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Federal Maritime Comm'n v. South Carolina State Ports Auth.

Citation: 32 ELR 20702
No. No. 01-46, 122 S. Ct. 1864/(U.S., 05/28/2002)

The Court holds that state sovereign immunity bars the Federal Maritime Commission (FMC) from adjudicating a private party's complaint against a nonconsenting state. A cruise line offering gambling cruises sued the South Carolina State Ports Authority (SCSPA) for denying the cruise line's five applications for a cruise ship berth in the Port of Charleston. The cruise line alleged that the SCSPA violated the Shipping Act by unlawfully granting preference to other cruise lines that offered gambling. According to FMC procedure, the complaint was referred to an administrative law judge (ALJ), who held that sovereign immunity barred the cruise line's private suit against the state in its form as the SCSPA. The FMC dismissed the ALJ ruling and held that sovereign immunity does not bar the FMC from adjudicating private complaints against state-run ports. The U.S. Court of Appeals for the Fourth Circuit reversed the FMC, and the FMC appealed.

The Court first holds that the Eleventh Amendment provides states immunity from suits by private citizens, and the FMC adjudications are the type of proceedings from which the framers of the U.S. Constitution would have thought the states possessed immunity. The FMC's rules of practice and procedure bear close resemblance to civil litigation in federal courts. Likewise, discovery in FMC adjudications mirrors discovery in federal civil litigation. The role of the ALJ in FMC adjudications is also virtually indistinguishable from the role of an Article III judge in civil litigation. Moreover, the preeminent purpose of state sovereign immunity is to accord states the dignity that is consistent with their status as sovereign entities. If the framers of the Constitution thought it impermissible to answer to a private party's suit in federal district court, they would have also found it unacceptable to compel a state to answer to a private suit in a federal administrative tribunal. The Court next holds that the fact that the FMC's orders are not self-executing does not suggest that a state is not compelled to participate in an FMC proceeding. Once the FMC issues an order, the sanctioned party, in this case the state, is not permitted to litigate its position in court, and if a party fails to appear before the FMC, it may not argue its position on appeal. Thus, a state charged by a private party with a violation before the FMC must either appear before the FMC or suffer severe penalties. Similarly, the argument that sovereign immunity does not apply because FMC proceedings do not present the same threat to a state's financial integrity as a private suit reflects a fundamental misunderstanding of the purposes of sovereign immunity. Sovereign immunity's central purpose is to afford states due respect, and, in any event, an FMC order may very well result in the withdrawal of state funds. In addition, sovereign immunity applies to maritime concerns, and the fact that a private party is seeking nonmonetary relief is irrelevant for sovereign immunity purposes. Justice Clarence Thomas delivered the opinion of the Court, in which Chief Justice William H. Rehnquist and Justices Anthony M. Kennedy, Sandra Day O'Connor, and Antonin Scalia joined. Justice John Paul Stevens dissenting, would hold that sovereign immunity does not apply in this case. Justice Stephen Breyer, as joined by Justices Ruth Bader Ginsburg, David H. Souter, and Stevens, also dissented.

The full text of this decision is available from ELR (49 pp., ELR Order No. L-527).

Counsel for Petitioner
Phillip C. Hughey, Solicitor General
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Respondent
Warren L. Dean Jr.
Thompson Colburn
1909 K St. NW, Ste. 600, Washington DC 20006
(202) 585-6900

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]