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United States v. Judge Peters, 9 US 115 (1809)

Peters was a decision against the alleged interest of Pennsylvania in asserting its right to prize money from the estate of David Rittenhouse, former Pennsylvania Treasurer, who retained possession of funds awarded to Gideon Olmstead by a federal court of appeals in 1779. In order to appreciate the ruling in Peters, it's necessary to understand the context of the case and the federal court decision in Gideon Olmstead and others v. Rittenhouse's Executrices, (1803).

Gideon Olmstead and others v. Rittenhouse's Executrices, (1803)

Olmstead was a prize case arising from the 1778 capture, by its crew, of The Active, a merchant vessel carrying cargo intended for use by the British military. The Active sailed into port at Egg Harbor, New York, where the crew intended to present their case in a court of admiralty for being awarded the proceeds from sale of the vessel and its cargo.

Upon entering Egg Harbor, The Active encountered The Convention, an armed vessel belonging to the Commonwealth of Pennsylvania. The Convention captured The Active in harbor, and proceeded to court to transfer rights. The trial court ordered The Active condemned and awarded the proceeds to Pennsylvania. The mutinous crew of The Active, lead by Gideon Olmstead, appealed the decision in federal court. The federal court overturned the court of admiralty's decision and remanded the case for disposition.

The admiralty judge refused to act on the order, however, and commanded the marshall of the court to liquidate The Active and its assets, and turn the proceeds over to the inferior court for distribution.

Olmstead appealed in federal court for an injunction prohibiting the marshall from giving the money to the inferior court. Although the injunction was issued, the marshall acted in contempt of the order on May 1, 1779, and transferred custody of the money to the court of admiralty, which, in turn, gave the funds to David Rittenhouse, who was then Treasurer of Pennsylvania.

David Rittenhouse retained personal possession of the money, pending a release of indemnity from Pennsylvania, which never arrived. Rittenhouse drew interest on the certificates, which became part of his estate upon his death.

Olmstead et al. filed suit against the Rittenhouse estate for possession of the certificates; their petition was granted in May 1803. The Pennsylvania state legislature sought to intervene by passing a law specific to the case, asserting its title to the funds. Judge Peters, a Pennsylvania court judge, subsequently refused to release the funds to Olmstead.

Nothing further was done until Olmstead et al. petitioned the the US Court of Appeals for a writ of mandamus (an order compelling an official to take, or refrain from taking, an action under his scope of responsibility) ordering the court to issue the award money to the petitioners. The Appeals court sent a preliminary notice to Judge Peters ordering him to execute the sentence pronounced in favor of Olmstead, or show cause why he could not.

Judge Peters acknowledged receipt of the court mandate, but responded by referencing the Pennsylvania legislature's Act, passed subsequent to the judgment in the original case. The Act authorized the Governor of Pennsylvania to seize the assets in question in order to protect the "just rights of the state," and prohibiting the defendants (Rittenhouse's executrices) from performing any action ordered by a federal court. The Pennsylvania Governor had been authorized to use armed force, if necessary, to prevent transfer of the prize money.

The Marshall Court ruled that states cannot annul the judgment of federal courts, or destroy the rights acquired under the courts' judgment without offending the US Constitution. The Governor overstepped his authority by attempting to alter the jurisdiction of the federal court.

Pennsylvania argued that the federal courts lacked constitutional jurisdiction over the case, per the Eleventh Amendment, because they were specifically prohibited from hearing cases in which citizens brought suit against a state.

The Court responded that the Eleventh Amendment was inapplicable because the suit was between private parties, citizens of two different states, over which the federal judiciary retained jurisdiction. Further, Pennsylvania was not named as a litigant and had no standing to participate in the case.

Chief Justice John Marshall declared Congress had long ago given the Supreme Court authority to revise and correct sentences of the courts of admiralty in prize cases. The court of appeals had extinguished Pennsylvania's claim to the money, and awarded it to the original claimant (Olmstead, et al.). This ruling was not changed by the fact that the prize money came into Rittenhouse's possession. Further, Rittenhouse's property, as is typically the case, passed to his representatives, not to the Commonwealth of Pennsylvania.

The Supreme Court issued a peremptory mandamus requiring the Pennsylvania court to release the funds to Olmstead.

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Q: What was the Supreme Court's decision in United States v. Peters?
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