Florida Prepaid Postsecondary Educ. Expense Bd. v. College Sav. Bank
527 U.S. 627 (1999)
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Rule of Law:
For Congress to abrogate state sovereign immunity pursuant to its enforcement power under Section 5 of the Fourteenth Amendment, it must identify a widespread pattern of unconstitutional state conduct and enact a remedy that is congruent and proportional to the identified constitutional injury.
Facts:
- College Savings Bank, a New Jersey chartered savings bank, markets and sells a patented certificate of deposit known as the CollegeSure CD, which is an annuity contract for financing future college expenses.
- College Savings Bank obtained a U.S. patent for its specific financing methodology.
- Florida Prepaid Postsecondary Education Expense Board (Florida Prepaid) is an entity created by the State of Florida that administers a similar tuition prepayment program for Florida residents.
- College Savings Bank alleged that Florida Prepaid, in the course of administering its program, directly and indirectly infringed on College Savings Bank's patent.
Procedural Posture:
- College Savings Bank sued Florida Prepaid in the U.S. District Court for the District of New Jersey for patent infringement.
- Florida Prepaid moved to dismiss the suit, claiming sovereign immunity under the Eleventh Amendment.
- The District Court denied Florida Prepaid's motion, holding that the Patent Remedy Act had validly abrogated the state's immunity.
- Florida Prepaid, the appellant, appealed to the U.S. Court of Appeals for the Federal Circuit.
- The Federal Circuit affirmed the District Court's decision, finding the Patent Remedy Act to be a valid exercise of congressional power under Section 5 of the Fourteenth Amendment.
- The U.S. Supreme Court granted certiorari to review the Federal Circuit's decision.
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Issue:
Does the Patent and Plant Variety Protection Remedy Clarification Act, by abrogating state sovereign immunity from patent infringement suits, constitute a valid exercise of Congress's enforcement power under Section 5 of the Fourteenth Amendment?
Opinions:
Majority - Chief Justice Rehnquist
No. The Patent and Plant Variety Protection Remedy Clarification Act does not constitute a valid exercise of Congress's enforcement power under Section 5 of the Fourteenth Amendment because it is not a proportionate and congruent response to a documented pattern of constitutional violations by the states. While patents are property protected by the Due Process Clause, a state's infringement of a patent does not, by itself, violate the Constitution. A constitutional deprivation of property without due process only occurs if a state infringes a patent and then fails to provide an adequate remedy. In enacting the Patent Remedy Act, Congress failed to identify a pattern of widespread and unremedied patent infringement by the states; the legislative record contained only scant evidence of such conduct. Furthermore, the Act's remedy is overly broad, subjecting all states to suit for any type of infringement indefinitely, rather than being tailored to address actual constitutional violations. The Act's primary purpose was to ensure uniformity in patent law, which is an Article I concern, not a basis for abrogating immunity under the Fourteenth Amendment.
Dissenting - Justice Stevens
Yes. The Patent and Plant Variety Protection Remedy Clarification Act is an appropriate exercise of Congress's power under Section 5 of the Fourteenth Amendment. Patents are a form of property, and the Act was a proper means to prevent states from depriving patent holders of that property without due process of law. Given that federal law grants exclusive jurisdiction over patent infringement cases to federal courts, state remedies for infringement are uncertain at best and likely nonexistent, creating a significant risk of due process violations. Congress was justified in acting prophylactically to close this loophole and ensure a uniform federal remedy, especially in light of increasing state participation in commercial activities. The Act is a congruent and proportional response, as it narrowly abrogates immunity only for patent infringement, placing states in the same position as private parties and ensuring the efficacy of the federal patent system.
Analysis:
This decision significantly reinforced the 'congruence and proportionality' test established in City of Boerne v. Flores, applying it as a strict standard for Congressional abrogation of state sovereign immunity. The ruling requires Congress to create a detailed legislative record demonstrating a widespread pattern of state constitutional violations before it can enact remedial legislation under Section 5 of the Fourteenth Amendment. By heightening this evidentiary burden, the Court narrowed Congress's enforcement power and strengthened the doctrine of state sovereign immunity, continuing a trend of limiting federal power over the states that began with Seminole Tribe.
