S. Carolina State Ports v. Fed. Maritime Comm'n

Decision Date22 January 2001
Docket NumberNo. 00-1481,00-1481
Citation243 F.3d 165
Parties(4th Cir. 2001) SOUTH CAROLINA STATE PORTS AUTHORITY, Petitioner, v. FEDERAL MARITIME COMMISSION; UNITED STATES OF AMERICA, Respondents. STATE OF MARYLAND; STATE OF ALABAMA; STATE OF ARKANSAS; STATE OF CONNECTICUT; STATE OF DELAWARE; STATE OF FLORIDA; STATE OF GEORGIA; STATE OF IOWA; STATE OF LOUISIANA; STATE OF MAINE; STATE OF MISSISSIPPI; STATE OF MONTANA; STATE OF NEVADA; STATE OF NORTH CAROLINA; STATE OF NORTH DAKOTA; STATE OF OKLAHOMA; STATE OF OREGON; STATE OF SOUTH CAROLINA; STATE OF SOUTH DAKOTA; STATE OF VIRGINIA; STATE OF WEST VIRGINIA; NATIONAL ASSOCIATION OF WATERFRONT EMPLOYERS, Amici Curiae. . Argued:
CourtU.S. Court of Appeals — Fourth Circuit

COUNSEL: ARGUED: Warren LaForest Dean, Jr., THOMPSON COBURN, L.L.P., Washington, D.C., for Petitioner. Andrew Howard Baida, Assistant Attorney General, Baltimore, Maryland, for Amici Curiae. Phillip Christopher Hughey, FEDERAL MARITIME COMMISSION, Washington, D.C.; Alisa Beth Klein, Appellate Staff, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondents. ON BRIEF: Susan Taylor Wall, Elizabeth Herlong Campbell, NEXSEN, PRUET, JACOBS, POLLARD & ROBINSON, L.L.P., Charleston, South Carolina, for Petitioner. J. Joseph Curran, Jr., Attorney General of Maryland, Baltimore, Maryland, for Amici Curiae States. Thomas Panebianco, General Counsel, FEDERAL MARITIME COMMISSION, Washington, D.C., for Respondent Commission. David W. Ogden, Assistant Attorney General, J. Rene Josey, United States Attorney, Mark B. Stern, Appellate Staff, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent United States. Charles T. Carroll, Jr., Carl Larsen Taylor, Washington, D.C., for Amicus Curiae Association.

Before WILKINSON, Chief Judge, NIEMEYER, Circuit Judge, and Malcolm J. HOWARD, United States District Judge for the Eastern District of North Carolina, sitting by designation.

Reversed and remanded with directions to dismiss by published opinion. Chief Judge Wilkinson wrote the opinion, in which Judge Niemeyer and Judge Howard joined.

OPINION

WILKINSON, Chief Judge:

This case requires us to decide whether a state's sovereign immunity protects it from being brought before a federal administrative tribunal by a private party. We hold that the state's immunity prevents such a suit or proceeding.

South Carolina Maritime Services, Inc. (Maritime Services), a cruise ship company, filed a complaint with the Federal Maritime Commission (FMC) against the South Carolina State Ports Authority (SCSPA). The suit sought reparations and injunctive relief for alleged violations of the Shipping Act of 1984, 46 U.S.C. app. S 1701 et seq. (1994). The FMC held that state sovereign immunity does not extend to private complaints filed before a federal agency. Because a state's sovereign immunity is not so fleeting as to depend upon the forum in which the state is sued, the judgment of the FMC is reversed and the case is remanded with directions to dismiss it.

I.

Maritime Services operates a cruise ship, the M/V TROPIC SEA. Passengers may gamble on board the ship while it is in international waters. The South Carolina State Ports Authority has a policy of refusing to berth ships whose primary purpose is gambling. The SCSPA allows some ships that permit gambling to berth, but only so long as gambling is not their primary purpose. The SCSPA refused to give the M/V TROPIC SEA a berthing space at the port of Charleston because it claimed the ship's primary purpose was to facilitate gambling.

Maritime Services, believing that it was being singled out for unfair treatment, filed a complaint with the FMC under the Shipping Act of 1984. The Shipping Act regulates the oceanborne foreign commerce of the United States. The Act prohibits discrimination by carriers and terminal operators and allows the FMC to regulate any agreement involving oceanborne foreign commerce. Id. SS 1701(1), 1703(a) & (b). Maritime Services alleged that the SCSPA, as a terminal operator, had violated the Shipping Act by unreasonably refusing to deal and by unreasonably preferring other cruise ship companies to the disadvantage of Maritime Services. Id.S 1709(b)(11) & (d)(3). The complaint asked for a cease and desist order, actual damages, interest, and attorney's fees.

