Savage v. Glendale Union High School

Decision Date10 September 2003
Docket NumberNo. 02-15743.,02-15743.
Citation343 F.3d 1036
PartiesShelley SAVAGE, Plaintiff-Appellee, v. GLENDALE UNION HIGH SCHOOL, District No. 205, Maricopa County, Defendant-Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Steven Plitt and Karla Starr; Shugart Thompson Kilroy Goodwin Raup, P.C.; Phoenix, AZ; attorneys for the appellants.

Rose Daly-Rooney; Tucson, AZ; attorney for the appellee.

Jill K. Osborne; Kerrin & Osborne, P.C.; Phoenix, AZ; attorneys for Amicus Curiae Arizona Education Association.

Anne Marie R. Segal; White & Case LLP; New York, NY; and Dan Woods; White & Case LLP; Los Angeles, CA; attorneys for Amicus Curiae National Association of Protection and Advocacy Systems.

Appeal from the United States District Court for the District of Arizona; Robert C. Broomfield, District Judge, Presiding. D.C. No. CV-00-01546-RCB.

Before: ROBERT R. BEEZER, SIDNEY R. THOMAS, and RICHARD R. CLIFTON, Circuit Judges.

THOMAS, Circuit Judge.

This appeal presents the question of whether an Arizona high school district is an arm of the state entitled to Eleventh Amendment immunity from suit in federal court for alleged violations of the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12101 & 12203 et seq., and the Rehabilitation Act ("RA"), 29 U.S.C. § 794 et seq. We hold that it is not, and affirm the district court.

I

This case arises out of the termination of plaintiff Shelley Savage's employment relationship with defendant Glendale Union High School District ("the School District").1 Shelley Savage, a disabled individual, was employed by the School District at Independence High School as an education services technician. The management at the high school informed Savage that she must affix a flagpole to her wheelchair in order to make herself more visible to students in the classroom. She objected to the request, informing the management staff she believed it to be discriminatory. Nevertheless, they continued to require that she comply. When Savage refused to put the flag and flagpole on her wheelchair, the School District terminated her employment. Savage subsequently filed a discrimination charge with the United States Equal Employment Opportunity Commission ("EEOC") and the Arizona Civil Rights Section of the Attorney General's office. The EEOC issued a determination letter, finding reasonable cause to believe that the School District had discriminated against Savage by subjecting her to discriminatory terms and conditions of employment, and then discharging her in retaliation for her opposition to the discriminatory terms. The EEOC then issued Savage a right to sue letter. Savage also received a right to sue letter from the Arizona Civil Rights Section of the Attorney General's office.

Savage filed suit in the United States District Court for the District of Arizona, claiming violations of Title I of the ADA, 42 U.S.C. §§ 12101 et seq., 42 U.S.C. § 12203, Section 504 of the RA, 29 U.S.C. § 794, and the Arizona Civil Rights Act ("ACRA"), Ariz.Rev.Stat. §§ 41-1461 et seq. Savage seeks injunctive, compensatory and punitive relief.

The School District filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1), arguing that Savage's claims under the ADA and RA are barred by the Eleventh Amendment because the School District is an arm of the state. The School District further argued that if the ADA claims and RA claims are dismissed, then the district court could not exercise supplemental jurisdiction over the ACRA claims. Both parties supplied affidavits and public documents in support of their positions regarding the motion to dismiss.2 After reviewing the arguments and documentation and applying the five part test set out in Mitchell v. Los Angeles Community College District, 861 F.2d 198, 201 (9th Cir.1988), the district court concluded that the School District was not an arm of the state and therefore not entitled to sovereign immunity under the Eleventh Amendment. Because the district court determined that it had jurisdiction over the ADA and RA claims, it concluded that the exercise of jurisdiction over the ACRA claims was a proper exercise of supplemental jurisdiction and declined to dismiss them. This appeal followed.

II

Whether a state has sovereign immunity under the Eleventh Amendment presents questions of law which we review de novo. Carey v. Nevada Gaming Control Bd., 279 F.3d 873, 877 (9th Cir.2002). The existence of subject matter jurisdiction is a question of law which we also review de novo. United States v. Peninsula Communications, Inc., 287 F.3d 832, 836 (9th Cir.2002). The district court had jurisdiction pursuant to 28 U.S.C. §§ 1331 & 1367(a). Although the denial of a motion to dismiss is ordinarily not a complete and final judgment subject to appeal, entities that claim to be arms of the State may use the collateral order doctrine to appeal a district court order denying a claim of Eleventh Amendment immunity. Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 147, 113 S.Ct. 684, 121 L.Ed.2d 605 (1993). Accordingly, we have jurisdiction pursuant to 28 U.S.C. § 1291.

