527 U.S. 666 (1999)
College Savings Bank is a New Jersey chartered bank located in Princeton, New Jersey.1 Since 1987 it has marketed and sold CollegeSure certificates of deposit designed to finance the costs of college education.2 College Savings holds a patent upon the methodology of administering its CollegeSure certificates.3
Respondent Florida Prepaid Postsecondary Education Expense Board is an arm of the State of Florida.4 Since 1988 it has administered a tuition prepayment program designed to provide individuals with sufficient funds to cover future college expenses.5
The Trademark Remedy Clarification Act amends the Lanham Act by defining any person to include any State or state instrumentality.6 It provides that such state entities shall not be immune under the Eleventh Amendment or any other doctrine of sovereign immunity from suit in federal court for violations of the Act.7 Remedies are available to the same extent as against nonstate entities.8
College Savings brought a patent infringement action against Florida Prepaid in United States District Court in New Jersey.9 In the same court College Savings also filed the instant action alleging that Florida Prepaid violated section 43(a) of the Lanham Act by making misstatements about its own tuition savings plans in its brochures and annual reports.10 Florida Prepaid moved to dismiss on sovereign-immunity grounds.11 The District Court granted the motion.12 The Court of Appeals affirmed.13 The Supreme Court granted certiorari.14
Whether the Trademark Remedy Clarification Act effects a constitutionally permissible abrogation of state sovereign immunity from suits under the Lanham Act?15
Congress may abrogate state sovereign immunity only when legislating to enforce the Fourteenth Amendment under section 5 of that Amendment.16 Such legislation must be carefully tailored to remedy or prevent actual constitutional violations rather than to protect interests that are not recognized property rights under the Due Process Clause.17
No. The Trademark Remedy Clarification Act was enacted pursuant to Article I rather than section 5 of the Fourteenth Amendment.18 The false-advertising provisions of the Lanham Act protect no property interest because the hallmark of property is the right to exclude others.19 Florida Prepaid's alleged misrepresentations concerning its own tuition savings plans in brochures and annual reports intruded upon no interest over which College Savings Bank had exclusive dominion.20 College Savings Bank is a New Jersey chartered bank that since 1987 has marketed CollegeSure certificates of deposit and holds a patent on the administration methodology.
Florida Prepaid is an arm of the State of Florida that since 1988 has administered a tuition prepayment program. The claim concerns only misstatements about Florida Prepaid's own products and does not implicate any right to exclude from College Savings Bank's patented methodology or other exclusive assets.21 The District Court rejected the abrogation argument and granted Florida Prepaid's motion to dismiss.22 The Court of Appeals affirmed.
The Supreme Court granted certiorari. Because no deprivation of property occurred the prophylactic measure of abrogating immunity was not necessary to prevent a constitutional violation under the standard of City of Boerne v. Flores.23
The Trademark Remedy Clarification Act does not effect a constitutionally permissible abrogation of state sovereign immunity from suits under the Lanham Act.24
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Justice Stevens dissents on the ground that the activity of doing business or making a profit constitutes a form of property equivalent to the good will that appears on a company's balance sheet.25 A State's deliberate destruction of a going business is a deprivation within the Due Process Clause.26 He further maintains that the validity of Congress's decision to abrogate sovereign immunity in a category of cases does not depend on the strength of the particular claim asserted.27
The decision depends on whether Congress had a reasonable basis for concluding that abrogation was necessary to prevent violations that would otherwise occur.28 The Court has failed to demonstrate why the judgment of Congress should not command respect.29
Justice Breyer dissents on the ground that Seminole Tribe should not be followed.30 Congress possesses authority under Article I to abrogate state sovereign immunity when necessary and proper to the exercise of an enumerated power.31 He argues that dual sovereignty undercuts the traditional justification for sovereign immunity because the State is not the authority that made the federal law being enforced.32
Denying Congress the power to provide private remedies against States would disable the National Government and weaken the Union.33
Whether the Trademark Remedy Clarification Act operates as an invitation to waiver of state sovereign immunity that is automatically accepted by a State's engaging in the activities regulated by the Lanham Act?34
No. There is no suggestion that Florida Prepaid expressly consented to suit in federal court or affirmatively invoked federal jurisdiction.38 The State's engagement in the interstate marketing and administration of its tuition prepayment program after enactment of the TRCA does not constitute an altogether voluntary waiver.39 The constructive-waiver theory is fundamentally incompatible with the requirement of a clear declaration by the State.40 It is also incompatible with the principle that waivers of constitutional rights are not implied.41
The theory is indistinguishable in practical effect from abrogation under Article I which Seminole Tribe forbids.42 Florida Prepaid moved to dismiss on sovereign-immunity grounds. The District Court granted the motion. The Court of Appeals affirmed.
Because the TRCA's purported abrogation provision is the same provision relied upon to demonstrate constructive waiver the theory collapses into the very abrogation that the Constitution prohibits.43
The Trademark Remedy Clarification Act does not operate as an invitation to waiver of state sovereign immunity that is automatically accepted by a State's engaging in the activities regulated by the Lanham Act.44
Related opinions on this issue
Justice Breyer dissents on the ground that Parden remains good law.45 Congress may condition a State's permit to engage in regulable commercial activity on a waiver of sovereign immunity.46 He maintains that when a State enters ordinary commercial ventures outside its core responsibilities it acts like a private person.47
The need for congressional power to impose waiver is unusually strong to avoid enforcement gaps that disadvantage private competitors.48 The line drawn in Parden is supported by precedent and by modern trends reflected in the Foreign Sovereign Immunities Act.49
Justice Stevens joins Justice Breyer's dissent and adds that the procedural posture of the case requires assuming Florida Prepaid is an arm of the State.50 That assumption may be doubtful if sovereign-immunity jurisprudence is to be based on eighteenth-century assumptions.51 Sovereigns did not then play the commercial role they do today.52
He suggests it may be appropriate in future cases to limit coverage of state sovereign immunity by treating commercial enterprises of the States like commercial activities of foreign sovereigns under the Foreign Sovereign Immunities Act.53