Opposition Brief — Troy University, et al., Petitioners v. Sharell Farmer

Supreme Court briefApr 24, 2023

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No. 22-787

IN THE

Supreme Court of the United States

TROY UNIVERSITY, et al.,

Petitioners,

SHARELL FARMER,

Respondent.

On Petition for a Writ of Certiorari to the

Supreme Court of North Carolina

RESPONDENT’S BRIEF IN OPPOSITION

HARVEY L. KENNEDY

HAROLD L. KENNEDY, III

KENNEDY, KENNEDY,

KENNEDY AND

KENNEDY, LLP

301 N. Main St., Suite 2000

Winston-Salem, NC 27101

ADAM R. PULVER

Counsel of Record

ALLISON M. ZIEVE

PUBLIC CITIZEN

LITIGATION GROUP

1600 20th Street NW

Washington, DC 20009

(202) 588-1000

apulver@citizen.org

Attorneys for Respondent

April 2023

QUESTION PRESENTED

Whether the North Carolina Supreme Court

correctly

held

that

Alabama-affiliated

corporation’s agreement to be subject to the same

duties and liabilities as similar North Carolina-based

businesses, including the right to “sue and be sued” in

North Carolina, served as consent to suit in North

Carolina’s courts for claims arising out of its

commercial operations there.

TABLE OF CONTENTS

QUESTION PRESENTED .......................................... i

TABLE OF AUTHORITIES ...................................... iii

INTRODUCTION ....................................................... 1

STATEMENT OF THE CASE .................................... 4

Factual background .................................................... 4

Procedural background ............................................... 7

REASONS FOR DENYING THE WRIT .................. 10

No lower court decision addresses the question

presented or conflicts with the decision below.. 10

II. The decision below is consistent with this Court’s

precedent. ........................................................... 13

III. This case is a poor vehicle to address the

question presented. ............................................ 19

A. The question presented by petitioners does

not align with the holding below. ............. 19

B. Even absent consent, petitioners’ entitlement

to state sovereign immunity is uncertain.20

1. Troy University is not the State of

Alabama.................................................. 20

2. Petitioners Gainey and Tillery are not the

State of Alabama. ................................... 23

C. The allegations of harassment of one North

Carolina citizen by two North Carolina

citizens acting in North Carolina make this

case unusual.............................................. 24

IV. Troy is wrong as to the consequences of the

decision below. .................................................... 24

CONCLUSION.......................................................... 26

iii

TABLE OF AUTHORITIES

Page(s)

CASES

Alabama State University v. Danley,

212 So. 3d 112 (Ala. 2016) ..................................... 20

Bank of the Commonwealth of Kentucky v. Wister,

27 U.S. 318 (1829) .................................................. 21

Bank of the United States v. Planters’ Bank of

Georgia,

22 U.S. 904 (1824) .................................................. 21

Briscoe v. Bank of the Commonwealth of Kentucky,

36 U.S. 257 (1837) .................................................. 21

Cayuga Indian Nation of New York v. Seneca

County,

978 F.3d 829 (2d Cir. 2020) ................................... 18

College Savings Bank v. Florida Prepaid

Postsecondary Education Expense Board,

527 U.S. 666 (1999) .......................................... 13–15

Curran v. Arkansas,

56 U.S. 304 (1853) .................................................. 21

Darrington v. Bank of Alabama,

54 U.S. 12 (1851) .................................................... 21

Faulkner v. University of Tennessee,

627 So. 2d 362 (Ala. 1992) ..................................... 10

Federal Housing Administration v. Burr,

309 U.S. 242 (1940) ................................................ 15

Fitzpatrick v. Bitzer,

427 U.S. 445 (1976) ................................................ 25

Franchise Tax Board of California v. Hyatt,

139 S. Ct. 1485 (2019) ............................... 1–3, 8–10,

13, 14, 22, 23

Gavle v. Little Six, Inc.,

555 N.W.2d 284 (Minn. 1996) .......................... 11, 12

Gebser v. Lago Vista Independent School District,

524 U.S. 274 (1998) ................................................ 25

Georgia v. City of Chattanooga,

264 U.S. 472 (1924) ................................ 3, 10, 16–18

Henry v. New Jersey Transit Corp.,

__ N.E.3d __, No. 11, 2023 WL 2575220

(N.Y. Mar. 21, 2023) .............................................. 11

Mabrey v. Smith,

548 S.E.2d 183 (N.C. Ct. App. 2001) ..................... 25

Michigan v. Bay Mills Indian Community,

572 U.S. 782 (2014) ................................................ 11

Nevada v. Hall,

440 U.S. 410 (1979) ................................................ 10

Paulus v. South Dakota,

227 N.W. 52 (N.D. 1929) ........................................ 18

PennEast Pipeline Co. v. New Jersey,

141 S. Ct. 2244 (2021) ...................................... 14, 22

Ransom v. St. Regis Mohawk Education &

Community Fund, Inc.,

658 N.E.2d 989 (N.Y. 1995) ............................. 11, 12

SGB Construction Services, Inc. v. Ray Sumlin

Construction Co.,

644 So. 2d 892 (Ala. 1994) ..................................... 26

Snelling & Snelling, Inc. v. Watson,

254 S.E.2d 785 (N.C. Ct. App. 1979) ..................... 25

Sossamon v. Texas,

563 U.S. 277 (2011) .......................................... 13, 15

In re Space Race, LLC,

__ So. 3d __, No. 1200685, 2021 WL 6141625

(Ala. Dec. 30, 2021) .......................................... 22, 23

Springboards to Education, Inc. v. McAllen

Independent School District,

62 F.4th 174 (5th Cir. 2023) .................................. 20

Taylor v. Troy State University,

437 So. 2d 472 (Ala. 1983) ..................................... 20

Thacker v. Tennessee Valley Authority,

139 S. Ct. 1435 (2019) ............................ 8–10, 15, 16

Wisconsin Department of Corrections v. Schacht,

524 U.S. 381 (1998) ................................................ 14

STATUTES

N.C. Gen. Stat. § 55A-3-02(a)(1) ................................ 6

N.C. Gen. Stat. § 55A-15-01(a) ................................... 5

N.C. Gen. Stat. § 55A-15-01(b) ................................. 25

N.C. Gen. Stat. § 55A-15-05(a) ................................... 9

N.C. Gen. Stat. § 55A-15-05(b) ............. 6, 9, 14, 17, 19

OTHER AUTHORITIES

Alexandria Walton Radford, Learning at a Distance:

Undergraduate Enrollment in Distance Education

Courses and Degree Programs, Nat’l Ctr. for Educ.

