OCTOBER TERM, 1998
Syllabus
COLLEGE SAVINGS BANK
v. FLORIDA PREPAID POSTSECONDARY
EDUCATION EXPENSE BOARD ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD
CIRCUIT
No. 98-149. Argued April 20, 1999-Decided June 23, 1999
An individual may sue a State where Congress has authorized such
a suit in the exercise of its power to enforce the Fourteenth
Amendment,
Fitzpatrick v.
Bitzer, 427 U. S. 445, or where a
State has waived its sovereign immunity by consenting to suit,
Clark v.
Barnard, 108 U. S. 436, 447-448.
The Trademark Remedy Clarification Act (TRCA) subjects States to
suits brought under § 43(a) of the Trademark Act of 1946 (Lanham
Act) for false and misleading advertising. Petitioner markets and
sells certificates of deposit designed to finance college costs.
When respondent Florida Prepaid Postsecondary Education Expense
Board (Florida Prepaid), a Florida state entity, began its own
tuition prepayment program, petitioner filed suit, alleging that
Florida Prepaid violated § 43 by misrepresenting its own program.
In granting Florida Prepaid's motion to dismiss on sovereign
immunity grounds, the District Court rejected arguments made by
petitioner and by the United States, which had intervened, that,
under the constructive waiver doctrine of
Parden v.
Terminal R. Co. of Ala. Docks Dept., 377 U. S. 184, Florida
Prepaid waived its immunity by engaging in interstate marketing and
administration of its program after the TRCA made clear that such
activity would subject it to suit; and that Congress's abrogation
of sovereign immunity in the TRCA was effective, since it was
enacted to enforce the Fourteenth Amendment's Due Process Clause.
The Third Circuit affirmed.
Held: The federal courts have no jurisdiction to
entertain this suit because Florida's sovereign immunity was
neither validly abrogated by the TRCA nor voluntarily waived. Pp.
672-691.
(a) The TRCA did not abrogate Florida's sovereign immunity.
Congress may legislate under § 5 of the Fourteenth Amendment to
enforce the Amendment's other provisions, but the object of such
legislation must be the remediation or prevention of constitutional
violations. Petitioner's argument that Congress enacted the TRCA to
remedy and prevent state deprivations of two property interests
without due process is rejected, for neither a right to be free
from a business competitor's false advertising about its own
product nor a right to be secure in one's
667
business interests qualifies as a protected property right. As
to the first: The hallmark of a constitutionally protected property
interest is the right to exclude others. The Lanham Act's
false-advertising provisions bear no relationship to any right to
exclude; and Florida Prepaid's alleged misrepresentation concerning
its own products intruded upon no interest over which petitioner
had exclusive dominion. As to the second asserted property
interest: While a business's assets are property, and any state
taking of those assets is a "deprivation," business in the sense of
the activity of doing business or
of making a profit
is not property at all-and it is only
that which is impinged
upon by a competitor's false advertising about its own product. Pp.
672-675.
(b) Florida's sovereign immunity was not voluntarily waived by
its activities in interstate commerce. Generally, waiver occurs
when a State voluntarily invokes, or clearly declares that it
intends to submit itself to, the jurisdiction of the federal
courts. Petitioner and the United States maintain that an implied
or constructive waiver is possible when Congress provides
unambiguously that a State will be subject to private suit if it
engages in certain federally regulated conduct and the State
voluntarily elects to engage in that conduct. They rely on this
Court's decision in
Parden, supra, which held that the
Federal Employers' Liability Act authorized private suit against
States operating railroads by virtue of its general provision
permitting suit against common carriers engaged in interstate
commerce. This Court has never applied
Parden's holding to
another statute, and in fact has narrowed the case in every
subsequent opinion in which it has been under consideration. Even
when supplemented by a requirement of unambiguous statement of
congressional intent to subject the States to suit,
Parden
cannot be squared with this Court's cases requiring that a State's
express waiver of sovereign immunity be unequivocal, see,
e. g.,
Great Northern Life Ins. Co. v.
Read, 322 U. S. 47, and is also
inconsistent with the Court's recent decision in
Seminole Tribe
of Fla. v.
Florida, 517 U. S. 44. Nor is it
relevant that the asserted basis for constructive waiver is conduct
by the State that is undertaken for profit, that is traditionally
performed by private entities, and that otherwise resembles the
behavior of market participants. Whatever may remain of this
Court's decision in
Parden is expressly overruled. Pp.
675-687.
131 F.3d
353, affirmed.
SCALIA, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and O'CONNOR, KENNEDY, and THOMAS, JJ., joined.
STEVENS, J., filed a dissenting opinion,
post, p. 691.
BREYER, J., filed a dissenting opinion, in which STEVENS, SOUTER,
and GINSBURG, JJ., joined,
post, p. 693.
668
David C.
Todd argued the cause for petitioner.
With him on the briefs was
Deborah M. Lodge.
Solicitor General Waxman argued the cause for the United States,
respondent under this Court's Rule 12.6, urging reversal. With him
on the briefs were Acting Assistant Attorney General Ogden, Deputy
Solicitor General Wallace, Malcolm L. Stewart, Mark B. Stern,
Michael E. Robinson, and H. Thomas Byron II 1.
William B. Mallin argued the cause for respondent Florida
Prepaid Postsecondary Education Expense Board. With him on the
brief were
Joseph M. Ramirez and
Louis F.
Hubener.*
JUSTICE SCALIA delivered the opinion of the Court.
The Trademark Remedy Clarification Act (TRCA), 106 Stat. 3567,
subjects the States to suits brought under § 43(a)
*Martin H. Redish and
Jerome Gilson filed a
brieffor the International Trademark Association as
amicus
curiae urging reversal.
Briefs of
amici curiae urging affirmance were filed for
the State of Ohio et al. by
Betty D. Montgomery, Attorney
General of Ohio,
Edward B. Foley, State Solicitor, and
Elise W Porter, Assistant Solicitor, and by the Attorneys
General for their respective States as follows:
Bill Pryor
of Alabama,
Bruce M. Botelho of Alaska,
Mark Pryor of
Arkansas,
Bill Lockyer of California,
Ken Salazar of
Colorado,
M. Jane Brady of Delaware,
Margery S.
Bronster of Hawaii,
James E. Ryan of Illinois,
J. Joseph Curran, Jr., of Maryland,
Jennifer
Granholm of Michigan,
Mike Moore of Mississippi,
Jeremiah W (Jay) Nixon of Missouri,
Don Stenberg of
Nebraska,
Frankie Sue Del Papa of Nevada,
Philip T.
McLaughlin of New Hampshire,
Patricia A. Madrid of New
Mexico,
Eliot Spitzer of New York,
W A. Drew
Edmondson of Oklahoma,
D. Michael Fisher of
Pennsylvania,
Sheldon Whitehouse of Rhode Island,
Mark
Barnett of South Dakota,
Paul G.
Summers of
Tennessee,
Jan Graham of Utah,
Mark L. Earley of
Virginia,
Christine Q Gregoire of Washington,
Darrell V.
McGraw, Jr., of West Virginia, and
Gay Woodhouse of
Wyoming; and for the National Conference of State Legislatures et
al. by
Richard Ruda and
James I. Crowley.
Charles A. Miller, Caroline M. Brown, Gerald P. Dodson, James
E.
Holst, P. Martin Simpson, Jr., and
Richard L.
Stanley filed a brieffor the Regents of the University of
California as
amicus curiae.
669
of the Trademark Act of 1946 (Lanham Act) for false and
misleading advertising, 60 Stat. 441, 15 U. S. C. § 1125(a). The
question presented in this case is whether that provision is
effective to permit suit against a State for its alleged
misrepresentation of its own product-either because the TRCA
effects a constitutionally permissible abrogation of state
sovereign immunity, or because the TRCA operates as an invitation
to waiver of such immunity which is automatically accepted by a
State's engaging in the activities regulated by the Lanham Act.
I
In
Chisholm v.
Georgia, 2 Dall. 419 (1793), we
asserted jurisdiction over an action in assumpsit brought by a
South Carolina citizen against the State of Georgia. In so doing,
we reasoned that Georgia's sovereign immunity was qualified by the
general jurisdictional provisions of Article III, and, most
specifically, by the provision extending the federal judicial power
to controversies "between a State and Citizens of another State."
U. S. Const., Art. III, § 2, cl. 1. The "shock of surprise" created
by this decision,
Principality of Monaco v.
Mississippi, 292 U. S. 313, 325
(1934), prompted the immediate adoption of the Eleventh Amendment,
which provides:
"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."
Though its precise terms bar only federal jurisdiction over
suits brought against one State by citizens of another State or
foreign state, we have long recognized that the Eleventh Amendment
accomplished much more: It repudiated the central premise of
Chisholm that the jurisdictional heads of Article III
superseded the sovereign immunity that the States possessed before
entering the Union. This has been our understanding of the
Amendment since the landmark
670
case of Hans v. Louisiana,
134 U. S. 1 (1890). See
also Ex parte New York,
256 U. S. 490, 497-498
(1921); Principality of Monaco, supra, at 320-328, Pennhurst State
School and Hospital v. Halderman,
465 U. S. 89, 97-98
(1984); Seminole Tribe of Fla. v. Florida,
517 U. S. 44, 54, 66-68
(1996).
