Eleventh Amendment:

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

Despite the apparent limitations of the Eleventh Amendment, individuals may, under certain circumstances, bring constitutional and statutory cases against states. In some of these cases, the state’s sovereign immunity has either been waived by the state (either explicitly or implicitly as a product of their consent to the plan of the Constitutional Convention) or abrogated by Congress. In other cases, the Eleventh Amendment does not apply because the procedural posture is such that the Court does not view them as being against a state. As discussed below, this latter doctrine is most often seen in suits to enjoin state officials. However, it has also been invoked in bankruptcy and admiralty cases, where the res, or property in dispute, is in fact the legal target of a dispute.1

The application of this last exception to the bankruptcy area has become less relevant, because even when a bankruptcy case is not focused on a particular res, the Court has held that a state’s sovereign immunity is not infringed by being subject to an order of a bankruptcy court. In Central Virginia Community College v. Katz, the Court noted that “[t]he history of the Bankruptcy Clause, the reasons it was inserted in the Constitution, and the legislation both proposed and enacted under its auspices immediately following ratification of the Constitution demonstrate that it was intended not just as a grant of legislative authority to Congress, but also to authorize limited subordination of state sovereign immunity in the bankruptcy arena.” 2 Thus, where a federal law authorized a bankruptcy trustee to recover “preferential transfers” made to state educational institutions,3 the court held that the state’s sovereign immunity was not infringed despite the fact that the issue was “ancillary” to a bankruptcy court’s in rem jurisdiction.4

Because Eleventh Amendment sovereign immunity inheres in states and not their subdivision or establishments, a state agency that wishes to claim state sovereign immunity must establish that it is acting as an arm of the state. In Lake County Estates v. Tahoe Regional Planning Agency, the Court stated: “[A]gencies exercising state power have been permitted to invoke the [Eleventh] Amendment in order to protect the state treasury from liability that would have had essentially the same practical consequences as a judgment against the State itself.” 5 In evaluating such a claim, courts will examine state law to determine the nature of the entity and whether to treat it as an arm of the state.6 The Supreme Court has consistently refused to extend Eleventh Amendment sovereign immunity to counties, cities, or towns,7 even though such political subdivisions exercise a “slice of state power.” 8 Even when such entities enjoy immunity from suit under state law, they do not have Eleventh Amendment immunity in federal court and states may not confer it.9 Similarly, entities created pursuant to interstate compacts (and subject to congressional approval) are not immune from suit, absent a showing that the entity was structured so as to take advantage of the state’s constitutional protections.10

Footnotes

1

See Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440, 446–48 (2004) (exercise of bankruptcy court’s in rem jurisdiction over a debtor’s estate to discharge a debt owed to a state does not infringe the state’s sovereignty); California v. Deep Sea Research, Inc., 523 U.S. 491, 507–08 (1998) (despite state claims over shipwrecked vessel, the Eleventh Amendment does not bar federal court in rem admiralty jurisdiction where the res is not in the possession of the sovereign).

2

Central Virginia Community College v. Katz, 546 U.S. 356, 362–63 (2006). The Court has cautioned, however, that Katz’s analysis is limited to the context of the Bankruptcy Clause. Specifically, the Court has described the Clause as “sui generis” or “unique” among Article I’s grants of authority, and, unlike other such grants, the Bankruptcy Clause itself abrogated state sovereign immunity in bankruptcy proceedings. See Allen v. Cooper, 140 S.Ct. 994, 1002–03 (2020) (observing that Katz “points to a good-for-one-clause-only holding” and does not cast further doubt on Seminole Tribe’s “general rule that Article I cannot justify haling a State into federal court” ).

3

A “preferential transfer” was defined as the transfer of a property interest from an insolvent debtor to a creditor, which occurred on or within ninety days before the filing of a bankruptcy petition, and which exceeds what the creditor would have been entitled to receive under such bankruptcy filing. 11 U.S.C. § 547(b). 55. 546 U.S. at 373.

4

546 U.S. at 373.

5

Lake County Estates v. Tahoe Regional Planning Agency, 440 U.S. 391, 400–01 (1979), citing Edelman v. Jordan, 415 U.S. 651 (1974), and Ford Motor Co. v. Department of Treasury, 323 U.S. 459 (1945). The fact that a state agency can be indemnified for the costs of litigation does not divest the agency of its Eleventh Amendment immunity. Regents of the University of California v. Doe, 519 U.S. 425 (1997).

6

See, e.g., Mt. Healthy City Bd. of Educ. v. Doyle, 429 U.S. 274, 280 (1977) (local school district not an arm of the state based on (1) its designation in state law as a political subdivision, (2) the degree of supervision by the state board of education, (3) the level of funding received from the state, and (4) the districts’ empowerment to generate their own revenue through the issuance of bonds or levying taxes.

7

Northern Insurance Company of New York v. Chatham County, 547 U.S. 189, 193 (2006) (counties have neither Eleventh Amendment immunity nor residual common law immunity). See Mt. Healthy City Bd. of Educ. v. Doyle, 429 U.S. 274 (1977); Moor v. County of Alameda, 411 U.S. 693 (1973); Workman v. City of New York, 179 U.S. 552 (1900); Lincoln County v. Luning, 133 U.S. 529 (1890). In contrast to their treatment under the Eleventh Amendment, the Court has found that state immunity from federal regulation under the Tenth Amendment extends to political subdivisions as well. See Printz v. United States, 521 U.S. 898 (1997).

8

Lake County Estates v. Tahoe Regional Planning Agency, 440 U.S. 391, 400–01 (1979) (quoting earlier cases).

9

Chicot County v. Sherwood, 148 U.S. 529 (1893).

10

Lake County Estates v. Tahoe Regional Planning Agency, 440 U.S. 391 (1979); Petty v. Tennessee-Missouri Bridge Comm’n, 359 U.S. 275 (1959).