ITSI TV Productions, Inc. v. Agricultural Associations
| Decision Date | 31 August 1993 |
| Docket Number | 92-15860,Nos. 92-15541,s. 92-15541 |
| Citation | 3 F.3d 1289 |
| Parties | , 1993 Copr.L.Dec. P 27,139 ITSI TV PRODUCTIONS, INC., Plaintiff-Appellee, v. AGRICULTURAL ASSOCIATIONS, for the 2nd (also referred to as San Joaquin Co Fair), 7th (also) referred to as Monterey Co Fair), 9th (also referred to as Redwood Acres Fair), 15th (also referred to as Great Kern Co Fair), 19th (also referred to as Santa Barbara National Horse and Flower Show), 21st (also referred to as Fresno County Fair), 22nd (also referred to as Del Mar Fair), 27th (also referred to as Shasta District Fair), 31st (also referred to as Ventura County Fair), 37th (also referred to as Santa Barbara County Fair), and 50th Districts (also referred to as Antelope Valley Fair--all named in plaintiff's Second Amended Complaint), Defendant-Appellants, and California Authority Racing Fairs, et al., Defendants. ITSI TV PRODUCTIONS, INC., Plaintiff-Appellant, v. CALIFORNIA EXPOSITION AND STATE FAIR, Defendant-Appellee, and California Authority Racing Fairs, et al., Defendants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Mark E. King, David B. Kahn, Ltd., Chicago, IL, and David W. Post, McDonough, Holland & Allen, Sacramento, CA, for plaintiff-appellee-cross-appellant.
Harold L. Eisenberg, Deputy Atty. Gen., Sacramento, CA, for defendants-appellants-cross-appellees.
Appeal from the United States District Court for the Eastern District of California.
Before: WALLACE, Chief Judge; NELSON and O'SCANNLAIN, Circuit Judges.
We must decide a question of apparent first impression: who bears the burden of persuasion when a putative state entity claims immunity from suit in federal court under the Eleventh Amendment?
ITSI T.V. Productions, Inc. ("ITSI") sued California State Fair and Exposition ("Cal Expo") and various District Agricultural Associations ("the DAAs") for copyright infringement. At issue were broadcasts of horse races created by ITSI and used by Cal Expo and the DAAs in connection with state and local fairs they had organized. Both Cal Expo and the DAAs moved to dismiss on the ground that they are "arms of the state" of California, and, as such, immune from suit under the Eleventh Amendment. The district court ruled that this motion presented a jurisdictional issue separate from the merits of the case, and thus permitted limited discovery and held an evidentiary hearing to determine the facts relevant to that issue. The court thereafter issued an order in which it granted the motion to dismiss as to Cal Expo, and denied the motion as to the DAAs. 785 F.Supp. 854. The disappointed parties appeal.
The district court assigned Cal Expo and the DAAs the burden of proving their entitlement to Eleventh Amendment immunity. On appeal, the DAAs say that the court erred because their motion went to the district court's jurisdiction, and it is established that the party asserting jurisdiction has a continuing burden to establish that jurisdiction is proper. See, e.g., McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936) ().
The Supreme Court has held that "the Eleventh Amendment defense ... partakes of the nature of a jurisdictional bar" insofar as it may be raised for the first time on appeal. Edelman v. Jordan, 415 U.S. 651, 678, 94 S.Ct. 1347, 1363, 39 L.Ed.2d 662 (1974). The Court has emphasized, however, that it has "never held that [the defense] is jurisdictional in the sense that it must be raised and decided by [the court] on its own motion." Patsy v. Board of Regents of the State of Florida, 457 U.S. 496, 516 n. 19, 102 S.Ct. 2557, 2567 n. 19, 73 L.Ed.2d 172 (1982). The Court has accordingly recognized that Eleventh Amendment immunity, unlike a true jurisdictional bar, may be expressly waived, Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 238, 105 S.Ct. 3142, 3145, 87 L.Ed.2d 171 (1985), Pennhurst State School and Hosp. v. Halderman, 465 U.S. 89, 99, 104 S.Ct. 900, 907, 79 L.Ed.2d 67 (1984), and may even be forfeited by the State's failure to assert it. See Blatchford v. Native Village of Noatak, --- U.S. ----, ---- n. 3, 111 S.Ct. 2578, 2584 n. 3, 115 L.Ed.2d 686 (1991) ().