While this immunity from suit is not absolute, we have
recognized only two circumstances in which an individual may sue a
State. First, Congress may authorize such a suit in the exercise of
its power to enforce the Fourteenth Amendment-an Amendment enacted
after the Eleventh Amendment and specifically designed to alter the
federalstate balance.
Fitzpatrick v.
Bitzer, 427 U. S. 445 (1976).
Second, a State may waive its sovereign immunity by consenting to
suit.
Clark v.
Barnard, 108 U. S. 436, 447-448
(1883). This case turns on whether either of these two
circumstances is present.
II
Section 43(a) of the Lanham Act, 15 U. S. C. § 1125(a), enacted
in 1946, created a private right of action against "[a]ny person"
who uses false descriptions or makes false representations in
commerce. The TRCA amends § 43(a) by defining "any person" to
include "any State, instrumentality of a State or employee of a
State or instrumentality of a State acting in his or her official
capacity." § 3(c), 106 Stat. 3568. The TRCA further amends the
Lanham Act to provide that such state entities "shall not be
immune, under the eleventh amendment of the Constitution of the
United States or under any other doctrine of sovereign immunity,
from suit in Federal court by any person, including any
governmental or nongovernmental entity for any violation under this
Act," and that remedies shall be available against such state
entities "to the same extent as such remedies are available ... in
a suit against" a nonstate entity. § 3(b) (codified in 15 U. S. C.
§ 1122).
Petitioner College Savings Bank is a New Jersey chartered bank
located in Princeton, New Jersey. Since 1987,
671
it has marketed and sold College Sure certificates of deposit
designed to finance the costs of college education. College Savings
holds a patent upon the methodology of administering its College
Sure certificates. Respondent Florida Prepaid Postsecondary
Education Expense Board (Florida Prepaid) is an arm of the State of
Florida. Since 1988, it has administered a tuition prepayment
program designed to provide individuals with sufficient funds to
cover future college expenses. College Savings brought a patent
infringement action against Florida Prepaid in United States
District Court in New Jersey. That action is the subject of to
day's decision in
Florida Prepaid Postsecondary Ed. Expense
Bd. v.
College Savings Bank, ante, p. 627. In addition,
and in the same court, College Savings filed the instant action
alleging that Florida Prepaid violated § 43(a) of the Lanham Act by
making misstatements about its own tuition savings plans in its
brochures and annual reports.
Florida Prepaid moved to dismiss this action on the ground that
it was barred by sovereign immunity. It argued that Congress had
not abrogated sovereign immunity in this case because the TRCA was
enacted pursuant to Congress's powers under Article I of the
Constitution and, under our decisions in
Seminole Tribe,
supra, and
Fitzpatrick, supra, Congress can abrogate
state sovereign immunity only when it legislates to enforce the
Fourteenth Amendment. The United States intervened to defend the
constitutionality of the TRCA. Both it and College Savings argued
that, under the doctrine of constructive waiver articulated in
Parden v.
Terminal R. Co. of Ala. Docks Dept.,
377 U. S. 184
(1964), Florida Prepaid had waived its immunity from Lanham Act
suits by engaging in the interstate marketing and administration of
its program after the TRCA made clear that such activity would
subject Florida Prepaid to suit. College Savings also argued that
Congress's purported abrogation of Florida Prepaid's sovereign
immunity in the TRCA
672
was effective, since it was enacted not merely pursuant to
Article I but also to enforce the Due Process Clause of the
Fourteenth Amendment. The District Court rejected both of these
arguments and granted Florida Prepaid's motion to dismiss. 948 F.
Supp. 400 (N. J. 1996). The Court of Appeals affirmed.
131 F.3d
353 (CA3 1997). We granted certiorari. 525 U. S. 1063
(1999).
III
We turn first to the contention that Florida's sovereign
immunity was validly abrogated. Our decision three Terms ago in
Seminole Tribe, supra, held that the power "to regulate
Commerce" conferred by Article I of the Constitution gives Congress
no authority to abrogate state sovereign immunity. As authority for
the abrogation in the present case, petitioner relies upon § 5 of
the Fourteenth Amendment, which we held in
Fitzpatrick v.
Bitzer, supra, and reaffirmed in
Seminole Tribe, see
517 U. S., at 72-73, could be used for that purpose.
Section 1 of the Fourteenth Amendment provides that no State
shall "deprive any person of ... property ... without due process
of law." Section 5 provides that "[t]he Congress shall have power
to enforce, by appropriate legislation, the provisions of this
article." We made clear in
City of Boerne v.
Flores,
521 U. S. 507,
516-529 (1997), that the term "enforce" is to be taken
seriously-that the object of valid § 5 legislation must be the
carefully delimited remediation or prevention of constitutional
violations. Petitioner claims that, with respect to § 43(a) of the
Lanham Act, Congress enacted the TRCA to remedy and prevent state
deprivations without due process of two species of "property"
rights: (1) a right to be free from a business competitor's false
advertising about its own product, and (2) a more generalized right
to be secure in one's business interests. Neither of these
qualifies as a property right protected by the Due Process
Clause.
673
As to the first: The hallmark of a protected property interest
is the right to exclude others. That is "one of the most essential
sticks in the bundle of rights that are commonly characterized as
property."
Kaiser Aetna v.
United States, 444 U. S. 164, 176
(1979). That is why the right that we all possess to use the public
lands is not the "property" right of anyone-hence the sardonic
maxim, explaining what economists call the "tragedy of the
commons," 1
res publica, res nullius. The Lanham Act may
well contain provisions that protect constitutionally cognizable
property interests-notably, its provisions dealing with
infringement of trademarks, which are the "property" of the owner
because he can exclude others from using them. See,
e. g., K
mart Corp. v.
Cartier, Inc., 485 U. S. 176, 185-186
(1988) ("Trademark law, like contract law, confers private rights,
which are themselves rights of exclusion. It grants the trademark
owner a bundle of such rights"). The Lanham Act's false-advertising
provisions, however, bear no relationship to any right to exclude;
and Florida Prepaid's alleged misrepresentations concerning its own
products intruded upon no interest over which petitioner had
exclusive dominion.
Unsurprisingly, petitioner points to no decision of this Court
(or of any other court, for that matter) recognizing a property
right in freedom from a competitor's false advertising about its
own products. The closest petitioner comes is dicta in
International News Service v.
Associated Press, 248
U. S. 215, 236 (1918), where the Court found equity jurisdiction
over an unfair-competition claim because "[t]he rule that a court
of equity concerns itself only in the protection of property rights
treats any civil right of a pecuniary nature as a property right."
But to say that a court of equity
"treats any civil right of
a pecuniary nature
as a property right" is not to say that
all civil rights of a pecuniary nature
are property rights.
In fact, when one reads the full pas-
1 See Hardin, The Tragedy of the Commons, 162 Science 1243
(1968).
674
sage from which this statement is taken it is clear that the
Court was saying just the opposite, namely, that equity will treat
civil rights of a pecuniary nature as property rights even though
they are properly not such:
"In order to sustain the jurisdiction of equity over the
controversy, we need not affirm any general and absolute property
in the news as such. The rule that a court of equity concerns
itself only in the protection of property rights treats any civil
right of a pecuniary nature as a property right ... ; and the right
to acquire property by honest labor or the conduct of a lawful
business is as much entitled to protection as the right to guard
property already acquired .... It is this right that furnishes the
basis of the jurisdiction in the ordinary case of unfair
competition." Id., at 236-237.
We may also note that the unfair competition at issue in
International News Service amounted to nothing short of
theft of proprietary information, something in which a power to
"exclude others" could be said to exist. See
id., at
233.
Petitioner argues that the common-law tort of unfair competition
"by definition" protects property interests, Brief for Petitioner
15, and thus the TRCA "by definition" is designed to remedy and
prevent deprivations of such interests in the false-advertising
context. Even as a logical matter, that does not follow, since not
everything which
protects property interests is designed to
remedy or prevent
deprivations of those property interests.
A municipal ordinance prohibiting billboards in residential areas
protects the property interests of homeowners, although erecting
billboards would ordinarily not deprive them of property. To sweep
within the Fourteenth Amendment the elusive property interests that
are "by definition" protected by unfair-competition law would
violate our frequent admonition that the Due Process Clause is not
merely a "font of tort law."
Paul v.
Davis, 424 U. S. 693, 701
(1976).
675
Petitioner's second assertion of a property interest rests upon
an argument similar to the one just discussed, and suffers from the
same flaw. Petitioner argues that businesses are "property" within
the meaning of the Due Process Clause, and that Congress legislates
under § 5 when it passes a law that prevents state interference
with business (which false advertising does). Brief for Petitioner
19-20. The assets of a business (including its good will)
unquestionably are property, and any state taking of those assets
is unquestionably a "deprivation" under the Fourteenth Amendment.
But business in the sense of
the activity of doing business,
or
the activity of making a profit is not property in the
ordinary sense-and it is only
that, and not any business
asset, which is impinged upon by a competitor's false
advertising.
Finding that there is no deprivation of property at issue here,
we need not pursue the follow-on question that
City of
Boerne would otherwise require us to resolve: whether the
prophylactic measure taken under purported authority of § 5 (viz.,
prohibition of States' sovereign-immunity claims, which are not in
themselves violations of the Fourteenth Amendment) was genuinely
necessary to prevent violation of the Fourteenth Amendment. We turn
next to the question whether Florida's sovereign immunity, though
not abrogated, was voluntarily waived.
