Brady v. Michelin Reifenwerke

• Decision Date: 22 July 1985
• Docket Number: Civ. A. No. S84-0146(R).
• Parties: Milton G. BRADY and Carolyn Abbot Brady, Plaintiffs, v. MICHELIN REIFENWERKE, American Honda Motor Company, Inc., Honda of Japan and Mississippi State Highway Department, Defendants.
• Court: U.S. District Court — Southern District of Mississippi

613 F. Supp. 1076

Milton G. BRADY and Carolyn Abbot Brady, Plaintiffs, v. MICHELIN REIFENWERKE, American Honda Motor Company, Inc., Honda of Japan and Mississippi State Highway Department, Defendants.

Civ. A. No. S84-0146(R).

United States District Court, S.D. Mississippi, S.D.

July 22, 1985.

William T. Reed, Pascagoula, Miss., James A. Dukes, Hammond, La., for plaintiffs.

Rae Bryant, Gulfport, Miss., Joe R. Colingo, Pascagoula, Miss., John M. Kenney, Garden City, N.Y., for defendant Michelin Reifenwerke.

Lawrence J. DuPlass, Johnston & DuPlass, New Orleans, La., James B. Galloway, Eaton, Cottrell, Galloway & Lang, Gulfport, Miss., for defendant American Honda Motor Co., Inc.

Hugh D. Keating, Gulfport, Miss., Edwin Lloyd Pitmman, ex rel. Atty. Gen. of Mississippi, P.O. Gibson, Jr., Asst. Atty. Gen., Jackson, Miss., Billy W. Hood, Bryan, Nelson, Allen, Schroeder & Cobb, Gulfport, Miss., for defendant Miss. State Hwy. Dept.

MEMORANDUM OPINION

DAN M. RUSSELL, Jr., Senior District Judge.

INTRODUCTION

This cause of action arises out of an automobile accident which occurred on July 16, 1981 near Pascagoula, Mississippi on Interstate 10. In this diversity action the plaintiffs, the parents of Brett Anthony Brady, deceased, allege that the accident was caused by the failure and blow-out of a tire and that the defendants, with the exception of the Mississippi State Highway Commission (MSHC), are liable in negligence and strict liability for a defect in the tire. The allegations pertaining to MSHC relate to the Highway Commission's unfortunate parking of one of their vehicles, a truck, in the right safety lane on the Dog River Bridge on I-10. When the alleged blow-out occurred the automobile veered to the right and collided with the parked Highway Commission truck, killing the driver, Charles A. Moore, and the passenger, Brett Anthony Brady.

The cause presently before the Court is the defendant Mississippi State Highway Commission's motion to dismiss, or in the alternative, for summary judgment. Specifically, the defendant has two propositions: (1) that this Court lacks jurisdiction over the defendant because the eleventh amendment limits this Court's judicial power in suits by private citizens against a state; and (2) that even if the suit is not barred by the eleventh amendment, the defendant is entitled to summary judgment as a matter of law since the MSHC had a legal right to be in and use the safety lane on the bridge. The plaintiffs counter the defendant's contentions with the argument that the MSHC is not entitled to eleventh amendment immunity because: (1) it has expressly waived such immunity by statute; (2) the suit will not affect the state treasury in light of the Highway Commission's purchase of liability insurance; and (3) the MSHC has independent autonomous powers such that it is not clothed with the immunity granted the state. As a final countermeasure the plaintiffs assert that the question of whether the MSHC had a right to be on the bridge in a safety lane is a question of fact for the jury.

DISCUSSION

The defendant's motion to dismiss under Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction requires that the Court examine the basis for its jurisdiction. Menchaca v. Chrysler Credit Corp., 613 F.2d 507 (5th Cir.1980). The federal courts of the United States must endeavor to honor the jurisdiction conferred upon them by Congress and permitted them by the Constitution. In re Carter, 618 F.2d 1093 (5th Cir.1980); C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure, § 3522 (1984). Therefore, the Court will first examine its own subject matter jurisdiction before delving into the defendant's alternative motion for summary judgment. See Hitt v. City of Pasadena, 561 F.2d 606 (5th Cir.1977).

I.

Because of the nature of the beast the Court must first discuss the plaintiffs' third contention that the MSHC is an independent, autonomous agency and not an alter ego of the state. If MSHC is the latter, a state instrumentality, then a question of eleventh amendment protection arises. If MSHC is not an alter ego of the state, but is an independent agency, the eleventh amendment is inapplicable.¹

The eleventh amendment to the United States Constitution provides: "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." After review of the constitutional debates the Supreme Court expressed the view that the federal judicial power over suits against a state without her consent "was not contemplated by the Constitution when establishing the judicial power of the United States." Hans v. Louisiana, 134 U.S. 1, 15, 10 S.Ct. 504, 507, 33 L.Ed. 842 (1890); Monaco v. Mississippi, 292 U.S. 313, 322-23, 54 S.Ct. 745, 747-48, 78 L.Ed. 1282 (1934). See also Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, ___, 104 S.Ct. 900, 906, 79 L.Ed.2d 67 (1984). The federal courts can hear disputes, however, where the dispute involves a political subdivision of the state, an independent state agency or a state official acting in his official capacity. See e.g., Monell v. New York City Dept. of Social Services, 436 U.S. 658, 690 n. 54, 98 S.Ct. 2018, 2035 n. 54, 56 L.Ed.2d 611 (1978); Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908).

