McCants v. Nat'l Collegiate Athletic Ass'n

• Citation: 251 F.Supp.3d 952
• Decision Date: 26 April 2017
• Docket Number: 1:15-cv-176.
• Court: United States District Courts. 4th Circuit. Middle District of North Carolina
• Parties: Rashanda MCCANTS and Devon Ramsay, individually and on behalf of all others similarly situated, Plaintiffs, v. The NATIONAL COLLEGIATE ATHLETIC ASSOCIATION and the University of North Carolina at Chapel Hill, Defendants.

251 F.Supp.3d 952

Rashanda MCCANTS and Devon Ramsay, individually and on behalf of all others similarly situated, Plaintiffs,

v.The NATIONAL COLLEGIATE ATHLETIC ASSOCIATION and the University of North Carolina at Chapel Hill, Defendants.

1:15-cv-176.

United States District Court, M.D. North Carolina.

April 26, 2017

Michael D. Hausfeld, Sathya S. Gosselin, Hausfeld LLP, Washington, DC Jeannine M. Kenney, Philadelphia, PA, Robert Flynn Orr, Campbell Shatley, PLLC, Asheville, NC, for Plaintiffs.

James T. Williams, Jr., Jennifer K. Van Zant, Justin Nathaniel Outling, Brooks Pierce McLendon Humphrey & Leonard, Greensboro, NC, Stephen D. Brody, O'Melveny & Myers, LLP, Washington, DC, Stephanie A. Brennan, N.C. Department Of Justice, Raleigh, NC, Lisa M. Gilford, Skadden Arps Slate Meagher & Flom, LLP, Los Angeles, CA, for Defendants.

MEMORANDUM OPINION AND ORDER

LORETTA C. BIGGS, District Judge.

Plaintiffs, Rashanda McCants and Devon Ramsay, brought this putative class action in state court against Defendants, the National Collegiate Athletic Association (the "NCAA") and the University of North Carolina at Chapel Hill ("UNC–Chapel Hill"), alleging various state claims against each Defendant. The NCAA removed the case to this Court pursuant to the Class Action Fairness Act ("CAFA"),¹ 28 U.S.C. §§ 1332(d), 1441, 1446, and 1453. (ECF No. 1.) UNC–Chapel Hill filed a motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure,² seeking dismissal on the ground that, as an agency of the State of North Carolina, it is immune from suit in this Court under the Eleventh Amendment, as well as other grounds. (ECF No. 19; see also ECF No. 22 at 9, 12.) For the reasons set forth below, the Court remands the case to state court.

I. LEGAL STANDARD

The Fourth Circuit has "been unclear on whether a dismissal on Eleventh Amendment immunity grounds is a dismissal for failure to state a claim under Rule 12(b)(6) or a dismissal for lack of subject matter jurisdiction under Rule 12(b)(1)." Andrews v. Daw , 201 F.3d 521, 524 n.2 (4th Cir. 2000). Several recent Fourth Circuit opinions, however, have recognized the jurisdictional characteristics of the Eleventh Amendment. See, e.g. , McCray v. Md. Dep't of Transp. , 741 F.3d 480, 483 (4th Cir. 2014) ; Carpenters Pension Fund of Baltimore v. Md. Dep't of Health & Mental Hygiene , 721 F.3d 217, 220, 223 (4th Cir. 2013) ; Constantine v. Rectors & Visitors of George Mason Univ. , 411 F.3d 474, 480–81 (4th Cir. 2005). While Eleventh Amendment immunity contains characteristics of subject matter jurisdiction in that a state may raise immunity at any time, it "is not strictly an issue of subject-matter jurisdiction" because, unlike subject matter jurisdiction, Eleventh Amendment immunity "may be waived by the [s]tate altogether."³ Constantine , 411 F.3d at 481, 482. According to the Supreme Court, "[t]he Eleventh Amendment ... does not automatically destroy original jurisdiction. Rather, [it] grants the State a legal power to assert a sovereign immunity defense should it choose to do so." Wis. Dep't. of Corrs. v. Schacht , 524 U.S. 381, 389, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998).

Though "not a true limit on the subject-matter jurisdiction of federal courts, the Eleventh Amendment is a block on the exercise of that jurisdiction." Roach v. W. Va. Reg'l Jail & Corr. Facility Auth. , 74 F.3d 46, 48 (4th Cir. 1996) (quotation omitted); accord Fent v. Okla. Water Res. Bd. , 235 F.3d 553, 559 (10th Cir. 2000) (stating that Eleventh Amendment immunity "constitutes a bar to the exercise of federal subject matter jurisdiction"). Once asserted by the state, such immunity becomes a threshold issue that must be resolved before the court can address any of a plaintiff's claims. See Constantine , 411 F.3d at 482 ("Given the States' unique dignitary interest in avoiding suit, it is no less important to resolve Eleventh Amendment immunity questions as soon as possible after the State asserts its immunity." (citation and footnote omitted)). In recent years, district courts within the Fourth Circuit have generally considered this immunity defense under Rule 12(b)(1). See, e.g. , Hutto v. S.C. Ret. Sys. , 899 F.Supp.2d 457, 466 (D.S.C. 2012) ; Beckham v. Nat'l R.R. Passenger Corp. , 569 F.Supp.2d 542, 547 (D. Md. 2008). This Court will do the same.