Statistics, U.S. Dep’t of Educ. (Oct. 2011),

https://nces.ed.gov/pubs2012/2012154.pdf............. 4

Alexandria Walton Radford, et al., After the Post9/11 GI Bill: A Profile of Military Service

Members and Veterans Enrolled in Undergraduate

and Graduate Education, Nat’l Ctr. for Educ.

Statistics, U.S. Dep’t of Educ. (Aug. 2016),

https://nces.ed.gov/pubs2016/2016435.pdf......... 4, 5

Marketing to Military Personnel as Non-Traditional

Students, Stamats Insights (Dec. 18, 2018) ............ 5

Troy University, 2020–2025 Strategic Plan, Key

Performance Indicators,

https://www.troy.edu/_assets/20-25-strategicplan/_documents/recruitment-2022.pdf .................. 5

INTRODUCTION

In Franchise Tax Board of California v. Hyatt, 139

S. Ct. 1485, 1490 (2019), this Court held that the

Constitution does not “permit[ ] a State to be sued by

a private party without its consent in the courts of a

different State.” This case raises a question left open

by Hyatt and not yet addressed by any state court of

last resort, other than the court below: whether a

state-affiliated entity consents to suit when it engages

in commercial activity in another state pursuant to an

agreement to be subject to the duties and liabilities of

a domestic corporation, including the right to sue and

be sued.

In resolving this question of first impression, the

North Carolina Supreme Court looked to decisions of

this Court and to what Troy University—an Alabama

public corporation—agreed to when it sought and

obtained permission to open an office in North

Carolina, employing North Carolina residents, for the

purpose of marketing online classes to students in

North Carolina. Based on the case law and the

allegations of this case, involving sexual harassment

of and a smear campaign against a North Carolina

citizen (respondent Sharell Farmer) by other North

Carolina citizens (petitioners Pamela Gainey and

Karen Tillery), and expressly limiting its holding to

claims arising out of the in-state commercial activity,

the North Carolina Supreme Court held that Troy’s

acceptance of two separate conditions on doing

business in North Carolina demonstrated explicit

consent to suit in its courts. That holding was

grounded in this Court’s recognition that the ordinary

meaning of a sue-and-be-sued clause waives sovereign

immunity, and the fact that Troy’s voluntary

agreement to that condition could not reasonably be

construed otherwise. Moreover, Troy agreed to be

subject to the same duties and liabilities of a “domestic

corporation of like character” in conducting its

commercial activities in North Carolina. Thus, like

North Carolina’s nonprofit universities, which sell

similar services as Troy, Troy consented to the

jurisdiction of North Carolina’s courts to adjudicate

alleged violations of North Carolina law.

Troy does not dispute North Carolina’s authority

to require it to obtain permission to conduct the

intrastate business at issue here: in-state recruitment

by employees residing in North Carolina of students

in North Carolina. And Troy does not dispute that it

voluntarily sought that permission and accepted the

benefits that came with it. Nonetheless, it asks this

Court to free it from the obligations it agreed to in

exchange for those benefits. As Justice Berger

emphasized in his concurrence below, however, and as

reflected in decisions of this Court, when a public

corporation decides to engage in commercial activities

in another state and agrees to do so under the same

terms as an in-state business, it waives sovereign

immunity for claims arising out of that activity.

The North Carolina Supreme Court’s factbound

holding does not warrant review under this Court’s

criteria. No other state court of last resort has yet

considered what constitutes consent to suit under

Hyatt, much less the question whether facts like those

here establish consent. Troy’s suggestion of conflict is

based on cases that involve tribal immunity—which

differs in nature and origin from the interstate

sovereign immunity recognized in Hyatt—and are

consistent with the decision below.

The North Carolina Supreme Court’s decision also

does not conflict with any decision of this Court. The

only decision of this Court to address whether a

foreign commercial state entity’s agreement to be

subject to the obligations of a similar domestic entity

waives that state’s sovereign immunity, Georgia v.

City of Chattanooga, 264 U.S. 472 (1924), is consistent

with, and was relied upon, below. And cases

addressing whether Congress validly abrogated

Eleventh Amendment immunity to suit in federal

court do not govern the question of when a state entity

has consented to suit in other state courts—a question

tied to a different immunity, grounded in personal

jurisdiction.

Beyond the lack of conflict, this case presents a

poor vehicle for this Court to address the question of

what constitutes consent sufficient to waive interstate

sovereign immunity. Here, there are significant

questions whether the defendants would be imbued

with Alabama’s sovereign immunity under Hyatt,

even absent the waiver. The historical record suggests

that, at the time of the Founding, state sovereign

immunity did not extend to state-established

corporate entities like Troy. That record calls into

question whether Troy University can invoke

interstate sovereign immunity at all—a predicate

question to considering the question presented.