IV
We have long recognized that a State's sovereign immunity is "a
personal privilege which it may waive at pleasure."
Clark v.
Barnard, 108 U. S., at 447. The decision to waive that
immunity, however, "is altogether voluntary on the part of the
sovereignty."
Beers v.
Arkansas, 20 How. 527, 529
(1858). Accordingly, our "test for determining whether a State has
waived its immunity from federal-court jurisdiction is a stringent
one."
Atascadero State Hospital v.
Scanlon, 473 U. S. 234, 241
(1985). Generally, we will find a waiver either if the State
voluntarily invokes our jurisdic-
676
tion,
Gunter v.
Atlantic Coast Line R. Co.,
200 U. S. 273,
284 (1906), or else if the State makes a "clear declaration" that
it intends to submit itself to our jurisdiction,
Great Northern
Life Ins. Co. v.
Read, 322 U. S. 47, 54 (1944).
See also
Pennhurst State School and Hospital v.
Halderman, 465 U. S., at 99 (State's consent to suit must be
"unequivocally expressed"). Thus, a State does not consent to suit
in federal court merely by consenting to suit in the courts of its
own creation.
Smith v.
Reeves, 178 U. S. 436, 441-445
(1900). Nor does it consent to suit in federal court merely by
stating its intention to "sue and be sued,"
Florida Dept. of
Health and Rehabilitative Servs. v.
Florida Nursing Home
Assn., 450 U. S.
147, 149-150 (1981)
(per curiam), or even by authorizing
suits against it "'in any court of competent jurisdiction,'"
Kennecott Copper Corp. v.
State Tax Comm'n, 327 U. S. 573, 577-579
(1946). We have even held that a State may, absent any contractual
commitment to the contrary, alter the conditions of its waiver and
apply those changes to a pending suit.
Beers v.
Arkansas,
supra.
There is no suggestion here that respondent Florida Prepaid
expressly consented to being sued in federal court. Nor is this a
case in which the State has affirmatively invoked our jurisdiction.
Rather, petitioner College Savings and the United States both
maintain that Florida Prepaid has "impliedly" or "constructively"
waived its immunity from Lanham Act suit. They do so on the
authority of
Parden v.
Terminal R. Co. of Ala. Docks
Dept., 377 U. S.
184 (1964)an elliptical opinion that stands at the nadir of our
waiver (and, for that matter, sovereign-immunity) jurisprudence. In
Parden, we permitted employees of a railroad owned and
operated by Alabama to bring an action under the Federal Employers'
Liability Act (FELA) against their employer. Despite the absence of
any provision in the statute specifically referring to the States,
we held that the Act authorized suits against the States by virtue
of its general provision subjecting to suit "[e]very common carrier
by railroad ...
677
engaging in commerce between ... the several States," 45 U. S.
C. § 51 (1940 ed.). We further held that Alabama had waived its
immunity from FELA suit even though Alabama law expressly disavowed
any such waiver:
"By enacting the [FELA] ... Congress conditioned the right to
operate a railroad in interstate commerce upon amenability to suit
in federal court as provided by the Act; by thereafter operating a
railroad in interstate commerce, Alabama must be taken to have
accepted that condition and thus to have consented to suit." 377 U.
S., at 192.
The four dissenting Justices in
Parden refused to infer a
waiver because Congress had not "expressly declared" that a
State operating in commerce would be subject to liability,
but they went on to acknowledge-in a concession that, strictly
speaking, was not necessary to their analysis-that Congress
possessed the power to effect such a waiver of the State's
constitutionally protected immunity so long as it did so with
clarity.
Id., at 198-200 (opinion of White, J.).
Only nine years later, in
Employees of Dept. of Public Health
and Welfare of Mo. v.
Department of Public Health and
Welfare of Mo., 411 U. S. 279 (1973), we
began to retreat from
Parden. That case held-in an opinion
written by one of the
Parden dissenters over the solitary
dissent of
Parden's author-that the State of Missouri was
immune from a suit brought under the Fair Labor Standards Act by
employees of its state health facilities. Although the statute
specifically covered the state hospitals in question, see 29 U. S.
C. § 203(d) (1964 ed.), and such coverage was unquestionably
enforceable in federal court by the United States, 411 U. S., at
285-286, we did not think that the statute expressed with clarity
Congress's intention to supersede the States' immunity from suits
brought by individuals. We "put to one side" the
Parden
case, which we characterized as involving "dramatic circumstances"
and "a rather isolated state activity,"
678
411 U. S., at 285, unlike the provision of the Fair Labor
Standards Act in question that applied to a broad class of state
employees. We also distinguished the railroad in
Parden on
the ground that it was "operated for profit" "in the area where
private persons and corporations normally ran the enterprise." 411
U. S., at 284. Justice Marshall, joined by Justice Stewart, went
even further, concluding that although, in their view, Congress
had clearly purported to subject the States to suits by
individuals in federal courts, it lacked the constitutional
authority to do so.
Id., at 287, 289-290 (opinion concurring
in result).
The next year, we observed (in dictum) that there is "no place"
for the doctrine of constructive waiver in our sovereign-immunity
jurisprudence, and we emphasized that we would "find waiver only
where stated by the most express language or by such overwhelming
implications from the text as [will] leave no room for any other
reasonable construction."
Edelman v.
Jordan, 415 U. S. 651, 673 (1974)
(internal quotation marks omitted). Several Terms later, in
Welch v.
Texas Dept. of Highways and Public Transp.,
483 U. S. 468
(1987), although we expressly avoided addressing the
constitutionality of Congress's conditioning a State's engaging in
Commerce Clause activity upon the State's waiver of sovereign
immunity, we said there was "no doubt that
Parden's
discussion of congressional intent to negate Eleventh Amendment
immunity is no longer good law," and overruled
Parden "to
the extent [it] is inconsistent with the requirement that an
abrogation of Eleventh Amendment immunity by Congress must be
expressed in unmistakably clear language," 483 U. S., at 478, and
n. 8.2
2 In response to this string of cases criticizing or narrowing
the holding of
Parden, JUSTICE BREYER holds up three
post-Parden cases as decisions that "support[ed]"
Parden,
post, at 696, or at least "carefully avoided calling [it] into
question,"
post, at 698. His perception of "support" in
Atascadero State Hospital v.
Scanlon, 473 U. S. 234 (1985),
rests upon nothing more substantial than the fact that the case
"suggest[ed] that a waiver
679
College Savings and the United States concede, as they surely
must, that these intervening decisions have seriously limited the
holding of
Parden. They maintain, however, that
Employees and
Welch are distinguishable, and that a
core principle of
Parden remains good law. A
Parden-style waiver of immunity, they say, is still possible
after
Employees and
Welch so long as the following
two conditions are satisfied: First, Congress must provide
unambiguously that the State will be subject to suit if it engages
in certain specified conduct governed by federal regulation.
Second, the State must voluntarily elect to engage in the federally
regulated conduct that subjects it to suit. In this latter regard,
their argument goes, a State is never deemed to have constructively
waived its sovereign immunity by engaging in activities that it
cannot realistically choose to abandon, such
may be found in a State's acceptance of a federal grant."
Post, at 696. But we make the same suggestion today, while
utterly rejecting
Parden. As we explain elsewhere in detail,
see
infra, at 686-687, conditions attached to a State's
receipt of federal funds are simply not analogous to
Parden-style conditions attached to a State's decision to
engage in otherwise lawful commercial activity. JUSTICE BREYER'S
second case,
Welch, overruled
Parden in part, as we
discuss above, and we think it quite impossible to believe that the
following statement in the opinion did not "questio[n] the holding
of
Parden that the Court today discards,"
post, at
698: "We assume, without deciding or intimating a view of the
question, that the authority of Congress to subject unconsenting
States to suit in federal court is not confined to § 5 of the
Fourteenth Amendment." 483 U. S., at 475. Calling what a prior case
has flatly decided a "question" in need of "deciding," and (lest
there be any doubt on the point) making it clear that we
"intimat[e] no view" as to whether the answer given by that prior
case was correct, surely was handwriting on the wall which even an
inept cryptologist would recognize as spelling out the caption of
today's opinion. As for
Seminole Tribe of Fla. v.
Florida, 517 U.
S. 44 (1996), we explain elsewhere, see
infra, at
682-684, how that case was logically and practically inconsistent
with
Parden, even though it did not expressly overrule it.
JUSTICE BREYER realizes this well enough, or else his call for an
overruling of that case, which occupies almost half of his dissent,
see
post, at 699-705, would be supremely irrelevant to the
matter before us.
680
as the operation of a police force; but constructive waiver is
appropriate where a State runs an enterprise for profit, operates
in a field traditionally occupied by private persons or
corporations, engages in activities sufficiently removed from "core
[state] functions," Reply Brief for United States 3, or otherwise
acts as a "market participant" in interstate commerce, cf.
White v.
Massachusetts Council of Constr. Employers,
Inc., 460 U. S.
204, 206-208 (1983). On this theory, Florida Prepaid
constructively waived its immunity from suit by engaging in the
voluntary and nonessential activity of selling and advertising a
for-profit educational investment vehicle in interstate commerce
after being put on notice by the clear language of the TRCA that it
would be subject to Lanham Act liability for doing so.
