SW Legal studies in Business

Sovereign Immunity Shields State Agency from Antitrust Claim
Description Appeals court affirmed that the Eleventh Amendment protects a state agency carrying out its delegated duties from suit by firms that contended that the actions of the agency served to violate the antitrust law. The sovereign may not be sued without permission and, unlike tort responsibility, the state does not accept liability in this instance.
Topic Constitutional Law
Key Words Eleventh Amendment; Sovereign Immunity; Trademarks; Antitrust
C A S E   S U M M A R Y
Facts State law requires the Idaho Potato Commission (IPC) to have brands that protect the identity of the origin of potatoes grown in Idaho. The IPC has registered certification marks. It requires all shippers who buy potatoes in bulk in Idaho to obtain a license from the IPC, submit to inspection, and use an IPC certification mark on their bags of potatoes so as to certify Idaho origin. Potato packers sued the IPC, contending that it was illegal under antitrust law and trademark law for the IPC to require all packers to use IPC trademarks. The district court dismissed the suit, holding that the IPC had sovereign immunity under the Eleventh Amendment and so could not be sued. The packers appealed.

Affirmed. The IPC is a state agency, empowered in its duties by the state legislature. As such, it is protected by sovereign immunity under the Eleventh Amendment from such suit. The state accepts liability for certain tort obligations, but that liability does not apply in this instance. The IPC was carrying out its delegated responsibilities and may not be sued without the consent of the legislature.

Citation Hapco Farms, Inc. v. Idaho Potato Commission, 238 F.3d 468 (2nd Cir., 2001)

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