Troy University v. Farmer

Troy University, an Alabama-affiliated university, operates an online education program that relies heavily on recruitment of members of the military. To aid in its recruitment, the school opened an office in Fayetteville, North Carolina, near Fort Bragg, and applied for a “certificate of authority” from the North Carolina Secretary of State allowing it to operate in that state. Under North Carolina law, such a certificate grants out-of-state non-profit corporations like Troy the same “rights and duties” of similar in-state corporations, including the right “to sue and be sued.”

Sharrell Farmer was hired by Troy to work as a recruiter in its Fayetteville office. Farmer later sued Troy and two of its employees in North Carolina state court. His complaint alleges that he experienced sexual harassment, including groping by other North Carolina-based employees, and witnessed sexual harassment of students. After he reported this harassment, he alleges, he was subjected to a vicious smear campaign, and then fired. Troy, on behalf of itself and the individuals, successfully moved to dismiss the case on the grounds that all three defendants were entitled to Alabama’s sovereign immunity from suit in North Carolina state courts. The North Carolina Supreme Court disagreed and held that, by applying for a certificate of authority to conduct its commercial activities in North Carolina, and agreeing to be subject to the same rights and duties of North Carolina entities, including the right to sue and be sued, Troy consented to suit in North Carolina.

Troy and the individual defendants petitioned the United States Supreme Court for review, arguing that the North Carolina Supreme Court erred in finding a waiver of immunity. Public Citizen Litigation Group, serving as co-counsel in the Supreme Court, prepared the brief in opposition to the petition. The brief explained that there is no disagreement among courts as to whether facts like these demonstrate waiver, that the North Carolina Supreme Court’s decision is consistent with existing precedent, and that questions as to whether any of the defendants would be entitled to sovereign immunity, even absent the waiver, made this case unsuitable for review. The Supreme Court denied the defendants’ petition.