Shelley v. Colo. State Univ.

• Decision Date: 06 March 2015
• Docket Number: A-14-CA-516 LY
• Parties: HERSHALL JOSEPH SHELLEY v. COLORADO STATE UNIV., et al.
• Court: U.S. District Court — Western District of Texas

HERSHALL JOSEPH SHELLEY v. COLORADO STATE UNIV., et al.

A-14-CA-516 LY

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS AUSTIN DIVISION

March 6, 2015

REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

TO: THE HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE

Before the Court are Defendant Colorado State University's Motion to Dismiss Plaintiff's Amended Complaint (Dkt. No. 30); Defendant Dell Inc.'s Motion to Deny Joinder, or in the Alternative, to Dismiss for Failure to State a Claim under Fed. R. Civ. P. 12(b)(6) (Dkt. No. 31); and Defendant Colorado Board of Governors' Motion to Dismiss Plaintiff's Amended Complaint (Dkt. No. 37); and the various Response and Reply briefs.¹

The District Court referred the above-motions to the undersigned Magistrate Judge for a report and recommendation pursuant to 28 U.S.C. §636(b) and Rule 1(c) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas, Local Rules for the Assignment of Duties to United States Magistrate Judges.

I. GENERAL BACKGROUND

While Plaintiff Hershall Joseph Shelley ("Shelley"), a Texas resident, was employed at Dell Inc. in Austin, Texas, he enrolled in an online and distance graduate Ph.D. program in theDepartment of Mechanical Engineering at Colorado State University ("CSU"), located in Fort Collins, Colorado. It appears that Shelley was also a fellow in the Alliances for Graduate Education and the Professoriate program ("AGEP") at CSU, a program run by the National Science Foundation to increase the number of minorities obtaining graduate degrees in science, technology, engineering and mathematics. After CSU did not confer a Ph.D. degree on Shelley, he filed this lawsuit pro se in the 200^th Judicial District Court of Travis County, Texas, alleging state law claims for breach of contract, age and race discrimination, and claims under the Texas Deceptive Consumer Protection Act and the Texas Business Code. See Shelley v. Colorado State University, No. D-1-GN-14-001245 (200^th Dist. Ct., Travis County, Tex. Apr. 30, 2014).

On June 3, 2014, CSU removed the case on the basis of diversity jurisdiction. Shortly thereafter, CSU filed a Motion to Dismiss arguing that Shelley's lawsuit should be dismissed for lack of subject matter jurisdiction under Rule 12(b)(1), lack of personal jurisdiction under Rule 12(b)(2), and for failure to state a claim under Rule 12(b)(6). In the alternative, CSU sought a more definite statement. On September 25, 2014, the undersigned issued a Report and Recommendation recommending that CSU's Motion to Dismiss be denied and that Shelley be permitted to file an amended complaint that "complies with Rule 8." See Dkt. No 15. On November 6, 2014, Judge Yeakel adopted in part and rejected in part the Report and Recommendation. Dkt. No. 24. He adopted the recommendation to permit Shelley to file an amended complaint, but altered the "denial" of the Motion to Dismiss to a dismissal without prejudice to refiling.

On November 21, 2014, Shelley filed his Amended Complaint and added the Colorado Board of Governors and Dell Inc. as defendants in this case. See Dkt. No. 25. Shelley's Amended Complaint continues to allege various state law causes of action including breach of contract, age and race discrimination, and claims under the Texas Deceptive Consumer Protection Act, the TexasHuman Resources Code, the Texas Business Code and the Texas Penal Code. Shelley's Amended Complaint does not allege any federal causes of action.²

After this case was removed to federal court, Shelley filed another lawsuit against the Colorado Board of Governors and Dell Inc. in state court alleging identical causes of action as the instant case. See Shelley v. Colorado Board of Governors and Dell Inc., No. D-1-GN-14-003625 (345^th Dist. Ct., Travis County, Tex. Sept. 12, 2014). On December 18, 2014, the state district court granted Dell's Rule 91a Motion to Dismiss in its entirety. Dkt. # 34-1 at Exh. 3. On January 8, 2015, the state court dismissed all of Shelley's claims against the Board of Governors except "claims of discrimination based on age and race." Dkt. No. 39 at Exh. A-3.

II. ANALYSIS

A. Colorado State University's Motion to Dismiss (Dkt. No. 30)

CSU moves to dismiss Shelley's Amended Complaint pursuant to Federal Rule of Civil Procedure 41(b), for Shelley's failure to follow the Court's order in amending his complaint, for failing to state a claim upon which relief may be granted pursuant to Rule 12(b)(6) and for lack of jurisdiction, pursuant to Rules 12(b)(1) and 12(b)(2).

