No Interstate Sovereign Immunity for Sister-State Municipal Corporations in Mississippi
The Supreme Court of Mississippi’s decision in The Promenade D’Iberville, LLC v. Jacksonville Electric Authority (2025)

Introduction

The Supreme Court of Mississippi has issued a landmark ruling clarifying the reach of interstate sovereign immunity after the U.S. Supreme Court’s trilogy of decisions in Franchise Tax Board v. Hyatt. The judgment holds that an out-of-state municipal utility—Jacksonville Electric Authority (JEA)—cannot invoke Hyatt III-style immunity in Mississippi courts. By doing so, the Court re-affirms its earlier decision in Church v. Massey and establishes a new, bright-line precedent: sister-state political subdivisions and their instrumentalities do not enjoy sovereign immunity in Mississippi absent compelling public policy concerns.

The dispute arose after extensive structural damage at a Mississippi shopping center allegedly caused by defective soil-stabilizing fill containing bed ash supplied by JEA. When sued, JEA claimed sovereign immunity (and alternatively, statutory damage caps) under Florida law, relying heavily on Hyatt III. The Harrison County Circuit Court agreed and dismissed the case. On appeal, the Mississippi Supreme Court reversed, holding that:

• Hyatt III applies only to States and their “arms,” not to municipal or other non-state entities.
• Neither the Full Faith and Credit Clause nor comity principles require Mississippi courts to dismiss or cap damages for such entities.
• Mississippi law—including its Constitution’s Takings Clause—governs the substantive claims, allowing the suit to proceed without statutory caps.

Summary of the Judgment

• The trial court’s dismissal for lack of subject-matter jurisdiction is reversed.
• JEA does not qualify as an “arm of the State of Florida”; therefore Hyatt III sovereign immunity does not attach.
• Full Faith and Credit does not compel Mississippi to apply Florida’s Tort Claims Act (§768.28) or its notice/venue requirements.
• Church v. Massey remains controlling in Mississippi for suits against sister-state municipalities.
• The case is remanded for trial on the merits under Mississippi substantive law, unencumbered by Florida’s $200,000 cap or Mississippi’s MTCA cap.

Analysis

Precedents Cited

1. Franchise Tax Board v. Hyatt I-III (U.S. 2003, 2016, 2019)
   Clarified interstate sovereign immunity among States. Hyatt III overruled Nevada v. Hall, confirming States’ immunity from private suits in sister-state courts.
2. Nevada v. Hall (1979)
   Former authority allowing suits against States in sister-state courts, now overruled.
3. Church v. Massey (Miss. 1997)
   Adopted the “no greater status” rule for foreign governmental entities and applied Mississippi tort law to an Alabama junior college.
4. California Franchise Tax Board v. Hyatt II (2016)
   Held a State may not apply “special rules” hostile to sister-state agencies, but did not mandate adoption of foreign immunity statutes.
5. Out-of-state authority post-Hyatt III – e.g., Farmer v. Troy University (N.C. 2022), Galette v. NJ Transit (Pa. 2025), Colt v. NJ Transit (N.Y. 2024) – considered when assessing “arm of the state” status.

Legal Reasoning

1. Defining “State” in Hyatt III: The Court explains that Hyatt III re-established immunity for sovereign States, but did not extend that shield to municipal corporations. JEA conceded it would not qualify as an “arm of the state” under Eleventh Amendment analysis; therefore, by parity of reasoning, it falls outside Hyatt III.

2. Reliance on Eleventh Amendment Tests: While the Eleventh Amendment technically governs federal courts, its tests for determining “arm of the state” status guided the Court. Those tests emphasize:

• How state law defines the entity
• The state’s control over the entity
• Whether a judgment is paid from the state treasury

Applying these factors, JEA—created and controlled by the City of Jacksonville—functions as a municipal utility, not an extension of Florida’s sovereign treasury.

3. Full Faith and Credit & Comity: Echoing Hyatt I, the Court re-states that the Clause is less exacting for choice-of-law problems. Mississippi may apply its own substantive law so long as that choice is neither “arbitrary nor fundamentally unfair” and does not exhibit a “policy of hostility” to Florida. Here, Mississippi has:

• A strong interest: the injury, property, and parties are in Mississippi.
• No hostility: the same standards would apply to a Mississippi utility.

4. Mississippi Constitutional Protections (Art. 3, §17): The Court underscores that property damage of this magnitude, if caused by a Mississippi public utility, would bypass MTCA caps through inverse-condemnation principles. To deny comparable protection here would disadvantage Mississippi landowners and conflict with state constitutional policy.

Impact of the Decision

• Clarifies Post-Hyatt III Boundaries: Sister-state municipal corporations cannot automatically claim sovereign immunity in Mississippi.
• Re-validates Church v. Massey: The “no greater status” doctrine survives and now expressly coexists with Hyatt III.
• Litigation Strategy: Out-of-state entities operating in Mississippi (e.g., transit authorities, city utilities, state universities) must analyze “arm of the state” status before invoking immunity.
• Policy Leverage: Encourages entities to comply with Mississippi regulatory regimes and standards rather than attempt to shield themselves through distant home-state statutes.
• National Dialogue: Adds to the patchwork of state high-court decisions (Galette, Colt, Farmer) post-Hyatt III, increasing pressure for SCOTUS clarification.

Complex Concepts Simplified

Sovereign Immunity

The principle that the State, as a sovereign, cannot be sued without its consent. After Hyatt III, States retain that immunity even in sister-state courts.

“Arm of the State”

An entity so closely tied to a State that it shares the State’s immunity. Courts look at legal definition, control, and who pays a judgment.

Full Faith and Credit Clause (Art. IV, §1, U.S. Const.)

Requires States to respect other States’ laws and judgments, with flexibility for local policy when applying foreign statutes would be unfair or hostile.

Comity

A discretionary, goodwill-based practice where one State’s courts may honor another State’s laws out of respect, but are not strictly required to.

Inverse Condemnation

A lawsuit by a property owner to recover compensation when government (or quasi-government) actions effectively take or damage property without formal eminent-domain proceedings.

MTCA (Mississippi Tort Claims Act)

The statute governing tort suits against Mississippi governmental entities—includes notice requirements and a $500K cap. It does not apply to constitutional takings claims.

Conclusion

The Mississippi Supreme Court’s ruling sends a clear message: interstate sovereign immunity stops at the State line for municipal and similar entities. By distinguishing between sovereign States and their political subdivisions, the Court balances respect for federalism with robust protection of in-state property owners. The decision preserves Mississippi’s constitutional mandate to compensate citizens for property damage while harmonizing with post-Hyatt III national jurisprudence. Going forward, foreign municipalities doing business in Mississippi must confront potential liability on equal footing with private actors, ensuring that Mississippi courts—and not distant legislatures—set the boundaries of redress for harms occurring within the State.