Petition for Writ of Certiorari — Illinois v. Struebin

\) Supreme Court, US,

88-sg | FiLeD

JUL 12. 1986

JOSEPH F. SPANIOL, 2,

N

In THe

Supreme Court of the Gnited States

Octoser Term, 1988

STATE OF ILLINOIS,

Petitioner,

V.

RONALD STRUEBIN, Ancillary Administrator of the Estate of

Joel F. Struebin, Deceased; KATHLEEN S. POTTER,

Ancillary Administrator of the Estate of

James K. Potter; and DAVENPORT BANK AND TRUST,

Ancillary Administrator of Both Estates,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE STATE OF IOWA

NEIL F. HARTIGAN

Attorney General, State of Illinois

ROBERT J. RUIZ

Solicitor General, State of Illinois

ROBERT E. WAGNER *

Special Assistant Attorney General

1300 South Eighth Street, Suite 1

P.O. Box 1858

Springfield, Dlinois 62705

(217) 528-5604

Attorneys for Petitioner

* Counsel of Reeord

Printed by Authority of the State of Illinois (P.O. 34134—55—7-12-88)

i

QUESTIONS PRESENTED

Whether a state, acting through its judiciary, may seize

income tax revenue of a sister state collected by and tem-

porarily in the possession of a private corporation in order

to satisfy a judgment against the sister state in favor of

its domiciliary.

Whether this Court’s decision in Nevada v. Hall should

be reconsidered.

il

LIST OF PARTIES BELOW

ns

The State of Illinois

Ronald Struebin, Ancillary Administrator

of the Estate of Joel F. Struebin;

Kathleen S. Potter, Ancillary Administrator

of the Estate of James K. Potter;

Davenport Bank and Trust, Ancillary Administrator

of both Estates

Caterpillar Tractor Company

|

ill

TABLE OF CONTENTS

QUESTIONS PRESENTED .................. i

LIST OF PARTIES BELOW ................ ii

TABLE OF AUTHORITIES ................. iv

EOL. Siu wiwavectnessccccceses 1

I ne 6 CUkeonbdedus vbeeccececane 2

CONSTITUTIONAL PROVISION ............ 2

STATEMENT OF THE CASE ............... 2

REASONS FOR GRANTING THE WRIT:

I.

THE COURT BELOW BOTH MISINTER-

PRETED AND MISAPPLIED THIS COURT'S

DECISION IN NEVADA v. HALL ......... 5

Il.

THE SEIZURE OF ILLINOIS’ PROPERTY BY

A SISTER STATE SUBSTANTIALLY INTER-

FERES WITH ITS ABILITY TO PERFORM

ITS SOVEREIGN GOVERNMENTAL FUNC-

LPP PPT ITIVETKT TERT Tee 10

Ill.

A RULE PERMITTING THE SEIZURE OF A

STATE’S ASSETS WHEREVER A DEBT IS

OWED THAT STATE BY A DEBTOR OVER

WHOM THE FORUM STATE MAY ASSERT

PERSONAL JURISDICTION POSES A SUB-

STANTIAL THREAT TO COOPERATIVE FED-

ERALISM

iv

IV.

THIS COURT SHOULD RECONSIDER ITS

DECISION IN NEVADA v. HALL .........

OE aC uhowedunsiancuaebennean casas

APPENDIX

A— Ronald Struebin, et al. v. State of Illinois, 421

ewe ae Gre Clem TOO oo ckccccaccccccccs

B— Struebin v. State of Iowa and State of Illinois,

322 N.W.2d 84 (Iowa 1982) ...............

C— Struebin v. Illinois, 383 N.W.2d 516 (1986) ...

TABLE OF AUTHORITIES

Cases

Aurora v. Simpson, 118 Ill.App.3d 392, 454 N.E.2d

Se NS ED avi his a SB eNe s

Brewington v. Brewington, 387 S.W.2d 777 (Tenn.

SE bi btonbaciatinnsakhdtek Patedwanencsee

Bullington v. Missouri, 451 U.S. 430, 101 S.Ct.

1852, 68 L.Ed.2d 270 (1981) ...............

Delta County Levee Imp. Dist. No. 2 v. Leonard,

516 S.W.2d 911 (Tex.), cert. denied 96 S.Ct. 48

PE heh dev dbbecnscncemcdadewsaldedes tne

Druid City Hospital Bd. v. Epperson, 378 S.2d 696

SN SN UF Ra caws eens 6eecebekekecass

PAGE

10

10

10

V

G & J Investment Corp. v. Florida Department of

Health and Rehab. Services, 429 S.2d 391 (Fla.

Ag, UBER) occ dcccccnsaccveccccvccesecaes 10

Hess v. Pawloski, 274 U.S. 352, 71 L.Ed.2d 1091

GORE). ccc vabsondssccunaarecanesanetansaars 12

Hilton v. Amburgey, 96 S.E.2d 151 (Va. 1957) .. 10

Holder v. Citizens & Southern Nat’l Bank, 222

S.E.2d 110 (Ga.App. 1975) .........6. 00005. 10

Mayor and City Council of Baltimore v. Comp-

troller of Treasury, 439 A.2d 1095 (Md. 1982) . 10

McQuarrie v. Balch, 285 N.E.2d 103 (S.Jud.Ct.

Been... DEED. dc ck ca baxndodatedacwnbandaesus 10

Nevada v. Hall, 440 U.S. 410, 99 S.Ct. 1182, 59

ERS GOB GIG ca cvccccsccwesensetans passim

Pacific Insurance Co. v. Industrial Accident Com-

mission, 306 U.S. 493, 59 S.Ct. at 634 (1939) . 6

Pennoyer v. Neff, 95 U.S. 714 (1878) ......... 11

Spencer v. Merchant, 125 U.S. 345, 8 S.Ct. 921,

Bl LEE. FEB CUBR) nn csc ccc ss cdvcccacscces 10

Star v. Manufacturing Employees Fed. Cr. U. v.

Araujo, 164 A.2d 309 (R.I. 1960) .......... 10

State v. Allred, 102 Ariz. 102, 425 P.2d 572 (Ariz.

DOUG ncaa bb cnccndoseesbascsubsdavasdeuenees 10

Ronald Struebin, et al. v. State of Illinois, 421

N.W.2d 874 (Iowa 1988) ...........cceceees 1

Struebin v. State of Iowa and State of Illinois, 322

W.W2d G4 Clowae TOG) ncccccccccccsioscces

Struebin v. Illinois, 383 N.W.2d 516 (1986) ....

State of Illinois v. Struebin, 459 U.S. 1087, 103

S.Ct. 570, 74 L.ind.ld 933 (1982) .......... 3

vi

Thompson v. Allen, 115 U.S. 550, 6 S.Ct. 140, 29

ele Gib GRD ccinssaeidRiskniavcivences

Union Transit Co. v. Kentucky, 199 U.S. 194, 26

S.Ct. 36, 50 L.Ed. 150 (1905) .............

World-Wide Volkswagen Corporation v. Woodson,

444 U.S. 286, 100 S.Ct. 559 (1980) .........

Weinstein, Bronfin & Heller v. LeBlanc, 249 La.

936, 192 S.2d 130 (La. 1966) ..............

Other Authorities

Iowa Code Section 642.2 ...................5.

Ill. Const. of 1970, art. XIII, §4 .............

> a peep er

ae GR, Be akin ibe weceessaceee

Ill.Rev.Stat. 1987, ch. 127, 9801 ..............

Ill.Rev.Stat. 1987, ch. 120, 47-705 .............

GP. R.kads GOD Ge bv cciecthschuskcwecddeusts

6 Am.Jr.2d Attachment and Garnishment, Section

WS cévéccsabedsuxteieancieen eee

10

10

1]

10

10

oo 4 WS +) =)

Is Tue

Supreme Court of the Cnited States

Ocroser Term, 1988

STATE OF ILLINOIS,

Petitioner,

v.

RONALD STRUEBIN, Ancillary Administrator of the Estate of

Joel F. Struebin, Deceased; KATHLEEN 8S. POTTER,

Ancillary Administrator of the Estate of

James K. Potter; and DAVENPORT BANK AND TRUST,

Ancillary Administrator of Both Estates,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE STATE OF IOWA

The Petitioner, State of Illinois, respectfully prays that

a Writ of Certiorari issue to review the final decision and

opinion of the Supreme Court of the State of lowa en-

tered in this proceeding on April 13, 1988.

OPINION BELOW

The opinion of the Supreme Court of Iowa is reported

under the name Ronald Struebin, et al. v. State of Illi-

nois, at 421 N.W.2d 874 (Iowa 1988). A copy of that opin-

ion is also contained in the Appendix to this Petition, at

Appendix A.

aie

JURISDICTION

The opinion of the Supreme Court of lowa was entered

on April 13, 1988. This Petition for Writ of Certiorari was

filed within 90 days of that date. This Court’s jurisdic-

tion is invoked under 28 U.S.C. §1257(3).

