The Judicial Power—Foreign Diversity Clause

The judicial Power shall extend . . . to Controversies . . . between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

—Seth J. Lucas

Introduction

The Foreign Diversity Clause defines the sixth and last of the “Controversies” to which the federal judicial power extends. It is also one of two clauses extending the judicial power to controversies in which the parties are diverse (meaning that they are not both citizens of the same state). But unlike the Citizen-State Diversity Clause (see Essay No. 130), the Foreign Diversity Clause extends the judicial power to controversies in which one side is made up entirely of foreign states or a foreign state’s citizens or subjects. Because various questions about the Foreign Diversity Clause intersect with questions about the meaning of “controversies” in Article III, citizen-state diversity, and the Eleventh Amendment, the reader is advised to also consult Essay Nos. 124, 130, and 189.

History Before 1787

By the American Revolution, it was settled practice that an alien from a friendly nation could generally sue an Englishman in England’s courts.¹ As Sir William Blackstone explained in his Commentaries, however, “an alien enemy” could not bring suit in English courts.² Before the U.S. Constitution’s ratification, aliens who were not enemies were able to sue Americans in the States’ courts too.

At the same time, as a general rule, sovereign immunity barred individuals, including aliens, from suing a state itself without its consent.³ Under the law of nations, this doctrine also barred sovereign states from suing other sovereigns in their courts.⁴ This rule rested on the theory that sovereigns were, in the words of Professor James Pfander, “equal and independent and . . . therefore not obliged to submit to the jurisdiction of another’s courts.”⁵ The usual means of dispute resolution were the exchange of ambassadors, treaty negotiations, and war if necessary.⁶

The Framers were likely very familiar with these principles. In 1781, for instance, when Pennsylvania’s Court of Common Pleas issued a writ of foreign attachment against Virginia, Virginia secured dismissal of the case through diplomatic channels.⁷ Virginia’s delegates to Congress, believing the writ violated the law of nations, sought relief from Pennsylvania’s Executive Council—not from the court.⁸ At the Council’s direction, Pennsylvania’s attorney general successfully urged the court to dismiss the case.⁹ Serving process on Virginia would violate the law of nations, he argued, because independent sovereigns are not subject to the other’s jurisdiction.¹⁰ Two Framers who would later defend the Foreign Diversity Clause were involved in the case: James Wilson of Pennsylvania represented the plaintiff, and James Madison of Virginia signed communications from Virginia to the Pennsylvania Executive Council.¹¹

The Constitutional Convention

An early version of the Foreign Diversity Clause appeared in the Virginia Plan, which Edmund Randolph introduced on May 29, 1787. The draft proposed to give inferior federal tribunals and the supreme tribunal jurisdiction over “cases in which foreigners or citizens of other States applying to such jurisdictions may be interested.”¹² Another recorded version would have conferred jurisdiction over “Disputes between Foreigners and Citizens.”¹³ On June 13, Randolph explained that “the object” of this jurisdiction was “to establish . . . the security of foreigners where treaties are in their favor, and to preserve the harmony of states and that of the citizens thereof.”¹⁴ The New Jersey Plan, however, introduced on June 15, proposed to give to the judiciary narrower “authority to hear . . . all cases in which foreigners may be interested, in construction of any treaty or treaties . . . .”¹⁵ This proposed jurisdiction was also solely appellate.¹⁶

Delegates went with the Virginia Plan’s draft clause. In one document from the Committee of Detail, the jurisdiction was extended to all “disputes” (a change from “cases”) “in which subjects or citizens of other countries are concerned.”¹⁷ Another version read that it would encompass “all Cases in which Foreigners may be interested in the Construction of any Treaty, or which may arise on any Act for regulating Trade or collecting Revenue or on the Law of Nations, or general commercial or marine laws.”¹⁸ Yet another document from the Committee of Detail, likely written by James Wilson of Pennsylvania and marked up by John Rutledge of South Carolina, gave the Supreme Court appellate jurisdiction over “Controversies . . . between Citizens (of any of the States) and foreign States, Citizens or Subjects.”19 (Angle brackets indicate Rutledge’s emendations, and parenthesis indicate crossed-out material.)

