Van Pilsum v. Iowa State Univ. of Science, Civ. No. 4-92-70619.

• Decision Date: 12 September 1994
• Docket Number: Civ. No. 4-92-70619.
• Citation: 863 F. Supp. 935
• Parties: Joyce VAN PILSUM, Plaintiff, v. IOWA STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY; Barbara Mack, Individually and in her official capacity; Martin C. Jischke, Individually and in his official capacity; Iowa State Board of Regents; State of Iowa; Frank Brown, individually and in his official capacity, Defendants.
• Court: U.S. District Court — Southern District of Iowa

863 F. Supp. 935

Joyce VAN PILSUM, Plaintiff, v. IOWA STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY; Barbara Mack, Individually and in her official capacity; Martin C. Jischke, Individually and in his official capacity; Iowa State Board of Regents; State of Iowa; Frank Brown, individually and in his official capacity, Defendants.

Civ. No. 4-92-70619.

United States District Court, S.D. Iowa, Central Division.

September 12, 1994.

John C. Barrett, John O. Haraldson, West Des Moines, IA, for plaintiff.

Steven K. Young, Asst. Atty. Gen. of Iowa, Des Moines, IA, for defendants.

MEMORANDUM OPINION, AND ORDERS DISMISSING CLAIMS BARRED BY THE ELEVENTH AMENDMENT

VIETOR, District Judge.

Plaintiff Joyce Van Pilsum brings suit against defendants Iowa State University of Science and Technology (I.S.U.); the State of Iowa; the Iowa State Board of Regents; and Barbara Mack, Martin C. Jischke, and Frank Brown, all officials at I.S.U. After this court's ruling on defendants' motion for summary judgment, plaintiff has two remaining claims: (1) an age discrimination claim brought under both the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq., and Iowa Code 601A (now Chapter 216); and (2) a 42 U.S.C. § 1983 claim for violation of the Fourteenth Amendment of the United States Constitution.

This court, as a court of limited jurisdiction, has a duty to assure itself that it has subject matter jurisdiction in each case. Sanders v. Clemco Indus., 823 F.2d 214, 216 (8th Cir.1987); see also Dale v. Weller, 956 F.2d 813 (8th Cir.1992). Specifically, "a federal court must examine each claim in a case to see if the court's jurisdiction over that claim is barred by the Eleventh Amendment." Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 121, 104 S.Ct. 900, 919, 79 L.Ed.2d 67 (1983). The court earlier ordered the parties to brief the issue of the applicability of the Eleventh Amendment to plaintiff's claims. The briefs have been filed and supplemented, and oral arguments have been heard.

Discussion

Before examining plaintiff's claims individually, the court must first decide whether defendants Iowa State Board of Regents and I.S.U. share in the State of Iowa's Eleventh Amendment immunity. The overwhelming majority of courts that have considered the question of whether state universities share in their respective state's Eleventh Amendment immunity have found that they do. See Sherman v. Curators of Univ. of Mo., 16 F.3d 860, 863 n. 3 (8th Cir.1994) (citing cases). The court must examine the particular circumstances of each entity, however, to determine whether the suit is in reality against an "arm or alter ego of the state." Greenwood v. Ross, 778 F.2d 448, 453 (8th Cir.1985); Sherman, 16 F.3d at 863. "`Courts typically look at the degree of local autonomy and control and most importantly whether the funds to pay any award will be derived from the state treasury.'" Sherman, 16 F.3d at 863 (quoting Greenwood, 778 F.2d at 453). The Sherman court approved of the nine factors identified in Kovats v. Rutgers, The State Univ., 822 F.2d 1303, 1309 (3d Cir.1987) for use in evaluating an entity's status under the Eleventh Amendment:

(1) local law and decisions defining the status and nature of the agency involved in its relation to the sovereign; (2) most importantly, whether the payment of the judgment will have to be made out of the state treasury; (3) whether the agency has the funds or the power to satisfy the judgment; (4) whether the agency is performing a governmental or proprietary function; (5) whether it has been separately incorporated; (6) the degree of autonomy over its operations; (7) whether it has the power to sue and be sued and to enter into contracts; (8) whether its property is immune from state taxation; and (9) whether the sovereign has immunized itself from responsibility for the agency's operations.

Sherman, 16 F.3d at 865 n. 6.

