I explained in my original response. Since when is the Governor of a state referred to a soverign? Since when does a member state have a consulate with the national Government or vice versa. These references clear make "state" to have the meaning of "the body politic as organized for civil rule and government" as opposed to "any of the bodies politic which together make up a federal union, as in the United States of America."
Therefore the subordinate courts do have jurisdiction.

Quote Originally Posted by chuck View Post
I don't claim to be an attorney or even a student of law, but as a layman, I don't see how you come to your conclusion. In the paragraph above the one in question (in Article III Section 2.) I find this list: "--to all cases affecting ambassadors, other public ministers and consuls;--to all cases of admiralty and maritime jurisdiction;--to controversies to which the United States shall be a party;--to controversies between two or more states;--between a state and citizens of another state;--between citizens of different states;--between citizens of the same state claiming lands under grants of different states, and between a state, or the citizens thereof, and foreign states, citizens or subjects."

In that list, the wording uses the term "foreign states" to differentiate between states of the USA and other states. I don't see why you assume the usage of the word "state" would be different in the very next paragraph. (The Eleventh Amendment also is careful to include the descriptor "foreign" when referencing a foreign state.)