We think that the constructive-waiver experiment of
Parden was ill conceived, and see no merit in attempting to
salvage any remnant of it. As we explain below in detail,
Parden broke sharply with prior cases, and is fundamentally
incompatible with later ones. We have never applied the holding of
Parden to another statute, and in fact have narrowed the
case in every subsequent opinion in which it has been under
consideration. In short,
Parden stands as an anomaly in the
jurisprudence of sovereign immunity, and indeed in the
jurisprudence of constitutional law. Today, we drop the other shoe:
Whatever may remain of our decision in
Parden is expressly
overruled.
To begin with, we cannot square
Parden with our cases
requiring that a State's express waiver of sovereign immunity be
unequivocal. See,
e. g., Great Northern Life Ins. Co. v.
Read, 322 U. S.
47 (1944). The whole point of requiring a "clear declaration"
by the State of its waiver is to be certain that the State
in fact consents to suit. But there is little reason to assume
actual consent based upon the State's mere presence in a field
subject to congressional regulation. There is a fundamental
difference between a State's expressing unequivocally that it
waives its immunity and Congress's
681
expressing unequivocally its intention that if the State takes
certain action it shall be deemed to have waived that immunity. In
the latter situation, the most that can be said with certainty is
that the State has been put on notice that Congress intends to
subject it to suits brought by individuals. That is very far from
concluding that
the State made an "altogether voluntary"
decision to waive its immunity.
Beers, 20 How., at 529.3
Indeed,
Parden-style waivers are simply unheard of in the
context of
other constitutionally protected privileges. As
we said in
Edelman, "[c]onstructive consent is not a
doctrine commonly associated with the surrender of constitutional
rights." 415 U. S., at 673. For example, imagine if Congress
amended the securities laws to provide with unmistakable clarity
that anyone committing fraud in connection with
3 In an attempt to cast doubt on our characterization of
Parden as a groundbreaking case, JUSTICE BREYER points to
three earlier decisions which allegedly demonstrate that
Parden worked no major change. These cases, however, have
only the most tenuous relation to
Parden's actual holding-as
one might suspect from the dissent's soft-pedaled description of
them as "roughly comparable" and involving (in quotation marks)
'"waivers.'''
Post, at 696. The first two,
United
States v.
California, 297 U. S. 175 (1936), and
California v.
Taylor, 353 U. S. 553 (1957),
involved neither state immunity from suit nor waiver, but the
entirely different question whether substantive provisions of
Commerce Clause legislation applied to the States. The former
concerned a suit brought against a State by
the United
States (a situation in which state sovereign immunity does not
exist, see
United States v.
Texas, 143 U. S. 621 (1892)),
and the latter expressly acknowledged that "the Eleventh Amendment"
was "not before us," 353 U. S., at 568, n. 16. The last case,
Gardner v.
New Jersey, 329 U. S. 565 (1947),
which held that a bankruptcy court can entertain a trustee's
objections to a claim filed by a State, stands for the unremarkable
proposition that a State waives its sovereign immunity by
voluntarily invoking the jurisdiction of the federal courts. See
supra, at 675-676. In sum, none of these cases laid any
foundation for
Pardenwhose author was quite correct in
acknowledging that it "presented a question of first impression,"
Employees of Dept. of Public Health and Welfare of Mo. v.
Department of Public Health and Welfare of Mo., 411 U. S.
279, 299 (1973) (Brennan, J., dissenting).
682
the buying or selling of securities in interstate commerce would
not be entitled to a jury in any federal criminal prosecution of
such fraud. Would persons engaging in securities fraud after the
adoption of such an amendment be deemed to have "constructively
waived" their constitutionally protected rights to trial by jury in
criminal cases? After all, the trading of securities is not so
vital an activity that anyone person's decision to trade cannot be
regarded as a voluntary choice. The answer, of course, is no. The
classic description of an effective waiver of a constitutional
right is the "intentional relinquishment or abandonment of a known
right or privilege."
Johnson v.
Zerbst, 304 U. S. 458, 464
(1938). "[C]ourts indulge every reasonable presumption against
waiver" of fundamental constitutional rights.
Aetna Ins. Co.
v.
Kennedy ex rel. Bogash, 301 U. S. 389, 393
(1937). See also
Ohio Bell Telephone Co. v.
Public Util.
Comm'n of Ohio, 301 U. S. 292, 307 (1937)
(we "do not presume acquiescence in the loss of fundamental
rights"). State sovereign immunity, no less than the right to trial
by jury in criminal cases, is constitutionally protected.
Great
Northern, supra, at 51;
Pennhurst, 465 U. S., at 98. And
in the context of
federal sovereign immunity-obviously the
closest analogy to the present case-it is well established that
waivers are not implied. See,
e. g., United States v.
King, 395 U. S.
1, 4 (1969) (describing the "settled propositio[n]" that the
United States' waiver of sovereign immunity "cannot be implied but
must be unequivocally expressed"). We see no reason why the rule
should be different with respect to state sovereign immunity.
Given how anomalous it is to speak of the "constructive waiver"
of a constitutionally protected privilege, it is not surprising
that the very cornerstone of the
Parden opinion was the
notion that state sovereign immunity is not constitutionally
grounded.
Parden's discussion of waiver began with the
observation:
683
"By empowering Congress to regulate commerce ... the States
necessarily surrendered any portion of their sovereignty that would
stand in the way of such regulation. Since imposition of the FELA
right of action upon interstate railroads is within the
congressional regulatory power, it must follow that application of
the Act to such a railroad cannot be precluded by sovereign
immunity." 377 U. S., at 192.
See also
id., at 193-194, n. 11. Our more recent decision
in
Seminole Tribe expressly repudiates that proposition, and
in formally overruling
Parden we do no more than make
explicit what that case implied.
Recognizing a congressional power to exact constructive waivers
of sovereign immunity through the exercise of Article I powers
would also, as a practical matter, permit Congress to circumvent
the antiabrogation holding of
Seminole Tribe. Forced waiver
and abrogation are not even different sides of the same coin-they
are the same side of the same coin. "All congressional creations of
private rights of action attach recovery to the defendant's
commission of some act, or possession of some status, in a field
where Congress has authority to regulate conduct. Thus,
all
federal prescriptions are, insofar as their prospective application
is concerned, in a sense conditional, and-to the extent that the
objects of the prescriptions consciously engage in the activity or
hold the status that produces liability-can be redescribed as
invitations to 'waiver.'"
Pennsylvania v.
Union Gas
Co.,
491 U. S. 1,
43 (1989) (SCALIA, J., dissenting). See also
Fitzpatrick,
427 U. S., at 451-452 (referring to congressional intent to
"abrogate" state sovereign immunity as a "necessary predicate" for
Parden-style waiver). There is little more than a verbal
distinction between saying that Congress can make Florida liable to
private parties for false or misleading advertising in interstate
commerce of its prepaid tuition program, and saying the same thing
but adding
684
at the end "if Florida chooses to engage in such advertising."
As further evidence that constructive waiver is little more than
abrogation under another name, consider the revealing facts of this
case: The statutory provision relied upon to demonstrate that
Florida constructively waived its sovereign immunity is the very
same provision that purported to abrogate it.
Nor do we think that the constitutionally grounded principle of
state sovereign immunity is any less robust where, as here, the
asserted basis for constructive waiver is conduct that the State
realistically could choose to abandon, that is undertaken for
profit, that is traditionally performed by private citizens and
corporations, and that otherwise resembles the behavior of "market
participants." Permitting abrogation or constructive waiver of the
constitutional right only when these conditions exist would of
course limit the evilbut it is hard to say that that limitation has
any more support in text or tradition than, say, limiting
abrogation or constructive waiver to the last Friday of the month.
Since sovereign immunity itself was not traditionally limited by
these factors, and since they have no bearing upon the
voluntariness of the waiver, there is no principled reason why they
should enter into our waiver analysis. When we held in
Seminole
Tribe that sovereign immunity barred an action brought under
the Indian Gaming Regulatory Act against the State of Florida for
its alleged failure to negotiate a gambling compact with the
Seminole Tribe of Indians, we did not pause to consider whether
Florida's decision not to negotiate was somehow involuntary. Nor
did we pause to consider whether running a tugboat towing service
at "fair and reasonable rates" was for profit, was traditionally
performed by private citizens and corporations, and otherwise
resembled the behavior of "market participants" when we held, in
Ex parte New York, 256 U. S. 490 (1921),
that sovereign immunity foreclosed an admiralty action against the
State of New
685
York for damages caused by the State's engaging in such
activity.
Hans itself involved an action against Louisiana
to recover coupons on a bond-the issuance of which surely rendered
Louisiana a participant in the financial markets.
The "market participant" cases from our dormant Commerce Clause
jurisprudence, relied upon by the United States, are inapposite.
See,
e. g., White v.
Massachusetts Council of Constr.
Employers, Inc., 460 U. S. 204 (1983);
Reeves, Inc. v.
Stake, 447 U. S. 429 (1980); and
Hughes v.
Alexandria Scrap Corp., 426 U. S. 794 (1976).
