Agreement to “submit to jurisdiction” is waiver of 11th Amendment immunity by state universityOctober 11, 2007

In a decision yesterday, the Federal Circuit held that a state university had waived its Eleventh Amendment immunity from suit. The university entered into an agreement with a "governing law" provision that stated that "all parties agree to proper venue and hereby submit to jurisdiction in the appropriate State or Federal Courts of Record sitting in the State of Michigan."

The court held that this provision "unequivocally expressed" the university's intent to waive its immunity to suit, and held that the suit could proceed.

Baum is the inventor of two patents relating testing baseball bats. He and his corporation entered into a license agreement with the University of Massachusetts regarding the patents that included a provision regarding the applicable law. That provision is set forth below:

III-3. Governing Law. This Agreement will be construed, interpreted and applied according to the laws of the State of Michigan and all parties agree to proper venue and hereby submit to jurisdiction in the appropriate State or Federal Courts of Record sitting in the State of Michigan.

After the agreement was signed, a dispute arose between the parties, and Baum sued the University for breach of contract and patent infringement. The University asserted immunity under the Eleventh Amendment. The district court held that immunity did not apply based on the above provision, and permitted the suit to continue. After trial on the breach of contract issue, the University again raised the issue, and the district court once again held immunity did not apply, but stayed further proceedings so the University could appeal the denial of immunity, as whether Eleventh Amendment immunity applies is appealable under the collateral order doctrine.

The Federal Circuit affirmed. First, the court noted that to waive immunity, a state must "clearly declare its intention to submit to federal jurisdiction," and that such intent must be "unequivocally expressed." Here, the University argued that the "Governing Law" provision was too vague to constitute such an unequivocal statement, and as a result, immunity should not be found. The court disagreed, finding the statement that the University would "submit to the jurisdiction of a federal court in Michigan" an adequately unequivocal statement to constitute waiver.

The University also advanced other novel arguments, such as that immunity may only be legislatively waived, and thus could not be waived via contract as was the case here. The Federal Circuit rejected this claim, as there was no assertion that the person in the Technology Transfer office of the University did not have the authority to enter into the contract. Essentially, the University argued that Baum should have to prove that the University acted legally in entering into the contract, a position rejected by the court, stating: "We discern no support for the thesis that the University's contract authority must be proved, when the University does not deny that authority." As a result, the district court's conclusion that immunity did not apply was affirmed.

This case presents an interesting issue for University Technology Transfer offices, and reminds those offices to make sure that contracts are carefully reviewed so that the University does not unintentionally waive its immunity from suit.

To read the full decision in Baum Research & Dev. Co. v. Univ. of Mass., click here.

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