CONSTITUTIONAL PROVISION

Article IV, Section 1

“Full Faith and Credit shall be given in each State to

the public Acts, Records, and judicial Proceedings of every

other State. And the Congress may by general Laws pre-

scribe the Manner in which such Acts, Records and Pro-

ceedings shall be proved, and the Effect thereof.”

STATEMENT OF CASE

In December of 1978, Respondents’ decedents were driv-

ing their jeep across a bridge traversing the Mississippi

River and connecting the states of Iowa and Illinois. The

vehicle left the roadway and plunged from the surface of

the bridge into the river.

In April of 1980, the Respondents’ estates filed a wrong-

ful death action, in lowa, against the manufacturer of the

vehicle, alleging, inter alia, faulty design and manufac-

ture of the product. In a separate suit, Respondents sued

the State of Iowa for its alleged failure to maintain prop-

erly the road surface of the bridge. Iowa successfully

————— ee

alien

moved to join the State of Illinois in the litigation,

presumably because of a certain interstate compact be-

tween Iowa and Illinois whereby Illinois agreed to main-

tain the Iowa portion of the Interstate 80 bridge span-

ning the river. Iowa then settled with the Respondents

and was dismissed from the suit.

Illinois filed a special appearance in the lowa trial! court

which the State of Iowa, prior te settlement, resisted. The

trial court rejected Illinois’ assertion that, as a sovereign

state, it was immune from suit in Iowa. In a decision re-

ported as Struebin v. State of lowa and State of lilinois,

322 N.W.2d 84 (lowa 1982) (Appendix B) the Iowa Su-

preme Court affirmed, holding that lowa’s assumption of

jurisdiction over the State of Illinois did not constitute

a substantial threat to cooperative federalism. It relied

on this Court’s decision in Nevada v. Hall, 440 U.S. 410,

99 S. Ct. 1182, 59 L.Ed.2d 416 (1979), observing that Hall

“does not suggest that an exception must be made where,

as here, a threat to interstate cooperation is asserted.”

Appendix B, at 5. Illinois’ Petition for Writ of Certiorari

was denied by this Court. State of Illinois v. Struebin,

et al., 459 U.S. 1087, 103 S.Ct. 570, 74 L.Ed.2d 933 (1982).

The case proceeded to trial with the Respondents con-

tending that Illinois negligently conducted snow removal

operations undertaken pursuant to the interstate agree-

ment. The jury found Illinois partially liable, found Jeep

not guilty, and found Respondents’ decedents 70% at fault.

No party appealed the jury verdict, and Respondents

took no steps to collect the judgment from Illinois until

March of 1984, when Respondents instituted the garnish-

ment proceeding that is the subject of the present peti-

tion. Specifically, Respondents sought to collect their judg-

ment against Illinois by garnishing Illinois income tax with-

cilia

held by Caterpillar Tractor Company (an Illinois corpora-

tion doing business in Iowa) on behalf of those Caterpillar

employees who worked in Iowa but resided in Illinois.

Illinois again appeared specially, contending, inter alia,

that garnishment by Iowa of Illinois income tax revenue

constituted a substantial threat to cooperative federalism.

The trial court upheld the special appearance. The Iowa

Supreme Court did not rule on the merits of this ques-

tion. Instead, it held that, “. . . as a matter of comity

and cooperative federalism, we will not open our courts

to consider [Respondents’] proceedings to collect the judg-

ments by garnishment in Iowa until such time as they

can allege and prove they were unable to secure payment

of these judgments in the Illinois courts.” Struebin v. IIli-

nois, 383 N.W.2d 516 (1986). (Appendix C, at 9).

Because Illinois is immune from suit in its trial courts

of general jurisdiction, Respondents filed suit in the IIli-

nois Court of Claims, a forum analogous to the federal

Court of Claims. That body found that Respondents’ Peti-

tion to Enforce Judgment was not timely filed. As a re-

sult, the case found its way to the Iowa Supreme Court

for a third time.

This time, the court decided the central question in the

litigation—whether a co-equal sovereign can seize the

property of another sovereign. It answered in the affirma-

tive, finding that this Court’s decision in Hall controlled.

It found that:

In this case the governmental authority of Illinois

is not being litigated. We are not addressing the issue

of whether Illinois can deny Respondents relief in its

own court of claims. Rather, we are allowing our own

courts to enforce a judgment entered in this state.

The only potential threat to cooperative federalism

im this case is the claim that Iowa cannot enforce

its own judgments.

= =

(Appendix A, at 6 [emphasis supplied].) Because Illinois

believes that its governmental authority is being litigated,

and that the seizure of its income tax by a sister state

does constitute a threat to interstate cooperation, Illinois

asks this Court to grant the present petition.

REASONS FOR GRANTING THE WRIT

i.

THE COURT BELOW BOTH MISINTERPRETED AND

MISAPPLIED THIS COURT’S DECISION IN NEVADA v.

HALL.

Historically, this Court has found it appropriate to re-

view state court decisions to determine whether its prior

decisions have been properly applied, interpreted, or ex-

tended. See Bullington v. Missouri, 451 U.S. 4380, 482,

101 S.Ct. 1852, 68 L.Ed.2d 270 (1981). In the present ac-

tion, the court below consistently has misinterpreted this

Court’s decision in Nevada v. Hall in several specific

ways, and in general by incorrectly extending that deci-

sion to the factual and public policy conditions present in

the case before it.

In Nevada v. Hall, this Court considered for the first

time whether a state could claim immunity from suit in

the courts of another state. The Court’s analysis was gov-

erned by the full faith and credit clause, and by contempo-

rary notions of comity.

The Court first ruled that the full faith and credit clause

did not require California to refrain from exercising juris-

diction over Nevada on the basis of sovereign immunity

when to do so would offend California’s own policies of

callie

full recovery for motorists against all tortfeasors, includ-

ing the government of California and its agents. This rul-

ing was grounded in historical notions of the territorial

limits of a state’s power.

Full faith and credit . . . does not here enable one

state to legislate for the other or to project its laws

across state lines so as to preclude the other from

prescribing for itself the legal consequences of acts

within it.

Id., at 423, 424, 99 S.Ct. at 1190 (quoting Pacific Insur-

ance Co. v. Industrial Accident Commission, 306 U.S.

493, 504-505, 59 S.Ct. at 634 (1939)). Given that this was

the first occasion for the Court to consider such an im-

portant question, it carefully limited its holding to the

facts and state policies before it.

California’s exercise of jurisdiction in this case

poses no substantial threat to our constitutional sys-

tem of cooperative federalism. Suits involving traffic

accidents occurring outside of Nevada could hardly

interfere with Nevada’s capacity to fulfill its own

sovereign responsibilities. We have no occasion, in

this case, to consider whether different state policies,

either of California or of Nevada, might require a dif-

ferent analysis or a different result.

Id., at 424, n. 24, 99 S.Ct. at 1190.

In Hall, California had waived its immunity from suit

in its own courts in favor of a policy of full recovery for

its citizens. Nevada had a different policy, in the form

of a statutory limit on the amount of money damages

available against Nevada in Nevada courts. Analogizing

from worker’s compensation choice of law precedents, the

Hall Court found that California was not required to give

full faith and credit to a sister state policy obnoxious to

its own policies of jurisdiction over nonresident motorists

and full recovery.

me

Unlike Hall, the policies of Iowa and Illinois are the

same: neither state permits execution on government

property to satisfy judgments against the state. Iowa stat-

utes expressly exempt from execution public buildings or

property owned by the state. Iowa Code, $627.18. Iowa

statutes alse provide that “[tJhe property of a private citi-

zen can in no case be levied on to pay the debt of [a public

body].”” fd. Similarly, Illinois cannot be made a party in

suits brought in Illinois courts of general jurisdiction. Ac-

tions against the State must be brought in the Illinois

Court of Claims. IIl.Rev.Stat. 1987, ch. 127, 4801. The pro-

hibition is equally applicable in the garnishment context.

Aurora National Bank v. Simpson, 118 Ill.App.3d 392,

454 N.E.2d 1132 (1st Dist. 1983).

The lower court’s decision here interferes with and of-

fends the structure of Illinois government as created by

its constitution. Article IX, Section 1 of the Illinois Con-

stitution of 1970 places the power to raise revenue exclu-

sively with the legislature. Article VIII, Section 2(b) pro-

vides that “[t]he General Assembly by law shall make ap-

propriations for all expenditures of public funds by the

State.” Those appropriations cannot exceed estimated avail-

able funds. Jd. The constitution also abolishes Illinois’

sovereign immunity, “except as the General Assembly

may provide by law.” Ill. Constitution of 1970, art. XIII,

§4. By enactment of the legislature, Illinois cannot be

made a party “in any court” other than the Illinois Court

of Claims. Ill.Rev.Stat. 1987, ch. 127, 4801. Taken to-

gether, these provisions place the sole authority to appro-

priate and distribute Illinois revenue in the Illinois legis-

lature.