Those cases hold that, where a State acts as a participant in the
private market, it may prefer the goods or services of its own
citizens, even though it could not do so while acting as a market
regulator. Since "state proprietary activities may be, and often
are, burdened with the same restrictions imposed on private market
participants," "[e]venhandedness suggests that, when acting as
proprietors, States should similarly share existing freedoms from
federal constraints, including the inherent limits of the [dormant]
Commerce Clause."
White, supra, at 207-208, n. 3. The
"market participant" exception to judicially created dormant
Commerce Clause restrictions makes sense because the evil addressed
by those restrictions-the prospect that States will use custom
duties, exclusionary trade regulations, and other exercises of
governmental power (as opposed to the expenditure of state
resources) to favor their own citizens, see
Hughes, supra,
at 808-is entirely absent where the States are buying and selling
in the market. In contrast, a suit by an individual against an
unconsenting State is the very evil at which the Eleventh Amendment
is directed-and it exists whether or not the State is acting for
profit, in a traditionally "private" enterprise, and as a "market
participant." In the sovereign-immunity context, moreover,
"[e]venhandness" between individuals and States is not to be
expected: "[T]he constitutional role of the States sets them apart
from other
686
employers and defendants."
Welch, 483 U. S., at 477. Cf.
Atascadero, 473 U. S., at 246.4
The United States points to two other contexts in which it
asserts we have permitted Congress, in the exercise of its Article
I powers, to extract "constructive waivers" of state sovereign
immunity. In
Petty v.
Tennessee-Missouri Bridge
Comm'n, 359 U. S.
275 (1959), we held that a bistate commission which had been
created pursuant to an interstate compact (and which we assumed
partook of state sovereign immunity) had consented to suit by
reason of a suability provision attached to the congressional
approval of the compact. And we have held in such cases as
South
Dakota v.
Dole, 483 U. S. 203 (1987), that Congress may,
in the exercise of its spending power, condition its grant of funds
to the States upon their taking certain actions that Congress could
not require them to take, and that acceptance of the funds entails
an agreement to the actions. These cases seem to us fundamentally
different from the present one. Under the Compact Clause, U. S.
Const., Art. I, § 10, cl. 3, States
cannot form an
interstate compact without first obtaining the express consent of
Congress; the granting of such consent is a gratuity. So also,
Congress has no obligation to use its Spending Clause power to
disburse funds to the States; such
4 As for the suggestion of JUSTICE BREYER that we limit state
sovereign immunity to noncommercial state activities because
Congress has so limited
foreign sovereign immunity, in
accord with the "modern trend," see
post, at 699 (dissenting
opinion) (citing the Foreign Sovereign Immunities Act of 1976
(FSIA), 28 U. S. C. § 1605(a)(2)), see also JUSTICE STEVENS'S
dissent,
post, at 692: This proposal ignores the fact that
state sovereign immunity, unlike foreign sovereign immunity, is a
constitutional doctrine that is meant to be both immutable
by Congress and resistant to trends. The text of the Eleventh
Amendment, of course, makes no distinction between commercial and
noncommercial state activities-and so if we were to combine JUSTICE
BREYER'S literalistic interpretation of that Amendment with his
affection for FSIA, we would have a "commercial activities"
exception for all suits against States except those commenced in
federal court by citizens of another State, a disposition that
hardly "makes sense,"
post, at 699.
687
funds are gifts. In the present case, however, what Congress
threatens if the State refuses to agree to its condition is not the
denial of a gift or gratuity, but a sanction: exclusion of the
State from otherwise permissible activity. JUSTICE BREYER'S dissent
acknowledges the intuitive difference between the two, but asserts
that it disappears when the gift that is threatened to be withheld
is substantial enough.
Post, at 697. Perhaps so, which is
why, in cases involving conditions attached to federal funding, we
have acknowledged that "the financial inducement offered by
Congress might be so coercive as to pass the point at which
'pressure turns into compulsion.'"
Dole, supra, at 211,
quoting
Steward Machine Co. v.
Davis, 301 U. S. 548, 590
(1937). In any event, we think where the constitutionally
guaranteed protection of the States' sovereign immunity is
involved, the point of coercion is automatically passed-and the
voluntariness of waiver destroyed-when what is attached to the
refusal to waive is the exclusion of the State from otherwise
lawful activity.
V
The principal thrust of JUSTICE BREYER'S dissent is an attack
upon the very legitimacy of state sovereign immunity itself. In
this regard, JUSTICE BREYER and the other dissenters proclaim that
they are "not
yet ready,"
post, at 699 (emphasis
added), to adhere to the still-warm precedent of
Seminole
Tribe and to the 110-year-old decision in
Hans that
supports it.5 Accordingly, JUSTICE BREYER reiterates
5 JUSTICE BREYER purports to "accept this Court's
pre-Seminole Tribe sovereign immunity decisions,"
post, at 699 (dissenting opinion), but by that he could not
mean
Hans, but rather only the distorted view of
Hans
that prevailed briefly between
Parden and
Seminole Tribe.
Parden was the first case to suggest that the sovereign
immunity announced in
Hans was so fragile a flower that it
could be abrogated under Article I-a suggestion contrary to the
reality that
Hans itself involved a congressional conferral
of jurisdiction enacted under Article I. See
Pennsylvania v.
Union Gas, 491
U. S. 1, 36-37 (1989) (SCALIA, J., dissenting). Moreover, that
conferral of jurisdiction was combined, in
Hans, with a
substantive
688
(but only in outline form, thankfully) the now-fashionable
revisionist accounts of the Eleventh Amendment set forth in other
opinions in a degree of repetitive detail that has despoiled our
northern woods. Compare
post, at 700-701, with
Atascadero, supra, at 258-302 (Brennan, J., dissenting);
Welch, supra, at 504-516 (Brennan, J., dissenting);
Seminole Tribe, 517 U. S., at 76-99 (STEVENS, J.,
dissenting);
id., at 100-185 (SOUTER, J., dissenting). But
see
Alden v.
Maine, post, at 760-808 (SOUTER, J.,
dissenting). The arguments recited in these sources have been
soundly refuted, and the position for which they have been
marshaled has been rejected by constitutional tradition and
precedent as clear and conclusive, and almost as venerable, as that
which consigns debate over whether
Marbury v.
Madison, 1 Cranch 137 (1803), was wrongly decided to forums
more otherworldly than ours. See
Union Gas, 491 U. S., at
33-34, 35-42 (SCALIA, J., dissenting);
Seminole Tribe,
supra, at 54-73;
Alden, post, at 712-730. On this score,
we think nothing further need be said except two minor observations
peculiar to this case.
claim under the Contracts Clause of the Constitution itself,
which one would think to have greater, rather than lesser,
abrogative force than a substantive statute enacted pursuant to the
Commerce Clause. JUSTICE BREYER would apparently interpose that the
statute in
Hans did not expressly" 'purpor[t] to pierce
state immunity,'"
post, at 700, quoting
Seminole
Tribe, 517 U. S., at 119 (SOUTER, J., dissenting)-but the
opinion in
Hans did not allude to that refinement, nor did
Parden think it made any difference. The so-called "clear
statement rule" was not even adumbrated until nine years after
Parden, in
Employees, 411 U. S., at 284-285. It is
difficult to square JUSTICE BREYER'S reliance upon the distinction
that the present case involves a federal question (and is therefore
not explicitly covered by the Eleventh Amendment), see
post,
at 700-701, with its professed fidelity to
Hans, the whole
point of which was that the sovereign immunity reflected in (rather
than created by) the Eleventh Amendment transcends the narrow text
of the Amendment itself. Or to put it differently, the
"pre-Seminole Tribe sovereign immunity decisions" to which
JUSTICE BREYER pledges allegiance appear to include
Chisholm
v.
Georgia, 2 Dall. 419 (1793). But see U. S. Const., Arndt.
11.
689
First, JUSTICE BREYER and the other dissenters have adopted a
decidedly perverse theory of
stare decisis. While finding
themselves entirely unconstrained by a venerable precedent such as
Hans, embedded within our legal system for over a century,
see,
e. g., Welch, 483 U. S., at 494, n. 27;
Union Gas,
supra, at 34-35 (SCALIA, J., dissenting), at the same time they
cling desperately to an anomalous and severely undermined decision
(Parden) from the 1960's. Surely this approach to
stare
decisis is exactly backwardsunless, of course, one wishes to
use it as a weapon rather than a guide, in which case any old
approach will do. Second, while we stress that the following
observation has no bearing upon our resolution of this case, we
find it puzzling that JUSTICE BREYER would choose this occasion to
criticize our sovereign-immunity jurisprudence as being ungrounded
in constitutional text, since the present lawsuit that he would
allow to go forward-having apparently been commenced against a
State (Florida) by a citizen of another State (College Savings Bank
of New Jersey), 948 F. Supp., at 401-402seems to fall foursquare
within the literal text of the 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 .... " u. S.
Const., Amdt. 11 (emphasis added). See
Seminole Tribe,
supra, at 82, n. 8 (STEVENS, J., dissenting).
As for the more diffuse treatment of the subject of federalism
contained in the last portion of JUSTICE BREYER'S opinion: It is
alarming to learn that so many Members of this Court subscribe to a
theory of federalism that rejects "the details of any particular
federalist doctrine" -which it says can and should "change to
reflect the Nation's changing needs"-and that puts forward as the
only "unchanging goal" of federalism worth mentioning "the
protection of liberty," which it believes is most directly achieved
by "promoting the sharing among citizens of governmental
decisionmaking
690
authority," which in turn demands (we finally come to the point)
"necessary legislative flexibility" for the people's
representatives in Congress.
