The Relevance of Law to Sovereign Debt

The literature on sovereign debt treats law as of marginal significance, largely because the doctrine of sovereign immunity leaves creditors few potent legal remedies against sovereign borrowers. Although sovereign debts can indeed by hard to enforce, the goal of this Essay is to demonstrate that law plays a central, and constantly evolving, role in structuring sovereign debt markets. To list just a few examples, legal rules and institutions (i) decide when a borrower is sovereign, (ii) define the consequences of sovereignty by drawing (or refusing to draw) artificial boundaries between the sovereign and other legal entities, (iii) play some role in cases of state and government succession, and (iv) determine the extent to which the rules of sovereign immunity can be changed by contract. These legal rules and institutions are not set in stone; they evolve in response to the political, economic, and social forces that shape the market for sovereign debt

A Test of Sovereignty: Franchise Tax Board of the State of California v. Gilbert P. Hyatt

In Franchise Tax Board of California v. Hyatt, the Supreme Court considers whether to overrule Nevada v. Hall, a 1979 Supreme Court decision. Hall permitted a State to be haled into the court of another State without its consent. In 2016, an evenly divided Supreme Court affirmed Hall 4-4 when faced with the same question, and following a remand to the Nevada Supreme Court, the Court has granted certiorari on this question once again. This Commentary contends that Hall was wrongly decided and should be overruled. The Constitution’s ratification did not alter the status of common-law State sovereign immunity, leaving intact not only State sovereign immunity in a State’s own court but also a State’s immunity to suits in the courts of another State without consent. However, this case, in which the Petitioner has already appeared in the court of another State, is not the appropriate vehicle for overruling Hall. State sovereign immunity should be restored at the next possible opportunity, when a State properly asks a federal court to enforce its common-law immunity from the courts of a sister State. Sovereigns should enjoy immunity not only in their own courts, but also in the courts of their peers

\u3ci\u3eAltmann v. Austria\u3c/i\u3e and the Retroactivity of the Foreign Sovereign Immunities Act

In Republic of Austria v. Altmann, the U.S. Supreme Court decided that the Foreign Sovereign Immunities Act of 1976 (FSIA) generally applies to claims based on events that occurred before the Statute\u27s enactment. To decide the retroactivity question, the Court had occasion to consider the essential nature of foreign sovereign immunity: is it merely a procedural immunity providing foreign states with present protection from the inconvenience and indignity of a lawsuit, or is it something more than that? The Court\u27s examination of this question was brief and unsatisfying. Its analysis would have been enriched by a recognition that foreign sovereign immunity is regulated not just by federal statute, but also by principles of customary international law that the federal statute sought, in large part, to codify. Among the authorities the Court did consider, it found support for the proposition that foreign sovereign immunity is a procedural immunity and also for the proposition that foreign sovereign immunity is an immunity from substantive liability. Viewing these authorities as contradictory, the Court concluded that the retroactivity issue had to be resolved on other grounds. This brief article maintains that the relevant authorities are not contradictory. They are consistent with the conclusion that foreign states enjoy both a procedural and a substantive immunity, a possibility that the Court appears to have overlooked

Its Hour Come Round at Last? State Sovereign Immunity and the Great State Debt Crisis of the Early Twenty-first Century

State sovereign immunity is a sort of constitutional comet, streaking across the sky once a century to the amazement and consternation of legal commentators. The comet’s appearance has usually coincided with major state debt crises: The Revolutionary War debts brought us Chisholm v. Georgia and the Eleventh Amendment, and the Reconstruction debts brought us Hans v. Louisiana and the Amendment’s extension to federal question cases. This essay argues that much of our law of state sovereign immunity, including its odd fictions and otherwise-incongruous exceptions, can be understood as an effort to maintain immunity’s core purpose — protecting the states from potentially crippling financial liability on their debts — while at the same time maintaining courts’ power to enforce individual rights in cases where the states’ financial viability is not at stake. The comet’s most recent appearance — the Rehnquist Court’s significant expansion of state sovereign immunity in the 1990s in cases like Seminole Tribe v. Florida — fit the historic once-a-century timetable, but it lacked a bona fide state debt crisis. I suggest that this absence may have induced both the Court to forget the legitimate core purpose of state sovereign immunity, with two deleterious effects: First, the Court’s need to rest on more ephemeral justifications, such as state dignity, left the doctrine open to widespread criticism. And second, these broader rationales led the Court to extend state immunity in ways that threatened the traditional doctrine’s concern to preserve judicial authority to enforce individual rights. The Rehnquist Court may simply have been fifteen years too early, however. Now we have a real state debt crisis, and I speculate that that crisis may both remind constitutional lawyers of state immunity’s legitimate role and — hopefully — redirect immunity doctrine into more traditional and appropriate channels

Sovereign Immunity in a Constitutional Government: The Federal Employment Discrimination Cases

Very early in our history we took steps to insure that the.rule of law, as expressed in the Constitution, would prevail over the mortals who run our government. Yet even as the concepts of rule of law and judicial review came into ascendancy, we also harbored the sovereign immunity doctrine as a restraint on judicial power and as an apparent repudiation of the rule of law. The inherent antagonism between the rule of law and the sovereign immunity doctrine has produced much mischief in our courts...this Article will argue that the sovereign immunity doctrine is not anticonstitutional, but rather reflects the Constitution\u27s allocation of power among the three branches of government. Section I is devoted to an intensive consideration of one area of the law-employment discrimination suits against federal officers-where application of the sovereign immunity doctrine has generated considerable confusion and attendant injustice. Sections II and III will develop the separation of powers rationale for sovereign immunity, showing how the immunity principles adopted by the Supreme Court implicitly define the decisionmaking powers of the separate branches

