May 30, 2017

Tenth Circuit: Eleventh Amendment Barred Claims Against Agricultural Employees

The Tenth Circuit Court of Appeals issued its opinion in Colby v. Herrick on March 1, 2017.

This case stemmed from a battle between Ms. Colby and her mother over the ownership of a horse. The mother complained to the Colorado Department of Agriculture, which sent someone from the Brand Inspection Division to investigate the situation. After investigating, the inspector seized the horse. Ms. Colby and her mother settled the ownership dispute in court and after three years, Ms. Colby prevailed and received the horse back. Ms. Colby and her husband then sued the Division and two of its officers. The district court dismissed the action.

The Tenth Circuit first addressed the Division as a defendant in the suit. It held that the Division was entitled to Eleventh Amendment immunity as an arm of the state and therefore could not be sued in federal court. Further, the Tenth Circuit held that because the Division was an arm of the state entitled to Eleventh Amendment immunity, the Colbys could not sue the two officers in their official capacity.

The Tenth Circuit reviewed the Eleventh Amendment immunity issue de novo. The Eleventh Amendment extends to governmental entities that are considered arms of the state. When determining if the Division was an arm of the state, the Tenth Circuit laid out five factors that it considered: (1) how the Division is characterized under Colorado law; (2) how much guidance and control the state of Colorado exercises over the Division; (3) how much funding the Division receives from the State; (4) whether the Division enjoys the ability to issue bonds and levy taxes; and (5) whether the state of Colorado bears legal liability to pay judgments against the Division.

The Tenth Circuit held that the first factor weighed in favor of regarding the Division as an arm of the state. This was due to the fact that Colorado law treats the Division as part of the state government. Additionally, the Division participates in state government as a state agency and the agency’s inspectors are Colorado law enforcement officers with the power to make arrests for violations of state law.

The Tenth Circuit held that the second factor also weighed in favor of regarding the Division as an arm of the state. This was because the Division is considered part of the state Department of Agriculture and is therefore subject to control by state officials.

With regard to the third factor, the Division is entirely self-funded. Additionally, with regard to the fourth factor, the State Board of Stock Commissioners is entitled to issue bonds worth up to $10 million to pay the Division’s expenses. The Tenth Circuit held that these two factors by themselves would cut against Eleventh Amendment immunity. However, the Tenth Circuit held that because the Division is entitled to participate in the Colorado risk management fund, which obtains money from state appropriations, that use of state money supports consideration of the Division as an arm of the state.

The Tenth Circuit held that it was unclear whether the State bears legal liability to pay a judgment of the Division.

Therefore, because the first and second factors clearly support characterization as an arm of the state, and the third and fourth could go both ways, the Tenth Circuit held that the balancing of all of the factors led it to regard the Division as an arm of the state. Therefore, the Division was entitled to Eleventh Amendment immunity. The Tenth Circuit held that the district court did not err in dismissing the claims against the division. However, it did hold that the dismissal with prejudice was a mistake. Because Eleventh Amendment immunity is jurisdictional, the Tenth Circuit held that the dismissal should have been without prejudice.

The Tenth Circuit next addressed the Eleventh Amendment immunity issue with regards to the Divisions’ two officers on the official-capacity claims for damages. The Tenth Circuit held that the officers were entitled to immunity in their official capacitates on behalf of the Division being an arm of the state. Therefore, The Tenth Circuit held that the officers were entitled to dismissal on the official-capacity claims for damages. However, just as with the Divisions Eleventh Amendment claim, because Eleventh Amendment immunity is jurisdictional, the district court should have dismissed the claim without prejudice.

The Tenth Circuit finally addressed the federal personal-capacity claims against the officers for damages. The district court had dismissed these claims based on timeliness. The Tenth Circuit stated that the Colbys claims had a two year statute of limitations. Further, the Tenth Circuit determined that the suffered damage accrued when the horse was seized on July 22, 2011. That action triggered the statute of limitations period. Because the Colbys did not sue until nearly three years later, the Tenth Circuit held that the claims were time-barred.

The Tenth Circuit addressed the Colbys’ argument that the statute of limitations should not have started until they were denied a timely post-deprivation hearing. The Tenth Circuit held that, even if this claim was accurate, that would only have moved the statute of limitations period six weeks in the future, which would still have resulted in the statute of limitations running out before the suit was filed.

Finally, the Tenth Circuit held that the continued violation doctrine did not apply to this case because the complaint does not base the claim on any acts taking place after July 22, 2011. Though the Colbys did not have their horse for three years, and therefore damages continued that entire period, the wrongful acts occurred only on July 22, 2011. Therefore, the Colbys’ claims against the officers in their individual capacity were time-barred.

In sum, the Tenth Circuit held that the Division and the officers in their official capacities were entitled to Eleventh Amendment immunity. However, because the district court dismissed these claims with prejudice, the Tenth Circuit remanded them for the limited purpose of directing the district court to make the dismissals without prejudice. Additionally, the remaining federal claims against the officers were properly dismissed based on the expiration of the statute of limitations.

Tenth Circuit: Waiver of 11th Amendment Immunity Applies to All Divisions of State Department of Labor

The Tenth Circuit Court of Appeals issued its opinion in Arbogast v. State of Kansas Department of Labor on Friday, June 19, 2015.