Furthermore, the Alabama state constitutional

provision cited by Troy does not concern the structural

immunity at issue in this case and in Hyatt, and it is

not pertinent here. In addition, two of the defendantpetitioners in this case are North Carolina citizens,

sued for intentional torts that they allegedly

committed in North Carolina against another North

Carolina citizen. It is unclear whether, as a matter of

North Carolina’s own sovereignty, Alabama can

bestow immunity on North Carolina residents from

suit in such a case, and also unclear whether Alabama

law purports to do so. These antecedent questions

were barely addressed by the lower courts and would

necessarily have to be resolved before consideration of

whether any immunity that might exist has been

waived.

Petitioners’ primary argument for review is that

the question presented—which omits significant facts,

including Troy’s agreement to be treated like a

domestic corporation—is important. If that is so, the

question is likely to recur—and likely to do so in a case

where the defendants’ entitlement to invoke sovereign

immunity is on firmer ground. In this case, at this

time, review is not warranted.

STATEMENT OF THE CASE

Factual background

Since the 2000s, online post-secondary education

programs have grown significantly. See Alexandria

Walton Radford,

Learning

at a Distance:

Undergraduate Enrollment in Distance Education

Courses and Degree Programs, Nat’l Ctr. for Educ.

Statistics, U.S. Dep’t of Educ. (Oct. 2011).1 Online

education has been particularly popular for activeduty members of the military and military veterans,

who have taken advantage of both the flexibility of

online programs and expanded military education

benefits. See Alexandria Walton Radford, et al., After

the Post-9/11 GI Bill: A Profile of Military Service

Members and Veterans Enrolled in Undergraduate

1 https://nces.ed.gov/pubs2012/2012154.pdf.

and Graduate Education 16–17, Nat’l Ctr. for Educ.

Statistics, U.S. Dep’t of Educ. (Aug. 2016).2

Petitioner Troy University, based in Alabama,

“participates in online learning programs with all

service branches.” Pet. 7. It has developed a strategic

plan to market its offerings to members of the

military—with great success. See Troy University,

2020–2025 Strategic Plan, Key Performance

Indicators (stating that approximately one-fourth of

Troy students are members of the military)3;

Marketing to Military Personnel as Non-Traditional

Students, Stamats Insights (Dec. 18, 2018) (interview

with Troy recruiter discussing the need to “get on a

base or post” to recruit military students).4

As part of its military recruitment strategy, Troy

decided to open a recruiting office in Fayetteville,

North Carolina, near Fort Bragg. Pet. 2a. Under

North Carolina law, if Troy wanted to employ North

Carolina residents in a North Carolina office to sell its

programs to North Carolina residents, Troy was

required to obtain a Certificate of Authority from the

North Carolina Secretary of State. See N.C. Gen. Stat.

§ 55A-15-01(a). Troy applied for the certificate, stating

in its application that it had been incorporated as a

non-profit corporation in Alabama in February 1887.

Pet. 58a, 61a. It made no reference to its creation by

the Alabama Legislature, and it did not suggest that

it was affiliated with the State of Alabama. By virtue

of applying for and obtaining this certificate, Troy was

2 https://nces.ed.gov/pubs2016/2016435.pdf.

3 https://www.troy.edu/_assets/20-25-strategic-plan/

_documents/recruitment-2022.pdf.

4 https://www.stamats.com/insights/marketing-military-

personnel-non-traditional-students.

granted “the same but no greater privileges as, and

[was] subject[ed] to the same duties, restrictions,

penalties, and liabilities now or later imposed on, a

domestic corporation of like character.” N.C. Gen.

Stat. § 55A-15-05(b). These privileges and duties

included the power “[t]o sue and be sued, complain

and defend in its corporate name.” Id. § 55A-302(a)(1).

In May 2014, Troy hired respondent Sharell

Farmer to work in its Fayetteville office. Pet. 2a. His

job was to recruit military personnel to take Troy’s

online courses, paid for by federal military education

benefits. Id. Mr. Farmer was good at his job—in fact,

he was the top recruiter for Troy in his district. Id.

From his first day on the job, however, Mr. Farmer

was subjected to frequent and ongoing sexual

harassment by two other Troy employees—the

manager of the Fayetteville office, Pamela Gainey,

and her administrative assistant, Karen Tillery. Id.

On that first day, for example, Ms. Gainey ordered Ms.

Tillery to give him “the test”—at which point Tillery

ran a magic marker down his chest, over his nipples,

and down his abs and and stomach—without his

consent. Compl. ¶ VIII. Tillery repeatedly subjected

him to sexual, unwanted physical touching. See

Farmer Aff. ¶ 12. Mr. Farmer also observed sexual

harassment of male students. Pet. 2a.

Mr. Farmer reported the harassment to Troy

management, providing the names of five U.S. Army

veterans who had been sexually harassed by Ms.

Gainey and Ms. Tillery in the North Carolina office.

Pet. 3a; Farmer Aff. ¶ 15. Troy closed its investigation

without contacting any of these men. Pet. 3a.

A pattern of retaliation unfolded. Ms. Gainey

increased Mr. Farmer’s working hours, made his

working conditions more onerous, and, with Ms.

Tillery, spread false rumors accusing him of various

sexual exploits. Pet. 3a; Compl. ¶ XVIII.

On September 9, 2015, Ms. Gainey walked into Mr.

Farmer’s Fayetteville office and fired him. Compl.

¶ XIII. He was unable to find another job and became

homeless. Farmer Aff. ¶ 21. He was later diagnosed

with post-traumatic stress disorder and major

depressive order as a result of the sexual harassment

and termination he suffered while working for Troy.

Id.

Procedural background

Mr. Farmer brought this action against Troy

University, Gainey, and Tillery in the Superior Court

of North Carolina in July 2018, asserting violations of

North Carolina tort law and the North Carolina

Constitution. The complaint did not state whether the

individual defendants were sued in their personal or

official capacities. After this Court decided Hyatt, the

defendants moved to dismiss Mr. Farmer’s claims,

claiming protection from suit in North Carolina based

on Alabama’s sovereign immunity. As to Troy, the

motion argued that it was an arm of the state of

Alabama. As to the two individual defendants, the

motion argued that, although the complaint did not

specify, the court should presume that they were sued

in their official capacities and, therefore, that

Alabama’s sovereign immunity applied to them.5 In a

The motion also argued that the claims against the

individual defendants should be dismissed as moot based on a

disputed interpretation of a stipulation. That argument was not

addressed by the courts below.

brief order citing Hyatt, the superior court granted the

motion and dismissed the case with prejudice. Pet.