The SCSPA's response raised, inter alia, the argument that South Carolina's sovereign immunity prohibits private parties from suing the SCSPA before a federal agency. In support, the SCSPA noted that in Ristow v. South Carolina Ports Authority, 58 F.3d 1051 (4th Cir. 1995), this court held that the SCSPA is protected by South Carolina's sovereign immunity because it is an arm of the state. The ALJ agreed and dismissed the suit on sovereign immunity grounds. The FMC then reviewed the case on its own motion. In reversing the ALJ, the FMC held that sovereign immunity does not bar private suits against the states before federal agencies. The SCSPA now appeals.

II.

The doctrine of sovereign immunity predates the founding of our nation. See W. Blackstone, Commentaries on the Laws of England 234-35 (1765). And "[a]lthough the American people had rejected other aspects of English political theory, the doctrine that a sovereign could not be sued without its consent was universal in the States when the Constitution was drafted and ratified." Alden v. Maine, 527 U.S. 706, 715-16 (1999) (citing Chisholm v. Georgia , 2 U.S. (2 Dall.) 419, 434-35 (1793) (Iredell, J., dissenting)).

Notwithstanding the presumed universality of this doctrine, the Supreme Court held in 1793 that a private citizen of South Carolina could in fact sue the State of Georgia without its consent. Chisholm, 2 U.S. at 420. Justice Iredell dissented, contending that both before and after the adoption of the Constitution, the states maintained their sovereign right to be protected from suit without consent. Id. at 43536, 448, 449-50 (Iredell, J., dissenting). The decision in Chisholm "fell upon the country with a profound shock" and was quickly overruled by the Eleventh Amendment. Alden, 527 U.S. at 720, 722 (internal quotations omitted).

The Eleventh Amendment provides that: "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." U.S. Const. amend. XI. Although the literal text of the Amendment speaks only to suits filed by citizens of one state against another state, the Supreme Court held in Hans v. Louisiana, 134 U.S. 1, 21 (1890), that sovereign immunity barred a citizen from suing his own state without consent. This is because the principle of sovereign immunity derives not just from the Eleventh Amendment, but from the structure and background principles of the Constitution. Hans, 134 U.S. at 11-12. It is with these background principles in mind that the Supreme Court decided two recent cases concerning state sovereign immunity: Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996), and Alden v. Maine, 527 U.S. 706 (1999). These two decisions provide significant guidance on how to resolve the underlying dispute.

A.

The Seminole Tribe case involved the Indian Gaming Regulation Act (IGRA), 25 U.S.C. S 2710(d), enacted under the Indian Commerce Clause. U.S. Const. art. I, S 8, cl. 3. Pursuant to the IGRA, the Seminole Tribe of Florida asked a federal district court to order the State of Florida to negotiate with the Tribe in good faith.

The Supreme Court affirmed the dismissal of the Tribe's suit, holding that Congress could not, in the exercise of its Article I powers, abrogate a state's sovereign immunity in federal court. 517 U.S. at 73. According to the Court, "the background principle of state sovereign immunity embodied in the Eleventh Amendment is not so ephemeral as to dissipate when the subject of the suit is an area . . . that is under the exclusive control of the Federal Government." Seminole Tribe, 517 U.S. at 72. Moreover, "[e]ven when the Constitution vests in Congress complete lawmaking authority over a particular area, the Eleventh Amendment prevents congressional authorization of suits by private parties against unconsenting States." Id. Noting that "[t]he Eleventh Amendment restricts the judicial power under Article III," the Supreme Court explained that "Article I cannot be used to circumvent the constitutional limitations placed upon federal jurisdiction." Id. at 72-73.

In reaching its decision, the Supreme Court held that the sovereign immunity principle is sufficiently strong that it transcends the literal text of the Eleventh Amendment and applies regardless of the type of relief sought. The Court noted that the Eleventh Amendment does not stand "`so much for what it says, but for the presupposition . . . which it confirms.'" Id. at 54. (quoting Blatchford v. Native Village of Noatak, 501 U.S. 775, 779 (1991)). The presupposition is that "each State is a sovereign entity in our federal system" and that "`it is inherent in the nature of sovereignty not to be amenable to the suit of an individual'" without consent. Id. (quoting The Federalist No. 81 p. 487 (C. Rossiter ed. 1961) (A. Hamilton)). Thus the Eleventh Amendment merely confirmed, rather than established, the structural principle of state sovereign immunity. Accordingly, the Court concluded that the "`States of the Union, still possessing attributes of sovereignty, shall be immune from suits, without their consent, save where there has been a surrender of this immunity in the plan of the convention.'" Id. at 68 (quoting Principality of Monaco v. Mississippi, 292 U.S. 313, 322-23 (1934)).

With respect to the type of relief sought, Seminole Tribe held that the doctrine of sovereign immunity...

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