Charleston, SC – On Tuesday, the Supreme Court issued its decision in the case of Federal Maritime Commission v. South Carolina State Ports Authority et al. The Court ruled in favor of the Ports Authority, affirming its win before the Fourth Circuit Court of Appeals.
“This was a tremendous victory not only for the Ports Authority and for South Carolina, but for states across the nation,” said Bernard S. Groseclose Jr., president and chief executive officer of the South Carolina State Ports Authority.
The issue in the case was whether the Ports Authority, an arm of the State, was entitled to assert the State’s sovereign immunity in a suit filed by a private party before the Federal Maritime Commission, a federal administrative agency.
The private party, South Carolina Maritime Services, sought berthing space for its vessel, the M/V Tropic Sea, at the Port of Charleston for the purpose of offering gambling cruises to nowhere and to the Bahamas. The Ports Authority denied berthing space to the M/V Tropic Sea because the Ports Authority has an established policy of denying berths to a vessel whose primary purpose is gambling.
Maritime Services filed a complaint against the Ports Authority with the Commission seeking injunctive relief and reparations against the state agency for alleged violations of the Shipping Act. The Ports Authority moved to dismiss the complaint, asserting in part that the State’s sovereign immunity precluded the Commission from adjudicating a private complaint against the State.
On appeal from the Commission, the Fourth Circuit agreed with the Ports Authority and dismissed the case. Last fall, the Supreme Court granted the Commission’s petition for certiorari, agreeing to review the case. The Court’s decision today, authored by Justice Thomas, holds that the State’s sovereign immunity bars the Commission from adjudicating a private party’s complaint against a state-run port under the Shipping Act.
Finding that the Commission’s administrative proceedings “bear a remarkably strong resemblance to civil litigation in federal courts,” the Court held that sovereign immunity is not limited to Article III proceedings, but applies with equal force to the Article I administrative proceedings before the Commission.
The Court reasoned: “Simply put, if the [Constitutional] Framers thought it an impermissible affront to a State’s dignity to be required to answer the complaints of private parties in federal courts, we cannot imagine that they would have found it acceptable to compel a State to do exactly the same thing before the administrative tribunal of an agency, such as the [Commission].”
Because the State is not immune from suits brought by the United States, the private party is not left remediless. As the court recognized, the private party is free to bring its complaint to
the attention of the Commission, and the Commission may bring an action against a state-run port if it determines in the exercise of its official discretion that an action is warranted.
The Court’s decision is a victory for the States and reaffirms states’ rights. The Court concluded: “By guarding against encroachments by the Federal Government on fundamental aspects of state
sovereignty, such as sovereign immunity, we strive to maintain the balance of power embodied in our Constitution and thus to ?reduce the risk of tyranny and abuse from either front.”