Ameritech Corp. v. McCann

• Decision Date: 22 July 2002
• Docket Number: No. 02-1158.,02-1158.
• Parties: AMERITECH CORP., Plaintiff-Appellant, v. E. Michael McCANN, in his official capacity as District Attorney of Milwaukee County, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

297 F.3d 582

AMERITECH CORP., Plaintiff-Appellant, v. E. Michael McCANN, in his official capacity as District Attorney of Milwaukee County, Defendant-Appellee.

No. 02-1158.

United States Court of Appeals, Seventh Circuit.

Argued June 5, 2002.

Decided July 22, 2002.

Craig A. Knot (argued), Ameritech Corp., Chicago, IL, for Plaintiff-Appellant.

Mary Woolsey Schlaefer (argued), Office of Attorney General, Wisconsin Dept. of Justice, Madison, WI, for Defendant-Appellee.

Before FLAUM, Chief Judge, and DIANE P. WOOD and WILLIAMS, Circuit Judges.

FLAUM, Chief Judge.

Plaintiff-Appellant Ameritech Corporation ("Ameritech") sued E. Michael McCann, the District Attorney of Milwaukee County, seeking a declaration that McCann must comply with certain provisions of the Electronic Communications Privacy Act ("ECPA" or "the Act"), 18 U.S.C. § 2510 et seq. The district court granted McCann's motion to dismiss, holding that the Eleventh Amendment barred Ameritech's suit. Ameritech appeals and, for the reasons stated herein, we reverse.

I. Background

In October 1986, Congress enacted the ECPA to "protect against the unauthorized interception of electronic communications." S.Rep. No. 99-541, reprinted at 1986 U.S.C.C.A.N. 3555, 3555. The Act generally defines the scope of a party's ability to intercept personal and proprietary communications, while at the same time recognizing the government's legitimate law enforcement needs in obtaining such information. To this end, Section 2703 of the Act sets forth the requirements for government access to private communications and states that electronic communications providers (such as Ameritech) shall furnish certain electronic records to governmental entities only under specific circumstances. The current appeal deals with Section 2706 of the ECPA, which obligates a governmental entity obtaining electronic records under Section 2703 to "pay the person or entity assembling or providing such information a fee for reimbursement for such costs as are reasonably necessary and which have been directly incurred in searching for, assembling, reproducing, or otherwise providing such information." The Act urges the governmental entity and information provider to agree on the reimbursement amount. 18 U.S.C. § 2706(b). If, however, the parties cannot reach an agreement, the ECPA states that the court that issued the order for production shall determine the appropriate reimbursement calculation. See id.¹

As the District Attorney for Milwaukee County, Wisconsin, McCann occasionally obtains court orders requesting automated message accounting studies ("AMAs"), which are compilations of information detailing the origin of incoming telephone calls to a particular telephone number. Pursuant to the ECPA, Ameritech requested reimbursement for the costs associated with compiling AMAs. McCann refused, maintaining that Ameritech is not entitled to reimbursement.

Ameritech sued McCann in his official capacity seeking a declaratory judgment that McCann must comply with § 2706 of the ECPA. McCann answered the complaint and filed a motion to dismiss arguing, inter alia, that the district court lacked jurisdiction and that the Eleventh Amendment barred Ameritech's suit. The district court issued a ruling concluding that a genuine case or controversy existed; however, the court declined to address the merits of the remaining issues within McCann's motion to dismiss. Instead, the district court requested supplemental briefing on two additional concerns: whether the ECPA violated the Tenth Amendment and whether 18 U.S.C. § 2706 preempted state law regarding access to electronic records. In a footnote, the district court briefly addressed the Eleventh Amendment issue, stating:

McCann also argues that Ameritech's suit is barred by the Eleventh Amendment. Under the Eleventh Amendment, a state and its officials, as such, may not be sued for money damages for past conduct. Const., Amend. XI. However, the Eleventh Amendment does not bar suits, like this one, that seek only declaratory relief. Hadi v. Horn, 830 F.2d 779, 783 (7th Cir.1987).