On August 6, the Committee of Detail delivered a report to the full Convention that contained almost identical language: The Supreme Court would have appellate jurisdiction over controversies “between a State or the Citizens thereof and foreign States, citizens or subjects.”²⁰ This language was referred to the Committee of Style,²¹ which reported it back to the Convention on September 12 with no changes other than the addition of two commas, one after “state” and the other after “citizens thereof.”²² The engrossed copy of the Constitution capitalized the words “State,” “Citizens,” and “Subjects.”²³ No other changes were made to the clause.

The Ratification Debates

The new federal judicial power provoked much controversy during the ratification debates, and the Foreign Diversity Clause was no exception. Federal Farmer, an Anti-Federalist, argued that “no action against a state government, by any citizen or foreigner, ought to be allowed. . . .”²⁴ He further contended that “no action in which a foreign subject is a party” should be permitted in the federal courts “unless it be of very considerable importance.”²⁵ In his view, there was no reason for foreigners to “carry[] sixpenny causes into the federal courts” as “state courts will be found by experience, to be bottomed on better principles, and to administer justice better than the federal courts.”²⁶

The Constitution’s supporters raised three arguments defending the clause. First, James Wilson emphasized that the clause merely gave foreigners a choice of venue.²⁷ This was necessary, he observed, “to restore either public or private credit” and “credit with . . . foreign states.”²⁸ And the United States’ commercial interests required providing “proper security . . . for the regular discharge of contracts,” which in turn required that the general government have the power “of deciding upon those contracts.”²⁹

Second, Wilson argued that foreigners should enjoy “the same security against state laws . . . that the citizens have” lest unequal treatment threaten peace with foreign states.³⁰ Wilson hypothesized that a foreigner denied justice might appeal to his own government, which would then demand that Congress do justice.³¹ In that instance, “[i]f the United States are answerable for the injury, ought they not to possess the means of compelling the faulty state to repair it? They ought; and this is what is done here.”³² If such a situation did arise, he concluded, Congress could simply respond to the aggrieved foreign government, “Why did not your subject apply to the General [Federal] Court, where the unequal and partial laws of a particular state would have had no force?”³³

This argument was also raised by Alexander Hamilton in Federalist No. 80 and James Monroe.³⁴ The alternative, as Monroe contemplated, would be disaster: Might not angered foreign states say that “‘we must take that redress by force which your feeble government denies us? We are under the necessity of seizing American property wherever we can lay our hands upon it, till the just demands of our subjects are satisfied.’”³⁵

Third, defenders argued that the clause would not abrogate the States’ immunity from suits. In the Virginia ratification convention, John Marshall pushed back on objections to extending the judicial power to cases involving a state and a foreign nation. He argued that “[t]he previous consent of the parties is necessary” to be sued in such cases.³⁶ Hinting at the desirability of a federal forum for resolving these disputes, Marshall then declared that “as the Federal Judiciary will decide, each party will acquiesce.”³⁷ Marshall also underscored that “[i]t will be the means of preventing disputes with foreign nations.”³⁸ James Madison similarly could “not conceive that any controversy can ever be decided, in these [federal] courts, between an American state and a foreign state, without the consent of the parties. If they consent, provision is here made.”³⁹ And in Federalist No. 81, Hamilton emphasized that, at least in the context of contracts with private individuals residing in other states, the Constitution did not abrogate a State’s immunity to suits by those individuals.

