State of S.D., In re

• Decision Date: 02 December 1982
• Docket Number: Nos. 82-1783,82-1875,RE-INSURANCE,s. 82-1783
• Parties: In re STATE OF SOUTH DAKOTA, Petitioner. AMERICANCOMPANY, a Delaware Corporation, Appellee, v. William J. JANKLOW, Individually and as Governor of the State of South Dakota; Vernon L. Larson, Individually and as Auditor of The State of South Dakota; Tim Engelhart, Individually and as Director of the Bureau of Administration of the State of South Dakota; James E. Brinkman, Individually and as Director of the Department of Purchasing and Printing of the State of South Dakota, Appellants. The Bureau of Administration of the State of South Dakota; and the State of South Dakota.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1158

692 F.2d 1158

In re STATE OF SOUTH DAKOTA, Petitioner AMERICAN RE-INSURANCE COMPANY, a Delaware Corporation, Appellee, v. William J. JANKLOW, Individually and as Governor of the State of South Dakota; Vernon L. Larson, Individually and as Auditor of The State of South Dakota; Tim Engelhart Individually and as Director of the Bureau of Administration of the State of South Dakota; James E. Brinkman Individually and as Director of the Department of Purchasing and Printing of the State of South Dakota, Appellants The Bureau of Administration of the State of South Dakota; and the State of South Dakota.

Nos. 82-1783, 82-1875.

United States Court of Appeals, Eighth Circuit.

Submitted July 14, 1982.

Decided Nov. 12, 1982.

As Amended Dec. 2, 1982.

Mark V. Meierhenry, Atty. Gen., Grant Gormley, Mark Smith, Asst. Attys. Gen., Pierre, S.D., for petitioner.

Lawrence L. Piersol, Celia Miner, Legal Intern, Davenport, Evans, Hurwitz & Smith, Sioux Falls, S.D., James M. Samples, Stephen D. Bell, Faegre & Benson, Minneapolis, Minn., for American Re-Ins. Co.

Gary E. Davis, Rick Johnson, Johnson, Eklund & Davis, Gregory, S.D., for appellants.

Before LAY, Chief Judge, and HEANEY and McMILLIAN, Circuit Judges.

LAY, Chief Judge.

The State of South Dakota has filed an original petition seeking a writ of prohibition under 28 U.S.C. Sec. 1651 to prevent the enforcement of a preliminary injunction issued by the United States District Court for the District of South Dakota. We have informally consolidated this petition with an appeal by four individual state officers against whom the injunction is directed.

Facts.

In June 1981, American Re-Insurance Co. filed suit against the State of South Dakota, its Bureau of Administration, and four officers of the state in their individual and official capacities. The four individual defendants are William J. Janklow, Governor; Vernon L. Larson, Auditor; Tim Engelhart, Director of the Bureau of Administration; and James E. Brinkman, Director of the Department of Purchasing and Printing. American alleged that the state breached a contract to lease computer equipment and that the individual defendants tortiously interfered with the contract, depriving American of its constitutional and civil rights. Jurisdiction was premised on the fourteenth amendment and article I, section 10 of the Constitution, and on 42 U.S.C. Sec. 1983. In an earlier appeal ¹ this court affirmed the dismissal of American's action against the state and its Bureau of Administration, on the ground that the state had not waived its eleventh amendment immunity from suit. This court also held, however, that "the declaratory and injunctive portions of American's complaint must be reinstated against the four individual appellees in their individual and official capacities." 676 F.2d at 1183.

On remand, on June 29, 1982, the district court, at American's request, issued a preliminary injunction against the four individual officials, commanding them to "desist and refrain from any and all interference with the Lease Agreement" between the parties. American Re-Insurance Co. v. Janklow, Civ. 81-4090 (D.S.D. June 29, 1982). ² On July 1, 1982, this court granted a stay of the district court's injunction, pending disposition of the petition for a writ of prohibition filed by the state to prevent the injunction's enforcement.

The state argues that the injunction in effect commands the individual officers of the state to make payments under the lease, and that the payments will have to be made from the Central Data Processing (CDP) fund, which, the state contends, is part of the state treasury. Thus, the state concludes, the injunction violates the eleventh amendment.

I. The Writ of Prohibition.

The state attacks the district court's action on the ground that the injunction violates the eleventh amendment. The issue before us is whether an allegedly erroneous decision based upon violation of the eleventh amendment poses such a jurisdictional bar to the district court's power to act that this court should prevent the enforcement of the injunction by way of a writ of prohibition. ³

The Supreme Court has observed an eleventh amendment defense "sufficiently partakes of the nature of a jurisdictional bar" so that it may be raised at any time during judicial proceedings, including on appeal. Edelman v. Jordan, 415 U.S. 651, 677-78, 94 S.Ct. 1347, 1362-1363, 39 L.Ed.2d 662 (1974); Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 467, 65 S.Ct. 347, 352, 89 L.Ed. 389 (1945). However, the Court has also noted that the eleventh amendment does not pose an absolute jurisdictional bar. In Patsy v. Board of Regents, --- U.S. ----, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982), the Court said:

[B]ecause of the importance of state law in analyzing Eleventh Amendment questions and because the State may, under certain circumstances, waive this defense, we have never held that it is jurisdictional in the sense that it must be raised and decided by this Court on its own motion.

