The Judicial Power—State-Citizen Diversity Clause

The judicial Power shall extend . . . to Controversies . . . between a State and Citizens of another State. . . .

—Ernest A. Young

Introduction

Article III extends the federal judicial power “to Controversies between a State and Citizens of another State.” This provision is generally known as the State-Citizen Diversity Clause. It is most often viewed in tandem with its neighbor, the Foreign Diversity Clause, which extends federal jurisdiction to controversies “between a state . . . and foreign states, citizens, or subjects.” (See Essay No. 133.) Both clauses govern a variety of potential applications, but they have been discussed primarily for their role in enduring controversies involving the scope of state sovereign immunity in suits by private parties.

History Before 1787

Sovereign immunity limits the ability of courts to entertain suits against government entities, especially when brought by private parties. The principle of sovereign immunity derives from both the English common-law background and writers on political theory, all of which formed part of the Founders’ intellectual vocabulary. (See Essay No. 189.) As Alexander Hamilton put it in Federalist No. 81, “It is inherent in the nature of sovereignty not to be amenable to the suit of an individual without its consent. This is the general sense and the general practice of mankind; and the exemption, as one of the attributes of sovereignty, is now enjoyed by the government of every state in the Union.” This view was widespread in the Founding era. Professor Caleb Nelson reports that “people of widely varying perspectives agreed that unconsenting states were not amenable to suit by individuals,” and “[t]he consensus on this fact continued in later years.”¹

The Constitutional Convention

At the Philadelphia Convention, the draft State-Citizen Diversity Clause appeared to threaten this consensus about sovereign immunity. The Committee of Detail proposed an early version of the clause on August 6, 1787. It provided in part that “The Jurisdiction of the Supreme Court shall extend to . . . controversies . . . between a State and Citizens of another State . . . and between a State or the Citizens thereof and foreign States citizens or subjects.”² This text at least raised the possibility that states could be sued in federal court. The final version included state-citizen diversity cases in the “judicial power” for all federal courts. This language, according to Professor Bradford Clark, “was adopted relatively late in the Convention without objection or discussion.”³

The Ratification Debates

The State-Citizen Diversity Clause’s text said nothing at all about the doctrine of sovereign immunity. Critics, however, feared that by extending the judicial power to cover suits involving state governments, the Clause implicitly subjected unwilling states to suit. These concerns surfaced in the various state ratifying conventions. Some delegates worried that by exposing states to suit in federal court, the State-Citizen Diversity Clause (and its state-alien analog) would undermine the states’ dignity and subject them to disastrous liability for debts arising out of the Revolutionary War. In the Virginia Convention, George Mason inquired, “Is this state to be brought to the bar of justice like a delinquent individual? Is the sovereignty of the state to be arraigned like a culprit, or private offender?”⁴ The Anti-Federalist writer Brutus warned that Article III would “produce the utmost confusion, and in its progress, will crush the states beneath its weight.”⁵

Some proponents of Article III seemed to embrace this possibility as a means for ensuring that state governments would honor their debts. Edmund Randolph of Virginia, for example, asked, “Are we to say that we shall discard this government because it would make us all honest?”⁶ James Wilson of Pennsylvania urged that employing federal courts to enforce state debts payable under the Treaty of Paris would “show the world that we make the faith of treaties a constitutional part of the character of the United States.”⁷

Mindful of the states’ financially precarious position following the Revolution, other leading Federalists sought to dispel these concerns by insisting that Article III left the states’ preexisting immunities intact. At the Virginia Convention, James Madison explained that the State-Citizen Diversity Clause was designed to allow state governments to come into federal court as plaintiffs, not to allow private citizens to overcome a state’s immunity as a defendant; states could be brought into federal court only “if a state should condescend to be a party.”⁸ John Marshall agreed: “The intent is, to enable states to recover claims of individuals residing in other states.”⁹ In Federalist No. 81, Hamilton acknowledged the states’ immunity prior to entering the Union and insisted that “[u]nless . . . there is a surrender of this immunity in the plan of the convention, it will remain with the States.”