Eleventh Amendment immunity thus does not implicate a federal court's subject matter jurisdiction in any ordinary sense. It therefore cannot be said that the general principle that the plaintiff must establish the facts supporting "jurisdiction" means that ITSI should have been required to prove that Cal Expo and the DAAs were not entitled to such immunity. Rather, we believe that Eleventh Amendment immunity, whatever its jurisdictional attributes, should be treated as an affirmative defense. See Blatchford, --- U.S. at ---- n. 4, 111 S.Ct. at 2585 n. 4 (). Like any other such defense, that which is promised by the Eleventh Amendment must be proved by the party that asserts it and would benefit from its acceptance.
Our conclusion is bolstered by consideration of the procedures employed in assessing other sovereign immunity claims. For example, under the Foreign Sovereign Immunities Act, 28 U.S.C. Secs. 1330, 1602-11, through which Congress has declared that the sovereign acts of foreign states may not be sued upon in our courts, it is ultimately "the defendant [that] must prove its entitlement to immunity by a preponderance of the evidence." Meadows v. Dominican Republic, 817 F.2d 517, 523 (9th Cir.), cert. denied, 484 U.S. 976, 108 S.Ct. 486, 98 L.Ed.2d 485 (1987). Similarly, under the Federal Tort Claims Act, 28 U.S.C. Sec. 1346, although the "plaintiff bears the burden of persuading the court that it has subject matter jurisdiction under the FTCA's general waiver of immunity," Prescott v. United States, 973 F.2d 696, 701 (9th Cir.1992), "the government bears the ultimate burden of proving the applicability of an exception" to this general waiver, because the claim of exception "is analogous to an affirmative defense," and the burden of proof is "correctly placed ... on the United States as the party which benefits from the defense." Id. at 702.
Finally, we note the familiar principle that, "when the true facts relating to [a] disputed issue lie peculiarly within the knowledge of" one party, the burden of proof may properly be assigned to that party "in the interest of fairness." United States v. Hayes, 369 F.2d 671, 676 (9th Cir.1966). See United States v. New York, N.H. & H.R.R. Co., 355 U.S. 253, 256 n. 5, 78 S.Ct. 212, 214-15 n. 5, 2 L.Ed.2d 247 (1957) (). In general, a claim of Eleventh Amendment immunity will occasion serious dispute only where a relatively complex institutional arrangement makes it unclear whether a given entity ought to be treated as an arm of the state. In such cases, the "true facts" as to the particulars of this arrangement will presumably "lie peculiarly within the knowledge of" the party claiming immunity. "Considerations of fairness" thus support the conclusion that the public entity ought to bear the burden of proving the facts that establish its immunity under the Eleventh Amendment.
The district court was correct in assigning the burden of persuasion to Cal Expo and the DAAs.
Turning to the merits, we observe that our cases have established a five-part test for use in evaluating a litigant's claim that it is an "arm of the state" entitled to Eleventh Amendment immunity:
To determine whether a governmental agency is an arm of the state, the following factors must be examined: whether a money judgment would be satisfied out of state funds, whether the entity performs central governmental functions, whether the entity may sue or be sued, whether the entity has power to take property in its own name or only the name of the state, and the corporate status of the entity. To determine these factors, the court looks to the way state law treats the entity.
Durning v. Citibank, N.A., 950 F.2d 1419, 1423 (9th Cir.1991) (quoting Mitchell v. Los Angeles Community College Dist., 861 F.2d 198, 201 (9th Cir.1988), cert. denied, 490 U.S. 1081, 109 S.Ct. 2102, 104 L.Ed.2d 663 (1989)) (citation omitted). In Durning, we stated that the first of these is the "most important factor." Id. at 1424. We explained that the inquiry required under this heading is "whether a judgment against the defendant entity under the terms of the complaint would have to be satisfied out of the limited resources of the entity itself or whether the state treasury would also be legally pledged to satisfy the obligation." Id.
The district court found that "Cal Expo receives all of its funds from sources other than the state's General Fund," 1 that "essentially all of its funds are derived directly from its own activities or from allocations from Special Revenue Funds," 2 and that "[t]here appears to be no obligation on the part of the state to pay debts of a special fund agency." These findings are not clearly erroneous. Under Durning, such facts lead unavoidably to the conclusion that "the first and most important factor" weighs against Cal Expo's claim of immunity. 3
The district court nonetheless "conclude[d] that, as to the most crucial factor, the relationship between the...
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