The eleventh amendment by its own language requires that the state be subject to suit before the bar to suit in federal court takes effect. Jagnandan v. Giles, 538 F.2d 1166, 1173 (5th Cir.1976). This requirement is satisfied if, for all intents and purposes, the suit is against the state. Id. See also Aerojet-General Corp. v. Askew, 453 F.2d 819, 828-29 (5th Cir.1971) cert. denied, 409 U.S. 892, 93 S.Ct. 110, 34 L.Ed.2d 149 (1972); Ex parte State of New York, 256 U.S. 490, 500, 41 S.Ct. 588, 590, 65 L.Ed. 1057 (1921).

The Fifth Circuit has stated that should the status of the defendant be unclear, as is the MSHC's here, the court must then "look to any and all available sources for guidance." Huber, Hunt & Nichols v. Architectual Stone Co., 625 F.2d 22, 25 (5th Cir.1980). In Tradigrain v. Mississippi State Port Authority, 701 F.2d 1131, 1133 (5th Cir.1983), the court offered the following factors to consider in the evaluation.

The court should consider whether the agency has been granted the right to hold and use property, whether it has the express authority to sue and be sued in its corporate name, the extent of its independent management authority, and `a factor that subsumes all others,' the treatment of the agency by the state courts ... Other relevant factors might include: (1) whether the state is responsible for the agency's debt; (2) whether the agency is primarily concerned with local, as opposed to statewide problems, and (3) the degree of general financial autonomy of the agency.

Id. (citations omitted).

In Tradigrain the court, finding no constitutional or decisional law directly on point, primarily evaluated the Port Authority's enabling act, Miss.Code Ann. § 59-5-1 et seq., and decided that "the Mississippi State Port Authority is merely the alter ego of the State of Mississippi...." Tradigrain, 701 F.2d at 1134. This Court does have the benefit of some state decisional law. With these principles in mind the Court will now embark upon a determination of whether the MSHC is an alter ego of the State of Mississippi.

The MSHC's enabling act is found at Miss.Code Ann. § 65-1-1 et seq. Under the act the Highway Commission is granted some of the generally recognized powers of an independent agency. For example, it may sue and be sued in its own name, Miss.Code Ann. § 65-1-8(b) (Supp. 1984); acquire by gift, purchase or condemnation, or otherwise land or other property. § 65-1-8(a) (Supp.1984); purchase necessary equipment and vehicles and to provide for the repair and housing of the same, § 65-1-8(m); and enter into contracts necessary and proper for its operation, § 65-1-8(q); § 65-1-10(b).

Factors in the statutory language which tend to establish the Highway Commission as an alter ego of the state include items such as the requirement that the Highway Commission submit a budget which is approved by legislature each fiscal year with the legislative budget office and state fiscal management board having power and authority over the Highway Commission's administrative budget. Miss.Code Ann. § 65-1-149 (Supp.1984). The books and accounts of the Highway Department are audited every six (6) months by the state auditor. Miss.Code Ann. § 65-1-113 (Supp.1984). The Highway Commission's method of expenditure of funds available for construction and reconstruction of primary and secondary roads is governed by statute. Miss.Code Ann. § 65-1-141 and § 65-1-145 (Supp.1984). In the latter cited statute, worthy of particular mention, is the condition on expenditure of highway funds that "no state monies shall be expended on any construction project unless a State Highway Department engineer shall be assigned to such project." Miss.Code Ann. § 65-1-145(2) (Supp.1984). Finally, the funds provided to the State Highway fund are required to be expended on the basis of the state's needs as a whole. Miss.Code Ann. § 65-1-112 (Supp.1984).

As in Tradigrain with the Mississippi State Port Authority the statute strongly suggests that the legislature considered the Highway Commission an alter ego of the state. This Court also has the benefit of Mississippi decisional law which also imports that the MSHC is an alter ego of the state. For instance, in State Highway Commission v. Gulley, 167 Miss. 631, 145 So. 351 (1933) the Mississippi Supreme Court held that the Highway Commission is an agency of the state. See also Karpovs v. State of Mississippi, 663 F.2d 640, 645 (5th Cir.1981); State Highway Commission v. Knight, 170 Miss. 60, 154 So. 263 (1934); Stewart v. State...