Distribution of that revenue by the courts of another

state is outside of and not contemplated by Illinois’ con-

stitution and laws. Put simply, Illinois has no mechanism

=

for the distribution of revenue other than by its duly

elected legislature. Neither its appropriation and budget-

ing process nor its auditing procedures contemplate seiz-

ure and distribution of its property by a foreign state.

Because Illinois property, of necessity, frequently will be

located in other states (see Reason III, infra), the seizure

of that property by foreign states will have dramatic and

unpredictable effects on Illinois government.

Neither Iowa nor Illinois permits execution on state

property either directly, or, as here, against a private par-

ty, to satisfy a judgment against the state. Thus the

policies of both states are the same. A correct applica-

tion of Hall to the facts and policies of this case man-

dates that Iowa give full faith and credit to Illinois’ policy

prohibiting execution against a sovereign.

The second way in which the lower court misinterpreted

this Court’s decision in Hall concerns the question of

whether the assumption of jurisdiction of the underlying

suit by Iowa over Illinois would constitute a “substan-

tial threat to cooperative federalism”. Jd. at 423, n. 24,

99 S.Ct. 1190. In Hall, the Court observed that “{s]uits

involving traffic accidents occurring outside of Nevada

could hardly interfere with Nevada’s capacity to fulfill its

own sovereign responsibilities.” Jd. There, a California

jury was asked to decide whether an agent of Nevada

operated his car in a careful and prudent manner, com-

mon law duties owed by each citizen to the public at

large. Here, an Iowa jury was asked to decide whether

Illinois performed a sovereign function—removing snow

from public roadways—in a prudent manner. In essence,

Illinoisans’ tax dollars were disbursed by Iowa residents

and the Iowa judiciary for conduct that only Illinois gov-

ernment could perform. The Hall Court had no occasion to

consider the application of the full faith and credit clause

jie

in the context of the policies and governmental conduct

at issue in this case.

This case also presents a question which concerned the

dissenters in Hall: whether Illinois must give full faith

and credit to a garnishment of its property by Iowa. The

question is important to any private debtor of a state,

such as Caterpillar here, who may be obligated to both

the garnishment state and to its principal creditor state.

Caterpillar is required under Illinois law to withhold in-

come tax from its employees’ compensation, and becomes

personally liable for its failure to remit the tax. Ill.Rev.

Stat., 1987, ch. 120, 47-705. If the withheld tax is gar-

nished in Iowa, and if Illinois does not give full faith and

credit to the Iowa garnishment proceeding because the

seizure of its property offends its public policy, Caterpillar

could be liable in two different states for the same obliga-

tion in violation of its right to due process of law.

The final, and possibly most basic, misinterpretation of

Nevada v. Hall by the court below is its failure to dis-

tinguish the choice of law aspects of Hall concerning the

assumption of jurisdiction in the first instance from the

full faith and credit question in the enforcement of judg-

ments context—an issue squarely present in this case in

its present posture. Petitioner has found no precedent in

any state establishing that non-wage property of a state

is subject to execution. The question of whether a state

may seize the property of a sister state was not decided

1 The rule is well established that funds or credits of a public

body exercising governmental functions acquired by it in its gov-

ernmental capacity cannot be reached by execution or garnish-

ment served upon the debtor or depository of the public on

See, 89 A.L.R. 863 (1931); 6 Am.Jr.2d Attachment and Garnish-

ment, Section 78. This rule is followed today by the courts of vir-

(Footnote continued on following page)

=

in Hall, but must be decided here. The answer will

govern interstate relations at a fundamental level. The

court below construed Hall to permit such execution in

the face of overwhelming nationwide precedent to the con-

trary.

II.

THE SEIZURE OF ILLINOIS’ PROPERTY BY A SISTER

STATE SUBSTANTIALLY INTERFERES WITH ITS ABIL-

ITY TO PERFORM ITS SOVEREIGN GOVERNMENTAL

FUNCTIONS.

The power to tax is an incident of sovereignty of all

governments indispensable to their very existence. Union

Transit Co. v. Kentucky, 199 U.S. 194, 26 S.Ct. 36, 50

L.Ed. 150 (1905). At both the state and federal level, the

power to appropriate and expend revenue is the peculiar

province of the legislative branch of government. Spencer

v. Merchant, 125 U.S. 345, 8 S.Ct. 921, 31 L.Ed. 763

(1888); Thompson v. Allen, 115 U.S. 550, 6 S.Ct. 140, 29

L.Ed. 472 (1885). The Iowa Supreme Court’s decision

1 continued

tually every state. See, State v. Allred, 102 Ariz. 102, 425 P.2d

572 (Ariz. 1967); G & J Investment Corp. v. Florida Department

of Health and Rehab. Services, 429 S.2d 391 (Fla.App. 1983);

Holder v. Citizens & Southern Nat’l Bank, 222 S.E.2d 110 (Ga.

App. 1975); Weinstein, Bronfin & Heller v. LeBlanc, 249 La. 936,

192 So.2d 130 (La. 1966); Mayor and City Council of Baltimore

v. Comptroller of Treasury, 439 A.2d 1095 (Md. 1982); MacQuarrie

v. Balch, 285 N.E.2d 103 (S.Jud.Ct.Mass. 1972); Star v. Manufac-

turing Employees Fed. Cr. U. v. Araujo, 164 A.2d 309 (R.I. 1960);

Brewington v. Brewington, 387 S.W.2d 777 (Tenn. 1965); Delta

County Levee Imp. Dist. No. 2 v. Leonard, 516 S.W.2d 911 (Tex.),

cert. denied 96 S.Ct. 48 (1974).

States which deviate from the general rule do so only to the

extent of permittin —— of wages of state employees.

Druid City Hospital Bd. v. Epperson, 378 So.2d 696 (Ala. 1979);

Iowa Code Section 642.2; Hilton v. Amburgey, 96 S.E.2d 151 (Va.

1957). None of the states permits garnishment of non-wage state

property.

-_ =

changes this rule in two radical ways. First, it shifts from

the legislative to the judicial branch authority for deter-

mining how, to whom, and under what circumstances a

state’s property will be distributed. Second, it permits the

courts of one state to make that decision for the legisla-

ture of another state.

The judgment state will always have an interest in re-

covering for its own citizen, and cannot have an interest

in the governmental needs, policies, and obligations of the

foreign legislature, for the judgment state has no organic

authority or competence to distribute the property of a

sister state. Yet by garnishing Illinois income tax, the

Iowa judiciary in effect is placing itself in the role of a

de facto Illinois legislature, distributing Illinois tax reve-

nue to particular recipients in a particular manner.

Such action is beyond the power of a state court. The

absence of such power is grounded in the territorial limi-

tations of co-equal sovereigns in this federal union. See,

Pennoyer v. Neff, 95 U.S. 714, 722, 24 L.Ed. at 568 (1878).

While noting the gradual erosion of historical restrictions

on state power resulting solely from territorial limits of

the state establishing the power, this Court has not aban-

doned all territorial restrictions on the jurisdiction of state

courts. “Those restrictions are more than a guarantee of

immunity from inconvenient or distant litigation. They are

a consequence of territorial limitations on the power of

the respective states.”” World-Wide Volkswagen Corpora-

tion v. Woodson, 444 U.S. 286, 293, 100 S.Ct. 559, 565

(1980). This case presents a substantial federal question

concerning the territorial limits of the jurisdiction of the

state courts over sister states.

The precedent established by the lower court decision

here also inhibits Illinois’ ability to fulfill its governmen-

tal functions. The basic factual question in the trial of this

= =

cause was whether Illinois exercised in a negligent man-

ner its governmental obligation of removing snow from

a bridge connecting Iowa and Illinois pursuant to an inter-

state agreement. This question is distinctly different than |

that presented in Nevada v. Hall, supra. The question

there was whether a Nevada resident drove his car in

California in a negligent manner. By ruling that Califor- |

nia could assume jurisdiction over the State of Nevada, |

this Court presumably determined that it was appropriate

for California residents to judge the adequacy of the driv-

ing behavior of a citizen of another state, a determina-

tion foreshadowed, if not squarely reached, in Hess v.

Pawloski, 274 U.S. 352, 71 L.Ed. 1091 (1927).

Here, by contrast, the residents of one state determined

the adequacy of another state’s exercise of a purely gov-

ernmental function—removing snow from public roadways.

Upon what basis could they do so other than standards

of conduct demanded by Iowa citizens of their own gov-

ernment? But Iowa residents have no voice in deciding

how much Illinoisans should tax themselves in order to

buy road equipment or salt, and no voice in whether more

or less resources should be committed to other and com-

peting obligations of Illinois government. The government

of Illinois simply cannot fulfill its sovereign obligations

based upon standards of conduct established or deter-

mined by the residents of another state.

