The Eleventh Amendment and the Contracts Clause (Part II)

John Marshall also believed that Article III, Section 2 should have been construed broadly at the time of the Virginia ratifying convention. But, as we shall see, Marshall changed his tune as Chief Justice because he was not expecting States to hide behind immunity to commit crimes against citizens. Besides, how do you protect the rights of citizens without yielding some degree of sovereignty to the people? This is what makes the Constitution, the Northwest Ordinance, and the Declaration of Independence so unique: these documents followed Lockean social compact theory by placing priority for individual sovereignty over government sovereignty.

In Chisholm, property was sold by a South Carolina citizen to the State of Georgia. The Court was correct to hold Georgia or any State should not default or impair their contractual agreements with citizens. Was the purpose of the Eleventh Amendment to protect States who default or impair contracts or violate the rights of citizens? Was the purpose of the Constitution to protect the government over citizens? Some believe the drafters of the Eleventh Amendment wanted to protect States from frivolous claims while at the same time maintaining peace and tranquility within the Union (eliminating disputes between States). If this is true, this is a weak argument. After all, it can create just as much friction between States if a neighboring State is taking advantage of its residents. Hence, the peace and tranquility argument can go both ways.

This text believes the best reason for the Eleventh Amendment is to protect States and citizens from federal government encroachment (judicial and legislative). Other than that, it suits no purpose. However, the amendment is hardly used for that reason.

In Hans v. Louisiana (1890), the Court’s Justice Joseph Bradley overruled the principals of sovereignty held in Chisholm by siding with the views held by a single justice in that decision: Iredell. This was not an easy decision since the Eleventh Amendment says “Citizens of another State” but Hans was from Louisiana, the State he was suing. Yet, the Court decided that the drafters of the Eleventh Amendment also meant to include “Citizens of the same State”. Interestingly, Justice John Harlan concurs with the decision in Hans but writes “The comments made about the decision in Chisholm v. Georgia do not meet my approval.” He would continue by writing “Besides, I am of opinion that the decision in that case was based upon a sound interpretation of the Constitution as that instrument then was.” Hans also went against Justice Marshall’s precedent set in Cohens v. United States (1821). In Cohens Justice Marshall held citizens can sue a State in which they reside. Of course, it seems odd that a State can be sued by its own citizens but a citizen of another State with a similar grievance has no recourse. That seems to be the compromise made by the drafters of the amendment. But the text is clear, if the Eleventh Amendment meant to provide States sovereign immunity from ALL suits introduced by citizens those words cannot be found in the amendment. In his Hans opinion, Justice Bradley also conveniently ignored Justice John Marshall’s opinion in Fletcher v. Peck (1810). Marshall said individuals suing State governments may no longer be in the Constitution, but Chisholm was the proper interpretation of the intent of the Constitution. In other words, the Eleventh Amendment does not change the meaning of the Constitution, it merely prohibits citizens (from different States) from suing States. Marshall’s exact words in Fletcher were: “The Constitution as passed, gave the courts of the United States jurisdiction in suits brought against individual States. A State, then, which violated its own contract was suable in the Courts of the United States for that violation. Would it have been a defense in such a suit that the State had passed a law absolving itself from the contract? It is scarcely to be conceived that such a defense could be set up. And yet, if a State is neither restrained by the general principles of our political institutions nor by the words of the Constitution from impairing the obligation of its own contracts, such a defense would be a valid one. This feature is no longer found in the Constitution, but it aids in the construction of those clauses with which it was originally associated.” Therefore, Marshall does not necessarily think Chisholm was completely repudiated by the Eleventh Amendment. In Marshall’s view, Chisholm was a sound decision whose principles still represent legitimate constitutional jurisprudence: Citizens are still sovereign within the structure of the Constitution. Put another way, the Eleventh Amendment was not an open invitation for States to violate the rights of its citizens.

In fact, over Marshall’s long tenure as Chief Justice he restricted the Eleventh Amendment by narrowly interpreting the text. In the line of cases United States v. Peters (1809) and Osborn v. Bank of the United States (1824), Marshall held that the Eleventh Amendment applied only to States and not State officers. In other words, State’s had to be the party of record in the case to obtain sovereign immunity. However, in Governor of Georgia v. Madrazo (1828) the Marshall Court backtracked a bit and established a new doctrine. The Court held the Eleventh Amendment can be applied to cases where the suit is brought against a State office but not to those cases where the individual character of the person holding that office is the purpose of the suit. And of course, in Cohens, Marshall held that the Eleventh Amendment did not apply to States being sued by citizens of the same State. Even the unfriendly Hans Court held in Lincoln County v. Luning (1890), that any subdivision of a State (in this case a county) is exempt from sovereign immunity.

After the Civil War, the Court moved in a positive manner to protect citizens from having States default on contract obligations. In Davis v. Grey (1873), the Court used Osborn precedent (State officers can be sued) and the substantive due process concept of “freedom of contract” in holding Texas violated a land contract with a local railroad. In other words, the State could not pass legislation that would allow a State to default on a property contract. Of course, many scholars like Clyde Jacobs criticized the opinion because it meant State officers could be held liable for State debts. Jacobs also did not like the substantive holding by the Court, but that was not much different than using the contract clause to strike down the law. However, Jacobs admits State officers have never been held liable for debt amassed by a State since the State would repay the debt before an officer was held accountable. And what is wrong with that: A State honoring its contract obligations with American citizens and foreigners. In Board of Liquidation v. McComb (1875), the Court held that the State of Louisiana repaying a bond debt at 60 cents on the dollar was an impairment of a contract. Again, the Court did not let States hide behind the Eleventh Amendment to default or impair their contract obligations with citizens. In the United States v. Lee (1882), the Court even held the United States could not be shielded from immunity in property rights cases because this is a fundamental right of all citizens.