Michael Weaver v. Madison City Board of Education ( 2014 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 13-14182 & 13-14927
________________________
D.C. Docket No. 2:13-cv-00524-RDP
DARRYL WALKER, et al.,
Plaintiffs-Appellants,
versus
JEFFERSON COUNTY BOARD OF EDUCATION, et al.,
Defendants-Appellees.
________________________
No. 13-14624
________________________
D.C. Docket No. 5:11-cv-03558-TMP
MICHAEL WEAVER,
Plaintiff-Appellee,
versus
MADISON CITY BOARD OF EDUCATION, et al.,
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Defendants-Appellants.
________________________
Appeals from the United States District Court
for the Northern District of Alabama
________________________
(November 4, 2014)
Before ED CARNES, Chief Judge, and JORDAN and ROSENBAUM, Circuit
Judges.
JORDAN, Circuit Judge:
In these consolidated appeals—Walker and Weaver—the Jefferson County
Board of Education and the Madison City Board of Education ask us to recede
from our opinion in Stewart v. Baldwin Cnty. Bd. of Educ., 908 F.2d 1499, 1511
(11th Cir. 1990), which held that school boards in Alabama are not arms of the
state and therefore not entitled to Eleventh Amendment immunity. With the
benefit of oral argument, we conclude that the Eleventh Amendment ruling in
Stewart has not been overruled or abrogated, and therefore remains binding
precedent.
I
We begin with a summary of the proceedings in Walker and Weaver.
In Walker, a number of so-called 240-day employees sued the Jefferson
County Board of Education, alleging that the Board’s practice of dividing their
annual salaries by 260 days to obtain their hourly and overtime rates violated the
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Fair Labor Standards Act, 29 U.S.C. § 201, et seq. The Walker plaintiffs sought to
recover wrongfully calculated wages, withheld wages, unpaid wages, overtime
compensation, and liquidated damages.
The district court in Walker granted the Jefferson County Board’s motion to
dismiss. It held that the Board was an arm of the state and therefore entitled to
assert Eleventh Amendment immunity from suit. In so ruling, the district court
concluded that Stewart did not constitute binding precedent. Relying on Versiglio
v. Bd. of Dental Exam’rs of Ala., 686 F.3d 1290, 1291 (11th Cir. 2012) (Versiglio
II), the district court looked to decisions of the Alabama Supreme Court declaring
that school boards have sovereign immunity under the Alabama Constitution from
suits based on state tort and contract law. Like the panel in Versiglio II, the district
court declined to interpret Alabama law in a way that it believed was diametrically
opposed to the decisions of the Alabama Supreme Court. See Walker v. Jefferson
Cnty. Bd. of Educ., No. 2:13-CV-00524-RDP, 2013 WL 4056224, at *1 (N.D. Ala.
Aug. 12, 2013); Walker v. Jefferson Cnty. Bd. of Educ., No. 2:13-CV-00524-RDP,
Order Denying Relief from Judgment [D.E. 26] at 2-5 (N.D. Ala. Oct. 4, 2013).
The plaintiffs appeal from that ruling.
The plaintiff in Weaver, a member of the United States Army Reserve, sued
his former employer, the Madison City Board of Education, alleging that after his
nearly two-year tour of duty in Afghanistan, the Board refused to reinstate him to
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his prior position. He claimed that, by reducing his responsibilities, status, and
salary upon his return from active duty service, the Board violated the Uniformed
Services Employment and Reemployment Rights Act, 38 U.S.C. § 4301, et seq.
The district court in Weaver denied the Madison City Board’s motion to
dismiss on Eleventh Amendment grounds. It ruled that our decision in Stewart
was binding and, alternatively, that the result would be the same even if Stewart
were not controlling. See Weaver v. Madison City Bd. of Educ., 947 F. Supp. 2d
1308, 1314-24 (N.D. Ala. 2013). The Board appeals from that decision.
II
The Eleventh Amendment, as interpreted by the Supreme Court, generally
provides that Article III’s jurisdictional grant did not and does not limit the
sovereign immunity that states enjoyed when they joined the Union. See generally
Va. Office for Prot. & Advocacy v. Stewart, 131 S. Ct. 1632, 1637 (2011). This
immunity from suit is available “only” to states and arms of the states. See N. Ins.
Co. of N.Y. v. Chatham Cnty., Ga., 547 U.S. 189, 193 (2006) (holding that county
could not assert Eleventh Amendment immunity because it was not acting as an
arm of the state when it operated a drawbridge that it owned). See also Odebrecht
Const., Inc. v. Sec’y, Fla. Dep’t of Transp., 715 F.3d 1268, 1289 (11th Cir. 2013)
(“Odebrecht has no monetary recourse against a state agency like FDOT because
of the Eleventh Amendment.”). The Boards contend that they are entitled to
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Eleventh Amendment immunity as arms of the state of Alabama, and insist that our
1990 decision in Stewart is no longer good law.
