Lynch v. San Francisco Housing Authority

• Decision Date: 02 June 1997
• Docket Number: No. A075350,A075350
• Citation: 55 Cal.App.4th 527,65 Cal.Rptr.2d 620
• Parties: , 97 Cal. Daily Op. Serv. 4158, 97 Daily Journal D.A.R. 7027 John LYNCH, Plaintiff and Appellant, v. SAN FRANCISCO HOUSING AUTHORITY et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

Page 620

65 Cal.Rptr.2d 620

55 Cal.App.4th 527, 97 Cal. Daily Op. Serv. 4158,

97 Daily Journal D.A.R. 7027

John LYNCH, Plaintiff and Appellant, v. SAN FRANCISCO HOUSING AUTHORITY et al., Defendants and Respondents.

No. A075350.

Court of Appeal, First District, Division 5, California.

June 2, 1997.

Jody I. LeWitter, Oakland, Paula A. Brantner, San Francisco, Eggleston, Siegel & LeWitter, Oakland, for plaintiff and appellant.

William F. Terheyden, Daniel A. Croley, Littler, Mendelson, Fastiff, Tichy & Mathiason, San Francisco, for defendants and respondents.

JONES, Associate Justice.

Appellant John Lynch appeals the trial court's decision to sustain the demurrer filed by respondent The San Francisco Housing Authority (SFHA) without leave to amend as to Lynch's cause of action brought under 42 United States Code section 1983 (hereafter section 1983). In this appeal, we consider whether the trial court properly concluded on demurrer that the SFHA is an arm of the state for purposes of section 1983. We conclude that such a conclusion on demurrer was improper. We therefore reverse that portion of the trial court's judgment sustaining the demurrer to Lynch's section 1983 claim.

I. FACTUAL AND PROCEDURAL HISTORY

On September 29, 1995, Lynch filed a complaint for damages in propria persona against his former employer, the SFHA. On December 26, 1995, after retaining counsel, Lynch filed a first amended complaint alleging five causes of action. One cause of action asserted a violation of section 1983. Lynch alleged that the SFHA, a "local public agency," terminated him for exercising his First Amendment rights.

The SFHA demurred to the first amended complaint. The SFHA argued as the sole basis for dismissal of the section 1983 claim that the SFHA is a state agency and hence outside the class of persons subject to liability under section 1983. The SFHA's reply brief reiterated this sole ground for dismissal of the section 1983 cause of action. The court's ruling, in pertinent part, sustained the demurrer to the section 1983 cause of action without leave to amend.

Lynch later filed a second and third amended complaint containing causes of action that the trial court had dismissed with leave to amend. Ultimately, the trial court granted judgment on the pleadings without leave to amend.

II. DISCUSSION

A. Standard of Review

In this appeal, we review de novo the trial court's decision sustaining the SFHA's demurrer. (See Hernandez v. City of Pomona (1996) 49 Cal.App.4th 1492, 57 Cal.Rptr.2d 406.) In doing so, "we accept as true the properly pleaded material factual allegations of the complaint, together with facts that may be properly judicially noticed." (Id. at p. 1497, 57 Cal.Rptr.2d 406.) Reversible error exists if those facts show entitlement to relief under any possible legal theory. (Ibid.)

B. Section 1983 and the Eleventh Amendment

Section 1983 permits suit by an injured party against "[e]very person who, under color of any statute, ordinance, regulation, custom, or usage, of any State ... subjects ... any citizen of the United States ... to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws ...." (§ 1983, italics added.) The SFHA argues, as it did before the trial court, that it is a "state agency" and hence not a "person" subject to suit under section 1983.

The SFHA's argument relies on Will v. Michigan Depart. of State Police (1989) 491 U.S. 58, 109 S.Ct. 2304, 105 L.Ed.2d 45 (Will ). In Will, the United States Supreme Court concluded that an action could not be brought under section 1983 in state court against the Michigan Department of State Police. (491 U.S. at pp. 70-71, 109 S.Ct. at pp. 2311-12.) In support of its conclusion, the Supreme Court explained that the Eleventh Amendment bars suit against a state or an arm of the state in federal court "unless the State has waived its immunity [citation], or unless Congress has exercised its undoubted power under § 5 of the Fourteenth Amendment to override that immunity." (Will, 491 U.S. at p. 66, 109 S.Ct. at p. 2310.) Congress, in passing section 1983, had not overridden the states' Eleventh Amendment immunity. Therefore, absent the state's consent, Eleventh Amendment immunity barred a suit against a state or arm of the state in federal court under section 1983. (Ibid.)

