Jacintoport Corp. v. Greater Baton Rouge Port Com'n

• Decision Date: 10 June 1985
• Docket Number: No. 84-3365,84-3365
• Citation: 762 F.2d 435
• Parties: JACINTOPORT CORP., Plaintiff-Appellant, v. GREATER BATON ROUGE PORT COMMISSION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 435

762 F.2d 435

JACINTOPORT CORP., Plaintiff-Appellant, v. GREATER BATON ROUGE PORT COMMISSION, Defendant-Appellee.

No. 84-3365.

United States Court of Appeals, Fifth Circuit.

June 10, 1985.

Rehearing Denied July 29, 1985.

Charles D. Marshall, Jr., Andrew Podolnick, New Orleans, La., for plaintiff-appellant.

Fred Belcher, Jr., Baton Rouge, La., for defendant-appellee.

Appeal from the United States District Court for the Middle District of Louisiana.

Before WISDOM, REAVLEY, and RANDALL, Circuit Judges.

WISDOM, Circuit Judge:

This appeal presents the question whether the Greater Baton Rouge Port Commission is entitled to immunity from suit in federal court by virtue of the Eleventh Amendment. The district court, 599 F.Supp. 21, ruled that the Commission is entitled to immunity from suit. The court felt bound by Miller v. Greater Baton Rouge Port Commission, 1954, 225 La. 1905, 74 So.2d 387, and by Pacific Railroad v. Travelers Ins. Co., E.D.La.1968, 281 F.Supp. 100, which described the Commission as an executive department of the State of Louisiana and therefore an alter ego of the state. We hold that neither decision controls the precise question before us. We further hold that under the tests of this Court and other courts, especially the Courts of Appeals of the Third and Sixth Circuits, the Commission does not merit Eleventh Amendment immunity. Although the Commission's members serve at the pleasure of the governor, they enjoy considerable autonomy in the exercise of their powers. The Commission's activities are undertaken only for the Greater Baton Rouge Port, its bonds have only an ancillary effect on the state, and the Commission generates its own revenues. Finally, any judgment against the Commission by Jacintoport will, on the record before us, have no effect on the state treasury. We reverse the trial court.

I. STATEMENT OF THE CASE

The Jacintoport Corporation brought this action against the Greater Baton Rouge Port Commission alleging that the Commission had constructed adjacent to Jacintoport's property two buoys in the bed of the Mississippi River that now impair access to its property from the river. These buoys are used to help in the mooring of vessels for loading and unloading at the public wharf operated by the Commission and leased to Apex Petroleum Fuel and Terminal Oil Company, located immediately down river from the plaintiff's property. Jacintoport prayed for injunctive relief and alternatively for money damages.

The case was tried on the merits without a jury and submitted for decision. After the trial, the district court noted a written stipulation earlier admitted in the proceedings that "the commission is an agency, political subdivision or alter ego of the state of Louisiana" and on February 10, 1984, requested that counsel for both sides brief the issue whether this action is barred by the Eleventh Amendment. On May 4, 1984, the district court found that the Commission was immune from suit in federal court and dismissed the action. This appeal followed.

II. DISCUSSION

There is considerable uniformity in the circuits in their determination of whether an entity may enjoy immunity under the Eleventh Amendment. ¹ Because the question of diversity jurisdiction in a suit against an "agency" of the state frequently parallels this Eleventh Amendment inquiry, we can draw upon this jurisprudence. ²

We take as the starting point for determining the immunity of the Commission the Supreme Court's discussion in Lake Country Estates v. Tahoe Regional Planning Agency, 1979, 440 U.S. 391, 99 S.Ct. 1171, 59 L.Ed.2d 401. There, the Supreme Court denied Eleventh Amendment immunity to a bi-state planning agency created by California and Nevada and sanctioned by Congress:

"By its terms, the protection afforded by that Amendment is only available to 'one of the United States.' It is true, of course, that some agencies exercising state power have been permitted to invoke the Amendment in order to protect the state treasury from liability that would have had essentially the same practical consequences as a judgment against the State itself. But the Court has consistently refused to construe the Amendment to afford protection to political subdivisions such as counties and municipalities, even though such entities exercise a 'slice of state power.' "

440 U.S. at 400-01, 99 S.Ct. at 1177, 59 L.Ed.2d at 410 (emphasis added).

Although sometimes local governmental entities may be held to be an arm of the state and thereby enjoy the state's Eleventh Amendment immunity, Sessions v. Rusk State Hospital, 5 Cir.1981, 648 F.2d 1066, 1069, independent local political subdivisions are not entitled to that immunity even though they exercise a "slice of state power". This Circuit has outlined the general inquiry as follows: "A federal court must examine the particular entity in question and its powers and characteristics as created by state law to determine whether the suit is in reality a suit against the state itself." Laje v. R.E. Thomason General Hospital, 5 Cir.1982, 665 F.2d 724. If the state is a "necessary party", then the suit is typically barred by the Eleventh Amendment.

