Chicago Stadium Corp. v. State of Indiana

• Decision Date: 10 August 1954
• Docket Number: Civ. No. 3742.
• Citation: 123 F. Supp. 783
• Parties: CHICAGO STADIUM CORP. v. STATE OF INDIANA et al.
• Court: U.S. District Court — Southern District of Indiana

123 F. Supp. 783

CHICAGO STADIUM CORP. v. STATE OF INDIANA et al.

Civ. No. 3742.

United States District Court, S. D. Indiana, Indianapolis Division.

August 10, 1954.

Rochford & Rochford, Indianapolis, Ind., for plaintiff.

Edwin K. Steers, Atty. Gen. of Indiana, Lloyd C. Hutchinson and George B. Jeffrey, Indianapolis, Ind., for defendants.

STECKLER, Chief Judge.

This is an action sounding in tort, it being an action in replevin brought by the plaintiff against the named defendants in their representative capacity as members of the Indiana State Fair Board, including the State of Indiana, as Trustee, for the possession of certain personal property located in the coliseum building at the State Fair Grounds at Indianapolis, Indiana; and in addition thereto, the plaintiff seeks damages in the sum of $100,000 for the alleged wrongful taking and unlawful detention by the defendants of such personal property. The alleged property involved is "four high intensity spotlights with rheostats, carbons and fittings; 6,000 feet of cable in various sizes; 72 Alzah fixtures with color frames; switches, connections and miscellaneous supplies necessary for operation of same." The light fixtures have been installed and are attached to the realty.

In response to the complaint each of the defendants joined in the filing of a motion to dismiss the cause of action on the following grounds:

(1) The Court lacks jurisdiction of the subject matter because the complaint does not allege that the matter in controversy is between citizens of different states; that the matter in controversy is not one wholly between the citizens of different states in that the defendant, State of Indiana, as Trustee, and the defendant, Indiana State Fair Board, are not, nor is either of them a citizen of the State of Indiana or citizens of any state.

(2) The Court lacks jurisdiction of the subject matter because this action is in substance and effect a suit against the sovereign State of Indiana, which has not consented to be sued in this Court; that the sovereign State of Indiana was granted immunity from suit in this Court by, under and pusuant to the Eleventh Amendment to the Constitution of the United States of America and that the sovereign State of Indiana has not waived the immunity from suit in this Court granted to it by said Eleventh Amendment to the Constitution of the United States of America.

(3) That the complaint fails to state a claim upon which relief can be granted to the plaintiff.

The issues presented by the Motion to Dismiss have been exhaustively briefed, and counsel for the parties have been heard in oral arguments.

The nub of the plaintiff's argument in opposition to the Motion to Dismiss is that the Indiana State Fair Board as defined by Chapter 214, Acts of the General Assembly 1947, is a separate entity from the sovereign State of Indiana; that it engages in transactions in competition with private enterprise; that the broad grant of powers to the Board vesting in it the right to contract with reference to the maintenance and control of the State Fair Grounds, including the right to rent property, collect rents, borrow money and issue bonds, and generally to do that which is necessary in the operation of the State Fair Grounds as though it were a private enterprise, carries with it as a corollary, liability to suits at law, whether such actions be in the nature of actions ex contractu or ex delicto.

If the Indiana State Fair Board is an inseparable instrumentality or agency of the sovereign, and not a separate entity as contended by plaintiff, then the State's sovereign immunity would protect it, and the Indiana State Fair Board, against all actions at law, including the one here involved, unless the State through its legislature has clearly waived such immunity. It follows that if the Board is an inseparable instrumentality acting in its lawful capacity, the State of Indiana would then be the real party in interest in this action, entitling the defendants to the relief sought in the second paragraph of the Motion to Dismiss.

Inasmuch as the case has been brought in this Court by reason of diversity of citizenship between the parties, the Court must look to the substantive law of the State of Indiana in order to determine whether the sovereign state is the real party in interest, and this is a question to be determined solely under the laws of Indiana as declared either by the Legislature of Indiana or by the decisions of its highest courts. Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188; Guaranty Trust Co. of New York v. York, 1945, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079.

