Holladay v. State of Mont.

• Decision Date: 30 January 1981
• Docket Number: No. CV-80-66-H.,CV-80-66-H.
• Citation: 506 F. Supp. 1317
• Parties: Don T. HOLLADAY, Plaintiff, v. STATE OF MONTANA; State Department of Institutions; Lawrence M. Zanto, Director of Institutions; Robert J. Rhay, Administrator, Division of Corrections; Herman Gibson, Business Manager, Defendants.
• Court: U.S. District Court — District of Montana

506 F. Supp. 1317

Don T. HOLLADAY, Plaintiff, v. STATE OF MONTANA; State Department of Institutions; Lawrence M. Zanto, Director of Institutions; Robert J. Rhay, Administrator, Division of Corrections; Herman Gibson, Business Manager, Defendants.

No. CV-80-66-H.

United States District Court, D. Montana, Helena Division.

January 30, 1981.

COPYRIGHT MATERIAL OMITTED

Carl A. Hatch, Small, Hatch & Doubek, Helena, Mont., for plaintiff.

J. Daniel Hoven, Agency Legal Services Bureau, Dept. of Justice, Helena, Mont., for defendants.

AMENDED MEMORANDUM OPINION

BATTIN, Chief Judge.

The basic issues raised by defendants' motion to dismiss are (1) whether a federal court has jurisdiction over a civil rights suit against a state by a former superintendent of a state institution and (2) whether an allegation that a state employer tortiously interfered with an employee's "right to work in his profession and contractual employment rights" states a cause of action under Montana law.

For the reasons provided below, we conclude that, first of all, this Court lacks jurisdiction over the State of Montana and the State Department of Institutions because (a) a state is not a citizen for the purposes of diversity jurisdiction, (b) the State of Montana cannot be sued by a private citizen under the 11th Amendment prohibition against such suits, and (c) the State of Montana is not a "person" under 42 U.S.C. § 1983 (1976). The State of Montana and the State Department of Institutions should thus be dismissed as defendants. Second, while it is doubtful that interference with the right to work states any valid constitutional violation under the United States Constitution, it is not impossible that a right of privacy violation occurred. For this reason, the preferable remedy would be to encourage defendants to move for a more definite statement of the constitutional rights alleged to have been violated.

I. FACTUAL BACKGROUND

From 1966 to 1978, the plaintiff Don T. Holladay was the superintendent of the Pine Hills School for Boys, a division of the Montana State Department of Institutions, located at Miles City, Montana. On May 23, 1978, defendant Lawrence M. Zanto, the Director of Institutions, suspended Holladay from his position. In addition, Holladay alleges that Zanto and other state officials supplied the media with false and malicious charges of wrongdoing and that two officials broke into Holladay's home and searched through his personal effects.

On May 21, 1980, Holladay filed suit in this Court against the State of Montana, the State Department of Institutions, Lawrence M. Zanto (Director of Institutions), Robert J. Rhay (Administrator of the Division of Corrections), and Herman Gibson (Business Manager), seeking $2.5 million in damages. On July 8, 1980, defendant State of Montana moved to dismiss the suit on the grounds that this Court lacked jurisdiction and that the complaint failed to state a claim upon which relief could be granted. On July 31, 1980, plaintiff filed an amended complaint alleging for the first time the citizenship of defendants Rhay and Gibson.

II. JURISDICTION OVER THE STATE OF MONTANA

Peculiarly enough, neither the complaint nor the amended complaint contain any specific jurisdictional allegation other than the geographical location of defendants and an amount in controversy in excess of $10,000. This implies that plaintiff is invoking diversity jurisdiction under 28 U.S.C. § 1332 (1976). Yet the nature of these alleged torts, all civil rights violations, also suggests jurisdiction of a "federal question" under 28 U.S.C. § 1331 (1976) or of a civil rights violation under 28 U.S.C. § 1343 (1976). However, no matter which of these jurisdictional statutes plaintiff actually wishes to rely on, none of the statutes can supply this Court with jurisdiction over the State of Montana or over the State Department of Institutions.

First of all, the reliance upon this Court's diversity jurisdiction for a suit against the State of Montana seems ill-founded. It is well-settled that a state is not a citizen for purposes of diversity jurisdiction under 28 U.S.C. § 1332 (1976). Moor v. County of Alameda, 411 U.S. 693, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973); 13 Wright, Miller & Cooper, Federal Practice and Procedure: § 3602 at pp. 599-600 (1975). Furthermore, a political subdivision is not a citizen for purposes of diversity jurisdiction if the political subdivision is simply the arm or alter ego of the state. Moor v. County of Alameda, supra, 411 U.S. at 717, 93 S.Ct. at 1799; 13 Wright, Miller & Cooper at p. 600. The State Department of Institutions is merely an alter ego of the State of Montana, MCA § 2-15-104(1) (1979), and is not the sort of separate corporate entity held to be a citizen for purposes of diversity. 13 Wright, Miller & Cooper at p. 769 n. 22. Thus, this Court lacks diversity jurisdiction over both the State of Montana and the State Department of Institutions.