57a.

Mr. Farmer appealed to the North Carolina Court

of Appeals, which affirmed. Id. at 35a. Based on its

interpretation of North Carolina sovereign immunity

case law, that court held that Troy had not waived

Alabama’s sovereign immunity. Id. at 44a–47a. The

court “presume[d]” that the intentional tort claims

against defendants Gainey and Tillery were brought

against them in their official capacities, and thus

found Alabama’s sovereign immunity barred the suit

against them as well. Id. at 54a.

The North Carolina Supreme Court granted Mr.

Farmer’s petition for discretionary review and

reversed. Id. at 16a, 34a. That court held that Troy

had explicitly waived its sovereign immunity.

To start, the court noted that “when Troy

University registered as a nonprofit corporation here

and engaged in business in North Carolina, it

accepted the sue and be sued clause in the North

Carolina Nonprofit Corporation Act.” Id. at 9a. The

court then looked to this Court’s analysis of the effects

of a sue-and-be-sued-clause in the context of federal

sovereign immunity in Thacker v. Tennessee Valley

Authority, 139 S. Ct. 1435 (2019), which held that such

a clause can act as a waiver of sovereign immunity

where a suit challenges acts that are “not

governmental but commercial in nature,” id. at 1442.

The court explained that, “while Hyatt … requires a

State to acknowledge a sister State’s sovereign

immunity, Thacker recognizes that a sue and be sued

clause can act as a waiver of sovereign immunity when

a state entity’s nongovernmental activity is being

challenged.” Pet. 11a (citing Hyatt, 139 S. Ct. at 1492,

and Thacker, 139 S. Ct. at 1443).

Looking at the facts here, the court concluded that

Troy’s “business of recruiting students for on-line

education—recruitment that occurred in North

Carolina for students who remained in North

Carolina”—was not a governmental activity. Id. at

11a–12a. Rather, based on the allegations of the

complaint, the court concluded that “Mr. Farmer’s job

was to help Troy University carry out its commercial

activities by recruiting military personnel in North

Carolina to enroll in and pay for educational courses.”

Id. at 12a. Accordingly while recognizing that “a

waiver of sovereign immunity cannot be ‘implied,’” the

court held that, under Thacker, “when Troy

University chose to do business in North Carolina,

while knowing it was subject to the North Carolina

Nonprofit Corporation Act and able to take advantage

of the Act’s sue and be sued clause, it explicitly waived

its sovereign immunity.” Id. (citations omitted).

The court found “additional support” for Troy’s

consent in the provisions of the North Carolina

Nonprofit Corporation Act that prohibit out-of-state

corporations from doing business in the state absent a

certificate of authority, and provide those that do have

a valid certificate of authority the “same but no

greater privileges as” and “same duties, restrictions,

penalties, and liabilities now or later imposed on, a

domestic corporation of like character.” Pet. 13a

(citing N.C. Gen. Stat. § 55A-15-05(a) and quoting id.

§ 55A-15-05(b)). By applying for a certificate of

authority, the Court reasoned, Troy “agreed to be

treated like a domestic corporation of like

character,”—here, a private nonprofit university that

lacks sovereign immunity. Id. at 13a & n.4 (cleaned

up). Under City of Chattanooga, that agreement

constituted a waiver of sovereign immunity. Id. at

13a–14a.

Justice Berger concurred, noting that he “would

have decided the case with greater emphasis on the

proprietary actions by Troy University” and citing

City of Chattanooga and Thacker. Id. at 17a.

Dissenting, Justice Barringer would have found no

waiver based on her interpretation of North Carolina

law as to the significance of sue-and-be-sued clauses,

id. at 30a–31a, and distinguishing City of

Chattanooga and Thacker, id. at 31a–32a. In so doing,

she acknowledged that Hyatt “did not address the

distinction between commercial and governmental

activity” and that “this door may have been left open

by” this Court. Id.

REASONS FOR DENYING THE WRIT

I. No lower court decision addresses the

question presented or conflicts with the

decision below.

For forty years, state courts around the country

followed Nevada v. Hall, 440 U.S. 410 (1979), which

held that the Constitution does not provide the states

with sovereign immunity from suit in the courts of the

other states. See, e.g., Faulkner v. Univ. of Tenn., 627

So. 2d 362, 365–66 (Ala. 1992) (citing Hall and

declining to recognize sovereign immunity in a lawsuit

brought against an out-of-state state university). In

Hyatt, the Court overruled Hall, concluding that the

notion that one state could not be sued in the courts of

another was inherent in the structure of the

Constitution, as understood at the Founding. See

Hyatt, 139 S. Ct. at 1493–99.

In Hyatt, where the defendant was a state agency

performing governmental functions, id. at 1490–91,

the Court did not address either whether interstate

sovereign immunity applies where a state corporation

undertakes commercial activity in another state or

what constitutes consent to suit in another state. In

the four years since, these questions have seldom

arisen. Indeed, the North Carolina Supreme Court’s

decision in this case appears to be the only state high

court decision touching on them.6

Faced with the absence of decisions on point, Troy

argues that the state high courts are in conflict by

pointing to two decisions from nearly thirty years ago

involving tribal sovereign immunity. See Pet. 18–19

(citing Ransom v. St. Regis Mohawk Educ. & Cmty.

Fund, Inc., 658 N.E.2d 989 (N.Y. 1995), and Gavle v.

