Supreme Court

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

|The Volokh Conspiracy |

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.

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  1. I would have thought that, under the original constitutional design (not the creative redesign done by the courts), if state A does something wrong to state B, then state B can go to the U. S. Supreme Court to sue state A. In such a situation there would be no need for the Court to limit itself to constitutional issues; it would be able to apply the law of nations, or such of it as has not been abrogated by the Constitution.

    So if there’s a dispute over the physical boundary between Pennsylvania and New Jersey, the Court won’t find much help in the Constitution except the jurisdictional grant – the rules of law for deciding the boundary would be supplied by the law of nations.

    1. As to states using each others’ courts against each other, I would imagine that’s some kind of violation of the law of nations, and ought to be proclaimed such in the U. S. Supreme Court if the affected state sues the offending state.

      1. This case isn’t isn’t state government A suing state government B in state A’s courts.

        It’s a civil tort case brought by private parties for damages done in state A by agents of State B in State A on official business.

        From the very top of the linked decision.

        Respondents, California residents, brought this suit in a California court for damages against petitioner State of Nevada and others for injuries respondents sustained when a Nevada-owned vehicle on official business collided on a California highway with a vehicle occupied by respondents. After the California Supreme Court, reversing the trial court, held Nevada amenable to suit in the California courts, Nevada, on the basis of the Full Faith and Credit Clause of the Federal Constitution, unsuccessfully invoked a Nevada statute limiting to $25,000 any tort award against the State pursuant to its statutory waiver of sovereign immunity. Following trial, damages were awarded respondents for $1,150,000, and the judgment in their favor was affirmed on appeal.

        Nevada’s first response probably should have been removal to federal court on diversity.

        1. Though I would think even a case like this falls under the original jurisdiction of SCOTUS.

          In all cases affecting ambassadors, other public ministers and consuls, and those in which a state shall be party, the Supreme Court shall have original jurisdiction.

          Note, it doesn’t say where a state is the plaintiff.

          On the other hand, has SCOTUS ever exercised their original jurisdiction? Or do they prefer to pretend it doesn’t exist?

          Has anyone ever tried to bring a case directly to SCOTUS on original jurisdiction?

          1. State vs state cases arise a few times a year, I don’t know about cases involving the few named types of individuals.

            1. Yes, but directly before SCOTUS on their original jurisdiction, or do they usually go to the federal district courts first?

              1. The cases I’m aware of are generally enforcing Congress-approved interstate compacts (usually involving water rights) and are filed directly in SCOTUS. It may be those compacts don’t provide for alternate potential venue unlike actions based on the US Code.

        2. I referred to “states using each others’ courts against each other” and this seems to qualify.

          The state of California is using its courts against Nevada by making Nevada a defendant in a California court.

          You felt the need to rebut some other position.

          And you quoted language which gives the US Supreme Court jurisdiction if Nevada sues California.

          To help you out, suppose the United Kingdom makes the United States a defendant in UK courts.

          Then the US objects to this, invoking the law of nations.

          The difference according to the “original constitutional design” (as I put it), Nevada can go to the US Supreme Court to adjudicate such complaints against California in a binding way.

          1. The facts you’ve quoted suggest to me that at the very least California could go to the U. S. Supreme Court to sue Nevada for causing mayhem on California’s highways.

            As for the injured individuals, of course Nevada should allow those injured to go into Nevada courts.

            And it would be very nice if we had no 11th Amendment, so the injured individuals could go straight to the US Supreme Court.

            Or maybe they could say Nevada wasn’t doing any sovereign-type activities and so could be sued in another state, which wouldn’t be a constitutional issue but for the law-of-nations types to hash out.

            1. I would suspect that if a repeal of the 11th Amendment were sent by Congress to state conventions elected by the people, rather than being sent to state legislatures, the 11th Amendment would be gone, and good riddance, too.

          2. “I referred to “states using each others’ courts against each other” and this seems to qualify.”

            No, it doesn’t

            “The state of California is using its courts against Nevada by making Nevada a defendant in a California court.”

            No, this is private individuals using the California courts against Nevada.

            1. Arr, that be like the difference between puhtayto and puhtahtoe.

              I may be but a simple unlettered pirate, but I had always thought a state is said to act whenever any of its agencies, including the judiciary, acts.

              Didn’t a court, an agency of the state of California, hold another state – Nevada – liable for alleged injuries?

              1. “Thought a state is said to act whenever any of its agencies, including the judiciary, acts.”

                Generally yes, but there are exceptions in the case of the judiciary.

                “Didn’t a court, an agency of the state of California, hold another state – Nevada – liable for alleged injuries?”

                Yes, but it was a private individual who brought the case and was using the California courts. The same for the Nevada case against California. The state whose courts heard the case was not a party to the case.

                It’s the plaintiff and not the state (unless the state is the plaintiff) who hauls the defendant before the court and is “using” the court.

                1. In neither case, was the host state “using” it’s own courts in any meaningful sense.

                  1. As Hamlet said of the gravedigger, “how absolute the knave is!”

                    Now, I’m not saying you’re a gravedigger
                    But you took a tiny pedantic point and made it bigger

                    1. You come to a legal blog and you are upset over pendantry?

                    2. Did you want some pedantry? Why didn’t you say so.

                      I referred to “states using each others’ courts against each other” and your paraphrased that as “state government A suing state government B in state A’s courts.”

