| I once had a conversation with a State of Oregon Department of Revenue agent over
whether the State had the authority to tax me for a particular activity. During that
converstion, she stated that the "King" had the right to "tax" his
people; the implication of her comment was that the State of Oregon was the
"King" with sovereign power to tax the people of the State. This comment took me
by surprise, as I had always understood that "there is no king in America."
Since that conversation, I have learned much more about the subject; in many ways the
agent was correct in her statement -- and in other ways she was wrong. The State of
Oregon (and this is true for all other States -- I use the State of Oregon as a specific
State for the purposes of this discussion) is sovereign
over those it creates. It possesses sovereign immunity in
relation to its actions of government with those it creates. The State will claim said
sovereign immunity when it is sued. There are rules relating to when sovereign immunity
applies to government acts, these rules have been litigated, and they may be determined by
study of pertinent court cases.
Generally, there are two rules governing sovereign immunity. First, if the State has
established an agency for which the State is liable for its acts and debts, it will
generally indicate so by stating the State may sue and be sued in the name of the agency,
and so sovereign immunity may apply. If the State is not liable for the acts or debts of
what appears to be a State agency, the State will generally indicate they are separate by
stating the State may not be sued in the name of the agency, and sovereign immunity may
not apply. For example, the State of Oregon has appeared to create a State agency in the
form of the Oregon State Bar. However, the State is not liable for the obligations of the
Bar, therefore, the Bar is not an agency of the State of Oregon, but merely a corporation
established by direct legislation rather than by the authority delegated by the
legislature to the Corporation Commission.
The second general rule is, that if an agent of the State or one of its agencies acts
outside statutory authority, the agent does not possess sovereign immunity, and may be
sued in their private capacity. The State generally still possesses sovereign immunity, as
it has not authorized the extra-statutory acts of the agent, so is not liable for the acts
of the agent.
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