Little Six, Inc., 555 N.W.2d 284 (Minn. 1996)). Tribal

sovereign immunity, however, implicates a “special

brand of sovereignty” that differs both in “its nature

and its extent” from that at issue in Hyatt. Michigan

v. Bay Mills Indian Cmty. , 572 U.S. 782, 800 (2014).

Moreover, both Ransom and Gavle precede this

Court’s decision in Thacker, which was central to the

North Carolina Supreme Court’s analysis.

Even beyond those distinctions, neither case poses

a conflict here. In Ransom, a case brought by members

of the St. Regis Mohawk Tribe against a tribal entity

6 The New York Court of Appeals recently dismissed an

appeal by a New Jersey entity on the ground that it failed to

preserve its Hyatt-based sovereign immunity argument. See

Henry v. N.J. Transit Corp., __ N.E.3d __, No. 11, 2023 WL

2575220, at *6 (N.Y. Mar. 21, 2023). Dissenting Judge Wilson

addressed the merits, offering an analysis consistent with the

North Carolina Supreme Court’s in this case. See id. at *18

(Wilson, J., dissenting).

and the Tribal Chiefs, the New York Court of Appeals

based its decision that the defendants had sovereign

immunity on the fact that they were engaged in

traditional governmental functions. See 658 N.E.2d at

993. By contrast, the North Carolina Supreme Court’s

decision in this case was expressly tied to the fact that

nongovernmental, commercial activity is at issue. Pet.

11a. Additionally, although the court in Ransom held

that a state statutory sue-and-be-sued clause was not

sufficient to waive the tribe’s sovereign immunity in

connection with its governmental activity, the opinion

nowhere suggests that the defendants there—unlike

the defendant Troy here—had agreed to be subject to

the same duties and liabilities of a “domestic

corporation of like character.” See Pet. 13a–14a

(majority opinion); id. at 21a–22a (concurring

opinion).

As for Gavle, that case did not involve either an

agreement to be subject to the duties and liabilities of

a domestic corporation or a sue-and-be-sued clause. In

holding that consent to service of process was

insufficient to serve as a waiver of tribal sovereign

immunity, the court expressly noted that “[i]f there

were” a sue-and-be-sued clause, its “conclusion might

indeed be different.” 555 N.W.2d at 297.

As the case law develops in response to Hyatt, as

well as the 2019 decision in Thacker, it is possible that

courts’ fact-bound applications may develop into rules

of law regarding specific fact patterns that could

conceivably come into conflict. To date, however,

because no other state high court has addressed the

question presented, certiorari is not warranted.

II. The decision below is consistent with this

Court’s precedent.

A. Troy contends that the North Carolina

Supreme Court’s decision conflicts with this Court’s

decisions in Hyatt, College Savings Bank v. Florida

Prepaid Postsecondary Education Expense Board, 527

U.S. 666 (1999), and Sossamon v. Texas, 563 U.S. 277

(2011). Pet. 13–18. Troy is wrong.

As to Hyatt, the North Carolina Supreme Court

repeatedly cited the case and properly stated the rule

it sets out: A state is “entitled to sovereign immunity

from suit without its consent in the state courts of

every state in the country.” Pet. 8a (citing Hyatt, 139

S. Ct. at 1490). Hyatt did not address the issue

presented by this case: what suffices to demonstrate a

state entity’s consent to be sued in the courts of a

different state. Nor did it address how a state’s

immunity from suit in another state applies to

commercial activity undertaken in that other state.

Nonetheless, Troy argues that the North Carolina

Supreme Court ran afoul of Hyatt by “applying” state

law—the North Carolina Nonprofit Corporation Act—

to the question whether the school waived sovereign

immunity. Pet. 16. The court’s conclusion that Troy

waived sovereign immunity, however, was not an

application of that law. The court’s conclusion was

based on application of this Court’s decisions—Hyatt,

Thacker, and others—to the facts before it, including

the fact that Troy affirmatively “consented to be

treated like ‘a domestic corporation of like character’

and therefore to be sued in North Carolina.” Id. at 16a.

Indeed, the opinion cites only two North Carolina

decisions: one to respond to an argument made by

Troy and one to distinguish a case on which the court

of appeals had relied. Id. at 12a, 14a.

Troy also argues that the decision below conflicts

with this Court’s decision in College Savings, which

held that a state would not be deemed to have waived

its Eleventh Amendment sovereign immunity absent

a “clear” waiver. 527 U.S. at 680; see Pet. 13–16. This

case presents no conflict for two reasons. To begin

with, as Justice Gorsuch recently explained, the

standard for waiver of Eleventh Amendment

immunity is more stringent than that which applies

to the immunity at issue in Hyatt—and here—which

derives from the structure of the Constitution.

“Structural immunity sounds in personal jurisdiction,

so the sovereign can waive that immunity by ‘consent’

if it wishes.” PennEast Pipeline Co. v. New Jersey, 141

S. Ct. 2244, 2264 (2021) (Gorsuch, J., dissenting)

(citing Hyatt, 139 S. Ct. at 1493–94, and Wisc. Dep’t of

Corrections v. Schacht, 524 U.S. 381, 394 (1998)

(Kennedy, J., concurring)). The Eleventh Amendment,

on the other hand, is a matter of federal subjectmatter jurisdiction and, accordingly, cannot be

waived. Id. at 2264–65. College Savings is thus not on

point here.

Just as importantly, in addition to addressing a

meaningfully different type of immunity, College

Savings addressed a meaningfully different question:

whether “Congress, in the exercise of its Article I

powers,” was permitted “to extract ‘constructive

waivers’ of state sovereign immunity” by putting

states on notice that engaging in certain activity

would subject them to suit in federal court. 527 U.S.

at 686. No such “constructive waiver” is presented

here. Here, the North Carolina Supreme Court relied

on Troy’s affirmative request to be imbued with the

rights and responsibilities of a “domestic corporation

of like character.” N.C. Gen. Stat. § 55A-15-05(b).