Ill.

A RULE PERMITTING THE SEIZURE OF A STATE’S

ASSETS WHEREVER A DEBT IS OWED THAT STATE

BY A DEBTOR OVER WHOM THE FORUM STATE MAY

ASSERT P® SONAL JURISDICTION POSES A SUBSTAN-

TIAL THREAT TO COOPERATIVE FEDERALISM.

Respondents seek to garnish Illinois income tax withheld

by Caterpillar Tractor Company on behalf of Illinois resi-

a

=

dents employed by Caterpillar in its facility located in

Iowa. Caterpillar is an Illinois corporation. The opinion

below sanctions this method of enforcing a judgment

against a sister state. The precedential effect of this rul-

ing is to permit the seizure of Illinois property in any

state in which a private party is obligated to Illinois.

Illinois property will at times and of necessity be located

outside its territorial borders. Illinois residents employed

in other states will, as here, be liable for income taxes.

Those taxes will be collected by both foreign and Illinois

domestic corporations. Illinois employs revenue agents

physically located in and residents of other states who

temporarily possess tax money owed to Illinois. Foreign

corporations doing business in Illinois owe various kinds

of income or franchise taxes to this state as a condition

precedent to conducting business in Illinois. Illinois’ state

militia has occasion to be assigned duties outside of Illi-

nois. Under the lower court’s precedent, in all of these

circumstances Illinois property is subject to attachment

or garnishment, irrespective of the relationship or impor-

tance of those resources to Illinois in fulfilling its obliga-

tions to its citizens.

The Hall majority suggested, without deciding, that

states could avoid such problems by refraining from de-

positing money in out-of-state banks. But as the above

examples demonstrate, Illinois does not control the loca-

tion of its assets when its property is temporarily possessed

by third parties. Yet under the lower court’s decision, any

property held by a third party is potentially subject to

attachment.

In addition to adversely affecting Illinois’ ability to con-

trol its own property and revenues, the lower court’s rule

hinders the ability of the several states to enter into co-

iin

operative agreements among themselves. Potential liability

created by such agreements (for example, interstate agree-

ments concerning disposal of hazardous waste) can be

staggering. If the enforcement of a judgment against any

party to such an agreement can occur in any state by

seizure of another state’s property located there, that

state’s inability to predict and allocate resources to pay

such judgments in a rational manner may discourage legis-

lative willingness to enter into the agreement in the first

instance. The lower court’s decision in this case poses pre-

cisely the kind of “substantial threat to cooperative fed-

eralism” about which the Hall Court was concerned.

Nevada v. Hall, 440 U.S. at 424, n. 24.

IV.

THIS COURT SHOULD RECONSIDER ITS DECISION IN

NEVADA v. HALL.

In Nevada v. Hall, supra, this Court, for the first time,

ruled that one state of the union could assume jurisdic-

tion in its own courts over another state. In his dissent,

Justice Rehnquist said that he “fearfed] the ultimate con-

sequences of that holding”. Nevada v. Hall, 440 U.S. at

427, 99 S.Ct. at 1191. The present action vividly discloses

the consequences of the Hall decision, and the reasons

why this Court should reconsider that decision.

Noting the “severe strains’ the Hall decision could

place on cooperative federalism, the dissent anticipated

many of the problems presented by this case in its pres-

ent posture.

States in all likelihood will retaliate against one

another 7 abolishing the “sovereign im-

munity”’ e. States’ legal officers will re-

quired to defend suits in all other States. States

probably will decide to modify their tax collection and

==

revenue systems in order to avoid the collection of

judgments. . . . The Court’s decision, thus, may force

radical changes in the way States do business with

one another, and it imposes, as well, financial and ad-

ministrative burdens on the States themselves.

Nevada v. Hall, 440 U.S. at 429, 430, 99 S.Ct. at 1192,

1193.

These concerns are present here. The Illinois Attorney

General was required to defend this action in the lowa

courts for eight years. The financial burdens imposed on

Illinois as a result of the seizure of its income are mani-

fest. Illinois may indeed be required to change its tax col-

lection system to protect its revenue base.

Moreover, the lower court’s ruling that collection may

be secured by garnishment of state property held by third

parties effectively precludes a debtor-state such as Illinois

from protecting that property. That is, while a state may

attempt to protect itself by maintaining the situs of its

property, where possible, within its borders, it cannot in

all instances determine, or even influence, the situs of its

property when possessed by third parties.

As to the constitutional source of the sovereign immuni-

ty doctrine, the dissent found it “in a guarantee that is

implied as an essential component of federalism.’’ Nevada

v. Hall, 440 U.S. at 430, 99 S.Ct. at 1193. Illinois sub-

mits that the structure of the Constitution does not per-

mit one state to garnish the tax revenue of another, ir-

respective of the policies of either state. Such an asser-

tion of extra-territorial power by one state against another

is inconsistent with the very notion of a federal union.

Because the enforcement problems presented here are an

inevitable result of this Court’s ruling in Nevada v. Hall,

that decision should be reconsidered.

af

CONCLUSION

For these reasons, a Writ of Certiorari should issue to

review the decision and order of the Supreme Court of

the State of lowa.

Respectfully submitted,

NEIL F. HARTIGAN

Attorney General, State of Illinois

ROBERT J. RUIZ

Solicitor General, State of Illinois

ROBERT E. WAGNER *

Special Assistant Attorney General

1300 South Eighth Street, Suite 1

P.O. Box 1858

Springfield, Illinois 62705

(217) 528-5604

Attorneys for Petitioner

* Counsel of Record

A-1

APPENDIX A

[FILED APRIL 13, 1988]

IN THE SUPREME COURT OF IOWA

92

87-446

RONALD STRUEBIN, et al.,

Appellees,

VS.

THE STATE OF ILLINOIS,

Appellant.

Appeal from the Iowa District Court for Scott County,

Margaret S. Briles, Judge.

Judgment debtor appeals from decision granting plain-

tiffs’ petition for enforcement of judgment by garnishment.

AFFIRMED.

Neil F. Hartigan, Attorney General of Illinois, and

Robert E. Wagner, Special Assistant Attorney General

of Illinois, for appellant.

Rand 8S. Wonio, Lane & Waterman, Davenport, for

appellees.

Considered by Larson, P.J., and Schultz, Carter,

Neuman, and Snell, JJ.

A-2

SCHULTZ, J.

The issue presented by this appeal is whether judg-

ments entered by an Iowa District Court against the

State of Illinois may be enforced by garnishment of tax

revenues owed to Illinois by a corporation located in Iowa.

We hold that under the facts presented, the judgments

may be so enforced.

This case arises from a 1978 automobile accident which

resulted in two wrongful death judgments against the

State of Illinois for its negligence in maintaining the

Interstate-80 bridge over the Mississippi River. Although

the accident occurred in Iowa, Illinois had agreed to main-

tain that portion of the bridge under a contract between

the states.

This case has been before us twice already. In Struebin

v. State, 322 N.W.2d 84, 85-87 (Iowa), cert. denied, 459

U.S. 1087, 103 S. Ct. 570, 74 L. Ed. 2d 933 (1982) (Strue-

bin I), we held that constitutional principles did not bar

an action against Illinois in our courts and refused to

grant immunity as a matter of comity. The case went to

trial and judgments totaling $118,800 were entered against

Illinois. In Struebin v. Illinois, 383 N.W.2d 516 (lowa

1986) (Struebin II), we addressed the issue of how those

judgments should be enforced. We held that as a matter

of comity we would not allow garnishment in Iowa at that

time because the plaintiffs had not sought to enforce their

judgments in Illinois. Jd. at 520. We also stated in Strue-

bin II, that our decision would not prejudice plaintiffs’

return to our courts if they were unable to enforce the

judgments in Illinois. Jd.

After Struebin II, plaintiffs filed complaints to enforce

their judgments in the Illinois Court of Claims, that

state’s forum for claims against it. Illinois moved to

A-3

dismiss the complaints on grounds that they were untime-

ly. After five months passed with n° action on the mo-

tions, plaintiffs filed a second petition for enforcement of

their judgments in the Iowa District Court for Scott

County. The district court granted the petition and ruled

that the judgments could be enforced against the State

of Illinois in the same manner as if it were a private

nongovernmental litigant. Illinois appealed from this rul-

ing. While the appeal was pending, the Illinois Court of

Claims granted Illinois’ motions to dismiss on grounds that

plaintiffs’ actions were not timely. We granted a limited

remand to allow the district court to amend its findings

of fact to include this ruling.