1. Subject Matter Jurisdiction

If a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court should consider the jurisdictional attack under Rule 12(b)(1) before addressing any attack on the legal merits. See Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 578 (1999) ( "Customarily, a federal court first resolves doubts about its jurisdiction over the subject matter . . . ."); Ramming v. United States, 281 F.3d 158, 161 (5th Cir.), cert. denied, 536 U.S. 960 (2002).

CSU argues that this Court lacks subject matter jurisdiction over CSU because it is immune from suit under the Eleventh Amendment³ of the United States Constitution. The Court disagrees. The Eleventh Amendment states:

The 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, or by Citizens or Subjects of any Foreign State.

U.S. CONST. Amend. XI. "Sovereign immunity is the privilege of the sovereign not to be sued without its consent." Virginia Office for Protection and Advocacy v. Stewart, 131 S.Ct. 1632, 1638 (2011). Accordingly, absent a waiver or valid abrogation, "federal courts may not entertain a private person's suit against a State." Id. at 1638. It is well-established that sovereign immunity applies not only to actions where a state is actually named as a defendant, but also to "ceratin actions against state agents and state instrumentalities." Regents of the University of California v. Doe, 519 U.S. 425, 429 (1997).

CSU and its Board of Governors are considered state entities under Colorado law. See Colo. Const. art. VIII, § 5 (recognizing CSU as a "state institution of higher education. . .subject to the control of the state."); Colo. Rev. Stat. §24-18-104(9) (state ethics code classifies statute institutions of higher learning as state agencies); Ruotsinoja v. Bd. of Governors of the Colorado State Univ. Sys., 2014 WL 2057773, *3 (D. Colo. May 19, 2014) ("CSU and its Board are an arm-of-the-state.").⁴ Under this line of cases, CSU is entitled to assert sovereign immunity. The question is whether CSU waived its sovereign immunity by removing this case to federal court.

While sovereign immunity grants immunity from suit in federal court, a state may waive its jurisdictional immunity by voluntarily invoking the federal court's jurisdiction. College Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 675-76 (1999). In Lapides v. Bd. of Regents of the Univ. Sys. of Ga., 535 U.S. 613, 616 (2002), the Supreme Court held that a State waives its Eleventh Amendment immunity when it removes a case to federal court. Id. at 624. "'[W]here a State voluntarily becomes a party to a cause and submits its rights for judicial determination, it will be bound thereby and cannot escape the result of its own voluntary act by invoking the prohibitions of the Eleventh Amendment.'" Id. at 619 (quoting Gunter v. Atl. Coast Line R.R. Co., 200 U.S. 273, 284 (1906)). As the Court explained,

[i]t would seem anomalous or inconsistent for a State both (1) to invoke federal jurisdiction, thereby contending that the 'Judicial power of the United States' extends to the case at hand, and (2) to claim Eleventh Amendment immunity, thereby denying that the 'Judicial power of the United States' extends to the case at hand. And a Constitution that permitted States to follow their litigation interests by freely asserting both claims in the same case could generate seriously unfair results.

Id.

By voluntarily removing this case to federal court, CSU waived its immunity from suit in federal court. The Court finds CSU's attempts to distinguish Lapides from the instant case are unconvincing. CSU argues that Lapides should be interpreted narrowly and limited "to the case's unique facts where, 'in the context of state-law claims, the State has explicitly waived immunity from suit in state-court proceedings'" CSU's Motion to Dismiss at p. 16. The Fifth Circuit hasexplicitly rejected this narrow interpretation of Lapides. In Meyers v. Texas, 410 F.3d 236 (5^th Cir. 2005), cert denied, 550 U.S. 917 (2007),⁵ the plaintiffs, relying on Lapides, argued that the state had waived its state sovereign immunity to its federal claims by removing the case to federal court. Texas argued that Lapides did not apply to it because its holding was limited to suits based on state law claims in respect to which the state had waived its immunity in its own courts. The Fifth Circuit rejected this argument and held that in light of Lapides, a state waives its immunity from suit in federal court when it removes a private suit involving state or federal claims from state court to federal district court. Id. at 243-50. The Fifth Circuit explained its reasoning as follows:

Although the Supreme Court in Lapides circumspectly did not address any issue unnecessary to its decision, we believe that Lapides's interpretation of the voluntary invocation principle, as including the waiver-by-removal rule, applies generally to any private suit which a state removes to federal court. There is no evident basis in law or judicial administration for severely limiting those general principles, or Lapides's substantial overruling of Ford Motor Co. v. Dep't of Treasury of State of Indiana, 323 U.S. 459, 65 S.Ct. 347, 89 L.Ed. 389 (1945), to a small sub-set

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