Early Practice

The Judiciary Act of 1789 did not grant federal courts the full scope of jurisdiction possible under the Foreign Diversity Clause. Congress gave the newly created federal district courts jurisdiction over only “all causes where an alien sues for a tort only in violation of the law of nations or a treaty of the United States.”⁴⁰ This provision became known as the Alien Tort Statute, which is discussed in more depth in Essay No. 55. The Judiciary Act also gave the circuit courts jurisdiction over “all suits of a civil nature at common law or in equity” in which the matter exceeded $500 (excluding costs) and “an alien is a party.”⁴¹ An alien defendant could also petition to remove the same cases from state court into federal court.⁴²

State Sovereignty and the Eleventh Amendment

The Foreign Diversity Clause also raised the question of whether a foreign state could sue a State without that State’s consent. In Chisholm v. Georgia (1793), Justice John Blair Jr. remarked that if the Foreign Diversity Clause were read to allow a State to sue a foreign nation but not to allow a foreign nation to sue a State, that reading would “lose sight of the policy which, no doubt, suggested this provision, viz. That no State in the Union should, by withholding justice, have it in its power to embroil the whole confederacy in disputes of another nature.”⁴³ Similarly looking back to arguments during the ratification debates, Justice William Cushing asserted that the states and foreign states were placed “without distinction upon the same footing” by the Constitution to ensure peaceful relations with other nations.⁴⁴

Although the Eleventh Amendment has been read as repudiating the Court’s holding in Chisholm v. Georgia, the Amendment’s text does not mention a foreign state’s suits against non-consenting States. After all, it applied only to suits brought “by Citizens of another State, or by Citizens or Subjects of any Foreign State.”

Cherokee Nation v. Georgia (1831) indicated that the Eleventh Amendment did not bar a foreign nation from suing a State.⁴⁵ In that case, Georgia attempted to evict the Cherokee nation from land it then occupied. In response, the Cherokee nation sued Georgia in the U.S. Supreme Court’s original jurisdiction (see Essay No. 134). The Court dismissed the suit on jurisdictional grounds, holding that the Cherokee nation was not a foreign state under the Foreign Diversity Clause.⁴⁶ No one disputed, however, that if the Cherokee nation were a foreign state, the Court would have had jurisdiction. In his majority opinion, Chief Justice John Marshall never asked whether the Eleventh Amendment barred the suit.⁴⁷ Justice William Johnson Jr., dissenting, explained that the Court’s original jurisdiction required “that a state of this union should be a party” and that “the other party must, under the control of the eleventh amendment, be another state of the union, or a foreign state.”⁴⁸ Justice Smith Thompson, also dissenting, remarked that “[t]he controversy in the present case is alleged to be between a foreign state, and one of the states of the union; and does not, therefore, come within the eleventh amendment. . . .”⁴⁹ Justice Joseph Story agreed with Thompson’s dissent.⁵⁰

Nonetheless, a century later, Principality of Monaco v. Mississippi (1934) declared that a foreign state could not sue one of the United States without its consent.⁵¹ The Court concluded that Madison’s remarks at the Virginia Convention “correctly interpreted [the Clause] . . . as making provision for jurisdiction of a suit against a State by a foreign State in the event of the State’s consent but not otherwise.”⁵² The Court stated that Cherokee Nation “is not opposed” to this holding because it only resolved whether the Cherokee nation was a foreign state.⁵³ Notably, however, Monaco also added that “[i]t cannot be supposed that it was the intention” of the Framers that an action of a State which harms a foreign state’s interests and provokes a controversy of national concern “should be taken out of the sphere of international negotiations and adjustment through a resort by the foreign State to a suit under the provisions of § 2 of Article III.”⁵⁴

Open Questions

• Dissenting in Seminole Tribe v. Florida (1996), Justice John Paul Stevens remarked that “Monaco reveals little about the power of Congress to create a private federal cause of action to remedy a State’s violation of federal law” because that case concerned only a State’s federal defense to an equitable state-law action.⁵⁵ Is he correct, and if so, could Congress create a federal cause of action for foreign nations to sue a state for violating federal law?
• Disagreement exists about whether sovereign immunity limits federal courts’ jurisdiction over this kind of controversy. One view of the Eleventh Amendment and the distinction between “cases” and “controversies” is that the Amendment reaffirmed that “state sovereign immunity would limit the judicial Power over . . . controversies.”⁵⁶ Some scholars have argued, however, that the Eleventh Amendment did not extend to suits against a State brought by a foreign state, because the Amendment reflected contemporary international law that “presume[ed] no difference between the sovereign dignity of a State and a nation-state.”⁵⁷ Does a state lack immunity from suit by a foreign state under the clause’s original meaning?