On this appeal, Illinois contends that the district court

erred in ruling that plaintiffs could enforce their judg-

ments by garnishment of tax revenues owed by an Illinois

corporation located in Iowa. Initially, we reject plaintiffs’

contention that this issue was decided in Struebin II.

While it is true that issues decided on a prior appeal are

the law of the case and may not be reconsidered on a

subsequent appeal, see Lawson v. Fordyce, 237 Iowa 28,

32, 21 N.W.2d 69, 73 (1945), we have not yet addressed

this issue. In Struebin II we stated:

[W]e will not open our courts to consider plaintiffs’

proceedings to collect the judgments by garnishment

in Iowa until such time as they can allege and prove

they were unable to secure payment of these judg-

ments in the Illinois courts. This holding, of course,

is without prejudice to plaintiffs’ future return to the

Iowa court system to secure payment of their judg-

ments upon the pleading and proof above specified.

383 N.W.2d at 520. Although the arguments made on this

appeal are virtually identical to arguments made in Strue-

bin II, our disposition of the prior case made it unneces-

A-4

sary to decide the present issue. Therefore, the question

is properly before us. To analyze the dispute we will first

discuss whether Illinois’ status as a sovereign state pre-

cludes the garnishment and then discuss whether we

should extend such immunity as a matter of comity.

I. Immunity. Illinois contends that coequal sovereigns

cannot seize one another’s property. It maintains that its

tax revenues are immune from execution or garnishment

by the Iowa courts. We believe that the United States

Supreme Court has resolved this issue in Nevada v. Hall,

440 U.S. 410, 99 S. Ct. 1182, 59 L. Ed. 2d 416 (1979).

In Hall, the Court held that the State of Nevada was

not immune from suit in California for injuries caused by

a state employee’s negligence within the State of Califor-

nia. Id. at 426, 99 S. Ct. at 1191, 59 L. Ed. 2d at 428

(nothing in federal constitution requires California to grant

Nevada immunity from negligence claims). The Court traced

the history of the sovereign immunity doctrine and con-

cluded that “it affords no support for a claim of immunity

in another sovereign’s courts.” Id. at 416, 99 S. Ct. at

1186, 59 L. Ed. 2d at 422. It further reasoned that such

immunity would: implicate concerns about the forum

state’s own sovereignty. Id. The Court also rejected argu-

ments that the United States Constitution provided for

such immunity in either article III, the eleventh amend-

ment, or the full faith and credit clause. Jd. at 421-24,

99 S. Ct. at 1188-90, 59 L. Ed. 2d at 425-27. Finally, the

Court rejected a “penumbra” argument that the constitu-

tion implicitly establishes a union in which states must

respect each other’s sovereignty by extending immunity.

Id. at 424-25, 99 S. Ct. at 1190, 59 L. Ed. 2d at 427-28.

The import of the Hall case to this appeal is that Illi-

nois’ claim of immunity must fail. We are urged to make

a distinction between jurisdiction for purposes of obtain-

A-5

ing a judgment and jurisdiction for purposes of enforc-

ing it. However, it is clear that such a distinction was

not intended by the Court in Hall. While the majority

did not expressly reject this distinction, the dissenters

assumed that under the majority rule judgments against

sister states could be enforced. Justice Blackmun makes

the following observation:

States probably will decide to modify their tax-col-

lection and revenue systems in order to avoid the

collection of judgments. In this very case, for ex-

ample, Nevada evidently maintains cash balances in

California banks to facilitate the collection of sales

taxes from California corporations doing business in

Nevada. Under the Court’s decision, Nevada will

have strong incentive to withdraw those balances and

place them in Nevada banks so as to insulate itself

from California judgments.

Id. at 429, 99 S. Ct. at 1192-93, 59 L. Ed. 2d at 430-31

(Blackmun, J., dissenting) (citation to pleadings omitted);

see also id. at 443, 99 S. Ct. at 1199-200, 59 L. Ed. 2d

at 439 (Rehnquist, J., dissenting) (decision will induce

states to isolate assets from foreign judgments).

Illinois argues that Hall should not be applied to allow

garnishment in this case because to do so would impose

a substantial threat to our constitutional system of coop-

erative federalism. In so arguing, Illinois cites to a foot-

note in the Court’s opinion where it stated that Califor-

nia’s exercise of jurisdiction imposed no such threat. Id.

at 424 n.24, 99 S. Ct. at 1190 n.24, 59 L. Ed. 2d at 427

n.24. We do not see a substantial threat to cooperative

federalism in our decision. An example of where such a

threat would exist is Guarini v. New York, 215 N.J.

Super. 426, 521 A.2d 1362 (Ch. Div.), aff'd, 215 N.J. Super.

293, 521 A.2d 1294 (App. Div. 1986), cert. denied, 108 S.

Ct. 71 (1987), where the language in this footnote was

A-6

used to distinguish Hall. In Guarini, citizens of New

Jersey were challenging the authority of New York to

exercise authority over two islands on the New Jersey

side of the Hudson River. Jd. at 429, 521 A.2d at 1364.

New York had been granted this authority through an

interstate compact with New Jersey. The court saw the

action as a challenge to the governmental authority of

New York and held that permitting the action would “vio-

late principles of cooperative federalism.” Id. at 438, 521

A.2d at 1368.

In this case the governmental authority of Illinois is not

being litigated. We are not addressing the issue of whether

Illinois can deny plaintiffs relief in its own court of claims.

Rather, we are allowing our own courts to enforce a judg-

ment entered in this state. The only potential threat to

cooperative federalism in this case is the claim that Iowa

cannot enforce its own judgments.

Illinois makes two other arguments in support of its im-

munity claim. We find neither one persuasive. Allowing

garnishment of tax revenues is not an interference with

Illinois’ sovereign power to levy and distribute taxes. The

power to tax has already been exercised and the funds

garnished were already designated as tax revenue owed

to Illinois. Execution and garnishment requires a specific

identification of the judgment debtor’s assets. Here, the

particular assets happen to be tax revenues set aside but

not yet paid. There is no interference with Illinois sov-

ereign power to tax.

We also reject the argument that garnishment of the

Illinois corporation violates due process by potentially sub-

jecting it to double liability for the tax revenues. lowa

Code section 642.10 (1985), expressly provides that the cor-

poration is exonerated from its liability to Illinois to the

A-7

extent it must pay under the garnishment. If Illinois seeks

to recover this money from the corporation, its courts will

be obligated to give full faith and credit to the Iowa dis-

charge. See Chicago, R.I. & Pac. Ry. v. Sturm, 174 U.S.

710, 718, 19 S. Ct. 797, 800, 43 L. Ed. 1144, 1147 (1899).

In Sturm, the Court held that a garnishee’s discharge

under Iowa law obligated a Kansas court to give the dis-

charge the same effect it would have had in Iowa. Jd.

Illinois’ own supreme court has recognized this principle

as well. See Taylor v. Taylor, 44 Ill. 2d 139, 142-43, 254

N.E.2d 445, 447 (1969) (citing Sturm). Under these cases,

double liability is not a risk.

In summary, Illinois has no right to immunity from en-

forcement of the judgments against it in this state.

II. Comity. While we are not required to grant im-

munity from garnishment to Illinois, we are free to do

so as a matter of comity. In fact, we have previously re-

frained from exercising this jurisdiction to allow Illinois

the chance to provide for enforcement in its own court

of claim. Struebin II, 383 N.W.2d at 520. However, IIli-

nois refused to allow enforcement by dismissing the ac-

tions as untimely. Under the facts of this case we will

not, as a matter of comity, give effect to Illinois’ refusal

to enforce the judgment.

In Strwebin I, we addressed the issue of whether a

statutory limit on damages provided by Illinois law should

apply to this dispute. We stated:

Iowa’s interest in full compensation outweighs Illinois’

interest in extending its statutory limitation on re-

covery to its Iowa torts. Iowa’s policy is a legitimate

attribute of its own sovereignty.

322 N.W.2d at 87. This time around, Illinois would have

us abandon our interest in full compensation for accident

A-8

victims in this state, in favor of its own interest in

avoiding the untimely enforcement of judgments against

it.1 While Illinois is free to apply its own statute of limita-

tions in its court of claims we conclude that we should

not as a matter of comity apply it in our courts.

III. Conclusion. We conclude that the plaintiffs are

free to proceed in accordance with the trial court ruling

permitting them to garnish funds owed to the State of

Illinois that are located within this state.

Plaintiffs have asked us to impose sanctions against the

State of Illinois for taking a frivolous appeal. See lowa

R. Civ. P. 80a). We do not believe sanctions are appro-

priate under these circumstances. |

AFFIRMED.

1 There is no dispute that the action to enforce is timely in Iowa.

B-1

APPENDIX B

[FILED JULY 21, 1982]

IN THE SUPREME COURT OF IOWA

250

66836

RONALD STRUEBIN, Ancillary Administrator of the Estate

of Joel F. Struebin, deceased; KATHLEEN S. POTTER, An-

cillary Administrator of the Estate of James K. Potter; and

DAVENPORT BANK AND TRUST, Ancillary Administrator

of both Estates,

Appellees,

VS.

