Page:Franchise Tax Board of California v. Hyatt.pdf/23

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FRANCHISE TAX BD. OF CAL. v. HYATT

Breyer, J., dissenting

the Constitution was ratified. And we then asked whether ratification of the Constitution altered the principles of state sovereign immunity in any relevant respect. At both steps, we concluded, the relevant history and precedent refuted the claim that States are entitled to absolute immunity in each other’s courts.

A

Hall first considered the immunity that States possessed before ratification. “States considered themselves fully sovereign nations” during this period, ante, at 6, and the Court in Hall therefore asked whether sovereign nations would have enjoyed absolute immunity in each other’s courts at the time of our founding.

The answer was no. At the time of the founding, nations granted other nations sovereign immunity in their courts not as a matter of legal obligation but as a matter of choice, i. e., of comity or grace or consent. Foreign sovereign immunity was a doctrine “of implied consent by the territorial sovereign… deriving from standards of public morality, fair dealing, reciprocal self-interest, and respect.” National City Bank of N. Y. v. Republic of China, 348 U. S. 356, 362 (1955). Since customary international law made the matter one of choice, a nation could withdraw that sovereign immunity if it so chose.

This Court took that view of foreign sovereign immunity in two founding-era decisions that forecast the result in Hall. In Schooner Exchange v. McFaddon, 7 Cranch 116 (1812), when considering whether an American citizen could impose a lien upon a French warship, Chief Justice John Marshall wrote for the Court that international law did not require the United States to grant France sovereign immunity. Any such requirement, he reasoned, “would imply a diminution” of American “sovereignty.” Id., at 136. Instead, Chief Justice Marshall observed that any “exceptions” to “the full and complete power of a na-