                      If I were in a pedantic mood I’d point out the difference between these two phrases.

                    3. Also, I was using a conversational phrase not a legal phrase.

                      California wants Nevada to be dragged into California courts. Phrase that how you please. Language is made for communication.

                    4. Anyway, for all their alleged pedantry, many lawyers and judges have difficulty understanding simply words – e. g., the word “process” in due process.

                      In the state of New York (so I’m told) they have trouble understanding rental agreements which don’t fully favor the tenant.

                      And so on.

      2. Indeed, see p. 24 of our brief on this:

        Alternatively, California could have filed an original action against Nevada in this Court, see ?1251(a), seeking a declaration of its entitlement to sister-state immunity. Again, this Court is not necessarily bound by a State’s efforts to abrogate immunity in its own courts. (Indeed, Nevada might well consent to such an action, as it has joined in asking this Court to overturn Hall. See Br. for Indiana et al. on Pet. for Cert. 1, 11.)

        The Board did none of these things. It entered an appearance in the Nevada court, argued the merits, litigated the case to judgment, and eventually sought this Court’s review on federal-question grounds. See Pet. for Cert. 2 (invoking 28 U.S.C. ?1257 (2012)); Pet. Br. 4 (same). That was the wrong approach. Because the Nevada judgment infringed no federal right, this Court has no proper means by which to disturb that judgment. And because the common-law immunity concerns the State’s amenability to compulsory process, the Board’s appearance may have waived its ability to contest the judgment.

  2. If your brief argues that the case should be dismissed, then such a holding would benefit Hyatt, as he is the respondent in the case. The respondent’s brief also cites an article by Will Baude in support of its argument. It would seem then that your brief does support a party in this case.

  3. I think the Nevada v. Hall decision is correct.

    It doesn’t matter if it’s an individual, a state, or a country.

    We all agree if I go into your state/country and commit a crime/tort, then I can be held accountable under your state’s/country’s judicial system.

    In Nevada, Nevadian (sp?) officials went into California and, while on official business, caused an accident.

    So of course Nevada can be sued under Californian juridiction.

    In the Hyatt case, California has not committed any offenses in Nevada (wow–same states!), so Nevada cannot sue California.

    Nevada cannot ‘protect’ Hyatt from California’s reach either (Art. IV, Sec 2).

    1. It’s a question of which court you use.

      California can sue Nevada in the US Supreme Court, I would hope, because Nevada caused mayhem on California’s highways.

      Whether California can sue on behalf of its own citizens is a delicate question, but it can sue on behalf of itself for what a sister state did to make trouble within California’s boundaries, and on California’s highways.

      1. Under the Hyatt case, Cali is attempting to take action against a former Cali citizen (who now apparently lives in Nevada). Nevada really isn’t a player.

        1. Wait, didn’t a Nevada-owned car have a bad accident on a California highway, whichever case that happened in?

          1. Yes, that was Neveda v. Hall and that was appropriately decided.

          2. That’s Nevada v Hall, the original case California wants to have overturned so they can demand that Nevada state courts respect their sovereign immunity under California Law.

            Of course if Nevada V Hall gets overturned and it turns out that Nevada was entitled to Sovereign immunity in California State courts, does Nevada get it’s money back from Hall et al?

  4. ESTOPPEL.

    I feel there is something morally wrong (i.e., hypocritical) in that a California resident originally argued, successfully, that Nevada could be subject to the courts of California, but now California is arguing the exact opposite against Nevada.

    And it would be incorrect to say that because Nevada v. Hall was between an individual and Nevada, there is no hypocrisy here. Before that case reached the US Supreme Court, the California Supreme Court had held that Nevada could be sued in California courts. So at that point the disagreement was in fact between California (because of its state supreme court finding) and Nevada.

    Hypocrisy is normally argued in a court of law not literally as hypocrisy but its legal equivalent estoppel. I think an estoppel-based argument ought to be made that California may not now argue in the US Supreme Court against California’s own legal position. If Nevada v. Hall is to be overruled, let that case be brought by a state that has not previously maintained the opposite point of view.

    And if estoppel has not been thus used previously, maybe this is a good time to start.

  5. Given how prominent a role stare decisis has played in the Kavanaugh hearings and the left’s outrage, I think SCOTUS should be very cautious about overruling past decisions without a VERY CLEAR rationale…eg. how Janus was in stark contrast to other First Amendment doctrines (I think the South Dakota v Wayfair decision was not appropriate to overturn). Also, since state immunity wasn’t explicitly stated in the Constitution, why should US states enjoy immunity while Congress has been free to pass the Foreign Sovereign Immunities Act limiting the immunity of jurisdictions outside the US. The FSIA hasn’t caused outrage by foreign countries because it recognized that some commercial activities should not be immunized. Why should the states be forced to stick to immunity as it existed at the founding?

    Keep in mind the biggest beneficiaries will be public universities that have billions of dollars worth of IP portfolios. Should they be immune in other states for violating local laws in the course of their commercial activities? The Full Faith & Credit Clause is relatively weak in this area, so I don’t think that SCOTUS can overturn Nevada v. Hall without greatly strengthening the applicability of the Full Faith & Credit Clause when states act outside their borders.

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