[2] Since the case was argued prior to the formal pronouncement of judicial review by Marbury v. Madison (1803), there was little available legal precedent (particularly in U.S.

The case was superseded in 1795 by the Eleventh Amendment to the United States Constitution which was considered binding by the Court in Hollingsworth v. Virginia (1798).

On October 31, 1777, the Executive Council of Georgia authorized Thomas Stone and Edward Davies, as commissioners of the state, to purchase goods from Robert Farquhar, a South Carolina merchant, to help stationed Continental Army troops in Savannah who were in dire need of supplies.

The estate filed a claim for the debt with the Georgia legislature in 1789, but was met with a committee report refusing payment.

Instead, the committee suggested the estate sue Stone and Davies, as they had withdrawn the funds meant for Farquhar from the state treasury.

Alexander Chisholm, a merchant in Charleston and an executor to Farquhar's estate, brought suit against the state of Georgia in the U.S.

Associate Justice James Iredell, who heard the case while riding circuit, along with U.S. District Court Judge Nathaniel Pendleton, dismissed the case, citing a lack of jurisdiction under the Judiciary Act of 1789, on grounds that a state could not be sued by a citizen of another state in federal circuit court.

In his opinion, Chief Justice John Jay begins by breaking down the argument made by the plaintiffs into four different questions:[5] In the opening words of his opinion, Justice Wilson stated the essential principle on which the case turned: "This is a case of uncommon magnitude.