Chisholm, the Eleventh Amendment, and Subsequent Interpretation

Despite the leading Federalists’ assurances that the State-Citizen Diversity Clause would not eliminate the states’ traditional immunity from suit, the U.S. Supreme Court rejected that reading shortly thereafter in Chisholm v. Georgia (1793).¹⁰ Chisholm involved a suit by a South Carolina citizen to recover Revolutionary War debts owed by the State of Georgia. The state insisted that it was immune from such suits, but the Court upheld its jurisdiction. Justice James Wilson rejected the very notion of state sovereign immunity on the broad ground that it was antithetical to republican government.¹¹ By contrast, Justices John Jay, John Blair, and William Cushing relied primarily on the State-Citizen Diversity Clause.¹² They argued that this provision had in fact done precisely what the Anti-Federalists feared: overridden the common-law immunity that the states would otherwise have enjoyed in a suit by a private individual. Only Justice James Iredell dissented, primarily on the ground that Congress had not passed any statute that clearly authorized private suits against state governments in the federal courts.¹³

Hans v. State of Louisiana (1890) would later observe that Chisholm “created such a shock of surprise throughout the country that, at the first meeting of Congress thereafter, the Eleventh Amendment to the Constitution was almost unanimously proposed, and was in due course adopted by the legislatures of the States.”¹⁴ That amendment provided that “[t]he 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.”

Several commentators have noted the extent to which the latter part of the Eleventh Amendment tracks the language of the State-Citizen Diversity Clause; the “diversity theory” of the amendment thus infers that it simply “repealed” the State-Citizen Diversity Clause in all cases in which a nonconsenting state is the defendant.¹⁵ On this reading, federal courts could exercise jurisdiction over a state defendant if some other ground existed, such as a federal question. Although other scholars have endorsed different readings, most justices of the Supreme Court have construed the amendment’s text in line with the diversity reading.¹⁶

However, the Supreme Court has also endorsed a broader principle of constitutional immunity extending beyond the amendment’s text. (See Essay No. 189.) The text is limited to a suit by a citizen of one state against another state. Hans acknowledged the Amendment’s textual limits, but still enforced a broader principle of immunity to also bar suit by a citizen against his own state when raising a federal question.¹⁷ And Seminole Tribe v. Florida (1996) and Alden v. Maine (1999) have read the Eleventh Amendment’s reversal of Chisholm to restore the broad baseline of state sovereign immunity that Madison, Hamilton, and Marshall accepted during the ratification debates.¹⁸ Challenges to that view focus on whether that baseline is constitutional in stature or rather, like a form of federal common law, subject to alteration by Congress.¹⁹ That debate, however, does not turn on any disagreement about the meaning or effect of the State-Citizen Diversity Clause.

1. Caleb Nelson, Sovereign Immunity as a Doctrine of Personal Jurisdiction, 115 Harv. L. Rev. 1559, 1577, 1578 (2002). ↩︎
2. 2 Farrand’s 186. ↩︎
3. Bradford R. Clark, The Eleventh Amendment and the Nature of the Union, 123 Harv. L. Rev. 1817, 1852 (2010). ↩︎
4. 3 Elliot’s 527. ↩︎
5. Storing 2.9.167. ↩︎
6. 3 Elliot’s 575. ↩︎
7. 2 Elliot’s 490. ↩︎
8. 3 Elliot’s 533. ↩︎
9. John Marshall, Address to the Virginia Convention (June 20, 1788), in 10 DHRC 1430, 1433. ↩︎
10. 2 U.S. (2 Dall.) 419 (1793). ↩︎
11. Id. at 454–58 (Wilson, J.). ↩︎
12. Id. at 450–52 (Blair, J.); 466–68 (Cushing, J.); 475–77 (Jay, C.J.). ↩︎
13. Id. at 432–35 (Iredell, J.). ↩︎
14. 134 U.S. 1, 11 (1890). ↩︎
15. William A. Fletcher, A Historical Interpretation of the Eleventh Amendment: A Narrow Construction of an Affirmative Grant of Jurisdiction Rather than a Prohibition Against Jurisdiction, 35 Stan. L. Rev. 1033, 1058–63 (1983). ↩︎
16. Franchise Tax Bd. v. Hyatt, 587 U.S. 230, 1496 (2019); Seminole Tribe v. Florida, 517 U.S. 44, 54 (1996). ↩︎
17. 134 U.S. at 10–12. ↩︎
18. 517 U.S. 44 (1996); 527 U.S. 706 (1999); Kurt T. Lash, Leaving the Chisholm Trail: The Eleventh Amendment and the Background Principle of Strict Construction, 50 Wm. & Mary L. Rev. 1577, 1689–90 (2009). ↩︎
19. Seminole Tribe, 517 U.S. at 100, 137–42, 159 (Souter, J., dissenting). ↩︎