Further, nothing in College Savings, which concerns

interstate commercial activity, addresses whether one

state may require an entity associated with another

state to be treated like a similar in-state entity for

purposes of conducting commercial operations within

its borders.

Last, Troy points to Sossamon, another case

examining whether Congress validly abrogated

Eleventh Amendment immunity. Sossamon’s holding

that Spending Clause legislation must be explicit to

abrogate state immunity, 563 U.S. at 284, cited in

Pet.8a–9a, says nothing about whether Troy’s

voluntary actions here constituted consent to suit.

B. Although the court below cited Hyatt, College

Savings, and Sossamon to the extent that they bore on

the question before it, its analysis relied more heavily

on two of this Court’s other cases, Thacker and City of

Chattanooga. Contrary to Troy’s contention, the North

Carolina court’s reliance on those cases does not

support its request for review.

In its unanimous decision in Thacker, this Court

addressed the effect of sue-and-be-sued clauses on

federal sovereign immunity. The Court explained

that, when an entity is “launched with such a clause

into the commercial world and authorized to engage

in business transactions with the public,” the plain

meaning of the term “sue and be sued” is that the

entity has “the same amenability to judicial process as

a private enterprise under like circumstances.” 139 S.

Ct. at 1442 (quoting Fed. Housing Admin. v. Burr, 309

U.S. 242, 245 (1940)) (cleaned up). In a suit “based on

a public corporation’s commercial activity,” there is no

reason to depart from the plain meaning of the term,

even if there may be an “implied limit on [a] sue-andbe-sued clause’” in “suits challenging the entity’s

governmental activity.” Id. at 1443.

Troy contends that the court below erred in relying

on Thacker because this case does not involve federal

legislation waiving federal sovereign immunity. But

the Court’s decision in Thacker was not based on a

unique aspect of federal sovereign immunity; it was

based on the “usual and ordinary” meaning of the

words “sue and be sued.” Id. at 1441 (citation omitted).

Troy offers no support for the suggestion that, in this

case, which, like Thacker, involves a “public

corporation’s commercial activity,” id. at 1443, some

other meaning applies to that identical term. Troy’s

suggestion that the court below erred in applying the

“usual and ordinary” meaning expressly identified by

this Court should be rejected. See Pet. 10a–11a (citing

Thacker, 139 S. Ct. at 1441, 1443).

As for City of Chattanooga, there, Tennessee had

enacted a statute allowing Georgia to construct and

manage a railroad business within the state, and to

acquire a right of way and land for the facilities,

subject to the same “rights, privileges and immunities

with the same restrictions which are given and

granted” to a domestic railroad. 264 U.S. at 479, 481.

When Tennessee later sought to condemn part of the

land, Georgia asserted sovereign immunity. Rejecting

that claim, this Court held that “[t]he terms on which

Tennessee gave Georgia permission to acquire and use

the land and Georgia’s acceptance amount [to] consent

that Georgia may be made a party to condemnation

proceedings.” Id. at 480. By accepting the conditions

imposed on it by the Tennessee legislature and

proceeding with its commercial operations subject to

those conditions, Georgia “divested itself of its

sovereign character” and “t[ook] on the character of

those engaged in the railroad business in Tennessee.”

Id. at 482.

Arguing that City of Chattanooga addresses only

suits concerning real property, Troy claims that the

court below erred in relying on that case to support its

holding that Alabama consented to suit in North

Carolina for claims related to its business activity in

North Carolina. But Troy ignores key aspects of the

Court’s opinion, which more than once highlights

Georgia’s consent to be sued by accepting the terms of

Tennessee’s permission to operate in the state. Id. And

while the Court declined to address “the broad

question whether Georgia has consented generally to

be sued in the courts of Tennessee in respect of all

matters arising out of” its ownership of the railroad in

that state, id., it stated clearly that “the acceptance by

Georgia of the permission given it to acquire the

railroad land in Tennessee is inconsistent with an

assertion of its own sovereign privileges in respect of

that land … and amounts to a consent,” id. at 482–83.

Although this case is not about real property, the

cases plainly present other analogous facts. There, the

statute that granted Georgia the right to operate its

business conditioned that approval onbeing subject to

the duties of a similar domestic corporation, and

Georgia accepted that condition by proceeding with its

business. See id. at 481–82. Here, North Carolina

granted Troy the right to operate its business subject

to its acceptance of the duties of “domestic

corporation[s] of like character,” including the ability

to be sued in North Carolina courts, see N.C. Gen.

Stat. § 55A-15-05(b), and Troy accepted that condition

by operating its business in North Carolina. The court

below committed no error in relying on City of

Chattanooga as “additional support,” Pet. 13a, for its

holding.

Troy contends that Paulus v. South Dakota, 227

N.W. 52, 55 (N.D. 1929), supports its argument that

the North Carolina Supreme Court misread City of

Chattanooga. Troy correctly states that Paulus rejects

the argument that City of Chattanooga “is authority

for the proposition that a state, by engaging in a

private business within another state, subjects itself

to the laws of the latter to the extent that it can no

longer claim immunity from suit to enforce the

obligations arising therefrom.” Pet. 24 (quoting

Paulus, 227 N.W. at 55). The decision below, however,

cannot reasonably be read to stand for that broad

proposition, given its focus on the specific terms to

which Troy agreed when it sought permission to do

business in North Carolina.

Troy also contends that its argument with respect

to City of Chattanooga is supported by Cayuga Indian

Nation of New York v. Seneca County, 978 F.3d 829

(2d Cir. 2020). Specifically, Troy claims that a “see

also” citation to City of Chattanooga in a footnote in

Cayuga Indian Nation about the “immovable

property” exception to immunity demonstrates a

conflict. Pet. 25 (citing 978 F.3d at 836–37 n.6). Troy

is wrong. Cayuga Indian Nation does not involve a

sue-and-be-sued clause, does not address consent, and

does not discuss City of Chattanooga. A citation does

not create a conflict, and Cayuga Indian Nation is not

inconsistent with the decision below.

