Hyatt's judgments on several of his tort
causes of action, we must reverse the district court's costs award and
remand the costs issue for the district court to determine which party, if
any, is the prevailing party based on our rulings. See Bower v. Harrah's
Laughlin, Inc., 125 Nev. 470, 494-95, 215 P.3d 709, 726 (2009) (stating
that the reversal of costs award is required when this court reverses the
underlying judgment); Glenbrook Homeowners Ass'n v. Glenbrook Co., 111
Nev. 909, 922, 901 P.2d 132, 141 (1995) (upholding the district court's
determination that neither party was a prevailing party because each
party won some issues and lost some issues). On remand, if costs are
awarded, the district court should consider the proper amount of costs to
award, including allocation of costs as to each cause of action and recovery
for only the successful causes of action, if possible. Cf. Mayfield v.
Koroghli, 124 Nev. 343, 353, 184 P.3d 362, 369 (2008) (holding that the
district court should apportion costs award when there are multiple
defendants, unless it is "rendered impracticable by the interrelationship of
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 the claims"); Bergmann v. Boyce, 109 Nev. 670, 675-76, 856 P.2d 560, 563
(1993) (holding that the district court should apportion attorney fees
between causes of action that were colorable and those that were
groundless and award attorney fees for the groundless claims).
Because this issue is remanded to the district court, we also
address FTB's challenges on appeal to the procedure used by the district
court in awarding costs. Hyatt moved for costs after trial, which FTB
opposed. FTB's opposition revolved in part around its contention that
Hyatt failed to properly support his request for costs with necessary
documentation as to the costs incurred. The district court assigned the
costs issue to a special master. During the process, Hyatt supplemented
his request for costs on more than one occasion to provide additional
documentation to support his claimed costs. After approximately 15
months of discovery, the special master issued a recommendation to award
Hyatt approximately $2.5 million in costs. FTB sought to challenge the
special master's recommendation, but the district court concluded that
FTB could not challenge the recommendation under the process used, and
the court ultimately adopted the special master's recommendation.
FTB argues that Hyatt was improperly allowed to submit,
under NRS 18.110, documentation to support the costs he sought after the
deadline. This court has previously held that the five-day time limit
established for filing a memorandum for costs is not jurisdictional because
the statute specifically allows for "such further time as the court or judge
may grant" to file the costs memorandum. Eberle v. State ex rel. Nell J.
Redfield Trust, 108 Nev. 587, 590, 836 P.2d 67, 69 (1992). In Eberle, this
court stated that even if no extension of time was granted by the district
court, the fact that it favorably awarded the costs requested demonstrated

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 that it impliedly granted additional time. Id. The Eberle court ruled that
this was within the district court's discretion and would not be disturbed
on appeal. Id. Based on the Eberle holding, we reject FTB's contention
that Hyatt was improperly allowed to supplement his costs memorandum
FTB also contends that the district court erred when it refused
to let FTB file an objection to the master's report and recommendation.
The district court concluded that, under NRCP 53(e)(3), no challenge was
permitted because there was a jury trial. While the district court could
refer the matter to a special master, the district court erroneously
determined that FTB was not entitled to file an objection to the special
master's recommendation. Although this case was a jury trial, the costs
issue was not placed before the jury. Therefore, NRCP 53(e)(2) applied to
the costs issue, not NRCP 53(e)(3). NRCP 53(e)(2) specifically provides
that "any party may serve written objections" to the master's report.
Accordingly, the district court erred when it precluded FTB from filing its
objections. On remand, if the district court concludes that Hyatt is still
entitled to costs, the court must allow FTB to file its objections to the
report before the court enters a cost award. Based on our reversal and
remand of the costs award, and our ruling in this appeal, we do not
address FTB's specific challenges to the costs awarded to Hyatt, as those
issues should be addressed by the district court, if necessary, in the first
instance.
Hyatt's cross-appeal
The final issues that we must resolve concern Hyatt's cross-
appeal. In his cross-appeal, Hyatt challenges the district court's summary
judgment ruling that prevented him from seeking economic damages as
part of his recovery for his intentional tort claims.

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 As background, during the first audit, FTB sent letters to two
Japanese companies with whom Hyatt had patent-licensing agreements
asking the companies for specific dates when any payments were sent to
Hyatt. Both companies responded to the letters and provided the
requested information. In the district court, Hyatt argued that sending
these letters to the Japanese companies was improper because they
revealed that Hyatt was being audited by FTB and that he had disclosed
the licensing agreements to FTB. Hyatt theorized that he suffered
economic damages by losing millions of dollars of potential licensing
revenue because he alleges that the Japanese market effectively
abandoned him based on the disclosures. FTB moved the district court for
summary judgment to preclude Hyatt from seeking economic loss
damages, arguing that Hyatt did not have sufficient evidence to present
this claim for damages to the jury. The district court agreed and granted
FTB summary judgment.
Damages "cannot be based solely upon possibilities and
speculative testimony." United Exposition Serv. Co. v. State Indus. Ins.
Sys., 109 Nev. 421, 424, 851 P.2d 423, 425 (1993). This is true regardless
of 'whether the testimony comes from the mouth of a lay witness or an
expert." Gramanz v. T-Shirts & Souvenirs, Inc., 111 Nev. 478, 485, 894
P.2d 342, 347 (1995) (quoting Advent Sys. Ltd. v. Unisys Corp., 925 F.2d
670, 682 (3d Cir. 1991)). When circumstantial evidence is used to prove a
fact, "the circumstances must be proved, and not themselves be
presumed." Horgan v. Indart, 41 Nev. 228, 231, 168 P. 953, 953 (1917); see
also Frantz v. Johnson, 116 Nev. 455, 468, 999 P.2d 351, 359 (2000). A
party cannot use one inference to support another inference; only the
ultimate fact can be presumed based on actual proof of the other facts in

