The governmental-proprietary distinction has led a stormy life. Courts have characterized it as “illusory,” a “quagmire,” a “rule of law that is inherently unsound,” and as a “talismanic formula” that results in “unenlightening characterizations of States’ activities.” Commentators have branded the distinction as “probably one of the most unsatisfactory known to the law,” have questioned its internal coherence, and have dismissed it as irrelevant in constitutional decisions. The distinction, however, clings stubbornly to life, appearing in a remarkably wide range of cases. The United States Supreme Court itself appears ambivalent about its worth. In some cases, the Court has rejected the distinction and has directed scathing criticism toward it, but the Court also has found the distinction useful for a variety of purposes. In recent years, the distinction has appeared in Supreme Court opinions concerning the sovereign immunity of foreign nations for their acts of state, “the application of the antitrust laws to state and local governments,” the negative implications of the commerce clause’s (and perhaps the affirmative powers of Congress under that clause), the scope of state immunity from suit under the eleventh amendment, and the constitutional rights of individuals against the state. The distinction's persistence in the face of unrelenting criticism raises the question whether it may be a more subtle and intelligible doctrine than its reputation would suggest. This article pursues that question with respect to the uses to which the Court has put the distinction in constitutional cases. In view of the confusion surrounding the distinction, it is useful to begin the inquiry by mapping the ground that will be covered.
Michael L. Wells and Walter Hellerstein,
The Governmental-Proprietary Distinction in Constitutional Law
Available at: http://digitalcommons.law.uga.edu/fac_artchop/379