STATE OF IOWA,

Appellee, and

STATE OF ILLINOIS,

Appellant.

Appeal from Scott District Court - Margaret S. Briles,

Judge.

Appeal with permission by the State of Illinois from

order overruling its special appearance in a tort suit.

AFFIRMED.

Tyrone C. Fahner, Attorney General, and A. L. Zimmer,

Assistant Attorney General, State of Illinois for appellant.

B-2

Rand S. Wonio of Lane and Waterman, Davenport, for

appellees Struebin, Potter, and Davenport Bank and Trust.

Thomas J. Miller, Attorney General, and Robert J.

Huber, Assistant Attorney General, for appellee State of

lowa.

Considered en banc.

McCORMICK, J.

The questions here are whether principles of constitu-

tional law or comity required the trial court to sustain

the special appearance of defendant State of Illinois in

this wrongful death tort action. We granted interlocutory

appeal of the court’s order overruling the special appear-

ance in order to decide these issues of first impression

in Iowa. Because we find that the principles relied on by

Illinois do not bar the action, we affirm the trial court.

Plaintiffs are the ancillary administrators of the estates

of Joel F. Struebin and James K. Potter. They allege that

the decedents were killed when a jeep they were occu-

pying plummeted into the Mississippi River after skidding

over a snow embankment covering a railing on the Iowa

side of the Interstate 80 bridge near LeClaire. A contract

between Iowa and Illinois required Illinois to maintain the

bridge on behalf of both states. Iowa had a similar duty

on the Interstate 74 bridge. Plaintiffs allege that Illinois

is liable for the deaths on theories of negligence and nui-

sance based on the conditions that caused the accident.

lowa is also a defendant in the case.

In appearing specially, Illinois alleged that sovereign im-

munity precluded suit against it in an Iowa court. It also

cited an Illinois statute requiring tort claims against the

B-3

state to be brought in the Illinois Court of Claims and

imposing a $100,000 per person limit on recovery. See IIl.

Rev. Stat. ch. 37, §§ 439.8 and 439.23 (1979). When the

trial court overruled the special appearance, Illinois ap-

plied and obtained permission for the present appeal. We

are called upon to decide only the jurisdictional dispute.

I. The constitutional questions. For the first two hun-

dred years of this nation’s existence it was generally

assumed that the United States Constitution would not

aliow one state to be sued in the courts of another state.

The assumption was based on the theory that this immu-

nity was an attribute of state sovereignty that was pre-

served in the Constitution. See Paulus v. South Dakota,

58 N.D. 643, 227 N.W. 52 (1929); Nathan v. Virginia, 1

Dall. 77 (C.P. Philadelphia County Ct. 1781). In 1979, how-

ever, the Supreme Court held in Nevada v. Hall, 440 US.

410, 99 S. Ct. 1182, 59 L. Ed. 2d 416 (1979), that the as-

sumption was unwarranted.

Hall was a negligence action brought in a California

state court against the State of Nevada by persons who

were severely injured in a collision on a California high-

way with an employee of Nevada acting within the scope

of his employment. Although a Nevada statute waived

sovereign immunity against Nevada tort claims, it limited

recovery to $25,000 per claimant. The California court re-

jected Nevada’s assertions that it was not amendable to

suit in California and that, in any event, California was

required to give full faith and credit to the Nevada statute

limiting recovery. After the injured parties recovered a

substantial judgment, the court of appeals affirmed and

the California Supreme Court denied review. Nevada then

successfully sought certiorari review in the U. S. Supreme

Court. That Court found nothing in the understanding of

the framers, the structure of the Constitution, article III,

B-4

the eleventh amendment, or the full faith and credit clause

that required California to accord Nevada immunity from

suit in California or to apply the Nevada statute.

As in Hall, it is argued in this case that the full faith

and credit clause is a bar to suit. That provision requires

full faith and credit “in each state to the public Acts,

Records, and judicial Proceedings of every other State.”

U.S. Const. Art. IV, § 1. In Hall, the Court held that

this clause does not require one state to apply another

state’s law in violation of its own legitimate public policy.

440 U.S. at 422, 99 S. Ct. at 1189, 59 L. Ed. 2d at 426.

The Court characterized California’s policy interest as “full

protection of those who are injured on its highways through

the negligence of both residents and nonresidents.” /d.

at 424, 99 S. Ct. at 1190, 59 L. Ed. 2d at 427.

Iowa has a similar policy, reflected in section 321.498,

The Code, extending personal jurisdiction to nonresident

motorists. The policy is also manifested in chapter 25A,

which permits suits against the state for negligent main-

tenance of highways. See Hunt v. State, 252 N.W.2d 715,

717 (lowa 1977). lowa law permits full compensation.

Illinois seeks to distinguish the present case from Hall

by pointing out that its duty to maintain the interstate

bridge arose from a contract that it entered in its sovereign

capacity in a spirit of cooperative federalism. It asserts

that footnote 24 in Hall limits the holding to its unique

facts, leaving intact an allegedly preexisting constitutional

bar to state court jurisdiction over sister states where

liability is alleged based on the sister state’s exercise of

a governmental function. Footnote 24 provides:

California’s exercise of jurisdiction in this case

poses no substantial threat to our constitutional sys-

tem of cooperative federalism. Suits involving traf-

B-5

fic accidents occurring outside of Nevada could hardly

interfere with Nevada’s capacity to fulfill its own sov-

ereign responsibilities. We have no occasion, in this

case, to consider whether different state policies,

either of California or Nevada, might require a dif-

ferent analysis or a different result.

We see several flaws in Illinois’ position. First, the Hall

case enunciates for the first time an authoritative general

principle that the Constitution does not mandate interstate

comity. It demonstrates that the prior contrary assump-

tion was unwarranted. The case does not merely carve

out an exception to a general principle of immunity. Sec-

ond, the footnote points out that the Hall facts did not

threaten Nevada’s sovereign prerogatives and responsibil-

ities. It does not necessarily limit the holding to the Hall

facts. Finally, the footnote merely reserves the question

of a different analysis or result where different state

policies are involved. It does not suggest that an exce>-

tion must be made where, as here, a threat to interstate

cooperation is asserted. We do not think that allowing Illi-

nois to be sued in Iowa courts for torts committed in Iowa

constitutes a “substantial threat to our constitutional sys-

tem of cooperative federalism.”

Illinois does not and could not claim a sovereign right

to be negligent in carrying out its contractual responsi-

bilities in maintaining the Interstate 80 bridge. The fact

that it accepted the responsibilities as a sovereign does

not make them any less obligatory. Moreover the only

substantive Illinois policy involved is reflected in its stat-

ute that would limit recovery if the action were brought

in Illinois. This is the same kind of policy as was urged by

Nevada in Hall. Under Hall this policy is not of sufficient

magnitude to override lowa’s legitimate interest in giv-

ing full access and protection in lowa courts to those in-

B-6

jured on Iowa highways. No substantial harm to Illinois’

sovereignty appears. Illinois is more impressed with the

views of the dissenting justices and critics of Hall than

with the majority holding. We believe, however, the ma-

jority holding plainly controls here.

Other courts have uniformly reached the same conclu-

sion in various contexts, some of which are analogous to

this case. See Daughtry v. Arlington County, Virginia,

490 F. Supp. 307 (D.D.C. 1980) (District of Columbia courts

not required to recognize sovereign immunity of Virginia

in suit based on alleged misconduct of police exercising

Virginia police powers); Peterson v. Texas, 635 P.2d 241

(Colo. Ct. App. 1981) (Texas not immune from Colorado

suit based on alleged tort of youth participating in Colo-

rado in a Texas juvenile rehabilitation program); The Carl-

son Corporation v. University of Vermont, Mass Adv.

Sheets (1980) 659 (Mass. March 6, 1980) (sovereign immuni-

ty of Vermont not a bar to breach of contract suit against

Vermont state university in Massachusetts); Wendt v.

County of Osceloa, Iowa, 289 N.W.2d 67 (Minn. 1979)

(lowa political subdivision not immune from suit in Min-

nesota court for alleged negligent failure to post adequate

road signs and barricades); Ehrlich-Bober & Co. v. Univer-

sity of Houston, 49 N.Y.2d 574, 427 N.Y.S.2d 604, 404

N.E.2d 726 (1980) (another university contract case).

We conclude that the trial court was correct in over-

ruling Illinois’ special appearance on the full faith and

credit ground.

