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Petitioner, an autonomous Puerto Rico government instrumentality, moved to dismiss the diversity action brought against it by respondent, a private firm, on the grounds that it was an "arm of the State," and that the Eleventh Amendment therefore prohibited the suit. After the District Court denied the motion, the Court of Appeals dismissed petitioner's appeal for want of jurisdiction, concluding that Circuit precedent barred both States and their agencies from taking an immediate appeal on a claim of Eleventh Amendment immunity.
Held:
States and state entities that claim to be "arms of the State" may take advantage of the collateral order doctrine of Cohen v. Beneficial Industrial Loan Corp.,
945 F.2d 10, (CA1 1991) reversed and remanded.
WHITE, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and BLACKMUN, O'CONNOR, SCALIA, KENNEDY, SOUTER, and THOMAS, JJ., joined. BLACKMUN, J., filed a concurring opinion. STEVENS, J., filed a dissenting opinion, post, p. 148.
Richard Taranto argued the cause for petitioner. With him on the briefs were Perry M. Rosen, Paige E. Reffe, and Michael T. Brady.
Peter W. Sipkins argued the cause for respondent. With him on the brief were Michael J. Wahoske, Paul R. Dieseth, Carol A. Peterson, and Jay A. Garcia-Gregory. *
[ Footnote * ] Briefs of amici curiae urging reversal were filed for the State of Ohio et al. by Lee Fisher, Attorney General of Ohio, and Patrick A. Devine and Andrew I. Sutter, Assistant Attorneys General, and by the Attorneys General for their respective jurisdictions as follows: James H. Evans of Alabama, Grant Woods of Arizona, Winston Bryant of Arkansas, Daniel E. Lungren of California, Richard Blumenthal of Connecticut, Robert A. Butterworth of Florida, Michael J. Bowers of Georgia, Elizabeth Barrett-Anderson of Guam, Warren Price III of Hawaii, Larry EchoHawk of Idaho, Roland W. Burris of Illinois, Linley E. Pearson of Indiana, Bonnie J. Campbell of Iowa, Robert T. Stephan of Kansas, Chris Gorman of Kentucky, Michael E. Carpenter of Maine, Scott Harshbarger of Massachusetts, Frank J. Kelley of Michigan, Mike Moore of Mississippi, William L. Webster of Missouri, Marc Racicot of Montana, Frankie Sue Del Papa of Nevada, Robert J. Del Tufo of New Jersey, Tom Udall of New Mexico, Robert Abrams of New York, Lacy H. Thornburg of North Carolina, Nicholas J. Spaeth of North Dakota, Robert C. Naraja of Northern Mariana Islands, Susan Loving of Oklahoma, Charles Crookham of Oregon, Ernest D. Preate, Jr., of Pennsylvania, Jorge E. Perez Diaz of Puerto Rico, James E. O'Neil of Rhode Island, T. Travis Medlock of South Carolina, Mark W. Barnett of South Dakota, Charles W. Burson of Tennessee, Dan Morales of Texas, Paul Van Dam of Utah, Jeffrey L. Amestoy of Vermont, Mary [506 U.S. 139, 141] Sue Terry of Virginia, Kenneth Eikenberry of Washington, Mario J. Palumbo of West Virginia, James E. Doyle of Wisconsin, and Joseph B. Meyer of Wyoming; and for the Council of State Governments et al. by Richard Ruda, Michael G. Dzialo, and Clifton S. Elgarten.
JUSTICE WHITE delivered the opinion of the Court.
The question before the Court is whether a district court order denying a claim by a State or a state entity to Eleventh Amendment immunity from suit in federal court may be appealed under the collateral order doctrine of Cohen v. Beneficial Industrial Loan Corp.,
Petitioner, the Puerto Rico Aqueduct and Sewer Authority (PRASA), is "an autonomous government instrumentality" which functions to "provide to the inhabitants of Puerto Rico an adequate drinking water, sanitary sewage service and any other service or facility proper or incidental thereto." P.R.Laws Ann., Tit. 22, 142, 144 (1987). In 1985, PRASA entered into a consent decree with the federal Environmental Protection Agency under which it agreed to upgrade many of its wastewater treatment plants to ensure compliance with the federal Clean Water Act. PRASA subsequently contracted with respondent, a private engineering firm incorporated in Delaware, to assist it with this task. In 1990, PRASA withheld payments on the contract in light of alleged overcharging by respondent. Respondent brought a diversity action in the United States District Court for the District of Puerto Rico, alleging breach of contract and damage to its business reputation.
