Narrative Opinion Summary
In this case, a former employee of Troy University, an Alabama state institution operating in North Carolina, filed a lawsuit alleging wrongful termination, sexual harassment, and other tort claims. The university invoked sovereign immunity, arguing that it could not be sued in North Carolina's courts. However, the court found that Troy University had waived its sovereign immunity by registering as a nonprofit corporation in North Carolina and engaging in commercial activities, including student recruitment. The court distinguished between commercial activities, which are subject to suit, and governmental functions, which may retain immunity. Troy University's actions were deemed commercial, thus subject to legal action. The court's decision relied on precedents, notably Franchise Tax Board of California v. Hyatt, which affirmed that states retain sovereign immunity unless explicitly waived. Despite the motion to dismiss based on sovereign immunity, the court concluded that the university consented to be treated as a domestic corporation in North Carolina. Consequently, the court reversed the lower court's decision, allowing the lawsuit to proceed on the grounds of Troy University's waiver of sovereign immunity for its business operations in North Carolina.
Legal Issues Addressed
Application of Franchise Tax Board of California v. Hyattsubscribe to see similar legal issues
Application: The case applied the precedent from Hyatt, determining that states generally retain sovereign immunity from private suits in other states unless explicitly waived.
Reasoning: Hyatt III overruled Nevada v. Hall, directly addressing the issue of state sovereign immunity in tort actions.
Commercial vs. Governmental Functionssubscribe to see similar legal issues
Application: The court distinguished between Troy University's commercial activities, which are subject to suit, and governmental activities, which may retain immunity.
Reasoning: Thus, the distinction lies in the nature of the activities being challenged: nongovernmental activities are subject to suit while governmental activities may not be.
Legal Criteria for Waiver of Sovereign Immunitysubscribe to see similar legal issues
Application: The court noted that sovereign immunity waivers must be explicit, as established in U.S. Supreme Court precedent.
Reasoning: This waiver must be explicit, as established in Sossamon v. Texas and College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board; however, the Court of Appeals' conclusion that such clauses cannot constitute an explicit waiver is not supported by U.S. Supreme Court precedent.
Sovereign Immunity and Waiversubscribe to see similar legal issues
Application: The court concluded that Troy University waived its sovereign immunity by operating as a nonprofit corporation in North Carolina and accepting the 'sue and be sued' clause under the North Carolina Nonprofit Corporation Act.
Reasoning: Troy University has explicitly waived its sovereign immunity from suit in North Carolina by registering as a nonprofit corporation and accepting the sue and be sued clause in the North Carolina Nonprofit Corporation Act.