Post, at 702-703. The
proposition that "the protection of liberty" is most directly
achieved by "promoting the sharing among citizens of governmental
decisionmaking authority" might well have dropped from the lips of
Robespierre, but surely not from those of Madison, Jefferson, or
Hamilton, whose north star was that governmental power,
even-indeed, especially-governmental power wielded by the people,
had to be dispersed and countered. And to say that the
degree of dispersal to the States, and hence the degree of check by
the States, is to be governed by Congress's need for "legislative
flexibility" is to deny federalism utterly. (JUSTICE BREYER'S
opinion comes close to admitting this when the only example of a
"federalism" constraint that it can bear to acknowledge as being
appropriate for judicial recognition is the invalidation of a
State's law under-of all things, given the passion for text
that characterizes some parts of his opinion-the "dormant Commerce
Clause,"
post, at 703.) Legislative flexibility on the part
of Congress will be the touchstone of federalism when the capacity
to support combustion becomes the acid test of a fire extinguisher.
Congressional flexibility is desirable, of course-but only within
the
bounds of federal power established by the Constitution.
Beyond those bounds (the theory of our Constitution goes), it is a
menace. Our opinion today has sought to discern what the bounds
are; JUSTICE BREYER'S dissent denies them any permanent place.
Finally, we must comment upon JUSTICE BREYER'S comparison of our
decision today with the discredited substantive-due-process case of
Lochner v.
New York, 198 U. S. 45 (1905). It
resembles
Lochner, of course, in the respect that it rejects
a novel assertion of governmental power which the legislature
believed to be justified. But if that alone were enough to qualify
as a
mini-Lochner, the list of
mini-Lochners would be
endless. Most of our judgments in-
691
validating state and federal laws fit that description. We had
always thought that the
distinctive feature of
Lochner, nicely captured in Justice Holmes's dissenting
remark about "Mr. Herbert Spencer's Social Statics,"
id., at
75, was that it sought to impose a particular economic philosophy
upon the Constitution. And we think that feature aptly
characterizes, not our opinion, but JUSTICE BREYER'S dissent, which
believes that States should not enjoy the normal constitutional
protections of sovereign immunity when they step out of their
proper economic role to engage in (we are sure Mr. Herbert Spencer
would be shocked) "ordinary commercial ventures,"
post, at
694. What ever happened to the need for "legislative
flexibility"?
***
Concluding, for the foregoing reasons, that the sovereign
immunity of the State of Florida was neither validly abrogated by
the Trademark Remedy Clarification Act, nor voluntarily waived by
the State's activities in interstate commerce, we hold that the
federal courts are without jurisdiction to entertain this suit
against an arm of the State of Florida. The judgment of the Third
Circuit dismissing the action is affirmed.
It is so ordered.
JUSTICE STEVENS, dissenting.
This case has been argued and decided on the basis of
assumptions that may not be entirely correct. Accepting them,
arguendo, the judgment of the Court of Appeals should be
reversed for the reasons set forth in JUSTICE BREYER'S dissent,
which I have joined. I believe, however, that the importance of
this case and the other two "states rights" cases decided today
merits this additional comment.
The procedural posture of this case requires the Court to assume
that Florida Prepaid is an "arm of the State" of Florida because
its activities relate to the State's educational pro-
692
STEVENS, J., dissenting
grams.
Ante, at 671. But the validity of that assumption
is doubtful if the Court's jurisprudence in this area is to be
based primarily on present-day assumptions about the status of the
doctrine of sovereign immunity in the 18th century. Sovereigns did
not then play the kind of role in the commercial marketplace that
they do today. In future cases, it may therefore be appropriate to
limit the coverage of state sovereign immunity by treating the
commercial enterprises of the States like the commercial activities
of foreign sovereigns under the Foreign Sovereign Immunities Act of
1976.1
The majority also assumes that petitioner's complaint has
alleged a violation of the Lanham Act, but not one that is
sufficiently serious to amount to a "deprivation" of its property.
Ante, at 674-675. I think neither of those assumptions is
relevant to the principal issue raised in this case, namely,
whether Congress had the constitutional power to authorize suits
against States and state instrumentalities for such a violation. In
my judgment the Constitution granted it ample power to do SO.2
Section 5 of the Fourteenth Amendment authorizes Congress to enact
appropriate legislation to prevent deprivations of property without
due process. Unlike the majority, I am persuaded that the Trademark
Remedy Clarification Act was a valid exercise of that power, even
if Florida Prepaid's allegedly false advertising
1 See 28 U. S. C. § 1605(a)(2) (commercial activity exception to
foreign sovereign immunity). The statute provides the following
definition of "commercial activity": "either a regular course of
commercial conduct or a particular commercial transaction or act.
The commercial character of an activity shall be determined by
reference to the nature of the course of conduct or particular
transaction or act, rather than by reference to its purpose." §
1603(d).
2 As we held in
Pennsylvania v.
Union Gas Co.,
491 U. S. 1, 23
(1989), the Commerce Clause granted Congress the power to abrogate
the States' common-law defense of sovereign immunity. I remain
convinced that that case was correctly decided for the reasons
stated in the principal and concurring opinions.
693
in this case did not violate the Constitution. My conclusion
rests on two premises that the Court rejects.
First, in my opinion
"the activity of doing business, or
the activity of making a profit," ante, at 675, is a form of
property. The asset that often appears on a company's balance sheet
as "good will" is the substantial equivalent of that "activity." It
is the same kind of "property" that Congress described in § 7 of
the Sherman Act, 26 Stat. 210, and in § 4 of the Clayton Act, 38
Stat. 731. A State's deliberate destruction of a going business is
surely a deprivation of property within the meaning of the Due
Process Clause.
Second, the validity of a congressional decision to abrogate
sovereign immunity in a category of cases does not depend on the
strength of the claim asserted in a particular case within that
category. Instead, the decision depends on whether Congress had a
reasonable basis for concluding that abrogation was necessary to
prevent violations that would otherwise occur. Given the
presumption of validity that supports all federal statutes, I
believe the Court must shoulder the burden of demonstrating why the
judgment of the Congress of the United States should not command
our respect. It has not done so.
For these reasons, as well as those expressed by JUSTICE BREYER,
I respectfully dissent.
JUSTICE BREYER, with whom JUSTICE STEVENS, JUSTICE SOUTER, and
JUSTICE GINSBURG join, dissenting.
The Court holds that Congress, in the exercise of its commerce
power, cannot require a State to waive its immunity from suit in
federal court even where the State engages in activity from which
it might readily withdraw, such as federally regulated commercial
activity. This Court has previously held to the contrary.
Parden v.
Terminal R. Co. of Ala. Docks Dept.,
377 U. S. 184
(1964). I would not abandon that precedent.
694
BREYER, J., dissenting
I
Thirty-five years ago this Court unanimously subscribed to the
holding that the Court today overrules. Justice White, writing for
four Members of the Court who dissented on a different issue,
succinctly described that holding as follows:
"[I]t is within the power of Congress to condition a State's
permit to engage in the interstate transportation business on a
waiver of the State's sovereign immunity from suits arising out of
such business. Congress might well determine that allowing
regulable conduct such as the operation of a railroad to be
undertaken by a body legally immune from liability directly
resulting from these operations is so inimical to the purposes of
its regulation that the State must be put to the option of either
foregoing participation in the conduct or consenting to legal
responsibility for injury caused thereby." Id., at 198
(opinion of White, J., joined by Douglas, Harlan, and Stewart,
JJ.).
The majority, seeking to justify the overruling of so clear a
precedent, describes
Parden's holding as a constitutional
"anomaly" that "broke sharply with prior cases," that is
"fundamentally incompatible with later ones," and that has been
"narrowed ... in every subsequent opinion."
Ante, at
680.
Parden is none of those things.
Far from being anomalous,
Parden's holding finds support
in reason and precedent. When a State engages in ordinary
commercial ventures, it acts like a private person, outside the
area of its "core" responsibilities, and in a way unlikely to prove
essential to the fulfillment of a basic governmental obligation. A
Congress that decides to regulate those state commercial activities
rather than to exempt the State likely believes that an exemption,
by treating the State differently from identically situated private
persons, would threaten the objectives of a federal regulatory
program aimed primarily
695
at private conduct. Compare,
e. g., 12 U. S. C. §
1841(b) (1994 ed., Supp. III) (exempting state companies from
regulations covering federal bank holding companies); 15 U. S. C. §
77c(a)(2) (exempting state-issued securities from federal
securities laws); and 29 U. S. C. § 652(5) (exempting States from
the definition of "employer[s]" subject to federal occupational
safety and health laws), with 11 U. S. C. § 106(a) (subjecting
States to federal bankruptcy court judgments); 15 U. S. C. §
1122(a) (subjecting States to suit for violation of Lanham Act); 17
U. S. C. § 511(a) (subjecting States to suit for copyright
infringement); and 35 U. S. C. § 271(h) (subjecting States to suit
for patent infringement). And a Congress that includes the State
not only within its substantive regulatory rules but also
(expressly) within a related system of private remedies likely
believes that a remedial exemption would similarly threaten that
program. See
Florida Prepaid Postsecondary Ed. Expense Bd.
v.
