Waiver of immunity because of insurance

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.

The immunity of a state from suit is a privilege which it may waive at its pleasure. Historically, the conclusion that a state has consented or waived its immunity has not been lightly inferred; the Court strictly construes statutes alleged to consent to suit. Thus, a state may waive its immunity in its own courts without consenting to suit in federal court,1 Footnote
Smith v. Reeves, 178 U.S. 436 (1900) ; Murray v. Wilson Distilling Co., 213 U.S. 151, 172 (1909) ; Graves v. Texas Co., 298 U.S. 393, 403–04 (1936) ; Great Northern Life Ins. Co. v. Read, 322 U.S. 47 (1944) . and a general authorization “to sue and be sued” is ordinarily insufficient to constitute consent.2 Footnote
Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 54 (1944) ; Ford Motor Co. v. Department of Treasury, 323 U.S. 459 (1945) ; Kennecott Copper Corp. v. State Tax Comm’n, 327 U.S. 573 (1946) ; Petty v. Tennessee-Missouri Bridge Comm’n, 359 U.S. 275 (1959) ; Florida Dep’t of Health v. Florida Nursing Home Ass’n, 450 U.S. 147 (1981) . Compare Patsy v. Florida Bd. of Regents, 457 U.S. 496, 519 n.* (1982) (Justice White concurring), with id. at 522 and n.5 (Justice Lewis Powell dissenting). A statutory waiver of state Eleventh Amendment immunity is effective “only where stated in the most express language or by such overwhelming implication from the text as [will] leave no room for any other reasonable construction.” 3 Footnote
Port Authority Trans-Hudson Corp. v. Feeney, 495 U.S. 299, 305–06 (1990) (internal citations omitted; emphasis in original). 5. 495 U.S. 299 (1990) .

Thus, in Port Authority Trans-Hudson Corp. v. Feeney ,4 Footnote
495 U.S. 299 (1990) . an expansive consent “to suits, actions, or proceedings of any form or nature at law, in equity or otherwise” was deemed too “ambiguous and general” to waive immunity in federal court, because it might be interpreted to reflect only a state’s consent to suit in its own courts. But, when combined with language specifying that consent was conditioned on venue being laid “within a county or judicial district, established by one of said States or by the United States, and situated wholly or partially within the Port of New York District,” waiver was effective.5 Footnote
495 U.S. at 306–07 . But see Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 241 (1985) .

There are, however, a few cases in which the Court has found a waiver by implication. For example, in Parden v. Terminal Railway ,6 Footnote
377 U.S. 184 (1964) . The alternative but interwoven ground had to do with Congress’s power to withdraw immunity. See also Petty v. Tennessee- Missouri Bridge Comm’n, 359 U.S. 275 (1959) . the Court ruled that employees of a state-owned railroad could sue the state for damages under the Federal Employers’ Liability Act (FELA). One of the two primary grounds for finding lack of immunity was that by taking control of a railroad which was subject to the FELA, enacted some twenty years previously, the state had effectively accepted the imposition of the Act and consented to suit.7 Footnote
The implied waiver issue aside, Parden subsequently was overruled, a plurality of the Court emphasizing that Congress had failed to abrogate state immunity unmistakably. Welch v. Texas Dep’t of Highways and Pub. Transp., 483 U.S. 468 (1987) . Justice Lewis Powell’s plurality opinion was joined by Chief Justice William Rehnquist and by Justices Byron White and Sandra Day O’Connor. Justice Antonin Scalia, concurring, thought Parden should be overruled because it must be assumed that Congress enacted the FELA and other statutes with the understanding that Hans v. Louisiana shielded states from immunity. Id. at 495 . Distinguishing Parden as involving a proprietary activity,8 Footnote
Edelman v. Jordan, 415 U.S. 651, 671–72 (1974) . For the same distinction in the Tenth Amendment context, see National League of Cities v. Usery, 426 U.S. 833, 854 n.18 (1976) . the Court later refused to find any implied consent to suit by states participating in federal spending programs; participation was insufficient, and only when waiver has been “stated by the most express language or by such overwhelming implications from the text as [will] leave no room for any other reasonable construction,” will it be found.9 Footnote
Edelman v. Jordan, 415 U.S. 651 (1974) (quoting id. at 673 , Murray v. Wilson Distilling Co., 213 U.S. 151, 171 (1909) ); Florida Dep’t of Health v. Florida Nursing Home Ass’n, 450 U.S. 147 (1981) . Of the four Edelman dissenters, Justices Thurgood Marshall and Harry Blackmun found waiver through knowing participation, 415 U.S. at 688 . In Florida Dep’t, Justice John Stevens noted he would have agreed with them had he been on the Court at the time but that he would now adhere to Edelman. Id. at 151 . Further, even if a state becomes amenable to suit under a statutory condition on accepting federal funds, remedies, especially monetary damages, may be limited, absent express language to the contrary.10 Footnote
Sossamon v. Texas , 131 S. Ct. 1651 (2011) .

