Gordenstein v. University of Delaware

• Citation: 381 F. Supp. 718
• Decision Date: 16 September 1974
• Docket Number: Civ. A. No. 74-59.
• Parties: Arnold S. GORDENSTEIN, Plaintiff, v. The UNIVERSITY OF DELAWARE et al., Defendants.
• Court: United States District Courts. 3th Circuit. United States District Court (Delaware)

381 F. Supp. 718

Arnold S. GORDENSTEIN, Plaintiff, v. The UNIVERSITY OF DELAWARE et al., Defendants.

Civ. A. No. 74-59.

United States District Court, D. of Delaware.

September 16, 1974.

Sheldon N. Sandler, Bader, Dorsey & Kreshtool, Wilmington, Del., for plaintiff.

William Poole, Potter, Anderson & Corroon, Wilmington, Del., for defendants.

OPINION

STAPLETON, District Judge:

Arnold Gordenstein is a former member of the faculty of the University of Delaware ("University"). Seeking reinstatement and damages, he has sued numerous defendants: the University itself, the members of the University's Board of Trustees, and several administrative officers of the University. Jurisdiction is purportedly conferred by 28 U.S.C. § 1331, 28 U.S.C. § 1343(3) and 28 U.S.C. § 1343(4).

Plaintiff's grievances can be succinctly stated. From September 1, 1967, until August 31, 1973, the University employed plaintiff as a non-tenured professor. In November of 1971, plaintiff was informed that he would not receive tenure and that his contract would not be renewed upon its expiration on August 31, 1973. These determinations, plaintiff alleges, were made without any warning of inadequate performance, without a hearing held at a meaningful time, and without consultation with several segments of the University faculty and administration. Further, plaintiff alleges that he received no opportunity to cross-examine adverse witnesses, to present favorable witnesses, or to be represented by counsel. On this basis, he claims that his right to procedural due process guaranteed by the Fourteenth Amendment has been violated. Finally, plaintiff asserts that the University's decision was without basis in fact and discriminatory and that, accordingly, his rights to substantive due process and equal protection of the laws have also been abridged. The motions presently before the Court raise a number of questions which will be examined in turn.

I. DOES THIS COURT HAVE JURISDICTION OVER PLAINTIFF'S CLAIM AGAINST THE UNIVERSITY?

It is plaintiff's contention that he has a cause of action against the University deriving from the Civil Rights Act, 42 U.S.C. § 1983, or directly from the Fourteenth Amendment to the United States Constitution. In reply to the Civil Rights Act claim, the University asserts that it is not a "person" within the meaning of 42 U.S.C. § 1983.¹ This contention is discussed later in this opinion. In what would appear to be a distinct argument going to the jurisdiction of the Court, the University also urges: (1) that in Skehan v. Board of Trustees of Bloomsburg State College, 501 F.2d 31 (3d Cir. 1974), "the Third Circuit held that if, under state law, an educational institution is a state agency, then it is immune from suit under the Civil Rights Act" and (2) "the Delaware courts have held that the University is a state agency in Parker v. University of Delaware . . . and subsequent cases. . . ."² This Court, however, does not read the Skehan and Parker cases as dispositive.

The Skehan case deals primarily with the question of whether and when a state-affiliated entity may be entitled to the state's immunity from suit in a federal court under the Eleventh Amendment to the United States Constitution. That Amendment 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."

The State of Delaware is, of course, not a named party to this litigation. It has long been the rule, however, that the applicability of the Eleventh Amendment is to be judged not by who the nominal parties are, but by the nature and effect of the proceeding.³ It is said that, if the state is the "real party in interest", the suit is in reality one "against the state" and thus barred by the Eleventh Amendment.⁴

The question whether the state is the "real party in interest" is one of federal law.⁵ This does not mean, of course, that state law is irrelevant in the present context. In determining whether an entity like the University is so closely related to the state as to share its Eleventh Amendment shield, it will ordinarily be the law of the state which defines the relationship. State law is the context in which the matter is to be determined, but it does not provide the controlling rule of law. Judge Stahl, writing for the Third Circuit in Urbano v. Bd. of Managers of New Jersey State Prison, 415 F.2d 247 (3rd Cir. 1969), has put the matter this way:

". . . The conclusion that must be reached before the Eleventh Amendment may be interposed by appellant is that the state is the real party in interest cites omitted.