As to the alleged "federal question" and civil rights jurisdiction, both run afoul of the 11th Amendment which states as follows:

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.

Under the 11th Amendment, suit by a private party seeking to impose liability which must be paid from public funds in the state treasury is barred from being prosecuted in the federal courts. Quern v. Jordan, 440 U.S. 332, 337, 99 S.Ct. 1139, 1143, 59 L.Ed.2d 358 (1978); Edelman v. Jordan, 415 U.S. 651, 663, 94 S.Ct. 1347, 1355, 39 L.Ed.2d 662 (1974). Since damages assessed against the state or a state agency would be recovered from the state treasury, the 11th Amendment prohibits this action from proceeding, absent an express waiver by the State of Montana of its 11th Amendment right.

Plaintiff argues that article II, section 18 of the 1972 Montana Constitution acts as just such an express waiver of Montana's 11th Amendment rights. This section provides as follows:

The State, counties, cities, towns, and all other local governmental entities shall have no immunity from suit for injury to a person or property, except as may be specifically provided by law by two-thirds vote of each house of the legislature.

Mont.Const., art. II, § 18. We must remember, however, that waivers of the 11th Amendment are not to be lightly implied and must be in the form of clear and express consent to be sued in federal court, Edelman v. Jordan, 415 U.S. 651, 673, 94 S.Ct. 1347, 1360, 39 L.Ed.2d 662 (1974). The Montana waiver of sovereign immunity seems to be limited to consent to be sued in state courts and should not be construed as consent to be sued by private citizens in federal courts.¹

As this Court stated a few months ago in Gillespie v. State of Montana, CV-79-172-H (D.Mont., Helena Div., July 24, 1980) at pp. 2-4, neither the statutes implementing the sovereign immunity waiver (MCA §§ 2-9-301 to -318 (1979)) nor the legislative history of the sovereign immunity waiver provision (see Mont.Const.Conv. Studies, Report No. 10 "Bill of Rights") suggest an intent to submit to suit in federal court. In referring to the implementing statutes and the legislative history, we stated:

These factors militate strongly against reaching the conclusion that the state has waived its Eleventh Amendment immunity. When considered in light of the Supreme Court's declaration that it will find a state has waived its constitutional protections under the Eleventh Amendment "only where stated `by the most express language or by such overwhelming implication from the text as will leave no room for any other reasonable construction,'" Edelman v. Jordan, 415 U.S. 651, 673 94 S.Ct. 1347, 1360, 39 L.Ed.2d 662 (1974), substantial doubt arises as to whether Art. II, § 18 of the Montana Constitution was intended to effectuate a waiver of Eleventh Amendment guarantees. See also Great Northern Life Insurance Co. v. Read, 322 U.S. 47, 54 64 S.Ct. 873, 876, 88 L.Ed. 1121 (1944).

Thus, art. II, section 18 of the Montana Constitution is not a waiver of Montana's Eleventh Amendment rights.

To be sued under the federal civil rights statutes such as 42 U.S.C. § 1983 (1976), Montana must be considered a "person." The United States Supreme Court has held that, because of the Eleventh Amendment prohibition, a state is not a "person" under the federal civil rights statutes and thus cannot be sued thereunder. Quern v. Jordan, 440 U.S. 332, 343, 99 S.Ct. 1139, 1146, 59 L.Ed.2d 358 (1979). In our opinion in Gillespie v. State of Montana, we rejected the notion that this holding had been overruled by Monell v. Dept. of Social Services, 436 U.S. 658, 663, 98 S.Ct. 2018, 2021, 56 L.Ed.2d 611 (1978). We concluded instead that "Monell has left the rule of Edelman undisturbed." Gillespie v. State of Montana at p. 5. Thus, the state of Montana is not subject to suit under § 1983 because it is not a "person." This is yet another reason why the state and the state agency should be dismissed as defendants.

Defendants also argue that the aegis of the Eleventh Amendment immunity should extend to the state officials themselves. This argument is unpersuasive. First of all, 42 U.S.C. § 1983 (1976) was enacted to remedy civil rights violations made by any government official. Therefore, when state officers act under state law in violation of another's civil rights, the state has no power to impart its immunity to these officials; but if the allegations are true, the officials are stripped of their official character and subjected in their person to the consequences of their individual conduct. Scheuer v. Rhodes, 416 U.S. 232, 237, 94 S.Ct. 1683, 1687, 40 L.Ed.2d 90 (1974), citing Ex parte Young, 209 U.S. 123, 159-60, 28 S.Ct. 441, 453-54, 52 L.Ed. 714 (1908). Second, defendants argue that MCA § 2-9-305(2) (1979), permitting government...