III

It is well established that agencies of the state are immune under the Eleventh Amendment from private damages or suits for injunctive relief brought in federal court. See, e.g., Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 100, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984). However, while States are protected by the Eleventh Amendment from suit in federal court, local governments do not enjoy this immunity. Bd. of Trs. of Univ. of Ala. v. Garrett, 531 U.S. 356, 369, 121 S.Ct. 955, 148 L.Ed.2d 866 (2001); Lincoln County v. Luning, 133 U.S. 529, 530, 10 S.Ct. 363, 33 L.Ed. 766 (1890). Because Congress may not abrogate the sovereign immunity of states for suits under Title I of the ADA, Savage may not bring her ADA claims against the School District in federal court if the School District is an arm of the state rather than the local government, as the School District contends. See Garrett, 531 U.S. at 360, 121 S.Ct. 955. We conclude that the School District does not fall under the protection of the Eleventh Amendment.

To determine whether a governmental entity is an arm of the state for Eleventh Amendment purposes, we examine the following factors: (1) whether a money judgment would be satisfied out of state funds; (2) whether the entity performs central governmental functions; (3) whether the entity may sue or be sued; (4) whether the entity has the power to take property in its own name or only in the name of the state; and (5) the corporate status of the entity. Mitchell v. Los Angeles Cmty. Coll. Dist., 861 F.2d 198, 201 (9th Cir.1988). In making this determination, a court examines the manner in which state law treats the entity. Id. (citing Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977)). Applying these factors in examining the unique features of California law as it existed at the time, we determined in Belanger v. Madera Unified School District, 963 F.2d 248 (9th Cir.1992), that California school districts are state agencies entitled to Eleventh Amendment immunity. On the other hand, in Eason v. Clark County School District, 303 F.3d 1137 (9th Cir.2002), we applied the Mitchell factors and concluded that Nevada school districts are not arms of the state entitled to sovereign immunity. A careful examination of the Arizona statutory scheme demonstrates that Arizona's school districts are more akin to Nevada's than California's and therefore are subject to suit in federal court.

A

Because the impetus of the Eleventh Amendment is the prevention of federal-court judgments that must be paid out of a state's treasury, "[t]he vulnerability of the State's purse [is] the most salient factor in Eleventh Amendment determinations." Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30, 48, 115 S.Ct. 394, 130 L.Ed.2d 245 (1994). Accordingly, the first Mitchell factor is the most important component in establishing Eleventh Amendment immunity. Belanger, 963 F.2d at 251. After a careful review of the tendered evidence and relevant statutes, the district court concluded that the state of Arizona is not responsible for any money judgment awarded against the School District.

A close examination of Arizona's school funding structure demonstrates that the district court was correct in concluding that the Arizona State treasury would not be vulnerable to a money judgment against the School District. As the district court noted, school districts in Arizona are supported by federal, state and local funds. Federal money is acquired mainly in the form of grants, some of which are paid to the states and then dispersed to individual school districts, others of which are provided directly by the federal government to county treasurers for use by school districts. Ariz.Rev.Stat. §§ 15-206-15-209. The state provides grants for qualifying school districts, and also dispenses state monies in the form of state equalization assistance. Ariz.Rev.Stat. § 15-971. Local monies may come from county assistance and local property taxes. Ariz.Rev.Stat. § 15-971. School districts are also permitted by statute to raise money through bonded indebtedness. Ariz.Rev. Stat. §§ 15-1021 to 15-1032. All these federal, state and local monies go into the maintenance and operations fund ("M & O fund") maintained by the county treasurer. Ariz.Rev.Stat. § 15-996. State and federal grant money must be used only for the purposes for which the grants are awarded. Ariz.Rev.Stat. § 15-210. But other monies in a school district's M & O fund may be used for all the school district's operating expenses, including legal fees, liability insurance, and money judgments.

The School District argues that it is this commingling of funds that...

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