Constitutional Law Flashcards
(4 cards)
- Sovereign immunity likely precludes the bank from suing State A in federal court for damages.
The issue is whether the bank can maintain a suit in federal court against State A for damages.
Under the United States Constitution, the doctrine of sovereign immunity generally prevents private actors from suing states in federal court without their consent. This has been interpreted to mean suits for monetary damages. Sovereign immunity does not apply where (1) the state gives consent to such suit, or (2) where federal law explicitly creates a cause of action with damages, or (3) where there is a suit against an individual, in their official capacity, for an injunction to enjoin unconstitutional activity.
Here, there is no indication that State A has consented to the suit, and it is doubtful that they would consent to such a suit. They would, of course, be free to do so if they so desire. In addition, the facts state that there are no federal laws on point. This question involves a suit for damages, and as such, sovereign immunity would prevent such a suit in the absence of one of the exceptions.
Therefore, the bank cannot maintain a suit in federal court against State A for damages, without its consent, based on the doctrine of sovereign immunity as found in the US Constitution.
- Can the bank maintain a suit in federal court against the state Superintendent of Banking to enjoin her from enforcing the State A statute?
a. Sovereign immunity does not apply to suits for injunctions
The issue is whether sovereign immunity precludes the bank from maintaining a suit against the Superintendent of Banking to enjoin her from enforcing the State A statute.
Analysis of this issue is similar to the analysis above; however, the relevant rule is that an individual can be sued in their official capacity to enjoin unconstitutional actions.
Therefore, sovereign immunity does not preclude the suit.
The federal court likely has federal subject matter jurisdiction.
The issue is whether a federal court would have jurisdiction over the claims of the bank.
Federal courts are courts of limited jurisdiction and cannot hear all claims. The ways to get into federal court include (1) issues of federal laws, regulations, treaties, and the constitution, (2) diversity jurisdiction (there are many other ways to get into federal court based on the constitution, but they involve suits between parties do not present here.) Federal question jurisdiction must be raised on the face of a well-pleaded complaint.
Assuming that Bank A can raise a colorable argument sufficient to show a federal constitutional question - likely under the commerce clause, as discussed below. This will entitle them to file suit in federal court. The facts tell us that there are no other federal laws on point, so the argument must be constitutional. Diversity jurisdiction is not available for suits by private parties against a state.
Therefore, if the bank can raise a constitutional issue on the face of their well-pleaded complaint, likely based on the commerce clause, the federal court will have jurisdiction to hear their claim.
- The statute is likely not unconstitutional based on the commerce clause.
The issue is whether the dormant commerce clause prohibits State A’s law because it unduly burdens interstate commerce.
States have general police power, and can pass any legislation related to the health, safety, and welfare of its citizen. The federal constitution does provide some limits on this power, however. Regulating interstate commerce is an enumerated power of the federal government. It is also an exclusive power of the federal government. While are precluded from regulating interstate commerce where (1) there is a direct federal statute that contradicts the state statute, or (2) federal regulation is so pervasive that it “occupies the field.” The federal government can, however, permit states to regulate. However, the dormant commerce clause applies to limit the abilities of states to overly burden interstate commerce, even in the absence of federal regulation. States may not pass laws that directly discriminate against out-of-state actors; these are subject to strict scrutiny analysis. If a law does not directly burden interstate commerce but has a substantial incidental effect, courts apply a balancing test that compares the benefit to the state with the burden on interstate commerce.
In the instant case, the facts tell us that there are no on point federal statutes. Therefore, the dormant commerce clause will apply. The statute does not directly discriminate against out of state actors on its face, since it makes no provisions for separate treatment of out-of-state actors. Therefore, the burden is incidental, if any, and the benefits and burdens should be balanced.
There are apparently few benefits to State A. The benefits would theoretically be that it offers more security, protects State A citizens from fraud, and decreases bank related crime and fraud. However, the facts state that experts are in dispute about the value of biometric identification is significantly better than other techniques. On the other hand, the facts are sparse regarding what alternative methods are available and whether other methods may cost. The only dispute is whether they are better or worse. In addition, the facts state that State A is adopting it based on lobbying from a State A based manufacturer of biometric identification software.
However, the burden on interstate commerce may be equally light. The bank would be required to reprogram its entire US electronic banking system if it were to comply with state laws, but they would only lose about $2,000,000 in profits. Whether the burden is high would turn on the number of banks affected and the cost to each.
Based on the facts given, it is unlikely that a court would conclude the State A statute is unconstitutional based on the balance of harms under the facts given.
