Kashani v. Purdue University

• Decision Date: 10 March 1987
• Docket Number: No. 85-2306,85-2306
• Parties: 38 Ed. Law Rep. 112 Hamid R. KASHANI, Plaintiff-Appellant, v. PURDUE UNIVERSITY, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 843

813 F.2d 843

38 Ed. Law Rep. 112

Hamid R. KASHANI, Plaintiff-Appellant, v. PURDUE UNIVERSITY, et al., Defendants-Appellees.

No. 85-2306.

United States Court of Appeals Seventh Circuit.

Argued Sept. 23, 1986.

Decided March 10, 1987.

William E. Marsh, Indiana University School of Law, Indianapolis, Ind., for plaintiff-appellant.

John C. Duffey, Stuart & Branigin, LaFayette, Ind., for defendants-appellees.

Before BAUER, Chief Judge, WOOD, Circuit Judge, and ESCHBACH, Senior Circuit Judge.

ESCHBACH, Senior Circuit Judge.

Hamid R. Kashani sued Purdue University and various of its officials under 42 U.S.C. Sec. 1983, alleging that he was terminated from a doctoral program at Purdue University on the basis of national origin. The trial court held his claims both for damages and for reinstatement barred by the Eleventh Amendment. In this appeal we uphold the conclusion that Purdue University shares in the sovereign immunity of the State of Indiana under the Eleventh Amendment. We hold further, however, that the Eleventh Amendment does not bar suit against the officials for the injunctive relief of reinstatement into the doctoral program.

I

Hamid R. Kashani, an Iranian, was terminated from the doctoral program in electrical engineering at Purdue University in Indiana during the "Hostage Crisis." He filed a section 1983 action, alleging discrimination on the basis of national origin contrary to the Equal Protection Clause. The suit named as defendants Purdue University; the trustees and president of the university, in their official capacities; various graduate school officials and members of the Ph.D. Review committee, in both their official and individual capacities. Kashani sought both monetary damages and reinstatement from all defendants, except for the claims against the officials in their individual capacities, which sought only monetary damages.

The district court dismissed for lack of subject matter jurisdiction the claims for monetary relief against the University and against the various officials in their official capacity on the basis that Purdue was entitled to the protection of the Eleventh Amendment. The court subsequently dismissed all claims for injunctive relief, on the basis of the Eleventh Amendment. To enable appeal, the parties stipulated to dismissal of the remaining claims for monetary relief against officials in their individual capacities. Kashani does not appeal these stipulated dismissals. Kashani thus appeals only the claims against the university and against its officials in their official capacity. Against both, Kashani seeks monetary and injunctive relief. For the reasons stated below, we hold that Purdue is an arm of the state entitled to the protection of the Eleventh Amendment. We thus affirm the dismissal of all claims against the university and all claims against the officials for monetary relief. We hold, however, that the injunctive relief of reinstatement is not barred by the Eleventh Amendment and thus reverse the dismissal of the claims for injunctive relief against the officials in their official capacity.

II

The jurisdictional bar of the Eleventh Amendment protects the state and its agencies; it does not shield political subdivisions. The question here, then, is whether Purdue "is more like a county or city than it is like an arm of the State." Mount Healthy School District v. Doyle, 429 U.S. 274, 280, 97 S.Ct. 568, 573, 50 L.Ed.2d 471 (1977) (local school board not entitled to immunity). The question of sovereign immunity for a state university is not unexplored territory. The vast majority of cases considering the issue have found state universities to be forfended by the Eleventh Amendment. E.g., Hall v. Medical College of Ohio at Toledo, 742 F.2d 299 (6th Cir.1984), cert. denied, 469 U.S. 1113, 105 S.Ct. 796, 83 L.Ed.2d 789 (1985); Cannon v. University of Health Sciences/The Chicago Medical School, 710 F.2d 351 (7th Cir.1983) (Southern Illinois University and University of Illinois); Jackson v. Hayakawa, 682 F.2d 1344 (9th Cir.1982) (San Francisco State College); United Carolina Bank v. Board of Regents, 665 F.2d 553, 558 (5th Cir.1982) (Stephen F. Austin State University); Ronwin v. Shapiro, 657 F.2d 1071, 1073 (9th Cir.1981) (University of Arizona); Perez v. Rodriguez Bou, 575 F.2d 21 (1st Cir.1978) (University of Puerto Rico); Brennan v. University of Kansas, 451 F.2d 1287 (10th Cir.1971). In fact, the parties' briefs and our own research have failed to reveal a single circuit court opinion holding a state university not entitled to Eleventh Amendment immunity. There are district court opinions to the contrary. E.g., Samuel v. University of Pittsburgh, 375 F.Supp. 1119 (W.D.Pa.1974), rev'd on other grounds, 538 F.2d 991 (3rd Cir.1976).