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 the chain of proof. Horgan, 41 Nev. at 231, 168 P. at 953. Thus, "a
complete chain of circumstances must be proven, and not left to inference,
from which the ultimate fact may be presumed." Id.
Here, Hyatt argued that as a result of FTB sending letters to
the two Japanese companies inquiring about licensing payments, the
companies in turn would have notified the Japanese government about
FTB investigating Hyatt. Hyatt theorized that the Japanese government
would then notify other Japanese businesses about Hyatt being under
investigation, with the end result being that the companies would not
conduct any further licensing business with Hyatt. Hyatt's evidence to
support this alleged chain of events consisted of the two letters FTB sent
to the two companies and the fact that the companies responded to the
letters, the fact that his licensing business did not obtain any other
licensing agreements after the letters were sent, and expert testimony
regarding Japanese business culture that was proffered to establish this
potential series of events.
Hyatt claims that the district court erroneously ruled that he
had to present direct evidence to support his claim for damages, e.g.,
evidence that the alleged chain of events actually occurred and that other
companies in fact refused to do business with Hyatt as a result. Hyatt
insists that he had sufficient circumstantial evidence to support his
damages, and in any case, asserts that circumstantial evidence alone is
sufficient and that causation requirements are less stringent and can be
met through expert testimony under the circumstances at issue here. FTB
responds that the district court did not rule that direct evidence was

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 required, but instead concluded that Hyatt's evidence was speculative and
insufficient. FTB does not contest that damages can be proven through
circumstantial evidence, but argues that Hyatt did not provide such
evidence. It also argues that there is no different causation standard
under the facts of this case.
The issue we must decide is whether Hyatt set forth sufficient
circumstantial evidence to support his economic damages claim, or if the
evidence he presented was instead either too speculative or failed to create
a sufficient question of material fact as to his economic damages. To begin
with, we reject Hyatt's contention that reversal is necessary because the
district court improperly ruled that direct evidence was mandatory.
Hyatt's limited view of the district court's ruling is unavailing.
The ultimate fact that Hyatt seeks to establish through
circumstantial evidence, that the downfall of his licensing business in
Japan resulted from FTB contacting the two Japanese companies,
however, cannot be proven through reliance on multiple inferences—the
other facts in the chain must be proven. Here, Hyatt only set forth expert
testimony detailing what his experts believed would happen based on the
Japanese business culture. No evidence established that any of the
hypothetical steps actually occurred. Hyatt provided no proof that the two
businesses that received FTB's letters contacted the Japanese
government, nor did Hyatt prove that the Japanese government in turn
contacted other businesses regarding the investigation of Hyatt.
Therefore, Hyatt did not properly support his claim for economic damages
with circumstantial evidence. Wood v. Safeway, Inc., 121 Nev. 724, 731,
121 P.3d 1026, 1030-31 (2005) (recognizing that to avoid summary
judgment once the movant has properly supported the summary judgment

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 motion, the nonmoving party may not rest upon general allegations and
conclusions, but must instead set forth by affidavit or otherwise specific
facts demonstrating the existence of a genuine issue of material fact for
trial); see NRCP 56(e). Accordingly, summary judgment was proper and
we affirm the district court's summary judgment on this issue.
CONCLUSION
Discretionary-function immunity does not apply to intentional
and bad-faith tort claims. But while FTB is not entitled to immunity, it is
entitled to judgment as a matter of law on each of Hyatt's causes of action
except for his fraud and TIED claims. As to the fraud claim, we affirm the
district court's judgment in Hyatt's favor, and we conclude that the district
court's evidentiary and jury instruction errors were harmless. We also
uphold the amount of damages awarded, as we have determined that FTB
is not entitled to a statutory cap on damages under comity principles
because this state's interest in providing adequate relief to its citizens
outweighs providing FTB with the benefit of a damage cap under comity.
In regard to the TIED claim, we affirm the judgment in favor of Hyatt as to
liability, but conclude that evidentiary and jury instruction errors require
a new trial as to damages. Any damages awarded on remand are not
subject to a statutory cap under comity. We nevertheless hold that Hyatt
is precluded from recovering punitive damages against FTB. The district
court's judgment is therefore affirmed in part and reversed and remanded
in part. We also remand the prejudgment interest and the costs awards to
the district court for a new determination in light of this opinion. Finally,
we affirm the district court's prior summary judgment as to Hyatt's claim

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 for economic damages on Hyatt's cross-appeal. Given our resolution of
this appeal, we do not need to address the remaining arguments raised by
the parties on appeal or cross-appeal.

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