III. This case is a poor vehicle to address the

question presented.

Beyond the lack of a conflict, several aspects of this

case make it a particularly poor vehicle to address the

question presented. First, the petition’s “question

presented” does not accurately represent the holding

of the North Carolina Supreme Court. Second, the

facts of this case raise the antecedent question

whether petitioners had sovereign immunity to begin

with. Finally, the wholly intrastate nature of the

allegations in this case raise issues of competing

sovereignty that complicate the development of a

broad rule.

A. The question presented by petitioners

does not align with the holding below.

The question presented in the petition is whether

a state “operating” in a foreign state “under a

corporate registration statute with a sue-and-be-sued

clause” constitutes waiver of the structural sovereign

immunity recognized in Hyatt. Pet. i. The North

Carolina Supreme Court did not purport to answer

that broad question. As to sue-and-be-sued clauses,

the court limited its analysis to entities “engaged in

commercial rather than governmental activity” and

the facts of this case. Id. at 12a. The facts here do not

involve mere “operation” in a foreign state, but the

affirmative act of applying for a benefit, the provision

of which is subject to specified obligations.

More fundamentally, petitioners’ question ignores

that the majority explicitly did not base its holding

solely on a sue-and-be-sued clause. It grounded its

finding of consent on the additional basis that “by

requesting and receiving a certificate of authority to

do business in North Carolina, Troy University

consented to be treated like ‘a domestic corporation of

like character’ and therefore to be sued in North

Carolina.” Id. at 16a (quoting N.C. Gen. Stat. § 55A15-05(b)). None of the cases cited by petitioners

involved similar provisions, and the petition largely

ignores this aspect of the North Carolina Supreme

Court’s decision. These additional facts make this case

a poor vehicle to address the impact of sue-and-besued clauses in the abstract.

B. Even

absent

consent,

petitioners’

entitlement to state sovereign immunity

is uncertain.

The question whether an entity has waived

sovereign immunity arises, of course, only if the entity

is entitled to sovereign immunity in the first place.

Here, it is not certain whether, absent a waiver, any

of the three defendants were entitled to invoke the

immunity recognized in Hyatt.

1. Troy University is not the State of

Alabama.

a. With little discussion, the North Carolina

Supreme Court stated that Troy University itself was

entitled to invoke the state’s sovereign immunity,

citing cases involving in-state educational activities

and the immunity created by the Alabama

Constitution. Pet. 7a (citing Ala. State Univ. v.

Danley, 212 So. 3d 112, 122 (Ala. 2016) (quoting

Taylor v. Troy State Univ., 437 So. 2d 472, 474 (Ala.

1983)). But the original understanding of sovereign

immunity at the time the Constitution was adopted

casts doubt on whether Troy University—a separately

incorporated entity—is entitled to the sovereign

immunity at issue in Hyatt and here.

As recently explicated by Judge Oldham, the

historical record shows that, at the Founding, statecreated corporations—including state universities—

did not qualify as “the State” for purposes of sovereign

immunity. See Springboards to Educ., Inc. v. McAllen

Indep. Sch. Dist., 62 F.4th 174, 195 (5th Cir. 2023)

(Oldham, J., concurring) (“Even when a college

‘acquire[d] the character of a public institution,’ it

retained its corporate status. It didn't miraculously

become the State. Regardless of the types of

corporations or the State’s involvement in them, the

Court consistently found corporations weren’t entitled

to sovereign immunity.” (citation omitted)). Judge

Oldham explained that, according to Blackstone’s

Commentaries on the Laws of England, many types of

corporations that existed at common law, including

“colleges and universities,” “could only be created with

the consent of the sovereign” but “could not assert the

sovereign’s immunity from suit.” Id. at 191. That

sovereign immunity did not extend to state-created

corporations is reflected in a series of nineteenthcentury cases where this Court held that state-created

banks were not imbued with the sovereign privileges

of the states that created or owned them. See id. at 194

(citing Curran v. Arkansas, 56 U.S. 304, 309 (1853);

Darrington v. Bank of Ala., 54 U.S. 12, 16–17 (1851);

Briscoe v. Bank of Commonwealth of Ky., 36 U.S. 257,

327 (1837); Bank of Commonwealth of Ky. v. Wister,

27 U.S. 318, 319 (1829); Bank of U.S. v. Planters’ Bank

of Ga., 22 U.S. 904, 908 (1824)).

This evidence suggests that, at the time of the

Constitution’s ratification, a state university, such as

Troy, was not understood to have been imbued with

the privileges of state sovereignty inherent in the

constitutional structure. As Judge Oldham concluded,

“[i]f an entity has a separate legal status from the

State (e.g., as a corporation, LLC, or § 501(c)(3)

nonprofit organization) … the entity is not ‘the State’

and hence is not entitled to sovereign immunity.” Id.

at 198. Troy is just such a corporation: The Alabama

Secretary of State lists it as a “domestic non-profit

corporation,”7 and Troy stated on its Application for

Certificate of Authority to do business in North

Carolina that it is a corporation, Pet. 58a.

The question whether, absent consent, Troy would

be entitled to share in the state’s structural immunity

is necessarily antecedent to the question presented in

the petition.8 Because the defendant in Hyatt was a

state

government agency

engaged

the

governmental function of taxation, this Court did not

have the opportunity to address there the question

whether the interstate sovereign immunity that was

preserved in the constitutional structure includes

such corporate entities. In the four years since Hyatt,

the lower courts have not addressed this question

either. Consistent with its usual practice, this Court

should not be the first to do so.

b. In a footnote, Troy briefly suggests that

Article I, section 14 of the Alabama Constitution

https://arc-sos.state.al.us/cgi/corpdetail.mbr/detail?corp=

000815493&page=name&file=&type=ALL&status=ALL&place=

ALL&city=.