Illinois also alleges the trial court ruling denies it equal

protection of the law under U.S. Const. Amend. XIV. This

occurs, it argues, because Iowa could not be sued in its

own courts under the tort claims statute without prior

exhaustion of administrative remedies. See § 25A.5; Jones

aos

dy Tantra Nata dete TNR, Mt a I AN RH el Hs TS,

SaneD StS statics

B-7

v. Bowers, 256 N.W.2d 233 (lowa 1977). Illinois asserts

it is treated unequally because it does not receive the

benefit of the exhaustion requirement. Passing the issue

whether error was presented on this contention, we hold

that it is without merit. A state is not a “person” for

purposes of fourteenth amendment protection. Pennsyl-

vania v. New Jersey, 426 U.S. 660, 96 S. Ct. 2333, 49

L. Ed. 2d 124 (1976).

II. The comity question. Iowa is nevertheless free to

close its courts to suits against a sister state as a mat-

ter of comity rather than constitutional command. See

Hall, 440 U.S. at 426-27, 99 S. Ct. at 1190-91, 59 L. Ed.

2d at 429. Comity is a doctrine under which courts will

give effect to the law of another state as a matter of def-

erence and respect rather than of duty. Jacobsen v. Saner,

247 lowa 191, 1938, 72 N.W.2d 900, 901 (1955).

Illinois alleges that Iowa and Illinois have a similar view

toward —— immunity which should encourage Iowa

to respect fits desire to have litigation against it brought

only in the Illinois Court of Claims, as provided in its stat-

ute. Assuming the states do have a common view of the

doctrine, no basis appears for believing Illinois’ sovereign-

ty will not be sufficiently protected in Iowa courts. See

Comment, Nevada v. Hall: Sovereign Immunity, Federal-

ism and Compromising Relations Between Sister States,

1980 Utah L. Rev. 395, 410. Illinois acknowledges its stat-

ute permits an action against the state for negligence in

road maintenance.

The only material difference asserted by Illinois is its

statutory limitation on recovery. The Illinois policy limit-

ing the amount of recovery against the state for torts in

Illinois contrasts with the Iowa policy permitting full com-

pensation to those injured on its highways by the negli-

B-8

gence of nonresidents as well as residents. We believe

Iowa’s interest in full compensation outweighs Illinois’ in-

terest in extending its statutory limitation on recovery

to its Iowa torts. Iowa’s policy is a legitimate attribute

of its own sovereignty. Therefore we conclude that the

trial court was also correct in overruling the special ap-

pearance on the comity ground.

AFFIRMED.

C-1

APPENDIX C

[FILED MaARcH 19, 1986]

IN THE SUPREME COURT OF IOWA

1

84-1180

RONALD STRUEBIN, Ancillary Administrator of the Estate

of Joel F. Struebin; KATHLEEN S. POTTER, Ancillary Ad-

ministrator of the Estate of JAMES K. POTTER; and

DAVENPORT BANK and TRUST, Ancillary Administrator of

both Estates,

Appellants,

VS.

THE STATE OF ILLINOIS and

CATERPILLAR TRACTOR COMPANY,

Appellees.

Appeal from the Iowa District Court for Scott County,

Margaret Briles, Judge.

Plaintiffs appeal from trial court’s order sustaining a

special appearance by defendant Illinois in a garnishment

proceeding to enforce a prior judgment. AFFIRMED.

Rand S. Wonio of Lane and Waterman, Davenport, for

appellants.

Robert E. Wagner, Illinois Assistant Attorney General,

Springfield, Illinois, for appellee State of Illinois.

C-2

B. Douglas Stephens, Jr., and Mark A. Tarnow of Van

Der Kamp, Cleaver & Stojan P.C., Rock Island, Illinois,

for appellee Caterpillar Tractor Company.

Considered by Reynoldson, C.J., and Harris, McGiverin,

Schultz, and Wolle, JJ.

REYNOLDSON, C.J.

This appeal involves an unfortunate sequela flowing from

our decision in Struebin v. Illinois, 322 N.W.2d 84 (Iowa)

(Struebin I), cert. denied, 459 U.S. 1087 (1982). In that

interlocutory appeal we held the full faith and credit

clause of the United States Constitution did not prohibit

suit against the State of Illinois in an Iowa court for death

damages allegedly caused by its negligence in maintain-

ing the Iowa portion of an interstate bridge pursuant to

contract between the two states. Jd. at 86-87.

The case, involving two deaths, was returned to district

court where it was tried to a jury. Plaintiffs’ decedents

were found seventy percent at fault and defendant Illinois

was found thirty percent at fault. Judgments on the ver-

dicts were then entered against Illinois in the amounts

of $57,070.59 and $61,729.41.

When these judgments were not paid, plaintiffs caused

general writ of execution to issue to the Scott County

sheriff with a direction to serve notice of garnishment,

with interrogatories, on Caterpillar Tractor Company.

That Illinois corporation’s Iowa plant employs a number

of Illinois residents, and Illinois law requires it to withhold

and remit that state’s income tax from each Illinois em-

ployee.

The above information may be garnered from Cater-

pillar’s answers to the garnishment interrogatories, which

also acknowledged that “{aJs of the date of service of the

LE ae ee eT aT

a ee

nancies ties

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Notice of Garnishment, March 13, 1984, Caterpillar Trac-

tor Co. was obligated to pay the Illinois Department of

Revenue taxes deducted and withheld [from employees

residing in Illinois] in the amount of $15,000.00.”” At the

same time, Caterpillar claimed the described funds were

exempt from garnishment for various reasons.

Plaintiffs responded with “Controverting Answers to

Garnishment Interrogatories.” A copy of this pleading, as

well as the trial notice of the proceedings, were personally

served on the Illinois Attorney General, in Illinois, more

than ten days prior to trial. See Iowa Code § 642.14 (1983).

The latter responded with a special appearance attack-

ing trial court’s jurisdiction on several grounds. The court

was persuaded the property sought to be seized was used

for a public purpose and “execution will not run against

a sovereign state.” The court then sustained the special

appearance and dismissed the garnishment proceeding.

Plaintiffs’ timely appeal brings this issue of first impres-

sion before us for resolution.

I. Illinois first asserts trial court was without subject

matter jurisdiction over it in the garnishment proceeding,

because no proper service was had on that state. Illinois

relies on two of our early decisions, Wise v. Rothschild

Brothers, 67 Iowa 84, 24 N.W. 603 (1885), and Williams

v. Williams, 61 Iowa 612, 16 N.W. 718 (1883), which in-

deed state that in absence of notice on the principal defen-

dant trial court is without “jurisdiction” to render judg-

ment against the garnishee. Wise, 67 Iowa at 86, 24 N.W.

2d at 604; Williams, 61 Iowa at 615, 16 N.W. at 720.

Subsequent opinions of this court, however, made clear

that garnishment actions in this jurisdiction, involving a

nonresident, are in rem, and that trial court has subject

matter jurisdiction when the fund, debt, or other obliga-

tion of the nonresident, in the hands of the garnishee, is

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properly attached. See, e.g., Scott v. Wamsley, 215 Iowa

1409, 1412, 245 N.W. 214, 215 (1932); Leech v. Brown, 172

Iowa 182, 184, 154 N.W. 440, 441 (1915).

[Tyhe notice [to the principal defendant] is not jurisdic-

tional in the sense that the proceedings are void, or

nugatory until such notice is given. The garnishee

cannot ordinarily obtain a discharge because no notice

is given to the principal defendant. He may insist,

however, that no judgment can properly be rendered

against him until such notice is given.

J. J. Smith Lumber Co. v. Scott County Garbage Reduc-

ing & Fuel Co., 149 lowa 272, 276, 128 N.W. 389, 391

(1910). The provision for notice on the principal defendant

was not added to our statutory law until 1880, see 1880

Iowa Acts ch. 58.1 Its purpose is to permit that party to

intervene and protect his or her rights, and also is in-

tended to protect the garnishee. Hubbard v. Des Moines

Independent Community School District, 323 N.W.2d 238,

241 (lowa 1982).

Although modern terminology suggests a subclassifica-

tion of this proceeding as quasi in rem, see Mullenger v.

Clause, 178 N.W.2d 420, 425 (Iowa 1970); Hansen v. Haagen-

sen, 178 N.W.2d 325, 326 (lowa 1970), cert. denied, 401

U.S. 912 (1971); Restatement (Second) of Judgments §§ 6,

8 (1982), the basic requirement remains that the principal

defendant need only be provided a notice that is reason-

ably calculated to give the defendant knowledge of the

proceeding and an opportunity to be heard. Mullenger,

1 Iowa Code § 642-14 (1983) provides:

Judgment — the nishee shall not be entered until

the principal defendant shall have had ten days’ notice of the

garnishment proceedings, to be served in the same manner

as original notices.

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178 N.W.2d at 424-25. Further, the underlying contract

relating to the maintenance of the interstate bridge, the

tort committed in Iowa, and the resulting Iowa judgments

are more than adequate to satisfy the minimum contacts

standard of Shaffer v. Heitner, 433 U.S. 186, 216, 97 S.