Kathleen Arbogast worked for the Kansas Department of Labor (KDOL) in the Workers’ Compensation Division and suffers from asthma. She complained that her co-workers’ perfumes were triggering asthma attacks, so the Division moved her to an office in the basement in September 2010, but she continued to have asthma attacks when co-workers would visit her office. In August 2011, Ms. Arbogast was terminated by her supervisor, Karin Brownlee. Ms. Arbogast filed suit in January 2013, asserting claims of discrimination and retaliation in violation of the Rehabilitation Act, and named as defendants KDOL and Brownlee in her individual capacity. KDOL sought to dismiss the Rehabilitation Act claims, arguing KDOL lacks the capacity to sue or be sued and Kansas has not waived its judicial immunity under the Eleventh Amendment. The district court denied KDOL’s motion to dismiss and KDOL brought an interlocutory appeal.

The Tenth Circuit first examined its appellate jurisdiction to consider KDOL’s claim that it lacked capacity to be sued. KDOL argued that under state law, as a mere agency of the state, it lacked capacity to sue or be sued, and the collateral order doctrine conferred immediate jurisdiction on the Tenth Circuit to hear the issue. However, at oral argument, KDOL’s counsel conceded that the collateral order doctrine may not permit interlocutory review of the capacity argument. The Tenth Circuit agreed with the concession. Citing three requirements to invoke jurisdiction under the collateral order doctrine, i.e., (1) the district court’s order conclusively resolved the disputed issue, (2) the order resolved an issue separate from the merits of the case, and (3) the order is effectively unreviewable on order from final judgment, the Tenth Circuit found KDOL’s argument failed at the first prong because the district court did not conclusively determine KDOL’s capacity to sue or be sued. The Tenth Circuit dismissed the issue on appeal.

Next, the Tenth Circuit evaluated whether KDOL waived Eleventh Amendment immunity by accepting funds for the Unemployment Insurance Division housed within the Department of Labor. KDOL contended that because Ms. Arbogast worked for the Workers’ Compensation Division, not the Unemployment Insurance Division, there was no waiver of immunity. Looking at the Rehabilitation Act, the Tenth Circuit found the plain language included in the waiver of immunity “all the operations of . . . a department . . . of a State.” Since the Workers’ Compensation Division and Unemployment Insurance Division were both housed in the Kansas Department of Labor, the acceptance of funds for the Unemployment Insurance Division constituted a waiver of Eleventh Amendment immunity for the entire Department of Labor. Kansas argued that extending the waiver of immunity to the Workers’ Compensation Division when it received no federal funds would violate the Spending Clause of the U.S. Constitution. The Tenth Circuit found the first Dole factor was satisfied because allowing those who suffer discrimination to bring private causes of action is “reasonably calculated” to achieve Congress’s goal of combating discrimination. KDOL also argued it did not have notice of its waiver, but the Tenth Circuit disagreed, finding the plain language of the Rehabilitation Act provided sufficient notice that the waiver extended to all the operations of the department. KDOL also argued that the waiver of immunity is unrelated to the federal interest justifying expenditure of the funds, but the Tenth Circuit again disagreed, finding that Congress’s intent to eliminate discrimination based on disability was reasonably related to its distribution of federal funds.

The Tenth Circuit dismissed due to lack of jurisdiction KDOL’s argument that it lacked capacity to be sued. The Tenth Circuit affirmed the district court’s finding of a waiver of Eleventh Amendment immunity.

Tenth Circuit: State Waived Its Right Not to be Sued in Federal Court Under Eleventh Amendment

The Tenth Circuit Court of Appeals published its opinion in Pettigrew v. State of Oklahoma on Monday, July 15, 2013.

Thomas Pettigrew filed suit in federal court in Oklahoma against the Oklahoma Department of Public Safety (DPS) after having reached a settlement with DPS on previous claims. The state moved to dismiss the second and third state law claims, arguing the claims were barred by sovereign immunity under the Eleventh Amendment. The court denied the motion. The state filed this interlocutory appeal.

This appeal presented only one issue for consideration: whether the previous settlement agreement between Pettigrew and the Oklahoma Department of Public Safety waived the state’s Eleventh Amendment right not to be sued in federal court.

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. State sovereign immunity ordinarily bars federal-court jurisdiction over private suits against a state by citizens of the state. Pettigrew did not suggest that any federal statute abrogated Oklahoma’s sovereign immunity with respect to his state-law claims. Therefore, all the Tenth Circuit had to resolve was whether the state waived its immunity.

Waiver of sovereign immunity must be knowing and voluntary, and the test for determining whether a State has waived its immunity from federal jurisdiction is a stringent one. Pettigrew contended that the Venue Provision of the Settlement Agreement was such a waiver. It stated: “In the event that any litigation is commenced by either party to enforce the terms and conditions of the Agreement, the litigation will be brought in the appropriate Oklahoma court having jurisdiction, either state or federal . . . .”

Although the language of the agreement is not explicit, the Tenth Circuit held the settlement agreement’s reference to bringing suit in federal court had no reasonable construction except as a waiver. The Court therefore held that there was a waiver and affirmed the district court.