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A large bay in State A serves as an important state-operated port for major industrial and shipping companies. Prior to the implementation of modern environmental regulations, these industries and companies discharged a significant amount of waste into the river. As a result, the bottom of the river is now caked in a layer of industrial waste.
Pursuant to its power under the Commerce Clause, the federal government passes a law to facilitate the cleanup of waterways within the United States, including the bay in State A. The law allows the federal government to recoup cleanup costs from those businesses or other entities that operated along the waterways and contributed to the pollution.
The law also provides that these entities can in turn sue state governments to recoup costs attributable to the state government. In other words, if it can be demonstrated that the state government, through its operation of the port, was responsible for some of the business’s pollution, the business may recover part of the cleanup costs from the state.
S Corporation contributed to the pollution due to its operation of a paper mill near the bay in State A. The pollution was generated both by the production of its paper products and by the shipping of its paper products from the state-operated port in the bay. S corporation owes a significant amount of money to the federal government for the cleanup of this waste.
S Corporation, in turn, sues State A and the individual state officers charged with running the state-operated port. S Corporation brought suit under the federal law to recover the cleanup costs attributable to the shipping services provided by the state-operated port. State A, in turn, argues: (1) the state government is immune from suit under the Eleventh Amendment, and (2) the individual state officers are immune from suit under the doctrine of Ex Parte Young.