College Savings Bank, ante, at 656-657 (STEVENS, J.,
dissenting). It thereby avoids an enforcement gap which, when
allied with the pressures of a competitive marketplace, could place
the State's regulated private competitors at a significant
disadvantage.
These considerations make Congress' need to possess the power to
condition entry into the market upon a waiver of sovereign immunity
(as "necessary and proper" to the exercise of its commerce power)
unusually strong, for to deny Congress that power would deny
Congress the power effectively to regulate
private conduct.
Cf.
California v.
Taylor, 353 U. S. 553, 566
(1957). At the same time they make a State's need to exercise
sovereign immunity unusually weak, for the State is unlikely to
have to supply what private firms already supply, nor may it
fairly demand special treatment, even to protect the public purse,
when it does so. Neither can one easily imagine what the
Constitution's Founders would have thought about the assertion of
sovereign immunity in this special context. These considerations,
differing in kind or degree from those that would support a
general
696
BREYER, J., dissenting
congressional "abrogation" power, indicate that
Parden's
holding is sound, irrespective of this Court's decisions in
Seminole Tribe of Fla. v.
Florida, 517 U. S. 44 (1996), and
Alden v.
Maine, post, p. 706.
Neither did
Parden break "sharply with prior cases."
Parden itself cited authority that found related
"waivers" in at least roughly comparable circumstances.
United
States v.
California, 297 U. S. 175 (1936), for
example, held that a State, "by engaging in interstate commerce by
rail, has subjected itself to the commerce power,"
id., at
185, which amounted to a waiver of a (different though related)
substantive immunity. See also
Taylor, supra, at 568.
Parden also relied on authority holding that States seeking
necessary congressional approval for an interstate compact had, "by
venturing into the [federal] realm 'assume[d] the [waiver of
sovereign immunity] conditions ... attached.'" 377 U. S., at 196
(quoting
Petty v.
Tennessee-Missouri Bridge Comm'n,
359 U. S. 275,
281-282 (1959)). Earlier case law had found a waiver of sovereign
immunity in a State's decision to bring a creditor's claim in
bankruptcy. See
Gardner v.
New Jersey, 329 U. S. 565, 573-574
(1947). Later case law, suggesting that a waiver may be found in a
State's acceptance of a federal grant, see
Atascadero State
Hospital v.
Scanlon, 473 U. S. 234, 247
(1985), supports
Parden's conclusion. Where is the sharp
break?
The majority has only one answer to this question. It believes
that this Court's case law requires any "waiver" to be "express"
and "unequivocal."
Ante, at 680. But the cases to which I
have just referred show that is not so. The majority tries to
explain some of those cases away with the statement that what is
attached to the refusal to waive in those cases is "the denial of a
gift or gratuity," while what is involved here is "the exclusion of
the State from [an] otherwise lawful activity."
Ante, at
687. This statement does not explain away a difference. It simply
states a difference that demands an explanation.
697
The statement does appeal to an intuition, namely, that it is
somehow easier for the State, and hence more voluntary, to forgo "a
gift or gratuity" than to refrain from "otherwise lawful activity,"
or that it is somehow more compelling or oppressive for Congress to
forbid the State to perform an "otherwise lawful" act than to
withhold "beneficence." But the force of this intuition depends
upon the example that one chooses as its illustration; and
realistic examples suggest the intuition is not sound in the
present context. Given the amount of money at stake, it may be
harder, not easier, for a State to refuse highway funds than to
refrain from entering the investment services business. See U. S.
Dept. of Commerce, Bureau of Census, Federal Aid to States for
Fiscal Year 1998, p. 17 (Apr. 1999) (Federal Government provided
over $20 billion to States for highways in 1998). It is more
compelling and oppressive for Congress to threaten to withhold from
a State funds needed to educate its children than to threaten to
subject it to suit when it competes directly with a private
investment company. See
id., at 5 (Federal Government
provided over $21 billion to States for education in 1998). The
distinction that the majority seeks to make-drawn in terms of gifts
and entitlements-does not exist.
The majority is also wrong to say that this Court has "narrowed"
Parden in its "subsequent opinion[s],"
ante, at 680,
at least in any way relevant to to day's decision.
Parden
considered two separate issues: (1) Does Congress have the
power to require a State to waive its immunity? (2) How
clearly must Congress speak when it does so? The Court has
narrowed
Parden only in respect to the second issue, not the
first; but today we are concerned only with the first. The Court in
Employees of Dept. of Public Health and Welfare of Mo. v.
Department of Public Health and Welfare of Mo.,
411 U. S. 279 (1973), for
example, discussed whether Congress
had, or had not,
"lift[ed]" sovereign immunity, not whether it
could, or could
not, have done so.
Id., at 285
698
BREYER, J., dissenting
("Congress
did not lift the sovereign immunity of the
States" (emphasis added)). And
Employees' limitation of
Parden, to "the area where private persons and corporations
normally ran the enterprise," took place in the context of
clarity, not
power. 411 U. S., at 284 (specifying
that "Congress
can act" outside the limited area (emphasis
added)). Although two Justices would have limited
Parden's
holding in respect to power, that limitation would simply have
required Congress to give the States advance notice of the
consequence (loss of sovereign immunity), which, as they noted,
happened in
Parden. 411 U. S., at 296-297 (Marshall, J.,
concurring in result).
The remaining cases the majority mentions offer it no greater
support. One said, "We assume, without deciding or intimating a
view of the question, that the authority of Congress to subject
unconsenting States to suit in federal court is not confined to § 5
of the Fourteenth Amendment."
Welch v.
Texas Dept. of
Highways and Public Transp., 483 U. S. 468, 475 (1987). Two
others also considered legislative clarity, not power.
Atascadero State Hospital, supra, at 247 (Rehabilitation Act
"falls far short" of clearly indicating a waiver by a State
accepting funds under the Act);
Edelman v.
Jordan,
415 U. S. 651,
674 (1974) (same for Social Security Act). Even
Seminole
Tribe carefully avoided calling
Parden into question.
While specifying that Congress cannot, in the exercise of its
Article I powers, "abrogate unilaterally the States' immunity from
suit," 517 U. S., at 59, it left open the scope of the term
"unilaterally" by referring to
Parden, without criticism, as
standing for the "unremarkable, and completely unrelated,
proposition that the States may waive their sovereign immunity,"
517 U. S., at 65. In short, except for those in today's majority,
no member of this Court had ever questioned the holding of
Parden that the Court today discards because it cannot find
"merit in attempting to salvage any remnant of it."
Ante, at
680.
699
Parden had never been questioned because,
Seminole
Tribe or not, it still makes sense. The line the Court today
rejects has been drawn by this Court to place States outside the
ordinary dormant Commerce Clause rules when they act as "market
participants."
White v.
Massachusetts Council of Constr.
Employers, Inc., 460 U. S. 204, 206-208
(1983);
Reeves, Inc. v.
Stake, 447 U. S. 429, 434-439
(1980);
Hughes v.
Alexandria Scrap Corp., 426 U. S. 794, 804-810
(1976). And Congress has drawn this same line in the related
context of foreign state sovereign immunity. 28 U. S. C. §
1605(a)(2). In doing so, Congress followed the modern trend, which
"spread rapidly after the Second World War," regarding foreign
state sovereign immunity. 1 Restatement (Third) of Foreign
Relations Law of the United States, ch. 5, Introductory Note, p.
391 (1986) (recognizing that "immunity ... gave states an unfair
advantage in competition with private commercial enterprise"); see
also Report of the International Law Commission on the Work of its
Thirty-Eighth Session, Art. 11, ~ 1, p. 7 (United Nations Doc.
A/411498, Aug. 26, 1986) (when a State engages in a commercial
contract with a foreign person, "the State is considered to have
consented to the exercise" of foreign jurisdiction in a proceeding
arising out of that contract). Indeed, given the widely accepted
view among modern nations that when a State engages in ordinary
commercial activity sovereign immunity has no significant role to
play, it is today's holding, not
Parden, that creates the
legal "anomaly."
II
I resist all the more strongly the Court's extension of
Seminole Tribe in this case because, although I accept this
Court's
pre-Seminole Tribe sovereign immunity decisions, I
am not yet ready to adhere to the proposition of law set forth in
Seminole Tribe. Cf.
EEOC v.
Wyoming, 460 U. S. 226, 249-250
(1983) (STEVENS, J., concurring). In my view, Congress does possess
the authority to abrogate a State's sover-
700
BREYER, J., dissenting
eign immunity where "necessary and proper" to the exercise of an
Article I power. My reasons include those that JusTICES STEVENS and
SOUTER already have described in detail.
(1) Neither constitutional text nor the surrounding debates
support
Seminole Tribe's view that Congress lacks the
Article I power to abrogate a State's sovereign immunity in
federal-question cases (unlike diversity cases).
Seminole
Tribe, 517 U. S., at 82-83, and nn. 8, 9 (STEVENS, J.,
dissenting);
id., at 142-150 (SOUTER, J., dissenting); cf.
the majority's characterization of this argument,
ante, at
687-688.
