State Sovereign Immunity and Privatization: Can Eleventh Amendment Immunity Extend to Private Entities?

Abstract

Since the privatization-boom of the 1980s and 1990s, state governments have transferred a large number of traditionally public functions to private firms by: (1) privatizing traditionally public entities, and (2) contracting out to traditionally private entities. For the first time in American law, entities in these types of privatization schemes are asserting state sovereign immunity as an affirmative defense in suits arising out of work performed on behalf of the government. As a consequence, there has been some confusion in the federal circuit courts concerning whether these entities are arms of the state for purposes of the Eleventh Amendment. Because state sovereign immunity can prevent injured parties from having their cases heard on the merits in federal court, courts should not extend state sovereign immunity to entities that the Eleventh Amendment does not cover. Moreover, because the arm-of-the-state test imposes costs on the judicial system, courts should not employ the test when there is an alternative, lesscostly approach. This Comment makes four recommendations concerning state sovereign immunity and privatization that should assist federal courts and state legislatures in balancing the important judicial and governmental interests of fairness, efficiency, and proper deference to state sovereign immunity. * President, The Carlin Law Firm, P.A. in Fort Lauderdale, Florida; Florida International University College of Law, J.D. 2009; Florida State University, B.S. 2005. I thank Professor Howard Wasserman for his help and advice as I explored this topic; my wife, Brooke Carlin, for her love, support, and encouragement throughout my time in law school; my parents, Robert and Barbara Carlin, for their direction and love. The author welcomes comments at jcarlin@carlinfirm.com. 210 FIU Law Review [5:209