519 U.S. 425 (1997), 95-1694, Regents of Univ. of Cal. v. Doe

Docket Nº:Case No. 95-1694
Citation:519 U.S. 425, 117 S.Ct. 900, 137 L.Ed.2d 55, 65 U.S.L.W. 4129
Party Name:REGENTS OF THE UNIVERSITY OF CALIFORNIA et al. v. DOE
Case Date:February 19, 1997
Court:United States Supreme Court
 
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Page 425

519 U.S. 425 (1997)

117 S.Ct. 900, 137 L.Ed.2d 55, 65 U.S.L.W. 4129

REGENTS OF THE UNIVERSITY OF CALIFORNIA et al.

v.

DOE

Case No. 95-1694

United States Supreme Court

February 19, 1997

Argued December 2, 1996

CERTIORARI TO THE UNITED STATES COURT OF APPPEALS FOR THE NINTH CIRCUIT

Syllabus

Respondent Doe, a New York citizen, sued the Regents of the University of California and others, alleging, inter alia, that the University had agreed to employ him at a laboratory it operates pursuant to a contract with the federal Department of Energy, and that it had wrongfully breached its agreement with him upon determining that he could not obtain a required security clearance. Relying on Circuit precedent holding that the University is "an arm of the state," the District Court concluded that the Eleventh Amendment barred Doe from maintaining his breach-of-contract action in federal court. In reversing, the Ninth Circuit held that liability for money judgments is the single most important factor in determining whether an entity is an arm of the State, and gave decisive weight to the terms of the University's agreement with the Energy Department, under which the Department, not the State, is liable for any judgment rendered against the University in its performance of the contract.

Held:

The fact that the Federal Government has agreed to indemnify a state instrumentality against litigation costs, including adverse judgments, does not divest the state agency of Eleventh Amendment immunity. Nothing in this Court's opinions supports the notion that the presence or absence of a third party's undertaking to indemnify a state agency should determine whether it is the kind of entity that should be treated as an arm of the State. Just as with the arm-of-the-state inquiry, see, e. g., Hess v. Port Authority Trans-Hudson Corporation, 513 U.S. 30, 51-52, it is the entity's potential legal liability for judgments, rather than its ability or inability to require a third party to reimburse it, or to discharge the liability in the first instance, that is relevant in determining the underlying Eleventh Amendment question. Accordingly, the Court rejects Doe's principal contention—that the Amendment does not apply to this litigation because any damages award would be paid by the Energy Department, and therefore have no impact upon California's treasury. Because the question on which certiorari was granted does not encompass Doe's alternative argument attacking the Ninth Circuit cases holding the University to be an arm of the State, the Court declines to address that argument. Pp. 429-432.

65 F.3d 771, reversed.

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Charles A. Miller argued the cause for petitioners. With him on the briefs were Robert A. Long, Jr., John F.Duffy, James E. Holst, and Patrick J. O'Hern.

Lisa Schiavo Blatt argued the cause for the United States as amicus curiae urging reversal. With her on the brief were Acting Solicitor General Dellinger, Assistant Attorney General Hunger, Deputy Solicitor General Bender, and Mark B. Stern.

Richard Gayer, by appointment of the Court, 519 U.S. 804, argued the cause for respondent. With him on the brief was Madeleine Tress. [*]

Justice Stevens delivered the opinion of the Court.

The narrow question presented by this case is whether the fact that the Federal Government has agreed to indemnify a state instrumentality against the costs of litigation, including adverse judgments, divests the state agency of Eleventh Amendment immunity. We hold that it does not.

I

Respondent, a citizen of New York, brought suit against the Regents of the University of California and several individual defendants in the United States District Court for the Northern District of California. Although he alleged other claims, we are concerned only with respondent's breach-of-contract claim against the University. Doe contends that the University agreed to employ him as a mathematical physicist at the Lawrence Livermore National Laboratory, which the University operates pursuant to a contract with the Federal Government. According to his complaint, the

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University wrongfully refused to perform its agreement with Doe because it determined that he could not obtain the required security clearance from the Department of Energy (Department). Relying on Ninth Circuit cases holding that the University is "an arm of the state,"[1] the District Court concluded that the Eleventh Amendment barred respondent from maintaining his breach-of-contract action in federal court.

The Court of Appeals for the Ninth Circuit reversed. Assuming that in some, but not all, of its functions the University is entitled to Eleventh Amendment immunity,[2] the court addressed the narrow question whether it is an arm of the State when "acting in a managerial capacity" for the Livermore Laboratory. Doe v. Lawrence Livermore National Laboratory, 65 F.3d 771, 774 (1995). Although the majority applied "a five-factor analysis,"[3] it emphasized that "liability

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for money judgment is the single most important factor in determining whether an entity is an arm of the state." Ibid. The majority opinion gave decisive weight to the terms of the University's agreement with the Department, which made it "clear that the Department, and not the State of California, is liable for any judgment rendered against the University in its performance of the Contract." Ibid.

The dissenting judge did not take issue with the majority's emphasis on the importance of the defendant's liability for a money judgment, but he reasoned that the proper analysis should focus on the primary legal liability rather than the ultimate economic impact of the judgment. Noting that it was undisputed that a judgment against the University "is a legal obligation of the State of California," id., at 777, he discounted the significance of the indemnitor's secondary, or indirect, liability. For his conclusion, he relied on Ninth Circuit...

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