It is a fundamental of our constitutional law that no suit can be maintained against the United States, in any court, without express authority of Congress; and the United States cannot be sued in the courts of any State in any case.[289] It is the sovereign right of the United States not to be sued. To the extent that a State is sovereign it has the same right, and “These States are constituent parts of the United States. They are members of one great empire—for some purposes sovereign, for some purposes subordinate.”[290] The physical boundaries of a State, constituting a political, not a judicial question, must be determined by legislative authority, yet if the United States is a party to a case involving the issue of territorial boundary, the case falls within the judicial power,—that is, within the jurisdiction of the courts of the Union.
The States of the Union have agreed in the Constitution that the judicial power of the United States shall extend to all cases arising under the Constitution, laws, and treaties of the United States, without regard to the character of the parties (excluding of course, suits against a State by its own citizens, or by citizens or subjects of foreign states), and equally to controversies to which the United States shall be a party, without regard to the subject of such controversies, and that (the Supreme Court) may exercise original jurisdiction in all such cases [in which a State shall be a party] without excluding those in which the United States may be the opposite party.[291]
In other words, the United States possesses adequate governmental authority and jurisdiction to secure the large purposes outlined in the Preamble to the Constitution. The United States has judicial jurisdiction in all cases arising under the Constitution, the laws and the treaties of the United States “whoever may be the parties.”[292] This principle is of far-reaching effect; no party can be exempt.
117. A corporation created by a State is a citizen of that State for many purposes, but cannot be a citizen of another State because created by the former State. Outside of the State of its creation it is a foreign corporation and possesses only such privileges as are granted to it. This means that rights, privileges, judgments accruing to or possessed by a corporation, say created by Pennsylvania and in Pennsylvania, do not accrue to and are not possessed by that corporation, say in Ohio, unless conferred by Ohio and possessed by the corporation within Ohio, under laws of Ohio, and by decision of Ohio courts. The principle here is the familiar one of jurisdiction. No State has power beyond its own jurisdiction and “the courts of no country execute the penal laws of another.”[293]
The suability of a State involves its sovereignty and its honor and good faith. The constitutional law of America is that a State in the Union cannot be compelled to perform its contracts, although attempts on its part to avoid them may be judicially resisted, and State laws impairing the obligation of contracts are void. Yet the legislative department of a State represents its polity and its will and by every principle of justice is called upon to hold public obligations inviolate.
Any departure from this rule, except for reasons most cogent (of which the Legislature and not the courts, is the judge) never fails in the end to incur the odium of the world, and to bring lasting injury upon the State itself. But to deprive the Legislature of the power of judging what the honor and safety of the State may require, even at the expense of a temporary failure to discharge the public debts, would be attended with greater evils than such failure can cause.[294]
118. The judicial power of the United States extends, under the Constitution to controversies between citizens of different States and the Judiciary Act confers jurisdiction strictly within the meaning of the term.[295]
States, as the word is used in the Constitution, means only members of the Union; a Territory is not a State; the citizen of a Territory is not a citizen of a State and any controversy at law which he may have with another person is not “a controversy between citizens of different States,” and therefore does not come within the judicial jurisdiction of the United States. Of course the limitation applies to artificial persons,—corporations created by a State.
A corporation is not a citizen of the State and it cannot maintain a suit in a court of the United States against the citizen of a different State from that by which it was chartered, unless the persons who compose the corporate body are all citizens of that State.[296]
The jurisdiction of American courts is co-extensive with the power that creates them. Thus the jurisdiction of federal courts depends in no way upon the State, and State judges “possess an absolute independence of the United States.”