1. Omychund v. Barker (1744), 125 Eng. Rep. 1310, 1317, [1744] Willes 551. ↩︎
2. 3 Blackstone 301, 330–31, 343–45, 359–61. ↩︎
3. James Pfander, Rethinking the Supreme Court’s Original Jurisdiction in State Party Cases, 82 Cal. L. Rev. 555, 581 (1994). ↩︎
4. Id. at 582–83. ↩︎
5. Id. at 583. ↩︎
6. Id. at 583–84. ↩︎
7. McCarty v. Nixon, 1 U.S. (1 Dall.) 77, (Pa. C.P. 1781), https://perma.cc/7WFD-AXCJ. ↩︎
8. Id. at 78. ↩︎
9. Id. at 78, 80; Pfander, supra at 583–86. ↩︎
10. McCarty, 1 U.S. at 78. ↩︎
11. Pfander, supra at 586; Letter from Virginia Delegates to Supreme Executive Council of Pennsylvania (ca. July 9, 1781), https://perma.cc/4V4L-K883. ↩︎
12. 1 Farrand’s 22. ↩︎
13. Id. at 28–29. ↩︎
14. Id. at 238–39. ↩︎
15. Id. at 243. ↩︎
16. Id. ↩︎
17. 2 Farrand’s 147. ↩︎
18. Id. at 157. ↩︎
19. Id. at 163 n.17, 173 . ↩︎
20. Id. at 186. ↩︎
21. Id. at 576. ↩︎
22. Id. at 582, 601. ↩︎
23. Id. at 661. ↩︎
24. Storing 2.8.224. ↩︎
25. Id. ↩︎
26. Id. ↩︎
27. 2 Elliot’s 491–92. ↩︎
28. Id. at 492–93. ↩︎
29. Id. ↩︎
30. Id. at 493. ↩︎
31. Id. at 493. ↩︎
32. Id. ↩︎
33. Id. ↩︎
34. 4 Founders’ Constitution 251. ↩︎
35. Id. ↩︎
36. Id. at 249. ↩︎
37. Id. ↩︎
38. Id. ↩︎
39. 3 Elliot’s 533. ↩︎
40. 1 Stat. 73, 77. ↩︎
41. Id. at 78. ↩︎
42. Id. at 79. ↩︎
43. 2 U.S. 419, 451 (1793) (Blair, J.). ↩︎
44. Id. at 467–68 (Cushing, J.). ↩︎
45. 30 U.S. 1 (1831). ↩︎
46. Id. at 20. ↩︎
47. Id. at 15–16 (Marshall, C.J.). ↩︎
48. Id. at 21 (Johnson, J., dissenting). ↩︎
49. Id. at 52 (Thompson, J., dissenting). ↩︎
50. Id. at 80 (Thompson, J., dissenting). ↩︎
51. 292 U.S. 313 (1934). ↩︎
52. Id. at 330. ↩︎
53. Id. ↩︎
54. Id. at 331–32. ↩︎
55. 517 U.S. 44, 88–89 (1996) (Stevens, J., dissenting). ↩︎
56. Alexander Schultz, Sovereign Immunity and the Two Tiers of Article III, 29 Geo. Mason L. Rev. 287, 338–39 (2021). ↩︎
57. Thomas Lee, Making Sense of the Eleventh Amendment: International Law and State Sovereignty, 96 Nw. U. L. Rev. 1027, 1028–29 (2002). ↩︎