Interstate Sovereign Immunity and Why the Supreme Court Should Leave It Alone Right Now

My amicus brief with Stephen Sachs in Franchise Tax Board v. Hyatt

Over the past few decades, the Supreme Court has generally recognized that state governments cannot be sued without their consent under the doctrine of sovereign immunity, and that the federal government has little power to abrogate this immunity and force states into state or federal court. But can a state be forced into another state's courts? In a case called Nevada v. Hall, the Supreme Court said "yes," and in a case called Franchise Tax Board v. Hyatt, the Supreme Court has granted certiorari to decide whether Nevada v. Hall should be overruled.

Today my friend Stephen Sachs and I filed an amicus brief on behalf of ourselves and in support of neither party. In a nutshell we argue that Hall is mostly right, partly wrong, but that this case is a bad vehicle for dealing with any of the wrong parts and the case should be dismissed -- among other reasons because the Supreme Court itself may lack jurisdiction over the appeal. Here is the summary of the argument:

This case presents the question whether to overrule Nevada v. Hall, 440 U.S. 410 (1979). That question requires careful attention to the legal status of sovereign immunity and to the Constitution's effect on it, which neither Hall nor either party has quite right. The Founders did not silently constitutionalize a common-law immunity, contra Pet. Br. 35–36, but neither did they leave each State wholly free to hale other States before its courts, contra Br. in Opp. (BIO) 13–14. While Hall's holding was mostly right, other statements in Hall are likely quite wrong—yet this case is a poor vehicle for reconsidering them.

1. Hall correctly held that States lack a constitutional immunity in sister-state courts. The Founders viewed each State as immune from such suits under the common law and the law of nations. Before the Constitution's enactment, this was plainly not a constitutional right, and nothing in the Constitution changed that. Thus, Hall properly rejected the argument that there is a "federal rule of law implicit in the Constitution that requires all of the states to adhere to the sovereign-immunity doctrine as it prevailed when the Constitution was adopted." 440 U.S. at 418.

A plain reading of the Constitution's text reveals no affirmative guarantee of sister-state immunity. Unless otherwise specified "in the plan of the convention," The Federalist No. 81, at 549 (Alexander Hamilton) (Jacob E. Cooke ed., 1961), the Constitution takes the States' sovereign rights as it finds them. The Founders left the rules of sister-state immunity precisely as they were: as ordinary rules of common law and the law of nations, to be enforced through ordinary channels. The Franchise Tax Board treats the Founders' broad support for sovereign immunity as evidence of its constitutional stature. Pet. Br. 23–28. But it is a "fundamental mistake" to "quote prominent Framers without investigating the legal basis for their conclusions." Nelson, Sovereign Immunity as a Doctrine of Personal Jurisdiction, 115 Harv. L. Rev. 1559, 1653 (2002).

In essence, the Board argues that the issue is of constitutional significance, so it must be addressed somewhere in the Constitution—and that the Court has wandered from the text before, so it may as well do so here. Pet. Br. 18–20, 34–39. That sells this Court's decisions short. The "fundamental postulates" of immunity recognized by this Court, Alden v. Maine, 527 U.S. 706, 729 (1999), are bona fide rules of common law, "backdrop" legal principles that the Constitution indirectly protects from federal abrogation. See generally Baude, Sovereign Immunity and the Constitutional Text, 103 Va. L. Rev. 1 (2017); Sachs, Constitutional Backdrops, 80 Geo. Wash. L. Rev. 1813, 1816–19, 1868–75 (2012). Article III simply declines to abrogate certain State immunities from suit, see Hans v. Louisiana, 134 U.S. 1 (1890); Monaco v. Mississippi, 292 U.S. 313 (1934), and Article I likewise declines to grant Congress an enumerated power to do so, see Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (1996); Alden, 527 U.S. 706. Neither these refusals to grant additional powers to the Federal Government, nor the Eleventh Amendment's further restriction of the federal judicial power, impose any constitutional restraints on State governments—which retain every power "not delegated to the United States by the Constitution, nor prohibited by it to the States." U.S. Const. amend. X.

2. Hall went too far, however, in denying that "the Constitution places any limit on the exercise of one State's power to authorize its courts to assert jurisdiction over another State," 440 U.S. at 421 (emphasis added), and in reducing sister-state immunity to a "matter of comity," id. at 425. In particular, Hall was likely wrong to assume that a State's abrogation of immunity in its own courts could be projected outward so as to bind other state and federal courts.

Even without a direct guarantee of sister-state immunity, the Constitution may well offer substantial indirect protection rooted in the law of judgments. Whatever a State's power to prescribe rules for its own courts, it cannot force other courts to take notice of "a jurisdiction which, according to the law of nations, [the] sovereign could not confer." Rose v. Himely, 8 U.S. (4 Cranch) 241, 276–77 (1808). Early federal and state courts routinely refused full faith and credit to state judgments that exceeded the jurisdictional limits imposed by the law of nations and the common law. These same principles would provide ample protection for States today, shielding them from suit in sister-state courts without inventing a novel constitutional rule.

3. In an appropriate case, these principles might justify revisiting and narrowing portions of Hall. Yet this case is a poor vehicle for doing so.

A State threatened by suit in a sister-state court has many options, ranging from default to a federal action against the plaintiff to an original-jurisdiction action against the offending State. Each of these options might allow a federal court, including this Court, to enforce California's common-law immunity from suit.

The Board has done none of these things. Instead, it appeared in Nevada's courts, lost its state-court litigation, and then sought review in this Court on federal-question grounds. Yet sister-state immunity is not a rule of federal law that can support federal-question jurisdiction. And the Board's appearance may have waived its right to shield itself from the Nevada judgment under other heads of jurisdiction.

More urgently, on a faithful reading of the Eleventh Amendment's text, this Court's own subject-matter jurisdiction is in serious doubt. Gilbert Hyatt's suit against the Board is one "commenced or prosecuted against one of the United States by Citizens of another State"—to which "[t]he Judicial power of the United States," including the power vested in this Court, "shall not be construed to extend." U.S. Const. amend. XI. Though the Court has announced exceptions to the Eleventh Amendment in similar cases, these cases did not adequately address the Amendment's text and history. This issue is jurisdictional, and it would need to be reexamined sua sponte before the Court could reach the merits.

Because the case has been improperly framed by the parties and cannot be resolved properly without further briefing, the Court should dismiss the writ as improvidently granted. Alternatively, it should dismiss for lack of jurisdiction—or, if satisfied of its jurisdiction, should affirm.

You can read the whole brief on the Supreme Court website or on SSRN.