In determining whether an `alter ego' status attaches to the instrumentality of a state, it has been said:

* * * Local law and decisions defining the status and nature of the agency involved in its relation to the sovereign are factors to be considered, but only one of a number that are of significance.

Among the other factors, no one of which is conclusive, perhaps the most important is whether, in the event plaintiff prevails, the payment of the judgment will have to be made out of the state treasury; significant here also is whether the agency has the funds or the power to satisfy the judgment. Other relevant factors are whether the agency is performing a governmental or proprietary function; whether it has been separately incorporated; the degree of autonomy over its operations; whether it has the power to sue and be sued and to enter into contracts; whether its property is immune from state taxation, and whether the sovereign has immunized itself from responsibility for the agency's operations. Krisel v. Duran, 258 F.Supp. 845, 849 (S.D.N.Y.1966), aff'd per curiam, 386 F.2d 179 (2d Cir. 1967), cert. denied, 390 U.S. 1042, 88 S.Ct. 1635, 20 L.Ed.2d 303 (1968) (footnotes omitted)." 415 F.2d at 251-252.

The Skehan case does not, in this Court's judgment, dictate a different approach. While the opinion in that case makes repeated references to the law of Pennsylvania, the purpose was to ascertain "the status of Bloomsburg College in the governmental structure of the Commonwealth." The role of state law in Skehan is, accordingly, consistent with that described in Urbano.⁶

In applying the Urbano test to the University of Delaware, the Court has reviewed the applicable Delaware statutes,⁷ the relevant case law, and factual data stipulated into the record by the parties. Based upon the following analysis, the Court has concluded that the University is not a state agency for purposes of the Eleventh Amendment.

It appears that the University has both the power and the resources to pay any judgment entered against it herein without further action by the Delaware Legislature or any other governmental officer or entity. It is stipulated that any such judgment will be "paid by the University". The potential impact upon the Treasury of the State of Delaware is indirect, at best. Traditionally, the state has provided the University with financial support. In the 1972-1973 school year, for example, 34.1% of total revenues available to the University from all sources was appropriated by the Legislature. To the extent the payment of a judgment entered here depletes the resources of the University, this may increase the demand thereafter made upon the State and the University's other revenue sources, but this is an "ancillary" effect, insufficient to bring the Eleventh Amendment into play. Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L. Ed.2d 662 (1974).

Under Delaware law, the University is a separately incorporated entity with statutorily guaranteed "perpetual succession and existence."⁸ As such, it has "all the powers and franchises incident to a corporation, including the power to take and hold real and personal estate . . . and the same to . . . sell . . . and dispose of as occasion may require and the proceeds thereof to reinvest . . . for the benefit of the University . . ."⁹

The University is governed by a Board of Trustees composed of 28 regular and 4 ex-officio members: the Governor, the University's President, the President of the State Board of Education and the "Master of the State Grange." Eight of the regular members are appointed by the Governor with the consent of the State Senate; the remaining twenty are elected by a majority of the Board itself.¹⁰ Broad autonomy is conferred on the Board of Trustees; they are granted "entire control and management of the University."¹¹ Among the areas in which state law expressly accords the Trustees complete independence are: employee salaries; tuition rates; the adoption of a University budget; the selection of procedures for investing, depositing, controlling and allocating funds and securities; the decision whether to participate in federally-sponsored aid programs; the formulation of contracts for construction and other purposes; and the erection of buildings and other improvements to University property.¹² The fiscal autonomy of the University is further manifested by the fact that it may maintain an endowment in its own name¹³ and may issue and repay revenue bonds and other obligations.¹⁴ Of significance is the fact that Delaware law imposes on the University the exclusive responsibility for making payment on its bonds and expressly prohibits the state from pledging its own credit on the University's behalf.¹⁵

The State Legislature has imposed on the University relatively few responsibilities which diminish the scope of this autonomy. The University President is required to make an annual report to the Trustees who must in turn transmit it to the Governor and the Legislature.¹⁶ Although state officials are authorized to audit the University's finances, their inquiry is strictly limited in scope to the University's handling of state appropriations.¹⁷ The University must observe certain...