Ct. 2569, 2586, 53 L. Ed. 2d 683, 705 (1977).

Plaintiffs here do not seek in personam judgments against

Illinois; that was the result of Struebin I. We thus are

not confronted with the jurisdictional principles required

for personal judgments against defendants that we have

applied in the analysis of cases like Martin v. Ju-Li Corp.,

332 N.W.2d 871, 874 (Iowa 1983), relied on by Illinois.

Iowa Code section 642.14 (1983) simply provides that the

principal defendant must be given notice before judgment

could be entered against the garnishee, and further pro-

vides it shall be served “in the same manner as original

notices.” We think by this language the legislature sought

only to secure a type of service reasonably designed to

insure that the principal defendant had actual knowledge

of the garnishment proceeding. See Propper v. Clark, 337

U.S. 472, 488, 69 S. Ct. 1333, 1342, 93 L. Ed. 1480, 1494

(1949).

Here the necessary papers were served personally on

the Illinois Attorney General in the same manner as an

original notice, and proper return was filed in the garnish-

ment proceeding. Illinois, however, while conceding its at-

torney general is its chief legal officer, contends he “is

not authorized by the Illinois Constitution nor statutes

to accept service of process on behalf of the State of IIli-

nois.” Illinois further relies on Beauchamp v. Iowa Dis-

trict Court, 328 N.W.2d 527 (Iowa 1983), for the proposi-

tion that service upon an attorney does not give a district

court personal jurisdiction over a defendant. Jd. at 528.

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Beauchamp, however, involved service on a party’s attor-

ney in a collateral contempt proceeding. Jd. That case is

not controlling when, as here, the nonresident is a public

body that operates only through its officers.

Notably, Illinois fails to point out who in that state

should have received notice of the garnishment proceed-

ing. The attorney general clearly is one of the officers

in the executive branch. Ill. Const. art. V, § 1. The Illi-

nois Constitution provides that the attorney general “shall

be the legal officer of the State.” Ill. Const. art. V, § 15

(emphasis added). See also Gust K. Newberg, Inc. v. Illi-

nois State Toll Highway Authority, 98 Ill. 2d 58, 66, 456

N.E.2d 50, 55 (1983). The Illinois Attorney General is the

proper officer to receive a notice of intent to commence

an action against Illinois in the state’s court of claims.

See Ill. Ann. Stat. ch. 37, § 439.22-1 (Smith-Hurd Supp.

1985).

Service on the Illinois Attorney General obviously ap-

prised that state of the pending garnishment proceeding.

The statutory purpose of lowa Code section 642.14 was

fulfilled. We find trial court has jurisdiction to proceed

with the garnishment action. We thus are required to con-

sider another contention made by Illinois which we con-

sider controlling at this time.

II. We noted in Struebin I that Iowa remains free to

close its courts to suits against a sister state as a mat-

ter of comity, even though such policy, under Nevada v.

Hall, 440 U.S. 410, 99 S. Ct. 1182, 59 L. Ed. 2d 416

(1979), is aot dictated by constitutional command. 322

N.W.2d at 87. Though the present proceeding is not a

direct action against Illinois, it asserts that as a matter

of comity and cooperative federalism Iowa should stay its

hand in enforcing plaintiffs’ judgment against the Illinois

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tax revenues that are the subject matter of this dispute.

The Illinois Assistant Attorney General, in his recorded

argument on the submission of this appeal, asserted IIli-

nois is not flaunting the lowa judgments recovered in an

Iowa court trial arising out of the tort committed by IIli-

nois in Iowa. Rather, he pointed out that Illinois is not

unwilling to pay the judgment, and stated the vehicle and

mechanism provided for such payment under Illinois law

is through the Illinois Court of Claims.

Plaintiffs concede they have not attempted to enforce

the lowa judgment in Illinois. “‘A judgment entered in

one State must be respected in another [under the full

faith and credit clause of the Constitution] provided that

the first State has jurisdiction over the parties and the

subject matter.” Hall, 440 U.S. at 421, 99 S. Ct. at 1188,

59 L. Ed. 2d at 425; see National Equipment Rental, Ltd.

v. Estherville Ford, Inc., 313 N.W.2d 588, 541 (lowa 1981).

The general rule is “that a judgment is entitled to full

faith and credit—even as to questions of jurisdiction—when

the second court’s inquiry discloses that those questions

have been fully and fairly litigated and finally decided in

the court which rendered the original judgment.” Durfee

v. Duke, 375 U.S. 106, 111, 84 S. Ct. 242, 245, 11 L. Ed.

2d 186, 191 (1963).

In Struebin I, we held Iowa courts had jurisdiction over

Illinois when that state committed a tort within Iowa,

relying on Nevada v. Hall, 322 N.W.2d at 86-87. Other

state courts confronted with similar circumstances have

interpreted Hall accordingly. See, e.g., Peterson v. Texas,

635 P.2d 241, 243 (Colo. App. 1981); Wendt v. County of

Osceola, Iowa, 289 N.W.2d 67, 69 (Minn. 1979); Ehrlich-

Bober & Co. v. University of Houston, 49 N.Y.2d 574,

579-83, 404 N.E.2d 726, 729-31, 427 N.Y.S.2d 604, 607-09

(1980); Newberry v. Georgia Department of Industry &

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Trade, 283 S.C. 312, ___, 322 S.E.2d 212, 213-14 (S.C.

App. 1984), overruled on other grounds, McCall v. Batson,

__._.._&C. : , 329 S.E.2d 741, 745-46 (1985). Even

Illinois has given some indication that the doctrine of

sovereign immunity, while protecting a state from suits

in its own courts, may no longer protect that state from

suit in a sister state. See City of Shelbyville v. Shelbyville

Restorium, Inc., 96 Ill. 2d 457, 461, 451 N.E.2d 874, 876

(1983). The question of jurisdiction over Illinois to enter

the original judgment was fully and fairly litigated in

Struebin I. Moreover, the merits of the cause were fully

litigated in the subsequent trial that resulted in the judg-

ments. Under Durfee, we have no reason to assume Illi-

nois would not honor the Iowa judgments if plaintiffs at-

tempt to enforce them in Illinois. See 375 U.S. at 111,

84 S. Ct. at 245, 11 L. Ed. 2d at 191.

Illinois, of course, is not required to enforce the plain-

tiffs’ judgments if to do so would clearly offend its funda-

mental public policies. Hall, 440 U.S. at 421-22, 99 S. Ct.

at 1189, 59 L. Ed. 2d at 426. In the submission of this

appeal the Assistant Attorney General made no claim en-

forcement of these judgments would offend Illinois’ funda-

mental policies. Illinois has no policy against compensating

tort victims of that state’s negligence. To the contrary, IIli-

nois has a policy favoring compensation, as demonstrated

by the framework of its court of claims. See Ill. Ann. Stat.

ch. 37, § 439.8(d) (Smith-Hurd Supp. 1985).

Plaintiffs argue they cannot enforce their judgment in

Illinois because that state requires potential claimants

against the state to file a notice of intent with the attor-

ney general and court of claims within six months of in-

jury or wrongful death. See Ill. Ann. Stat. ch. 37,

§ 439.22-1, .22-2 (Smith-Hurd Supp. 1978) (The time period

was extended to one year in 1983, see 1983 Ill. Laws 83-

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865, § 2.). Plaintiffs did not file such notices. Illinois, on

submission of this appeal, did not suggest this require-

ment was applicable in this situation. Section 439.22-1 only

requires that those persons who are about to commence

an action in the court of claims against the state of IIli-

nois for damages flowing from an injury or wrongful death

file a notice within the time period set out. Ill. Ann. Stat.

ch. 37, § 439.22-1 (Smith-Hurd Supp. 1978). Here, plain-

tiffs have litigated their claims and obtained final judg-

ments enforceable in a sister state under the full faith

and credit clause of the Constitution. See U.S. Const. art.

IV, § 1. Moreover, Illinois has adopted the Uniform En-

forcement of Foreign Judgments Act to facilitate the en-

forcement. See Ill. Ann. Stat. ch. 110, §§ 12-601 - 12-617

(Smith-Hurd 1984). We are unpersuaded that plaintiffs

would be unable to collect their judgments in Illinois.

We therefore hold, as a matter of comity and coopera-

tive federalism, we will not open our courts to consider

plaintiffs’ proceedings to collect the judgments by garnish-

ment in Iowa until such time as they can allege and prove

they were unable to secure payment of these judgments

in the Illinois courts. This holding, of course, is without

prejudice to plaintiffs’ future return to the Iowa court

system to secure payment of their judgments upon the

pleading and proof above specified. At this time, therefore,

the district court dismissal of this garnishment action shall

stand affirmed, although on different grounds than those

relied on by that court.

AFFIRMED.