507 F.3d 1250 (10th Cir. 2007), 06-5212, Steadfast Ins. Co. v. Agricultural Ins. Co.

Docket Nº:06-5212.
Citation:507 F.3d 1250
Party Name:STEADFAST INSURANCE COMPANY, Plaintiff-Counter-Defendant-Appellee, v. AGRICULTURAL INSURANCE COMPANY, now known as Great American Assurance Company, Defendant-Counter-Claimant-Cross-Claimant-Appellant, v. Grand River Dam Authority, Defendant-Cross-Defendant-Appellee.
Case Date:November 20, 2007
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit

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507 F.3d 1250 (10th Cir. 2007)

STEADFAST INSURANCE COMPANY, Plaintiff-Counter-Defendant-Appellee,


AGRICULTURAL INSURANCE COMPANY, now known as Great American Assurance Company, Defendant-Counter-Claimant-Cross-Claimant-Appellant,


Grand River Dam Authority, Defendant-Cross-Defendant-Appellee.

No. 06-5212.

United States Court of Appeals, Tenth Circuit.

November 20, 2007


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         George W. Dahnke (Sarah J. Timberlake with him on the brief), Abowitz, Timberlake & Dahnke, P.C., Oklahoma City, Oklahoma, for Appellant.

         Galen L. Brittingham (Michael P. Atkinson with him on the brief), Atkinson, Haskins,

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Nellis, Brittingham, Gladd & Carwile, Tulsa, Oklahoma, for Appellee.

         Before KELLY, BALDOCK, and BRISCOE, Circuit Judges.

         BALDOCK, Circuit Judge.

         In several underlying actions, multiple claimants brought suit against the Grand River Dam Authority (GRDA) for damages related to a series of flood incidents, which began in 1992. Plaintiff Steadfast Insurance Company (Steadfast) serves as the GRDA's primary insurer. Steadfast filed this declaratory judgment action in federal court under 28 U.S.C. § 1332, seeking a ruling that it had no obligation to cover these underlying claims. Subsequently, Steadfast added Defendant Agricultural Insurance Company (Agricultural), the GRDA's excess liability insurer, to this action, alleging the possibility that the GRDA's excess liability policy might come into play.

         Agricultural filed a counter-claim against Steadfast, and a cross-claim against the GRDA, requesting a declaratory judgment that it had no duty to indemnify the GRDA. The GRDA moved to dismiss both Stead fast’s complaint and Agricultural's cross-claim based on its entitlement to Eleventh Amendment immunity. The district court ruled the GRDA was entitled to sovereign immunity and granted its motion to dismiss. The question presented on appeal is whether the GRDA is a state agency entitled to Eleventh Amendment immunity. See U.S. Const. amend. XI. We have jurisdiction under 28 U.S.C. § 1291, and affirm.1


         The Eleventh Amendment states: "The 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, or by Citizens or Subjects of any Foreign State." U.S. Const. amend. XI. Eleventh Amendment immunity's primary purpose is to accord states the respect owed them as joint sovereigns. See Fed. Mar. Comm'n v. S.C. State Ports Auth., 535 U.S. 743, 765, 122 S.Ct. 1864, 152 L.Ed.2d 962 (2002). Consequently, state sovereign immunity applies to any action brought against a state in federal court, including suits initiated by a state's own citizens. See Edelman v. Jordan, 415 U.S. 651, 662-63, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974). Eleventh Amendment immunity applies regardless of whether a plaintiff seeks declaratory or injunctive relief, or money damages. See Fed. Mar. Comm'n, 535 U.S. at 765-66, 122 S.Ct. 1864.

         The Eleventh Amendment does not automatically destroy a federal court's jurisdiction to decide lawsuits brought against a state. See Wis. Dept. of Corrs. v. Schacht, 524 U.S. 381, 389, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998). Rather, the Eleventh Amendment grants states a legal power to assert sovereign immunity as a defense. See id. A state may, therefore, waive its sovereign immunity. See id. The decision to waive Eleventh Amendment immunity is, however, "altogether voluntary" and we will not readily find such a waiver. Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 675, 119 S.Ct. 2219, 144 L.Ed.2d 605 (1999). In most cases, waiver of sovereign immunity occurs either when a state voluntarily invokes the jurisdiction of a federal court, or when a state makes a

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"clear declaration" that it intends to submit itself to a federal court's jurisdiction. Id. at 675-76, 119 S.Ct. 2219. A state's removal of a case to federal court is a voluntary invocation of federal jurisdiction sufficient to waive that state's Eleventh Amendment immunity. See Lapides v. Bd. of Regents, 535 U.S. 613, 624, 122 S.Ct. 1640, 152 L.Ed.2d 806 (2002).

         In terms of scope, Eleventh Amendment immunity extends to states and state entities but not to counties, municipalities, or other local government entities. See Mt. Healthy City Sch. Dist. v. Doyle, 429 U.S. 274, 280, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977). To determine the category into which a given entity falls, we consider whether that entity is, or is not, an "arm of the state." Id. The answer to this question depends, in large part, upon our analysis of the "nature of the entity created by state law." Regents of the Univ. of Cal. v. Doe, 519 U.S. 425, 429 & n. 5, 117 S.Ct. 900, 137 L.Ed.2d 55 (1997); Sturdevant v. Paulsen, 218 F.3d 1160, 1164 (10th Cir. 2000). If a state entity is more like a political subdivision - -such as a county or city - -than it is like an instrumentality of the state, that entity is not entitled to Eleventh Amendment immunity. See Mt. Healthy, 429 U.S. at 280, 97 S.Ct. 568; Sturdevant, 218 F.3d at 1164-65.

         We look to four primary factors in determining whether an entity constitutes an "arm of the state." Mt. Healthy, 429 U.S. at 280, 97 S.Ct. 568. First, we assess the character ascribed to the entity under state law. Simply stated, we conduct a formalistic survey of state law to ascertain whether the entity is identified as an agency of the state. See Sturdevant, 218 F.3d at 1164, 1166. Second, we consider...

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