A. The District Court's Holding

The district court first stated that "Louisiana courts have repeatedly held that the Greater Baton Rouge Port Commission is an executive department of the state of Louisiana", citing Miller v. Greater Baton Rouge Port Commission, 1954, 225 La. 1095, 74 So.2d 387, 389, 390. ³ The district court next relied on an earlier district court opinion holding that the Port Commission is the "alter ego of the State of Louisiana". Missouri Pacific Railroad v. Travelers Ins. Co., E.D.La.1968, 281 F.Supp. 100, 103. Finally, although the district court acknowledged the many comparable statutory powers of the Commission and the Board of Commissioners of the Port of New Orleans (held to be an independent legal entity not entitled to immunity in C.H. Leavell & Co. v. Board of Commissioners, 5 Cir.1970, 424 F.2d 764), the court felt compelled to give the Commission immunity because of Louisiana jurisprudence and the district court opinion in Missouri Pacific.

Upon review, we find that the cases relied upon by the district court are not dispositive of the issue. The Louisiana cases cited by the district court both in the instant case and in the Missouri Pacific opinion did not deal with the precise question before us, nor was their inquiry based on even analogous jurisprudential concerns guiding a determination of immunity under the Eleventh Amendment. Our examination of the Commission under the standards established by this Court and by other Circuits convinces us that, although the question is a close one, the Commission does not enjoy Louisiana's Eleventh Amendment immunity. We accordingly disaffirm Missouri Pacific to the extent it conflicts with the holding in this opinion.

B. Treatment of the Baton Rouge Commission by Earlier Courts

Our Circuit has held that, in determining immunity under the Eleventh Amendment, a factor that "subsumes all others" is the treatment of the entity in state courts. Huber, Hunt & Nichols v. Architectural Stone Co., 5 Cir.1980, 625 F.2d 22, 25. The overarching importance of this factor was reiterated in the analogous inquiry of citizenship for diversity jurisdiction. Tradigrain, Inc. v. Mississippi State Port Authority, 5 Cir.1983, 701 F.2d 1131, 1132. Federal courts attempt thereby to ascertain whether the entity is "separate and distinct" or whether the action is "in effect, a suit against the State" barred by the Eleventh Amendment. Louisiana Land & Exploration Co. v. State Mineral Board, 5 Cir.1956, 229 F.2d 5, 7.

Similarly, the Third and Sixth Circuits have held that although the question of Eleventh Amendment immunity is a matter of federal law, state decisions concerning the relationship of the entity to the state may be "an important, and under certain circumstances a controlling factor" in determining immunity under the Eleventh Amendment. Blake v. Kline, 3 Cir.1979, 612 F.2d 718, 722, cert. denied, 1980, 447 U.S. 921, 100 S.Ct. 3011, 65 L.Ed.2d 1112; see also Hall v. Medical College, 6 Cir.1984, 742 F.2d 299, 302, quoting Blake with approval.

In Miller v. Greater Baton Rouge Port Commission, 1954, 225 La. 1095, 74 So.2d 387, taxpayers sought to enjoin the Commission from issuing term notes or bonds, whether the issuance was pursuant to a resolution adopted by the Commission or was under the Louisiana constitutional amendment establishing the Port Commission. The relevant issue in that case was whether Act 9 of 1952, which empowered the Commission to issue bonds guaranteed by the state, had the improper effect of providing "the loan of credit of the State to a corporation". Id., 74 So.2d at 389. The court found the guarantee was proper: "The Port Commission is not a corporation but an executive department of the state." Id. at 390.

This single sentence pertaining to bond underwriting does not dispose of the question of the Commission's Eleventh Amendment immunity. Although Miller holds that the Commission is an "agent" of the state insofar as the state ultimately guarantees the Commission's bonds, the case is devoid of any language expressing or implying that this agency status is sufficiently broad based to make the Commission an "alter ego" of the state.

This Court impliedly rejected a similar argument for the Board of Commissioners of the Port of New Orleans in C.H. Leavell & Co. v. Board of Commissioners, 5 Cir.1970, 424 F.2d 764. Although the state guaranteed the New Orleans Commission's bonds, id. at 766, which would cast the Commission as an "agency" of the state under Miller, we found that the New Orleans Commission was a sufficiently separate entity from the state to sustain diversity jurisdiction, id. at 767. We found "no controlling State precedent" on whether the New Orleans Commission (the "Dock Board") was the alter ego of the State of...