Id. at 2568 n. 19.

Several courts, including this one, have held that a possibly erroneous decision, even on jurisdictional questions, does not mandate the issuance of a writ. In Ex parte Chicago, Rock Island & Pacific Railway Co., 255 U.S. 273, 274-76, 41 S.Ct. 288, 289-290, 65 L.Ed. 631 (1921), the petitioner sought a writ of mandamus ⁴ against a district court, alleging that the district court had no personal jurisdiction over the petitioner, and thus should not be allowed to proceed against it. The Court dismissed the petition and held:

There is a well-settled rule by which this court is guided upon applications for a writ of prohibition to prevent a lower court from wrongfully assuming jurisdiction of a party, of a cause, or of some collateral matter arising therein. If the lower court is clearly without jurisdiction the writ will ordinarily be granted to one who at the outset objected to the jurisdiction, has preserved his rights by appropriate procedure and has no other remedy. In re Rice, 155 U.S. 396 [15 S.Ct. 149, 39 L.Ed. 198]. If, however, the jurisdiction of the lower court is doubtful, Ex parte Muir, 254 U.S. 522 [41 S.Ct. 185, 65 L.Ed. 383]; or if the jurisdiction depends upon a finding of fact made upon evidence which is not in the record, In re Cooper, 143 U.S. 472, 506, 509 [12 S.Ct. 453, 462-463, 36 L.Ed. 232]; or if the complaining party has an adequate remedy by appeal or otherwise, Ex parte Tiffany, 252 U.S. 32, 37 [40 S.Ct. 239, 241, 64 L.Ed. 443]; Ex parte Harding, 219 U.S. 363 [31 S.Ct. 324, 55 L.Ed. 252]; the writ will ordinarily be denied.

Id. at 275-76, 41 S.Ct. at 289-290. ⁵

The Third Circuit observed in American Airlines, Inc. v. Forman, 204 F.2d 230 (3d Cir.1953):

The challenged assumption or denial of jurisdiction must be so plainly wrong as to indicate failure to comprehend or refusal to be guided by unambiguous provisions of a statute or settled common law doctrine. If a rational and substantial legal argument can be made in support of the questioned jurisdictional ruling, the case is not appropriate for mandamus or prohibition even though on normal appeal a reviewing court might find reversible error.

Id. at 232. ⁶

This court reaffirmed its support for the Forman rule in Pfizer, Inc. v. Lord, 522 F.2d 612 (8th Cir.1975), cert. denied, 424 U.S. 950, 96 S.Ct. 1422, 47 L.Ed.2d 356 (1976). The court declined to decide under a petition for a writ of mandamus whether foreign governments were "persons" entitled to sue for treble damages under the Clayton Act, ⁷ and held that the district court had the power to decide the jurisdictional question in the first instance, even if that decision later proved to be erroneous:

The district court was presented with a difficult question of statutory interpretation, a question apparently of first impression. Even if its decision were erroneous (and we intimate no view on the merits), under the circumstances of this case it would not constitute a clear abuse of discretion.

Further, the mere fact that a court might err even on jurisdictional questions does not necessarily amount to a usurpation of power making mandamus appropriate. ⁸

552 F.2d at 615.

In light of the guidelines outlined above, it cannot be said in this case that the district court's action was "so plainly wrong as to indicate failure to comprehend or refusal to be guided by unambiguous provisions of a statute or settled common law doctrine." American Airlines, Inc. v. Forman, 204 F.2d at 232. This court has once held that American may proceed against the individual defendants, notwithstanding the eleventh amendment defense of the state and its Bureau of Administration. American Re-Insurance Co. v. Janklow, 676 F.2d at 1183. In addition, as we will observe in discussing the appeal of the individual officers, it has yet to be determined by any court whether the funds from which payment would be made on the lease are a part of the state's treasury, and thus whether an eleventh amendment defense to payment is applicable. ⁹

In view of these factors and the less-than-absolute nature of an eleventh amendment jurisdictional bar, we cannot say that the district court's decision to grant the preliminary injunction was such a usurpation of power and a clear abuse of discretion that enforcement of the injunction should be prohibited at this stage in the proceedings. We also note that the individual defendants have appealed the grant of the preliminary injunction and have raised the same eleventh amendment defense on their own behalf that the state raises here. Under the circumstances it is readily apparent that extraordinary circumstances do not exist in this case, and the petition for a writ of prohibition should be denied.

II. The Appeal of the Individual State Officials.

In our earlier opinion, American Re-Insurance Co. v. Janklow, 676 F.2d 1177 (8th Cir.1982), we held that the district court's dismissal of the complaint...