Availability of Non-state Funds

Plaintiff relies heavily on the fact that less than forty percent of I.S.U.'s annual operating budget originates directly from state appropriations.¹ According to plaintiff, these budget figures demonstrate that I.S.U. has ample non-state funds with which to pay any judgment in this case. The fact that I.S.U. generates a substantial amount of income from such things as athletic events, bookstores, and residence halls, and receives money from grants and donations, however, is not dispositive. All state-supported universities generate income from similar sources and yet, in the vast majority of reported appellate decisions, they have been found to share in their respective state's Eleventh Amendment immunity.²

A similar argument was made in Kashani v. Purdue Univ., 813 F.2d 843 (7th Cir.1987). For the 1982-83 academic year, Purdue University received 36% of its income from state appropriations. After reviewing the budgeting scheme established under Indiana law, and considering Purdue University's inability to levy taxes and tax-exempt status under Indiana law, the court found that Purdue's financial basis was "dependent upon and functionally integrated with the state treasury" to an extent that any payment by Purdue would directly affect the state treasury. Id. at 846. After discussing Purdue's lack of autonomy from the State of Indiana, the court concluded that Purdue was entitled to Eleventh Amendment immunity. Id. at 848. See also Lewis v. Midwestern State Univ., 837 F.2d 197, 199 (5th Cir.1988) ("`Crucial question * * * is whether use of these unappropriated funds to pay a damage award * * * would interfere with the fiscal autonomy and political sovereignty of Texas.'") (quoting United Carolina Bank v. Board of Regents, 665 F.2d 553, 560 (5th Cir.1982)); Hall v. Medical College of Ohio at Toledo, 742 F.2d 299, 304-05 (6th Cir.1984) (appropriated revenues were linked to non-appropriated revenues so that any judgment against the university would have to be covered by an increase in state appropriations).

After reviewing the extensive legislative and executive control over I.S.U.'s finances, I find and conclude that any judgment against I.S.U. would likewise interfere with the fiscal autonomy of the State of Iowa. I.S.U. is governed by the State Board of Regents ("Board"). Iowa Code § 262.7. The Board is made up of nine members who are appointed by the governor, subject to confirmation by the senate, for six-year terms, and Board members may be removed by the governor, with approval of the senate, for malfeasance in office. Iowa Code §§ 262.2, 262.4. Expenses of the Board and Board employees are paid by the State of Iowa. Iowa Code § 262.29. The number and location of Board meetings is controlled by state law. Iowa Code §§ 262.8, 262.9(18). The Board is responsible for hiring the president and other executive officers of I.S.U. Iowa Code § 262.9(2). The Board directs the expenditure of all state appropriations made to I.S.U., "and any other moneys belonging thereto * * *." Iowa Code § 262.9(8). The Board may purchase and sell real estate belonging to I.S.U. only with the approval of the executive council, which consists of the governor, secretary of state, auditor of state, treasurer of state, and secretary of agriculture. Iowa Code § 262.9(6).

The legislature and executive carefully review I.S.U.'s finances in determining the amount of its appropriations. I.S.U. is required by law to provide an office for a state budget analyst who acts as a liaison between I.S.U. and the state department of management in preparation and execution of the budget. Iowa Code § 8.29.

All financial and statistical data and information prepared or accumulated by the budget analysts shall be made available to the governor and the general assembly for their needs in budgeting and appropriation legislation.

Id. I.S.U. is required to report the receipt of all federal funds and other non-appropriated funds that supplement or replace state appropriations. Iowa Code § 8.44. The state auditor is required to audit I.S.U.'s books at least quarterly, and is required to review the investment practices of the Board. Iowa Code § 11.2. Under Iowa Code § 262.26, the Board is required to

report to the governor and the legislature such facts, observations, and conclusions respecting I.S.U. as in the judgment of the board should be considered by the legislature. Such report shall contain an itemized account of the receipts and expenditures of the board, and also the reports made to the board by the executive officers of the several institutions or a summary thereof, and shall submit budgets for biennial appropriations deemed necessary and proper to be made for the support of the several institutions * * *.

I.S.U. is required to file a monthly abstract of all receipts and disbursements with the state director of revenue and finance. Iowa Code § 421.31(6)(d). Any judgment in this case would thus have to be reported to the State of Iowa.

While I.S.U. receives income from sources other than the State of Iowa, direct appropriations from the state and state-authorized tuition is by far the largest segment of the budget. The following passage from Purdue Univ. aptly describes I.S.U.'s situation:

If a judgment were awarded against Purdue, the state treasury would not write out a check to Kashani. But in view of the fact that Purdue is by design dependent on state appropriations, which are evidently carefully geared through close oversight to meet the changing financial needs of the university, it is apparent that the payment would directly affect the state treasury. Indiana has not created an entity with a separate financial basis; it has created one that is dependent upon and functionally integrated with the state treasury.

Purdue Univ., 813 F.2d at 846.³ Any judgment in this case would be paid directly out of the state treasury, or would directly affect the state treasury and the sovereignty of Iowa by influencing state appropriation and budgeting decisions.⁴

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