A motion under Rule 12(b)(1), which governs dismissal for lack of subject matter jurisdiction, raises the question of "whether [the plaintiff] has a right to be in the district court at all and whether the court has the power to hear and dispose of [the] claim." Holloway v. Pagan River Dockside Seafood, Inc. , 669 F.3d 448, 452 (4th Cir. 2012). Ordinarily, the party asserting jurisdiction bears the burden of establishing subject matter jurisdiction. See Strawn , 530 F.3d at 296. However, where the Eleventh Amendment bar has been asserted by a party, that party has the burden of proving that it is entitled to sovereign immunity. Hutto v. S.C. Ret. Sys. , 773 F.3d 536, 543 (4th Cir. 2014). In evaluating a motion under Rule 12(b)(1), the court may consider evidence outside the pleadings and should grant the motion "only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law." Richmond, Fredericksburg & Potomac R.R. Co. v. United States , 945 F.2d 765, 768 (4th Cir. 1991).

II. DISCUSSION

A. Sovereign Immunity and Eleventh Amendment Immunity Distinguished

Courts have recognized two forms or species of state sovereign immunity: (1) Eleventh Amendment immunity and (2) a state's broader, general sovereign immunity. See, e.g. , Beaulieu v. Vermont , 807 F.3d 478, 483 (2d Cir. 2015) ; Lombardo v. Pa., Dep't of Pub. Welfare , 540 F.3d 190, 194–95 (3d Cir. 2008) ; Stewart v. North Carolina , 393 F.3d 484, 487–88 (4th Cir. 2005). "While both doctrines are often referred to as ‘sovereign immunity,’ they are not the same." Murphy v. Smith , 844 F.3d 653, 656 (7th Cir. 2016) ; see also Stewart , 393 F.3d at 487 ("distinguish[ing] the related but not identical concepts of Eleventh Amendment immunity and state sovereign immunity").

The Eleventh Amendment provides that "[t]he 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," U.S. Const. amend. XI, "and (as interpreted) by its own citizens," Lapides v. Bd. of Regents of Univ. Sys. of Ga. , 535 U.S. 613, 618, 122 S.Ct. 1640, 152 L.Ed.2d 806 (2002). See Edelman v. Jordan , 415 U.S. 651, 662–63, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974). "This immunity protects a state's dignity and fiscal integrity from federal court judgments, and acts as a limitation on the federal judiciary's Article III powers." Beaulieu , 807 F.3d at 483 (citation omitted); see also Bragg v. W. Va. Coal Ass'n , 248 F.3d 275, 291 (4th Cir. 2001) (explaining that the Eleventh Amendment is a "limit on federal judicial power[,]" which is "an essential element of the constitutional design," because it "accords the States the respect owed them as members of the federation" (quoting P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc. , 506 U.S. 139, 146, 113 S.Ct. 684, 121 L.Ed.2d 605 (1993) )).

Although the precise terms of the Eleventh Amendment only bar federal jurisdiction over suits between a state and citizens of another state or foreign state, the Supreme Court has long observed that states possess a broader form of immunity that transcends the literal meaning of the Eleventh Amendment. See Fed. Maritime Comm'n v. S.C. State Ports Auth. , 535 U.S. 743, 754, 122 S.Ct. 1864, 152 L.Ed.2d 962 (2002) ; Idaho v. Coeur d'Alene Tribe of Idaho , 521 U.S. 261, 267–68, 117 S.Ct. 2028, 138 L.Ed.2d 438 (1997) (citing Hans v. Louisiana , 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890) ). This broader doctrine of immunity predates the enactment of the Eleventh Amendment and the founding of our Nation. See S.C. State Ports Auth. v. Fed. Maritime Comm'n , 243 F.3d 165, 167–68 (4th Cir. 2001). Unlike immunity under the Eleventh Amendment, which addresses whether a state has consented to being sued in a federal court, Stewart , 393 F.3d at 488, a state's more general sovereign immunity bars all private suits against the state whether brought in federal or state court, Beaulieu , 807 F.3d at 483 ; S.C. State Ports Auth. , 243 F.3d at 169. This form of immunity is "based on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends." Stewart , 393 F.3d at 488 (quoting Nevada v. Hall , 440 U.S. 410, 416, 99 S.Ct. 1182, 59 L.Ed.2d 416 (1979) ).

The Supreme Court explained the relationship between Eleventh Amendment immunity and sovereign immunity as follows:

We have ... sometimes referred to the States' immunity from suit as "Eleventh Amendment immunity." The phrase is convenient shorthand but something of a misnomer, for the sovereign immunity of the States neither derives from, nor is limited by, the terms of the Eleventh Amendment. Rather, as the Constitution's structure, its history, and the authoritative interpretations by this Court make clear, the States' immunity from suit is a fundamental aspect of the sovereignty which the States enjoyed before the ratification of the Constitution, and which they retain today (either literally or by virtue of their admission into the Union upon an equal footing with the other States) except as altered by the plan of the Convention or certain constitutional Amendments.

Alden v. Maine , 527 U.S. 706, 713, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999) ; Fed. Maritime Comm'n , 535 U.S. at 753, 122 S.Ct. 1864 ("[T]he Eleventh Amendment does not define the scope of the States' sovereign immunity; it is but one particular exemplification of that immunity.").

Neither form of immunity is absolute. States are free to waive either type of immunity in either federal or state...