PRASA moved to dismiss on the grounds that it was an "arm of the State," and that the Eleventh Amendment therefore prohibited the suit. 1 The District Court found that [506 U.S. 139, 142] petitioner did not qualify for immunity "because of its ability to raise funds for payment of its contractual obligations which do not affect the Commonwealth's funds," and denied the motion. App. to Pet. for Cert. A-9. PRASA filed a timely notice of appeal to the Court of Appeals for the First Circuit, and sought to stay proceedings while the appeal was pending. The court denied the stay and subsequently dismissed the appeal for want of jurisdiction, 945 F.2d 10, 14 (1991), concluding that First Circuit precedent barred both States and their agencies from taking an immediate appeal on a claim of Eleventh Amendment immunity. Id., at 12 (discussing Libby v. Marshall, 833 F.2d 402 (CA1 1987)).
In light of the conflict between the decision below and those of the other Courts of Appeals that have considered the issue, we granted certiorari.
2
Title 28 U.S.C. 1291 provides for appeal from "final decisions of the district courts." Appeal is thereby precluded "from any decision which is tentative, informal or incomplete," as well as from any "fully consummated decisions, where they are but steps towards final judgment in which they will merge." Cohen v. Beneficial Industrial Loan Corp.,
The Court has held that orders denying individual officials' claims of absolute and qualified immunity are among those that fall within the ambit of Cohen. See Nixon v. Fitzgerald,
Petitioner maintains, and we agree, that the same rationale ought to apply to claims of Eleventh Amendment immunity made by States and state entities possessing a claim to share in that immunity. Under the terms of the Amendment, "[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State. . . ." U.S. Const., Amdt. 11. This withdrawal of jurisdiction effectively confers an immunity from suit. Thus, "this Court has consistently held that an unconsenting State is immune from suits brought in federal courts by her own citizens as well as by citizens of another State." Edelman v. Jordan,
Once it is established that a State and its "arms" are, in effect, immune from suit in federal court, it follows that the elements of the Cohen collateral order doctrine are satisfied. "To come within the "small class" of . . . Cohen, the order must 1. conclusively determine the disputed question, 2. resolve an important issue completely separate from the merits of the action, and 3. be effectively unreviewable on appeal from a final judgment." Coopers & Lybrand v.
[506
U.S. 139, 145]
Livesay,
Respondent, following the rationale of the First Circuit in this case and in Libby v. Marshall, 833 F.2d 402 (1987), maintains that the Eleventh Amendment does not confer immunity from suit, but merely a defense to liability. Were this true, petitioner arguably would not be entitled to avail itself of the collateral order doctrine. See, e.g., Van Cauwenberghe v. Biard,
The doctrine of Ex parte Young, which ensures that state officials do not employ the Eleventh Amendment as a means of avoiding compliance with federal law, is regarded as carving out a necessary exception to Eleventh Amendment immunity. See, e.g., Green v. Mansour,
More generally, respondent's claim that the Eleventh Amendment confers only protection from liability misunderstands the role of the Amendment in our system of federalism: "[T]he very object and purpose of the 11th Amendment were to prevent the indignity of subjecting a State to the coercive process of judicial tribunals at the instance of private parties." In re Ayers,
Respondent argues in the alternative that a distinction should be drawn between cases in which the determination of a State or state agency's claim to Eleventh Amendment immunity is bound up with factual complexities whose resolution requires trial and cases in which it is not. See Tr. of Oral Arg. 30-32; cf. Dube v. State University of New York, 900 F.2d 587, 594 (CA2 1990), cert. denied,
We hold that States and state entities that claim to be "arms of the State" may take advantage of the collateral order doctrine to appeal a district court order denying a claim of Eleventh Amendment immunity. The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
[
Footnote 2
] See Dube v. Sate University of New York, 900 F.2d 587, 594 (CA2 1990), cert. denied,
[
Footnote 3
] The District Court also denied absolute immunity. This order was held appealable by he Court of Appeals, and was affirmed, as it was by us. Mitchell v. Forsyth,
[
Footnote 4
] The result reached today was largely anticipated by Ex parte New York,
[
Footnote 5
] For this reason, the First Circuit's attempt to distinguish Mitchell v. Forsyth,
JUSTICE BLACKMUN, concurring.
I join the Court's opinion, but write separately to make plain once again my position on one feature. I continue to
[506
U.S. 139, 148]
believe that the Court's interpretation of the Eleventh Amendment as embodying a broad principle of state immunity from suit in federal court "simply cannot be reconciled with the federal system envisioned by our Basic Document and its Amendments ." Atascadero State Hospital v. Scanlon,
JUSTICE STEVENS, dissenting.
