Northern Ins. Co. of N.Y. v. Chatham County - Oral Argument - March 01, 2006

Northern Ins. Co. of N.Y. v. Chatham County

Media for Northern Ins. Co. of N.Y. v. Chatham County

Audio Transcription for Opinion Announcement - April 25, 2006 in Northern Ins. Co. of N.Y. v. Chatham County

Audio Transcription for Oral Argument - March 01, 2006 in Northern Ins. Co. of N.Y. v. Chatham County

John G. Roberts, Jr.:

We'll hear argument next in No. 04-1618, Northern Insurance Company of New York v. Chatham County, Georgia.

Mr. Estrada.

Miguel A. Estrada:

Thank you, Mr. Chief Justice, and may it please the Court--

In this admiralty case, the Eleventh Circuit held that Chatham County, a political subdivision of the State of Georgia, is entitled to sovereign immunity in Federal court.

That is wrong for at least two reasons.

First, for well over a century, this Court consistently has held that counties and other political subdivisions are not entitled to sovereign immunity.

And second, in the specific context of in personam admiralty cases, the same rule has been recognized for over 100 years.

To go to my first point, in Lincoln County v. Luning, decided in 1890, this Court squarely held that counties and other political subdivisions are not entitled to sovereign immunity.

There are three, or at least three, significant aspects of Lincoln County that bear emphasis.

The first one is that even by 1890, the Court was able to say that in its own cases it could see decades of case law where counties had been a defendant without any objection being raised.

The second was that an important aspect of the Court's reasoning was the recognition that when a county is sued, the State is not a real party in interest, not the real party in interest, which is another way of saying that the county is not an arm of the State, the issue before here us today.

Ruth Bader Ginsburg:

Can a county be an arm of the State for some things?

Miguel A. Estrada:

I am not aware of any county that has been organized so as to meet the requirements that this Court set forth in Hess and other cases for an arm of the State.

This is, of course, not a question of labeling.

It is possible that the... that a... that a particular State would associate so closely with a county, so closely control its... its acts, and be on the hook for its liabilities, that under this Court's cases it could be an arm of the State, but that is not the case here.

In fact--

John G. Roberts, Jr.:

I assume it's... I assume it's sort of a... a case by case inquiry.

In other words, the county could be an arm of the State for some purposes but not others.

Miguel A. Estrada:

--That is... that is a possibility, Mr. Chief Justice.

I'm not aware this county would meet that inquiry with respect to what we have here.

What we have in this case is essentially two propositions.

One is that the county, like every other county in the country, exercises a slice of State power, and that was something that was found unremarkable by this Court in Lake Country Estates.

And the second one is that this county, like many other organs of government, may get funding, even substantial funding, from the State, and again, that was found unremarkable in Mt.

Healthy by this Court.

What is controlling here is that the county, like most counties or maybe all counties, enjoys a significant amount of autonomy, has the power under the State law to raise its own revenues through taxes and bonds, and that the State is ultimately not liable for its debts.

And under... under those factors, the county is unable to meet any definition of arm of the State that has ever been articulated by this Court's cases.

Anthony M. Kennedy:

Is... is the failure to extend immunity to counties and municipal entities in a State just a historical relic?

It depends on semantics.

Or is there some normative or good government policy that dictates the distinction?

Miguel A. Estrada:

Well, I think as a... as a fundamental feature of the Federal system and... and the plan of the Convention, that the States came together as sovereigns to form a new country, and under this Court's cases, the immunity that they retain is called residual because it is recognized that insofar as they did not relinquish it to the National Government, they kept it.