From: Kevin Smith <[log in to unmask]>
Date: Thu, 4 Sep 2014 12:40:30 +0000

I am also not sure how relevant this information is to the specific
question, although it is very interesting.

Just by way of background, sovereign immunity refers to the idea,
stated in the 11th Amendment to the U.S. Constitution, that the
federal courts do not have jurisdiction over states or state entities,
in most cases.  The idea, when the 11th Amendment was adopted, was to
balance the power of the federal government against the independent
prerogatives of the states.  The Constitution had struck this balance
pretty carefully in regard to legislative powers, but an early court
case (1793) let people to believe that the balance was not properly
set regarding the judicial power, so the Eleventh Amendment was
written and adopted.

The 11th Amendment does explicit deny the federal courts jurisdiction
over suits brought against a state by "citizens or subjects of any
Foreign State" as well as suits brought by U.S. citizens.  So
presumably a foreign vendor like OECD would have an interest in a
waiver that was the same, but not any more urgent, than that of a
domestic vendor.  In both cases the reason for seeking a waiver would
be to gain the ability to sue the customer in federal court, for
alleged violations of federal law or to avoid a "home court advantage"
in state courts.

Over the years there has been a complex set of rules developed around
waivers of sovereign immunity.  I can think of four basic ways it can
be waived.  First, Congress can waive this limitation on the
jurisdiction of the federal courts, but only in very limited
situations related to the 14th amendment guarantees of equal
protection of the law and due process.  In other situations, including
when Congress tried to waive sovereign immunity in regard to copyright
or patent claims, the Supreme Court said that it lacked the power to
do this.  Second, a state can waive its sovereign immunity, either
explicitly or by taking actions that indicate a waiver, such as
initiating a lawsuit in federal court itself.  Third, there is the
exception known as Ex Parte Young (from the Supreme Court case on
which it is based), which allows a lawsuit against a state or state
entity in federal court when no monetary damages are sought and the
only remedy is prospective -- an injunction to stop an ongoing
violation of federal law.  This is the theory under which the
publisher's lawsuit against Georgia State University has been
proceeding.  Finally, there is the possibility that a state entity
could waive sovereign immunity through a private contract, which is
what the vendor Liane is working with wants her to do.  I am unaware
of definitive rules about when and how such private waivers are
effective, and who has authority to enter such contracts, which is why
I urged Liane to be careful and seek authorization from a higher state
authority before agreeing to such a contract.

Sorry if this sounds like a lecture.  I am mostly just organizing my
own thoughts to consider whether the Eleventh Amendment prevents a
state entity from agreeing to an arbitration clause.  Both as a matter
of explicit language and the policy behind the amendment, I do not see
why a state entity could not agree to binding arbitration.  The only
difficulty would be those situations where the parties decline to
accept the decision of the arbitrator.  Such cases usually do then go
before the federal courts (if federal jurisdiction is otherwise
established).  So I wonder if agreement to an arbitration clause might
somehow or sometimes be interpreted as a waiver of sovereign immunity
by the state or, alternatively, if the other party to such a clause
(i.e. the international treaty organization in Toby's example) would
lack a remedy if the arbitration went against it, because it would be
unable to seek review by the federal courts.

More research is definitely called for.

Kevin

-----Original Message-----

From: <[log in to unmask]>
Date: Wed, 3 Sep 2014 07:36:12 +0000

I'm not sure if this either helpful or relevant, but if the vendor is
an international treaty organisation such as the one I work for, the
OECD, then they will be legally unable to agree to submit themselves
to any national or state law. This is a challenge for us whenever we
engage with customers and suppliers because, unless they know us,
their lawyers will be surprised that such a situation exists. The
solution is to have an arbitration clause (I can supply a boilerplate
clause if anyone is interested) - and this is the twist - stating
clearly where arbitration is to take place. This is because if an
arbitrator has to seek legal guidance on resolving a dispute, s/he
will look first to the laws of the place where arbitration is taking
place. So, if you agree to arbitration in your state and if an
arbitrator needs guidance, your state's laws will be relevant.

Toby Green
Head of Publishing
OECD


> On 3 Sep 2014, at 01:04, "LIBLICENSE" <[log in to unmask]> wrote:
>
> From: "Taylor, Liane R" <[log in to unmask]>
> Date: Tue, 2 Sep 2014 20:17:31 +0000
>
> Greetings all – I’m working with a vendor who has requested we waive
> our sovereign immunity. I have never been asked to do this before.
> They have not yet been willing to strike this clause. I am wondering
> if anyone else has encountered this and if you have any negotiation
> tips/effective arguments, before I have to send this off to our legal
> counsel to try to manage? I am sending this to other listservs, sorry
> for the duplication.
>
> –Liane
>
> Liane Taylor
> Continuing Resources Librarian/
> Interim Head Acquisitions Librarian
> Texas State University
> [log in to unmask] • 512.245.3009