Another form of waiver by implication is the waiver by consent to the plan of the Constitutional Convention; that is, that states waived sovereign immunity to litigation on certain matters when they ratified the Constitution. A recent decision seems to have expanded the scope of these sort of implicit waivers. In PennEast Pipeline Co. v. New Jersey ,11 Footnote
No. 19-1039 (U.S. June 29, 2021) . the Court heard an appeal related to an interstate pipeline approved by the federal government. Under the Natural Gas Act (NGA), parties who receive certificates to construct and operate interstate natural gas pipelines are authorized to exercise eminent domain in order to obtain the necessary rights-of-way to construct and operate the pipeline along the approved route.12 Footnote
15 U.S.C. § 717f(h). In this instance, the approved route included lands owned by the State of New Jersey. The certificate holders brought an action in federal district court seeking to condemn those state-owned parcels, and the state responded by asserting its sovereign immunity under the eleventh Amendment. The lower courts sided with the state, rejecting the argument that the federal government had delegated its authority to sue states in the NGA and the certificate proceeding, but the Supreme Court disagreed. Writing for the 5-4 majority, Chief Justice John Roberts noted that “[t]he ‘plan of the Convention’ includes certain waivers of sovereign immunity to which all States implicitly consented at the founding.” 13 Footnote
Alden , 527 U.S. at 755–56 . The Court concluded that it would be “untenable” to find that this waiver did not extend to private parties authorized by the federal government to exercise eminent domain authority.14 Footnote
Id . In addition, because the waiver of sovereign immunity was based on the states’ implicit consent via the “plan of the Convention” rather than abrogation or explicit waiver, there was no need to find that the NGA clearly authorized such suits.15 Footnote
Id . The Court’s decision in PennEast is one of the only Supreme Court decisions relying on the “plan of convention” as a basis for consent or waiver, so its impact outside of federal legislation delegating eminent domain power remains to be seen.

A state may also waive its immunity by initiating or participating in litigation. In Clark v. Barnard ,16 Footnote
108 U.S. 436 (1883) . the state had filed a claim for disputed money deposited in a federal court, and the Court held that the state could not thereafter complain when the court awarded the money to another claimant. However, the Court is loath to find a waiver simply because an official or an attorney representing the state decided to litigate the merits of a suit, so that a state may at any point in litigation raise a claim of immunity based on whether that official has the authority under state law to make a valid waiver.17 Footnote
Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 466–467 (1945) ; Edelman v. Jordan, 415 U.S. 651, 677–678 (1974) . However, this argument is only available when the state is brought into federal court involuntarily. If a state voluntarily agrees to removal of a state action to federal court, the Court has held it may not then invoke a defense of sovereign immunity and thereby gain an unfair tactical advantage.18 Footnote
Lapides v. Board of Regents, 535 U.S. 613 (2002) .

Footnotes 1 Smith v. Reeves, 178 U.S. 436 (1900) ; Murray v. Wilson Distilling Co., 213 U.S. 151, 172 (1909) ; Graves v. Texas Co., 298 U.S. 393, 403–04 (1936) ; Great Northern Life Ins. Co. v. Read, 322 U.S. 47 (1944) . 2 Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 54 (1944) ; Ford Motor Co. v. Department of Treasury, 323 U.S. 459 (1945) ; Kennecott Copper Corp. v. State Tax Comm’n, 327 U.S. 573 (1946) ; Petty v. Tennessee-Missouri Bridge Comm’n, 359 U.S. 275 (1959) ; Florida Dep’t of Health v. Florida Nursing Home Ass’n, 450 U.S. 147 (1981) . Compare Patsy v. Florida Bd. of Regents, 457 U.S. 496, 519 n.* (1982) (Justice White concurring), with id. at 522 and n.5 (Justice Lewis Powell dissenting). 3 Port Authority Trans-Hudson Corp. v. Feeney, 495 U.S. 299, 305–06 (1990) (internal citations omitted; emphasis in original). 5. 495 U.S. 299 (1990) . 4 495 U.S. 299 (1990) . 5 495 U.S. at 306–07 . But see Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 241 (1985) . 6 377 U.S. 184 (1964) . The alternative but interwoven ground had to do with Congress’s power to withdraw immunity. See also Petty v. Tennessee- Missouri Bridge Comm’n, 359 U.S. 275 (1959) . 7 The implied waiver issue aside, Parden subsequently was overruled, a plurality of the Court emphasizing that Congress had failed to abrogate state immunity unmistakably. Welch v. Texas Dep’t of Highways and Pub. Transp., 483 U.S. 468 (1987) . Justice Lewis Powell’s plurality opinion was joined by Chief Justice William Rehnquist and by Justices Byron White and Sandra Day O’Connor. Justice Antonin Scalia, concurring, thought Parden should be overruled because it must be assumed that Congress enacted the FELA and other statutes with the understanding that Hans v. Louisiana shielded states from immunity. Id. at 495 . 8 Edelman v. Jordan, 415 U.S. 651, 671–72 (1974) . For the same distinction in the Tenth Amendment context, see National League of Cities v. Usery, 426 U.S. 833, 854 n.18 (1976) . 9 Edelman v. Jordan, 415 U.S. 651 (1974) (quoting id. at 673 , Murray v. Wilson Distilling Co., 213 U.S. 151, 171 (1909) ); Florida Dep’t of Health v. Florida Nursing Home Ass’n, 450 U.S. 147 (1981) . Of the four Edelman dissenters, Justices Thurgood Marshall and Harry Blackmun found waiver through knowing participation, 415 U.S. at 688 . In Florida Dep’t, Justice John Stevens noted he would have agreed with them had he been on the Court at the time but that he would now adhere to Edelman. Id. at 151 . 10 Sossamon v. Texas , 131 S. Ct. 1651 (2011) . 11 No. 19-1039 (U.S. June 29, 2021) . 12 15 U.S.C. § 717f(h). 13 Alden , 527 U.S. at 755–56 . 14 Id . 15 Id . 16 108 U.S. 436 (1883) . 17 Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 466–467 (1945) ; Edelman v. Jordan, 415 U.S. 651, 677–678 (1974) . 18 Lapides v. Board of Regents, 535 U.S. 613 (2002) .