Troy University, et al. v. Sharell Farmer

In Franchise Tax Board of California v. Hyatt, 139 S. Ct. 1485 (2019), this Court held that, under the Constitution, “States retain their sovereign immunity from private suits brought in the courts of other States.” Id. at 1492. Although States may voluntarily “consent” to suit, id. at 1490, this Court has consistently stressed that only “a ‘clear declaration’ by the State . . . expressing unequivocally that it waives its immunity” will suffice—“waivers are not implied.” College Savings Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 680- 82 (1999) (emphasis in original). In this case, the North Carolina Supreme Court held—in a divided decision—that this Court’s precedents compelled the conclusion that Troy University, an arm of the State of Alabama, waived its sovereign immunity from private suit in North Carolina courts. App. 1a-2a. In so holding, the majority did not identify any declaration by Alabama expressly waiving its sovereign immunity. Instead, the majority deemed that immunity waived simply because Troy University operated in North Carolina after registering under a North Carolina statutory scheme generally providing that foreign nonprofit corporations may “sue and be sued” in that State. Id. at 9a. The question presented is: Whether a State waives its sovereign immunity from private suit in the courts of another State by operating in the State under a corporate registration statute with a sue-and-be-sued clause.