"Where relief is sought under general law from wrongful acts of state officials, the sovereign's immunity under the Eleventh Amendment does not extend to wrongful individual action, and the citizen is allowed a remedy against the wrongdoer personally. Atchison, T. & S. F. R. Co. v. O'Connor, 223 U.S. 280, 32 S.Ct. 216, 56 L.Ed. 436; cf. Matthews v. Rodgers, 284 U.S. 521, 528, 52 S.Ct. 217, 220, 76 L.Ed. 447. Where, however, an action is authorized by statute against a state officer in his official capacity and constituting an action against the state, the Eleventh Amendment operates to bar suit except in so far as the statute waives state immunity from suit. Smith v. Reeves, 178 U.S. 436, 20 S.Ct. 919, 44 L.Ed. 1140; Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 64 S.Ct. 873, 88 L.Ed. 1121." Ford Motor Co. v. Department of Treasury of State of Indiana, 323 U.S. 459, 462, 65 S.Ct. 347, 350, 89 L.Ed. 389.

As also stated by the Supreme Court in Ford Motor Co. v. Department of Treasury of Indiana, 323 U.S. 459, at page 464, 65 S.Ct. at page 350; "We have previously held that the nature of a suit as one against the state is to be determined by the essential nature and effect of the proceeding. Ex parte Ayers, 123 U.S. 443, 490-499, 8 S.Ct. 164, 174, 175, 31 L.Ed. 216; Ex parte State of New York, 256 U.S. 490, 500, 41 S.Ct. 588, 590, 65 L.Ed. 1057; Worchester County Trust Co. v. Riley, 302 U.S. 292, 296-298, 58 S.Ct. 185, 186, 187, 82 L.Ed. 268. And when the action is in essence one for the recovery of money from the state, the state is the real, substantial party in interest and is entitled to invoke its sovereign immunity from suit even though individual officials are nominal defendants. Smith v. Reeves, supra; Great Northern Life Ins. Co. v. Read, supra." Also see People of Colorado ex rel. Watrous v. District Court, 10 Cir., 207 F.2d 50, 56, wherein the Court stated: "Whether a suit is one against a state is to be determined, not by the fact of the party named as defendant on the record, but by the result of the judgment or decree which may be entered." Judge Parker, in a recent opinion, formulates the question to be that if the judgment is payable from public funds, then the suit is one against the state. O'Neill v. Early, 4 Cir., 208 F.2d 286.

The Indiana Legislature has been liberal in affording adequate remedies for claimants seeking redress on contract claims, but this relief has been confined to suits against the state in its own courts. See Burns' Indiana Statutes (1946 Repl.) Section 4-1501. Such actions are required to be brought in the Superior Court of Marion County with all judges thereof sitting together without a jury. And in this same connection Section 14 of Chapter 214 of the Acts of 1947 provides that actions on bonds issued by the Indiana State Fair Board must be brought in the same court with all the judges sitting without a jury. Thus it is indicated that the Legislature intended to confine authorized actions against it to actions in its own state courts.

The Court must next determine whether this is an action against the state.

"Suits against officers or agents personally, because, while claiming to act officially, they have committed or they threaten to commit wrong or injury to the person or property of plaintiff, either without right and authority or under color of an unconstitutional statute, are not suits against the state." 81 C.J. S., States, § 216, p. 1316. This being the general rule the Court must then determine whether this is such an action or whether it is an action against the state arising out of an authorized and legal transaction.

It is also a general rule that "a suit, involving property in which the state has an undoubted right or interest, and in which no effective decree can be rendered without binding the state itself, is a suit against the state and cannot be maintained without its consent." 81 C.J.S., States, § 216, p. 1320.

In the oral argument before the Court it was disclosed that the defendants had entered into a lease with an Indiana corporation known as the Indianapolis Coliseum Corporation. That some of the officers and stockholders of the Indianapolis Coliseum Corporation were also officers and stockholders of the plaintiff herein, Chicago Stadium Corporation. The personal property involved in this action is alleged to have been installed or placed in the coliseum building through an arrangement between these two corporations during the period of such lease. The dispute over the ownership of such property arose between the parties to this action at the termination of said lease. Since the Act under which the Indiana State Fair Board was created authorizes it to enter into rental agreements, it is apparent then that the misunderstanding between the parties has arisen out of a normal and legitimate function on the part of the Indiana State Fair Board.

There is considerable legislative history leading up to the Acts of 1947 under which the present status of the Indiana State Fair Board and its relation to the State of Indiana is defined. By the Acts of 1947 the Indiana State Legislature recognized the past confusion existing with reference to the present Indiana State Fair Board's predecessors, particularly in regard to the control and management of the ...