This case arises out of a commercial dispute between respondent, a private engineering firm, and the Puerto Rico Aqueduct and Sewer Authority (PRASA or Authority). The parties entered into a multimillion dollar contract providing for the construction of extensive improvements to Puerto Rico's wastewater treatment facilities. Respondent brought suit in the Federal District Court for the District of [506 U.S. 139, 149] Puerto Rico alleging breach of contract. The Authority filed a motion to dismiss, claiming that the action was barred by the Eleventh Amendment. The District Court concluded that the claim had no merit, and denied the motion to dismiss. The Court of Appeals dismissed PRASA's appeal from that order because it was not final within the meaning of 28 U.S.C. 1291.
If the Authority were a private litigant engaged in a commercial dispute, it would be perfectly clear that the dismissal of its appeal was required by our precedents. For the denial of a motion to dismiss on jurisdictional grounds - a motion that asserts that the defendant cannot be sued in a particular forum - is not a final order within the meaning of 1291. Van Cauwenberghe v. Biard,
Nonetheless, despite our decisions in Biard and Catlin, the Court holds that, when a State or state entity claiming to be an "arm of the State" asserts that it cannot be sued in a federal forum because of the Eleventh Amendment, the "final decision" rule must give way, and the claim must be subject to immediate appellate review. The Court reasons that such a claim is analogous to a government official's claim of absolute or qualified immunity, which we have held is subject to interlocutory appeal. Nixon v. Fitzgerald,
The defense of absolute or qualified immunity is designed to shield government officials from liability for their official conduct. In the absence of such a defense, we have held, "officials would hesitate to exercise their discretion in a way injuriously affecting the claims of particular individuals even when the public interest required bold and unhesitating action." Nixon v. Fitzgerald,
While the Eleventh Amendment defense available to States and state entities is often labeled an "immunity," that label is virtually all that it has in common with the defense of absolute or qualified immunity. In contrast to the latter, a defense based on the Eleventh Amendment, even when the Amendment is read at its broadest, does not contend that the State or state entity is shielded from liability for its conduct, but only that the federal courts are without jurisdiction over claims against the State or state entity. See ante, at 114. Nothing in the Eleventh Amendment bars respondent from seeking recovery in a different forum. Indeed, as noted above, petitioner acknowledges that it is not seeking immunity for its conduct, but merely that the suit be brought in the courts of the Commonwealth of Puerto Rico. Brief for Petitioner 4-5.
Plainly, then, the interests underlying our decisions allowing immediate appeal of claims of absolute or qualified immunity do not apply when the so-called "immunity" is one based on the Eleventh Amendment. Whether petitioner must bear the burden, expense, and distraction of litigation stemming from its contractual dispute with respondent has nothing whatsoever to do with the Eleventh Amendment; the Eleventh Amendment only determines where, or more precisely, where not, that suit may be brought. * Because the Amendment goes to the jurisdiction of the federal court, as opposed to the underlying liability of the State or state entity, [506 U.S. 139, 151] Biard and Catlin, not Nixon and Mitchell, are the relevant precedent for determining whether PRASA's claim is subject to interlocutory appeal.
If indeed the interests underlying our decisions permitting immediate appeal of claims of absolute or qualified immunity do not apply to a State or state entity's objection to federal jurisdiction on Eleventh Amendment grounds, what then is driving the Court to hold that PRASA's claim under the Eleventh Amendment is subject to immediate appeal? The Court tells us, ante, at 146: "[The] ultimate justification is the importance of ensuring that the States' dignitary interests can be fully vindicated." Whereas a private litigant must suffer through litigation in a federal tribunal despite his claim that the court lacks jurisdiction, e.g., Biard and Catlin, a State or state entity must be protected from the "indignity"of having to present its case - as to both the court's jurisdiction and the underlying me merits - in the neutral forum of a federal district court.
I find that rationale to be embarrassingly insufficient. The mandate of 1291 that appellate jurisdiction be limited to "final decisions of the district courts" is not predicated upon "mer[e] technical conceptions of `finality,'" Catlin,
For me, the balance of interests is easy. The cost to the courts and the parties of permitting piecemeal litigation of this sort clearly outweighs whatever benefit to their "dignity" States or state entities might derive by having their Eleventh Amendment claims subject to immediate appellate review. I would therefore hold, as did the court below, that the denial of a motion to dismiss on Eleventh Amendment grounds is not subject to immediate appellate review. Accordingly, I respectfully dissent.
[
Footnote *
] Not surprisingly, we have expressly characterized the Eleventh Amendment defense, albeit in a different context, as "partak[ing] . . . of a jurisdictional bar." Edelman v. Jordan,
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Citation: 506 U.S. 139
No. 91-1010
Argued: November 09, 1992
Decided: January 12, 1993
Court: United States Supreme Court
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