(2) The precedents that offer important legal support for the
doctrine of sovereign immunity do not help the
Seminole
Tribe majority. They all focus upon a critically different
question, namely, whether
courts, acting without legislative
support, can abrogate state sovereign immunity, not whether
Congress, acting legislatively, can do so. See
Principality of
Monaco v.
Mississippi, 292 U. S. 313 (1934);
Hans v.
Louisiana, 134 U. S. 1 (1890);
Chisholm v.
Georgia, 2 Dall. 419, 429 (1793)
(Iredell, J., dissenting);
Seminole Tribe, supra, at 119
(SOUTER, J., dissenting) ("Because no federal legislation
purporting to pierce state immunity was at issue, it cannot fairly
be said that
Hans held state sovereign immunity to have
attained some constitutional status immunizing it from
abrogation").
(3) Sovereign immunity is a common-law doctrine. The new
American Nation received common-law doctrines selectively,
accepting some, abandoning others, and frequently modifying those
it accepted in light of the new Nation's special needs and
circumstances.
Seminole Tribe, supra, at 130-142 (SOUTER,
J., dissenting). The new Nation's federalist lodestar, dual
sovereignty (of State and Nation), demanded modification of the
traditional single-sovereign immunity doctrine, thereby permitting
Congress to narrow or abolish state sovereign immunity where
necessary.
701
(a) Dual sovereignty undercuts the doctrine's traditional
"logical and practical" justification, namely (in the words of
Justice Holmes), that "there can be no legal right as against the
authority that makes the law on which the right depends."
Kawananakoa v.
Polyblank, 205 U. S. 349, 353
(1907). When a State is sued for violating federal law, the
"authority" that would assert the immunity, the State, is not the
"authority" that made the (federal) law. This point remains true
even if the Court treats sovereign immunity as a principle of
natural law.
Alden v.
Maine, post, at 762-764
(SOUTER, J., dissenting).
(b) Dual sovereignty, by granting Congress the power to create
substantive rights that bind States (despite their sovereignty)
must grant Congress the subsidiary power to create related private
remedies that bind States (despite their sovereignty).
(c) Dual sovereignty means that Congress may need that lesser
power lest States (if they are not subject to federal remedies)
ignore the substantive federal law that binds them, thereby
disabling the National Government and weakening the very Union that
the Constitution creates. Cf.
McCulloch v.
Maryland,
4 Wheat. 316, 407-408 (1819);
Cohens
(4) By interpreting the Constitution as rendering immutable this
one common-law doctrine (sovereign immunity),
Seminole Tribe
threatens the Nation's ability to enact economic legislation needed
for the future in much the way that
Lochner v.
New
York, 198 U. S.
45 (1905), threatened the Nation's ability to enact social
legislation over 90 years ago.
I shall elaborate upon this last-mentioned point. The similarity
to
Lochner lies in the risk that
Seminole Tribe and
the Court's subsequent cases will deprive Congress of necessary
legislative flexibility. Their rules will make it more difficult
for Congress to create, for example, a decentralized system of
individual private remedies, say a private remedial system needed
to protect intellectual property, including
702
BREYER, J., dissenting
computer-related educational materials, irrespective of the need
for, or importance of, such a system in a 21st-century advanced
economy. Cf.
Florida Prepaid Postsecondary Ed. Expense Bd.
v.
College Savings Bank, ante, at 656-660 (STEVENS, J.,
dissenting) (illustrating the harm the rules work to the patent
system). Similarly, those rules will inhibit the creation of
innovative legal regimes, say, incentive-based or decentralized
regulatory systems, that deliberately take account of local
differences by assigning roles, powers, or responsibility, not just
to federal administrators, but to citizens, at least if such a
regime must incorporate a private remedy against a State
(e.
g., a State as water polluter) to work effectively. Yet,
ironically, Congress needs this kind of flexibility if it is to
achieve one of federalism's basic objectives.
That basic objective should not be confused with the details of
any particular federalist doctrine, for the contours of federalist
doctrine have changed over the course of our Nation's history.
Thomas Jefferson's purchase of Louisiana, for example, reshaped the
great debate about the need for a broad, rather than a literal,
interpretation of federal powers; the Civil War effectively ended
the claim of a State's right to "nullify" a federal law; the Second
New Deal, and its ultimate judicial ratification, showed that
federal and state legislative authority were not mutually
exclusive; this Court's "civil rights" decisions clarified the
protection against state infringement that the Fourteenth Amendment
offers to basic human liberty. In each instance the content of
specific federalist doctrines had to change to reflect the Nation's
changing needs (territorial expansion, the end of slavery, the
Great Depression, and desegregation).
But those changing doctrines reflect at least one unchanging
goal: the protection of liberty. Federalism helps to protect
liberty not simply in our modern sense of helping the individual
remain free of restraints imposed by a distant government, but more
directly by promoting the sharing among
703
citizens of governmental decisionmaking authority. See B.
Constant, Political Writings 307 (B. Fontana transl. 1988)
(describing the "Liberty of the Ancients Compared with that of the
Moderns"). The ancient world understood the need to divide
sovereign power among a nation's citizens, thereby creating
government in which all would exercise that power; and they called
"free" the citizens who exercised that power so divided. Our
Nation's Founders understood the same, for they wrote a
Constitution that divided governmental authority, that retained
great power at state and local levels, and which foresaw, indeed
assumed, democratic citizen participation in government at all
levels, including levels that facilitated citizen participation
closer to a citizen's home.
In to day's world, legislative flexibility is necessary if we
are to protect this kind of liberty. Modern commerce and the
technology upon which it rests need large markets and seek
government large enough to secure trading rules that permit
industry to compete in the global marketplace, to prevent pollution
that crosses borders, and to assure adequate protection of health
and safety by discouraging a regulatory "race to the bottom." Yet
local control over local decisions remains necessary. Uniform
regulatory decisions about, for example, chemical waste disposal,
pesticides, or food labeling, will directly affect daily life in
every locality. But they may reflect differing views among
localities about the relative importance of the wage levels or
environmental preferences that underlie them. Local control can
take account of such concerns and help to maintain a sense of
community despite global forces that threaten it. Federalism
matters to ordinary citizens seeking to maintain a degree of
control, a sense of community, in an increasingly interrelated and
complex world.
Courts can remain sensitive to these needs when they interpret
statutes and apply constitutional provisions, for example, the
dormant Commerce Clause. But courts cannot easily draw the proper
basic lines of authority. The proper
704
BREYER, J., dissenting
local/national/international balance is often highly context
specific. And judicial rules that would allocate power are often
far too broad. Legislatures, however, can write laws that more
specifically embody that balance. Specific regulatory schemes, for
example, can draw lines that leave certain local authority
untouched, or that involve States, local communities, or citizens
directly through the grant of funds, powers, rights, or privileges.
Depending upon context, Congress may encourage or require
interaction among citizens working at various levels of government.
That is why the modern substantive federalist problem demands a
flexible, context-specific legislative response (and it does not
help to constitutionalize an ahistoric view of sovereign immunity
that, by freezing its remedial limitations, tends to place the
State beyond the reach of law).
I recognize the possibility that Congress may achieve its
objectives in other ways.
Ex parte Young, 209 U. S. 123 (1908), is
still available, though effective only where damages remedies are
not important. Congress, too, might create a federal
damages-collecting "enforcement" bureaucracy charged with
responsibilities that Congress would prefer to place in the hands
of States or private citizens,
Alden v.
Maine, post,
at 755-756;
Printz v.
United States, 521 U. S. 898, 977 (1997)
(BREYER, J., dissenting). Or perhaps Congress will be able to
achieve the results it seeks (including decentralization) by
embodying the necessary state "waivers" in federal funding
programs-in which case, the Court's decisions simply impose upon
Congress the burden of rewriting legislation, for no apparent
reason.
But none of these alternatives is satisfactory. Unfortunately,
Seminole Tribe and today's related decisions separate one
formal strand from the federalist skein-a strand that has been
understood as antirepublican since the time of Cicero-and they
elevate that strand to the level of an immutable constitutional
principle more akin to the thought of James I than of James
Madison. They do so when the role
705
sovereign immunity once played in helping to assure the States
that their political independence would remain even after joining
the Union no longer holds center stage. See
Nevada v.
Hall, 440 U.
S. 410, 418 (1979). They do so when a federal court's ability
to enforce its judgment against a State is no longer a major
concern. See The Federalist No. 81, p. 488
(C. Rossiter ed.
1961) (A. Hamilton). And they do so without adequate legal support
grounded in either history or practical need. To the contrary, by
making that doctrine immune from congressional Article I
modification, the Court makes it more difficult for Congress to
decentralize governmental decisionmaking and to provide individual
citizens, or local communities, with a variety of enforcement
powers. By diminishing congressional flexibility to do so, the
Court makes it somewhat more difficult to satisfy modern
federalism's more important liberty-protecting needs. In this
sense, it is counterproductive.
III
I do not know whether the State has engaged in false advertising
or unfair competition as College Savings Bank alleges. But this
case was dismissed at the threshold. Congress has clearly said that
College Savings Bank may bring a Lanham Act suit in these
circumstances. For the reasons set forth in this opinion, I believe
Congress has the constitutional power so to provide. I would
therefore reverse the judgment of the Court of Appeals.
Comments
Be the first to comment
Leave a Comment