Academic journal article Washington Law Review

The New Sister-State Sovereign Immunity

Academic journal article Washington Law Review

The New Sister-State Sovereign Immunity

Article excerpt

And what trouble will I get into with precedents in the Constitution or something else if I were to write the words that I suggested?

Justice Breyer1

introduction

The Eleventh Amendment purported to end private litigation against states in federal courts,2 and courts and commentators long assumed that a state could not be sued in other state courts without its consent.3 But in 1979 a divided Supreme Court held in Nevada v. Hall4 that the long tradition of sovereign immunity among states was not mandated by any provision of the federal Constitution: sister-state immunity was purely a matter of comity to be found in state law, and states were free to reject sister states' defenses of sovereign immunity.5

In June 2015, the Court granted certiorari in Franchise Tax Board v. Hyatt [hereinafter Hyatt II]6 to consider whether to overrule Hall. Fortyfive states urged the Court to do so.7 Reduced to eight members with the death of Justice Scalia in February 2016, the Court divided equally on the core constitutional issue, leaving the precedent standing-for the time being.8 But Hyatt II also announced a new rule of parity that decided the case on the facts before the Court. The Court held that full faith and credit has a special application in the area of interstate immunity and requires a state court to accord to other states at least as much sovereign immunity as it extends to the state in which it sits.9

This Article examines the current constitutional status of sister-state immunity.10 It argues that Hyatt II's parity requirement is a temporary expedient, inconsistent with full faith and credit principles and lacking a secure foundation in the case law. At the same time, it questions Hall's rejection of all constitutional limits on sister-state immunity and identifies a constitutional source for immunity in territorial restrictions on state power that were understood as attributes of sovereignty during the founding era and that persisted into the twentieth century. it proposes that states should be immune under their own law but only for acts and consequences of their acts within their own territory. And it contends that this territorial approach strikes the right constitutional balance between the interests of sovereign actors in limiting their liability and the interests of other states in exercising regulatory control over events in their territories.

Part II shows how Hall's broad rejection of constitutional limits on sister-state immunity was not required by the facts of that case and departed sharply from the reasoning offered by the state court. Part III discusses the Court's failure in Hyatt II to reach agreement on the constitutional status of sister-state sovereign immunity, examines the new rule of parity adopted by the majority, and considers objections raised by dissenting members of the Court.

Part IV critically evaluates the new parity requirement for sister-state sovereign immunity. It exposes the lack of foundation for the requirement in prior cases construing the Full Faith and Credit Clause, explores the uncertain scope of the requirement, and argues that parity insufficiently accommodates the competing interests of state sovereigns. While the new rule curtails potential interference with sister-state sovereignty, this Part argues that it does so by an unwarranted sacrifice of the forum state's legitimate regulatory policies.

Part V considers alternative approaches to sister-state immunity. First, it finds support for sister-state sovereign immunity in structural limitations on the reach of state process that were closely identified with attributes of sovereignty during the founding era. While such limitations effectively shielded states from liability in sister-state courts for over a century, they provide no authority for limiting state liability arising from the sovereign's conduct outside its own territorial jurisdiction. Second, it considers a proposal by Judge John M. …

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