Although state universities have consistently been found to be entitled to immunity, courts reexamine the issue with regard to the facts of each case "because the states have adopted different schemes, both intra and interstate, in constituting their institutions of higher learning." United Carolina Bank v. Board of Regents, 665 F.2d 553, 557 (5th Cir.1982). However, given the great number of cases holding state universities to be instrumentalities of the state for Eleventh Amendment purposes, it would be an unusual state university that would not receive immunity. The analyses in these cases support our holding that Purdue is an instrumentality of the State of Indiana, enjoying its sovereign immunity.

A

Courts have looked to a number of criteria in deciding this issue. The most important factor is the extent of the entity's financial autonomy from the state. "[A] crucial question in determining whether the suit should be regarded as one against the state is whether the named defendant has such independent status that a judgment against the defendant would not impact the state treasury." Ronwin v. Shapiro, 657 F.2d 1071, 1073 (9th Cir.1981); accord Cannon v. University of Health Sciences/The Chicago Medical School, 710 F.2d 351, 357 (7th Cir.1983). Courts consider the extent of state funding, the state's oversight and control of the university's fiscal affairs, the university's ability independently to raise funds, whether the state taxes the university, and whether a judgment against the university would result in the state increasing its appropriations to the university.

Purdue receives approximately one third of its income directly from the state. For example, in the academic year 1982-83, the university received slightly over 36% of its income from state appropriations. Other sources, with approximate percentages, were auxiliary enterprises (17%); student fees (16%); gifts, grants, and contracts (13%); sales and services (7%); student aid (4%); federal appropriations (3%); organized activities (2%); endowment income (.1%).

Indiana examines Purdue's finances carefully in deciding on the amount of appropriations. Indiana's Budget Agency Act, Ind.Code Secs. 4-12-1-1 et seq., expressly includes Purdue in the definition of "state agency." The definition expressly excludes "cities, towns, townships, school cities, school towns, school townships, school districts, [and] other municipal corporations or political subdivisions of the state." As a "state agency," Purdue is required to prepare and file a detailed statement of all expenditures it made in the last budgetary period or expects to find necessary in the next budgetary period. The statement must show reasons for all expenditures, "showing particularly the reason for any requested increase or decrease over former appropriations." The Budget Agency is empowered to require the submission of additional information and to hold hearings. The Budget Agency analyzes the statement and submits its recommendations to the legislature. Thus, Purdue would have to report the payment of a judgment to the legislature as part of its financial report. Cf. Harden v. Adams, 760 F.2d 1158, 1163 (11th Cir.), cert. denied, --- U.S. ----, 106 S.Ct. 530, 88 L.Ed.2d 462 (1985) ("Where the budget of an entity [Troy State University] is submitted to the state for approval, this suggests that the entity is an agency of the state."). The state exercises further supervision of Purdue's finances through the Commission for Higher Education, which is empowered under Ind.Code Sec. 20-12-0.5-8 to review appropriation requests and make recommendations to the governor, budget agency, and legislature.

Purdue has no power to levy taxes. So although Purdue has sources of revenue other than appropriations from the legislature, it lacks the ability that cities and counties typically have to require payments in the form of taxation. It can raise money only by entering into one of various markets: the market for bonds, for higher education, for services, and so forth. Paying a judgment in a case like the present is also not one of the purposes for which Purdue is authorized to issue bonds. The absence of the power to tax is a strong indication that an entity is more like an arm of the state than like a county or city, because that enablement gives an entity an important kind of independence. The absence of that authority, for an entity like Purdue, ensures ultimate fiscal reliance upon the state. Cf. Mackey v. Stanton, 586 F.2d 1126, 1131 (7th Cir.1978), cert. denied, 444 U.S. 882, 100 S.Ct. 172, 62 L.Ed.2d 112 (1979) ("More important, both have the power to raise their own funds by tax levy and by bond issuance."); United Carolina Bank v. Board of Regents, 665 F.2d 553, 558 (5th Cir.1982) ("Most telling is the power of junior colleges to levy ad valorem taxes.... Under Texas law, political subdivisions are sometimes defined as entities authorized to levy taxes."); Hall v. Medical College of Ohio at Toledo, 742 F.2d 299, 304 (6th Cir.1984), cert. denied, 469 U.S. 1113, 105 S.Ct. 796, 83 L.Ed.2d 789 (1985) ("[N]one of the state universities or colleges ... have power to levy taxes to service such...