Full Faith And Credit – Judgment of Sister State – Interstate Sovereign Immunity

Ex parte Space Race, LLC, [Ms. 1200685, Dec. 30, 2021] __ So. 3d __ (Ala. 2021). The Court (Sellers, J.; Parker, C.J., and Bolin, Wise, Mendheim, Stewart, and Mitchell, JJ., concur; Shaw and Bryan, JJ., concur in the result) issues a writ of mandamus to the Madison Circuit Court directing the court to dismiss an action filed by the Alabama Space Science Exhibit Commission d/b/a U.S. Space & Rocket Center (“ASSEC”) seeking to avoid an arbitration award entered in favor of Space Race, LLC (“Space Race”) and against ASSEC by an arbitration panel in New York. Space Race’s motion to dismiss asserted that a New York court had already entered a final judgment confirming the arbitration award against ASSEC. Ms. *2.

In confirming the arbitration award, the New York court rejected ASSEC’s sovereign immunity defense and held that ASSEC had waived the defense and that in any event, “ASSEC is not the equivalent of the State of Alabama for purposes of sovereign immunity.” Ms. *5.

ASSEC argued that the New York judgment was not entitled to full faith and credit because the court lacked adjudicatory authority over the subject matter because ASSEC enjoyed interstate sovereign immunity form suit in New York. ASSEC relied on Franchise Tax Board of California v. Hyatt, 587 U.S. ___, ___ 139 S. Ct. 1485, 1497 (2019), which “held that states are immune from private suits in the courts of sister states, [and] that ‘[t]he Constitution does not merely allow States to afford each other immunity as a matter of comity; it embeds interstate sovereign immunity within the constitutional design.’” Ms. **8-9.

In rejecting ASSEC’s argument, the Court explains

Whether the New York trial court’s judgment is entitled to full faith and credit does not necessarily turn on whether this Court agrees with the New York trial court’s conclusion that ASSEC should not be considered the equivalent of the State of Alabama for purposes of interstate sovereign immunity. Rather, the judgment is entitled to full faith and credit if the immunity issue was fully and fairly litigated in New York.

[T]he [United States Supreme] Court made it clear that whether a state extends full faith and credit to a judgment of another state depends only upon the existence of a full and fair litigation in the foreign state of the issues resolved by that judgment:

“‘[A] judgment is entitled to full faith and credit – even as to questions of jurisdiction – when the second court’s inquiry discloses that those questions have been fully and fairly litigated and finally decided in the court which rendered the original judgment.’” Omega Leasing Corp. v. Movie Gallery, Inc., 859 So. 2d 421, 422 (quoting Durfee v. Duke, 375 U.S. 106, 111(1963)).

Ms. **9-10.

The Court issues the writ and holds

The New York trial court provided the parties with a full and fair opportunity to litigate the sovereign-immunity issue, and the court fully and fairly considered the parties’ arguments and relevant law. Its determination that ASSEC should not be considered the equivalent of the State of Alabama for purposes of interstate sovereign immunity is, at the very least, defensible. We simply cannot conclude that the New York trial court was “so plainly” without subject-matter jurisdiction that it committed a “manifest abuse of authority,” that its judgment substantially infringes on the authority of another tribunal or agency of government, or that it lacked the capability to make an informed determination regarding the sovereign-immunity issue. Restatement (Second) of Judgments § 12.


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