The question before the court in Will, however, concerned the potential liability under section 1983 of the state or an arm of the state sued in state court. (See Will, 491 U.S. at pp. 63-64, 109 S.Ct. at pp. 2308-09.) The court explained, "Congress assigned to the federal courts a paramount role" in the endeavor to remedy deprivations of civil rights. (Id. at p. 66, 109 S.Ct. at p. 2309-10.) "Given that a principal purpose behind the enactment of § 1983 was to provide a federal forum for civil rights claims" and that the Eleventh Amendment barred suit against the states and arms of the states in federal court, the court could not accept the "argument that Congress intended nevertheless to create a cause of action against States to be brought in state courts, which are precisely the courts Congress sought to allow civil rights claimants to avoid through § 1983." (Ibid.) The court therefore concluded that states and "governmental entities that are considered 'arms of the State' for Eleventh Amendment purposes" are not "persons" subject to liability under section 1983 in any forum. (491 U.S. at p. 70, 109 S.Ct. at p. 2311-12.)

Despite the language and reasoning of Will, the SFHA challenges the relevance of Eleventh Amendment analysis to our inquiry. The SFHA points to the Supreme Court's statement in Will that the scope of the Eleventh Amendment and the scope of section 1983 are separate issues. Certainly, the two issues are not completely coextensive. An affirmative response to the inquiry whether the defendant is a state or an arm of the state for Eleventh Amendment purposes conclusively establishes that the defendant is not a "person" for purposes of section 1983. However, a negative response to that same inquiry does not necessarily establish that the defendant is a "person" for purposes of section 1983. Other issues can still arise. (See, e.g., Hervey v. Estes (9th Cir.1995) 65 F.3d 784, 791-792 [concluding that an intergovernmental association of law enforcement agencies did not constitute a "person" because not a separate legal entity from the law enforcement agencies that had created it].)

This appeal calls upon us to determine whether at this stage of the pleadings, the trial court properly concluded that the SFHA is an arm of the state. The scope of the Eleventh Amendment is critical to that determination. (See Thompson v. City of Los Angeles (9th Cir.1989) 885 F.2d 1439, 1443 [because the University of California at Los Angeles was an arm of the state under Eleventh Amendment it followed that it was not a person within meaning of section 1983].)

C. The Scope of the Eleventh Amendment

Concern for the state's solvency and dignity are the twin concerns that underpin the Eleventh Amendment. (See Hess v. Port Authority Trans-Hudson Corporation (1994) 513 U.S. 30, 32, 115 S.Ct. 394, 397, 130 L.Ed.2d 245.) It follows therefore that when deciding whether an entity may invoke Eleventh Amendment immunity the court should focus on "the relationship between the State and the entity in question." (See Regents of the University of California v. Doe (1997) --- U.S. ----, ----, 117 S.Ct. 900, 904, 137 L.Ed.2d 55.) If "the state is the real, substantial party in interest, [it] is entitled to invoke its sovereign immunity from suit" even though the entity and not the state is the named party. (Id. at pp. ---- - ----, 117 S.Ct. at pp. 903-904; quoting Ford Motor Co. v. Department of Treasury of Ind. (1945) 323 U.S. 459, 464, 65 S.Ct. 347, 350-51, 89 L.Ed. 389.)

While the question of whether an entity may invoke the state's Eleventh Amendment immunity is one of federal law, provisions of state law are indispensable elements of that federal analysis because an entity's treatment under state law tends to illuminate the relationship between the state and the entity for purposes of the Eleventh Amendment. A uniform test for defining the class of entities that share in the state's Eleventh Amendment immunity has not yet developed. The United States Court of Appeals for the Ninth Circuit, for example, considers five questions when resolving Eleventh Amendment issues such as the one presented here: " '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 the power to take property in its own name or only the name of the state, and the corporate status of the entity.' " (Hale v. State of Ariz. (9th Cir.1993) 993 F.2d 1387, 1399; quoting Mitchell v. Los Angeles Community College Dist. (9th Cir.1988) 861 F.2d 198, 201.) Other circuits, however, do not limit their inquiry to these five questions, instead examining various additional factors, such as, the degree of autonomy enjoyed by the governmental entity, (Christy v. Pennsylvania Turnpike Com'n (3d Cir.1995) 54 F.3d 1140, 1144); the entity's immunity from state taxation; the percentage of funding received from the state (ibid.); the geographic scope of the entities' area of operation and concern, (McDonald v. Board of Mississippi Levee Com'rs (5th Cir.1987) 832 F.2d 901, 906); the independent authority, if any, of the entity to raise funds and the extent of state control over the entity's fiscal affairs, (Kashani v. Purdue University (7th Cir.1987) 813 F.2d 843, 845). In our analysis, we will consider not just the five questions identified by the Ninth Circuit, but also many of these other factors that have been identified by courts throughout the federal system.

D. Housing Authority of Los Angeles and its Progeny

The SFHA relies almost exclusively on our ...