Shipping case shifts more power to states

The US Supreme Court has once again upheld state sovereignty at the expense of the authority of the national government in a key decision addressing the balance of power between the states and Washington.

This time, the high court's conservative wing has achieved this by siding with the South Carolina State Ports Authority in a dispute over whether a gambling ship should have access to the port at Charleston.

At issue was whether the operator of the gambling ship could file a federal complaint against the state ports authority to be adjudicated by the Federal Maritime Commission (FMC).

Lawyers for the state of South Carolina said the ports authority – as an arm of the state government – is protected by sovereign immunity guaranteed in the 11th Amendment. Lawyers for the Federal Maritime Commission countered that federal jurisdiction trumps state regulatory authority in matters involving shipping, a national commercial activity.

The nation's highest court agreed yesterday with South Carolina by a 5-to-4 vote.

In a majority decision written by Justice Clarence Thomas, the court says its decision is necessary in part to uphold the "dignity" of the states in the face of expansive federal bureaucratic power.

The majority reasoned that because the states were not subject to private lawsuits at the time of the nation's founding, the states should not now be subject to private suits filed through federal agencies.

"If the 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 FMC," Justice Thomas writes.

The decision marks an important addition to the high court's emerging federalism jurisprudence, which, piece by piece in a series of rulings since 1996, is reordering the balance of state and federal power.

Specifically, the court ruled that the 11th Amendment bars private parties from using federal lawsuits as a means to haul nonconsenting states before federal regulatory agencies to adjudicate pending disputes.

That doesn't mean private parties aren't without recourse. They may elect to litigate their dispute in state court under the laws of the applicable state, or they may attempt to persuade a federal agency with related jurisdiction to investigate and pursue the dispute as a matter of national importance.

But a private party may not use federal laws and federal agencies as a means to circumvent or undermine the equilibrium of dual sovereignty envisioned by the nation's Founding Fathers, the court says.

"While some might complain that our system of dual sovereignty is not a model of administrative convenience, that is not its purpose," Thomas writes. "By guarding against encroachments by the federal government on fundamental aspects of state sovereignty, 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."

In a dissent critical of the court's entire line of federalism cases, Justice Stephen Breyer warns that the South Carolina decision will result in less flexibility for federal agencies, a larger federal bureaucracy, less-fair proceedings, and potentially less-effective law enforcement.

"These decisions set loose an interpretive principle that restricts far too severely the authority of the federal government to regulate innumerable relationships between State and citizen," Justice Breyer writes.

"Just as this principle has no logical starting place, I fear that neither does it have any logical stopping point," he adds.

The case stems from a 1998 dispute over a decision by the South Carolina State Ports Authority denying access to facilities at Charleston port to the gambling ship Tropic Star.

The operators of the ship, South Carolina Maritime Services, filed a complaint with the Federal Maritime Commission alleging that the state ports authority had violated the federal Shipping Act by refusing to provide docking space for the Tropic Star.

State officials, opposed to gambling, saw the issue as one of local control over a hot political issue.

Federal Maritime officials saw it as a challenge to their ability to uniformly regulate interstate and international commerce via shipping.