8 That Eleventh Amendment immunity has sometimes been

extended to educational institutions like Troy does not mean that

the immunity recognized in Hyatt extends to such entities. The

two immunities are not co-extensive. See PennEast Pipeline, 141

S. Ct. at 2264 (Gorsuch, J., dissenting). And in looking to the

scope of the Hyatt immunity, it makes sense to look to the same

historical record that this Court relied upon in Hyatt. See 139 S.

Ct. at 1493–95.

confers sovereign immunity on Troy and makes that

immunity unwaivable. See Pet. 16 n.4; see also Ala.

Amicus Br. 3. Section 14 is not relevant here. As

Alabama Supreme Court Justice Shaw recently

explained, that provision addresses the type of

immunity grounded in “subject-matter jurisdiction.”

In re Space Race, LLC, __ So. 3d __, No. 1200685, 2021

WL 6141625, at *8 (Ala. Dec. 30, 2021) (Shaw, J.,

concurring). It does not address the state sovereign

immunity inherent in the federal constitutional

structure—that is, the type of immunity at issue here

and in Hyatt. See Hyatt, 139 S. Ct. at 1492; see also

supra p.14.

2. Petitioners Gainey and Tillery are

not the State of Alabama.

Whether the individual petitioners—North

Carolina residents sued for actions they took in North

Carolina—are entitled to share in the sovereign

immunity of Alabama is also disputed in this case. The

claims against petitioners Gainey and Tillery are

intentional tort claims. The parties dispute whether

these are official capacity claims, to which sovereign

immunity might apply, or personal capacity claims, to

which it cannot, see, e.g., N.C. Sup. Ct. Pl.-Appellant’s

Reply Br. at 17–18. And the North Carolina Supreme

Court explicitly did not address this question. See Pet.

6a n.2. But the allegations against Ms. Gainey and

Ms. Tillery—for intentional infliction of emotional

distress and intentional interference with a contract

between Mr. Farmer and Troy itself—suggest Mr.

Farmer intended to bring personal capacity claims.

See Mabrey v. Smith, 548 S.E.2d 183, 187 (N.C. Ct.

App. 2001) (looking to nature of allegations and

concluding claims were brought against state

employees in their individual capacities).

This predicate issue and independent basis for

finding that two of the three petitioners lack sovereign

immunity makes this case poorly suited for review.

C. The allegations of harassment of one

North Carolina citizen by two North

Carolina citizens acting in North

Carolina make this case unusual.

Hyatt involved claims against a California

government agency involved in a traditional

governmental function and actions taken by

California-based employees—predominantly taken in

California. This case, by contrast, involves claims

about the conduct of an Alabama state-affiliated

entity engaged in commercial activity in North

Carolina and actions taken by North Carolina

residents working exclusively in North Carolina. Thus

here, North Carolina’s own sovereign interest in

regulating conduct by its own citizens, within its own

borders, is at a maximum.

Unlike cases cited by Troy, this case thus poses the

issue whether, as part of a commercial enterprise, one

state can confer its immunity on the citizens of

another state for acts they take in their home state.

The need to address this additional issue, not

addressed below or in other cases, is further reason

why this case would be a poor vehicle for consideration

of the question presented in the petition.

IV. Troy is wrong as to the consequences of the

decision below.

Troy argues that this case is exceptionally

important because (1) other states’ universities have

opened similar businesses in North Carolina, and

(2) other states have similar business registration

regimes. Pet. 27–31. Yet Troy does not point to any

other case where the question presented has arisen.

The argument that other courts might later address

the question and might agree with North Carolina

does not satisfy this Court’s criteria for review.

Moreover, not only does the decision below address

only commercial activity, but claims like those at issue

can already be brought in federal court. The

underlying allegations of sexual harassment of a

university employee and of students would likely give

rise to federal court litigation under Title VII and

Title IX—claims as to which sovereign immunity does

not serve as a shield. Fitzpatrick v. Bitzer, 427 U.S.

445, 447–48 (1976) (Title VII); Gebser v. Lago Vista

Indep. Sch. Dist., 524 U.S. 274, 284 (1998) (Title IX).

In addition, under the decision below, stateaffiliated universities like Troy can still recruit

military students based in North Carolina and also

avoid waiving any immunity that they may have as

arms of their states. Troy chose to undertake to recruit

North Carolina students by leasing an office and

employing staff wholly within North Carolina. To do

so, it was required to consent to the jurisdiction of the

North Carolina courts for claims arising out of those

activities. However, not all recruitment activities

directed at individuals in the state require that

consent. North Carolina does not require foreign

corporations to seek and obtain a certificate of

authority in order to “[c]onduct[ ] affairs in interstate

commerce” or “[s]ell[ ] through independent contractors.” N.C. Gen. Stat. § 55A-15-01(b)(8), (10) . That is,

a foreign entity is not required to obtain a certificate

of authority—and therefore not required to consent to

suit in the state—in order to solicit sales to North

Carolina residents if it does not maintain an office in

the state. Snelling & Snelling, Inc. v. Watson, 254

S.E.2d 785, 790 (N.C. Ct. App. 1979). Other states

have similarly held that merely soliciting business in

a state does not require a foreign corporation to be

qualified to conduct affairs there. See, e.g., SGB

Constr. Servs., Inc. v. Ray Sumlin Constr. Co., 644 So.

2d 892, 894 (Ala. 1994). To the extent that stateaffiliated businesses would like to obtain the benefits

of selling their products to North Carolina students

without subjecting themselves to suit in North

Carolina state courts, there are ways they can do so.

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be denied.

Respectfully submitted,