Considered the most important U.S. Supreme Court decision prior to the era of John Marshall, Chisholm v. Georgia established the precedent that an individual from one state could sue another state without that state's permission in the federal courts. So many people objected to this assault on state sovereignty that the Eleventh Amendment to the U.S. Constitution was passed to prevent similar suits.

The case originated in unpaid expenses incurred by the state of Georgia in 1777 during the Revolutionary War (1775-83). Two commissary agents for Georgia purchased supplies and equipment from Robert Farquhar of Charleston, South Carolina, for $169,613.33. However, although the state of Georgia claimed to have forwarded the money to the agents, they never paid the debt. Farquhar died in 1784, leaving it to his executors, one of whom was Alexander Chisholm (also spelled Chisolme), to try to collect the money. After Farquhar's daughter and heir married Peter Trezevant in 1789, and after the ratification of the U.S. Constitution, those efforts intensified. The state legislature investigated the claim and decided that it was not liable since it had authorized the payment to the commissaries who were either dead or insolvent. In 1791 the case was taken to the U.S. District Court and decided in favor of the state of Georgia.

Chisholm, as the executor, appealed to the Supreme Court, which first heard the case in August 1792. Since Georgia did not send an attorney to represent the state, the case was postponed until February 1793. Again, Georgia did not send any legal representation, so the case was decided in favor of the plaintiff, although Justice James Iredell dissented (he had sat on the original circuit court decision). Georgia stalled on payment, leading to more legal wrangling, but in 1794 the state settled. Instead of paying the $500,000 requested in the suit (the original amount plus interest and damages), Georgia agreed to pay approximately $30,000 in state certificates. Trezevant redeemed about $8,000 in certificates to cover legal and other expenses and held on to around $22,000. Subsequent legislative action in Georgia made such state certificates almost worthless so that when Trezevant attempted to redeem them in 1838, negotiations dragged out until 1845, when Georgia at last agreed to pay $22,222.22.

Bibliography:

Doyle Mathis, "Chisholm v. Georgia: Background and Settlement," Journal of American History 54 (1967): 19-29.

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