Westinghouse Elec. Corp. v. West Virginia Dept. of Highways

• Decision Date: 02 May 1988
• Docket Number: Nos. 87-2107,87-2108,s. 87-2107
• Citation: 845 F.2d 468
• Parties: WESTINGHOUSE ELECTRIC CORPORATION, a Corporation, Plaintiff-Appellant, v. The WEST VIRGINIA DEPARTMENT OF HIGHWAYS, a Corporation, Defendant-Appellee (Two Cases).
• Court: U.S. Court of Appeals — Fourth Circuit

Page 468

845 F.2d 468

WESTINGHOUSE ELECTRIC CORPORATION, a Corporation, Plaintiff-Appellant, v. The WEST VIRGINIA DEPARTMENT OF HIGHWAYS, a Corporation Defendant-Appellee (Two Cases).

Nos. 87-2107, 87-2108.

United States Court of Appeals Fourth Circuit.

Argued March 11, 1988.

Decided May 2, 1988.

William T. Holmes (Alfred J. Lemley, Furbee, Amos, Webb & Critchfield, Fairmont, W.Va., on brief), for plaintiff-appellant.

John Andrew Smith (Kay, Casto & Chaney, Charleston, W.Va., on brief), for defendant-appellee.

Before RUSSELL and PHILLIPS, Circuit Judges, and BUTZNER, Senior Circuit Judge.

JAMES DICKSON PHILLIPS, Circuit Judge:

This third-party claim for indemnity or contribution against the West Virginia Department of Highways was filed by Westinghouse Electric Corp., a Pennsylvania corporation, as defendant in a diversity tort action arising out of an accident that occurred on a West Virginia state highway. Westinghouse alleged that the Department of Highways had negligently marked the portion of highway on which the accident occurred and that this negligence had caused or contributed to the accident. The district court held the claim barred by the eleventh amendment and dismissed for lack of subject matter jurisdiction. We affirm.

As the district court noted, a claim against the West Virginia Department of Highways is, for eleventh amendment purposes, properly considered one against the state itself. See, e.g., Florida Dept. of Health v. Florida Nursing Home Assoc., 450 U.S. 147, 101 S.Ct. 1032, 67 L.Ed.2d 132 (1981). Because the eleventh amendment is a jurisdictional limitation on the power of the federal courts, it applies to claims based, as is this one, on state rather than federal law. See Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984) (Pennhurst II ). Westinghouse argues however, that the eleventh amendment does not bar this claim because the state of West Virginia has waived its eleventh amendment immunity for all claims that fall within the scope of its liability insurance coverage. We disagree.

A state may waive its constitutional immunity and consent to suit in federal court, and when it does so, the eleventh amendment will not bar the action. See Clark v. Barnard, 108 U.S. 436, 447, 2 S.Ct. 878, 882-83, 27 L.Ed. 780 (1883). A state may only be held to have waived its immunity in one of two ways: (1) directly by statutory or constitutional provision, see Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 241, 105 S.Ct. 3142, 3147, 87 L.Ed.2d 171 (1985), or (2) "constructively," by voluntarily participating in a federal program when Congress has expressly conditioned state participation in that program on the state's consent to suit in federal court, see id. at 246-47, 105 S.Ct. at 3149-50. See generally id. at 238 n. 1, 105 S.Ct. at 3145 n. 1. Neither means of waiver can be found here.

Direct waiver by statute or constitution may be found only where the state has stated its intent to subject itself to suit in federal court "by the most express language, or by such overwhelming implication from the text as [will] leave no room for any other reasonable construction." Murray v. Wilson Distilling Co., 213 U.S. 151, 171, 29 S.Ct. 458, 464, 53 L.Ed. 742 (1909); see Atascadero, 473 U.S. at 239-40, 105 S.Ct. at 3146-47.

Because the eleventh amendment protects the state specifically against suit in federal court, see Pennhurst II, 465 U.S. at 99, 104 S.Ct. at 907 ("A State's constitutional interest in immunity encompasses not merely whether it may be sued, but where it may be sued."), a state's general waiver of sovereign immunity will not suffice to waive the immunity conferred by the eleventh amendment. Atascadero, 473 U.S. at 241, 105 S.Ct. at 3147. Instead, a state statutory or constitutional provision will constitute a waiver of eleventh amendment immunity only if it contains an "unequivocal" statement of the state's intention to subject itself to suit in federal court. Id.; see Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 54, 64 S.Ct. 873, 876-77, 88 L.Ed. 1121 (1944); Smith v. Reeves, 178 U.S. 436, 441, 20 S.Ct. 919, 921, 44 L.Ed. 1140 (1900).

Application of the stringent Atascadero test to this case reveals Westinghouse's claim of waiver to be without merit. The West Virginia Constitution contains no provision subjecting the state to suit in federal court. Indeed, the state constitution specifically provides that "[t]he State of West Virginia shall never be made defendant in any court of law or equity, ... except [in any] garnishment or attachment proceeding, as garnishee or suggestee." W.Va. Const. art. VI, Sec. 35. Westinghouse places principal reliance instead on two related provisions of the West Virginia Code dealing with liability insurance. First, Westinghouse points to W.Va. Code Sec. 29-12-5, which requires all insurance policies purchased for the state or its agencies or departments to contain a provision by which the insurer agrees not to raise the "constitutional immunity" of the insured as a defense to third-party claims. ¹ Second, Westinghouse cites W.Va. Code Sec. 33-6-14a, which at the time of this accident required all insurance policies issued to governmental units to contain a provision by which the insurer agreed not to assert the insured's "governmental status" as a defense to third-party claims. ²

These provisions can, at most, be construed as waiving the...