International Law: Waiver of Sovereign Immunity

Background: Different recovery patterns are reported for those befallen a whip-lash injury, but little is known about the variability within subgroups. The aims were (1) to compare a self-selected mildly affected sample (MILD) with a self-selected moderately to severely affected sample (MOD/SEV) with regard to background characteristics and pain-related disability, pain intensity, functional self-efficacy, fear of movement/(re) injury, pain catastrophising, post-traumatic stress symptoms in the acute stage (at baseline), (2) to study the development over the first year after the accident for the above listed clinical variables in the MILD sample, and (3) to study the validity of a prediction model including baseline levels of clinical variables on pain-related disability one year after baseline assessments. Methods: The study had a prospective and correlative design. Ninety-eight participants were consecutively selected. Inclusion criteria; age 18 to 65 years, WAD grade I-II, Swedish language skills, and subjective report of not being in need of treatment due to mild symptoms. A multivariate linear regression model was applied for the prediction analysis. Results: The MILD sample was less affected in all study variables compared to the MOD/SEV sample. Pain-related disability, pain catastrophising, and post-traumatic stress symptoms decreased over the first year after the accident, whereas functional self-efficacy and fear of movement/(re) injury increased. Pain intensity was stable. Pain-related disability at baseline emerged as the only statistically significant predictor of pain-related disability one year after the accident (Adj r(2) = 0.67). Conclusion: A good prognosis over the first year is expected for the majority of individuals with WAD grade I or II who decline treatment due to mild symptoms. The prediction model was not valid in the MILD sample except for the contribution of pain-related disability. An implication is that early observations of individuals with elevated levels of pain-related disability are warranted, although they may decline treatment

Exhuming the “Diversity Explanation” of the Eleventh Amendment

This essay, in a symposium honoring the scholarship of Ninth Circuit Judge William A. Fletcher, explores the “diversity explanation” of the Eleventh Amendment that he had advanced in articles while he was a UC-Berkeley law professor. That explanation, contrary to existing Supreme Court doctrine that heavily constitutionalizes state sovereign immunity from suits by private parties and foreign countries, would view the Eleventh Amendment as having solely to do with federal courts’ constitutional jurisdiction and nothing to do with states’ sovereign immunity. The essay notes the cleanness of interpretation provided by the diversity explanation, in contrast with the convoluted nature of current doctrine, and concludes that overruling of that doctrine would be warranted

Sovereign Immunity for Rent: How the Commodification of Tribal Sovereign Immunity Reflects the Failures of the U.S. Patent System

Last year, a Fortune 500 pharmaceutical company attempted to rent the sovereign immunity of an American Indian tribe in order to shield its patents on a dry-eye drug from invalidation by generic competitors in inter partes review. Pharmaceutical firms are notorious for pursuing unconventional methods to extend the duration of their patents and, in this sense, the maneuver is unsurprising. The exploitation, however, of an historically disenfranchised community with limited economic opportunities is particularly unsettling. This Article will provide, firstly, a factual summary of the legal background of this case; secondly, a review of the February 2018 decision of the Patent Trial and Appeal Board (“PTAB”) to deny the application of tribal sovereign immunity in this case; thirdly, a review of the July 2018 decision of the U.S. Court of Appeals for the Federal Circuit, affirming the PTAB’s decision; fourthly, a discussion of the ways in which the precedent set by Allergan’s maneuver may adversely affect consumer welfare by undermining the process of inter partes review; fifthly, an analysis of the history of tribal sovereign immunity and how its exploitation in this case reflects the historic oppression of American Indians; and finally, strategies to deter such transactions from recurring in the future

The Metes and Bounds of State Sovereign Immunity

What are the constitutional parameters of state sovereign immunity? The Court has made clear that certain provisions of Article I contain no authority for overriding state sovereign immunity, while at least one other provision, the Fourteenth Amendment, permits Congress to abrogate the states’ sovereign immunity. How is this constitutional line drawn? It is temporally bound? In other words, are only certain Amendments enacted after the Eleventh Amendment free from absolute subservience to state sovereign immunity? Or, does it divide the original Constitution and its Amendments, meaning that state sovereign immunity permeates the original Constitution but does not infiltrate certain Amendments, even those ratified before the Eleventh? Is state sovereign immunity article-bound, which would prohibit Congress from subjecting the states to private suit under any Article I power, but leave open the possibility that Article II or Article IV might overcome immunity? Or perhaps it is clause-bound, which would really provide no rule at all, and require a clause-by-clause analysis of Hamilton\u27s plan of the convention? I explore these questions and argue that the state sovereign immunity envisioned by the Court is an Amendment-driven inquiry: it is inviolable to the extent of the original Constitution, and even such nationalistic powers as Congress\u27 Article I War Powers or the Treaty Power of Article II cater to it. However, the Fourteenth Amendment changed the rules. Thus certain Amendments may enable its abrogation, even those ratified before the Eleventh Amendment if their preceptswere incorporated into the Fourteenth