Ameritech Corp. v. McCann, No. 99-C-675, slip op. at 10 n. 3 (N.D.Ill. July 20, 2000). The parties subsequently submitted supplemental briefs pursuant to the district court's order.²

In December 2001, the district court issued an order granting McCann's motion to dismiss, stating that in the course of considering the parties' supplemental briefs, the court changed course and decided that the Eleventh Amendment barred Ameritech's suit. The district court noted that a state's sovereign immunity generally bars declaratory judgment actions and that Congress lacked the power to abrogate that immunity when it passed the Declaratory Judgment Act in 1934. More important to the present appeal, the district court also held that the exception to Eleventh Amendment immunity announced by the Supreme Court in Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), was inapplicable for several reasons. First, the court ruled that, as a technical matter, the Young exception did not apply because Ameritech named McCann in his official and not individual capacity. Second, the district court reasoned that the res judicata effect of a declaration of rights under § 2706 would translate into a monetary damages award against the state. As a result, the court stated that although Ameritech requested prospective injunctive relief, its suit was the "functional equivalent" of a suit for damages and therefore barred by Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261, 267-69, 117 S.Ct. 2028, 138 L.Ed.2d 438 (1997). Finally, the court found that § 2706 impermissibly burdened the state's special sovereign interest in law enforcement by requiring the expenditure of state funds in an area traditionally reserved to the states. The district court then granted McCann's motion to dismiss the complaint, and Ameritech appeals.

II. Discussion

We review a district court's grant of a motion to dismiss de novo, accepting as true all well-pleaded facts and drawing all reasonable inferences in the nonmoving party's favor. McLeod v. Arrow Marine Transp., Inc., 258 F.3d 608, 614 (7th Cir.2001). In this case, the district court dismissed Ameritech's complaint based upon the Eleventh Amendment, which 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. Although the Amendment's terms do not bar suits against a State by its own citizens, the Supreme 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, 415 U.S. 651, 662-63, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974) (citing cases). However, a state's sovereign immunity is not absolute. In some cases, a suit against a state or its officials may proceed despite the Eleventh Amendment's proscription. For example, "a state may waive the protections of the amendment and consent to suit in federal court, or Congress may use its enforcement powers under the fourteenth amendment to abrogate the states' eleventh amendment immunity." MSA Realty Corp. v. Illinois, 990 F.2d 288, 291 (7th Cir.1993). In addition, a suit against state officials may proceed in the limited circumstances identified by the Supreme Court in Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). Because Eleventh Amendment immunity applies to injunctive suits against the states as well as those for damages, see Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 100, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984), we must determine whether the Young exception applies in this case and thus preserves Ameritech's suit.

Under the Young doctrine, "a private party can sue a state officer in his or her official capacity to enjoin prospective action that would violate federal law." Dean Foods Co. v. Brancel, 187 F.3d 609, 613 (7th Cir.1999). Young involved a suit against state officials to enjoin enforcement of a railroad commission's order requiring a reduction in rates. 209 U.S. at 129, 28 S.Ct. 441. In finding that the Eleventh Amendment did not bar the plaintiffs' suit, the Supreme Court held that when a state official violates the Constitution or federal law, he acts outside the scope of his authority and is no longer entitled to the State's immunity from suit. Id. at 155-56, 28 S.Ct. 441; see also Gibson v. Arkansas Dep't of Correction, 265 F.3d 718, 720 (8th Cir.2001). Young thus creates a legal fiction — the "state official who acts in violation of the federal Constitution is `stripped of his official or representative character and is subjected in his person to the consequences of his individual conduct.'" MSA Realty Corp., 990 F.2d at 291 (citing Young, 209 at 159-60, 28 S.Ct. 441). This allows federal courts to "vindicate federal rights and hold state officials responsible to the supreme authority of the United States." MCI Telecomm. Corp. v. Illinois Bell Tel. Co., 222 F.3d 323, 345 (7th Cir.2000). Accordingly, under Young, "state officials may be sued in their official capacities for injunctive relief, although they may not be sued for money damages." MSA Realty Corp., 990 F.2d at 291.

The foregoing discussion brings us to the first point of error. The district court held that "as a technical matter, the [Young] exception does not apply because McCann is named in his official and not his individual capacity." Ameritech v. McCann, 176 F.Supp.2d 870, 878 (E.D.Wis. 2001) (emphasis in original). Contrary to the district court's assertion, the fact that Ameritech sued McCann in his official capacity does not render Young inapposite. In fact, the opposite is true — a case may proceed under the Young exception only when a state official is sued in his...