Stewart involved a claim against an Alabama county board of education (and
others) under 42 U.S.C. § 1983 by a former employee alleging that he was fired for
exercising his First Amendment rights. The district court denied the school
board’s motion for summary judgment, and the school board appealed, arguing that
it was entitled to absolute immunity under the Eleventh Amendment. 908 F.2d at
1508. We declined to address whether the denial of Eleventh Amendment
immunity was immediately appealable under the collateral order doctrine, and
instead exercised our discretion to entertain the Eleventh Amendment immunity
question under the doctrine of pendent appellate jurisdiction. Id. at 1509.1
Turning to the merits, we applied a three-factor test to determine whether the
school board enjoyed Eleventh Amendment immunity under federal law. We
framed the test as follows: “(1) how the state law defines the entity; (2) the degree
of state control over the entity; and (3) the entity’s fiscal autonomy—i.e., where
the entity derives its funds and who is responsible for judgments against the
entity.” Id.
1
The Supreme Court later held that the denial of Eleventh Amendment immunity is
immediately appealable pursuant to the collateral order doctrine. See P.R. Aqueduct & Sewer
Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 141 (1993).
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That test, in conjunction with relevant Supreme Court and Eleventh Circuit
precedent, led us to conclude in Stewart that the school board could not assert
Eleventh Amendment immunity. First, the Supreme Court, looking in part to state
law, had held in Mt. Healthy Bd. of Educ. v. Doyle, 429 U.S. 274, 280-81 (1977),
that an Ohio school board was not entitled to Eleventh Amendment immunity, as it
was more like a county or city than an arm of the state. Stewart, 908 F.2d at 1509-
10. Second, we had previously denied Eleventh Amendment immunity to school
boards in Florida, Mississippi, and Louisiana because those entities had a
substantial amount of control over their own affairs and the means to raise funds,
so that any adverse judgments could be paid out of local funds. Id. at 1510 (citing
cases). Third, the fact that “Alabama state courts provide[d] county boards of
education with sovereign immunity in state tort law actions d[id] not require a
similar treatment under the Eleventh Amendment,” as it was improper to “conflate
sovereign immunity with regard to a state-created tort with Eleventh Amendment
immunity for a federal cause of action.” Id. at 1510 n.6. Fourth, school boards in
Alabama possessed a “significant amount of flexibility in raising local funding,”
including the ability to raise revenues by selling interest-bearing tax anticipation
warrants. Id. at 1510. As a result, “it c[ould not] be said that a judgment against a
county school board w[ould] come from state funds.” Id. at 1510-11. Fifth, those
school boards had the power to establish general education policy, and the
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authority to assign teachers and place students. Id. at 1511. Finally, at least four
district courts in Alabama had denied Eleventh Amendment immunity to school
boards in that state. Id. 2
III
Once a panel of this court decides an issue, its holding on that issue is
binding on all subsequent panels, “unless and until it is overruled or undermined to
the point of abrogation by the Supreme Court or by this court sitting en banc.”
United States v. Sneed, 600 F.3d 1326, 1332 (11th Cir. 2010) (italics omitted).
And that is the rule even if the prior panel failed to consider certain arguments or
contentions. “[W]e have categorically rejected an overlooked reason or argument
exception to the prior precedent rule.” United States v. Johnson, 528 F.3d 1318,
1320 (11th Cir. 2008) (citing cases), rev’d on other grounds, 559 U.S. 133 (2010).
A
A Supreme Court decision abrogates one of our prior cases only if it is
“clearly on point.” United States v. Lawson, 686 F.3d 1317, 1319 (11th Cir. 2012).
The Supreme Court has not decided any cases that abrogate Stewart, and Mt.
Healthy—its one decision on the Eleventh Amendment immunity of a local school
board—is still good law today, as it continues to be cited favorably by the Court.
2
We followed Stewart in Kendrick v. Jefferson Cnty. Bd. of Educ., 932 F.2d 910, 914
(11th Cir. 1991), and denied Eleventh Amendment immunity to an Alabama county school board
sued under federal law.
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See N. Ins. Co. of N.Y., 547 U.S. at 193; Alden v. Maine, 527 U.S. 706, 756 (1999);
Missouri v. Jenkins, 495 U.S. 33, 56 n.20 (1990).
Our circuit, moreover, has not overruled Stewart through an en banc
decision. Indeed, the Eleventh Amendment test articulated in Stewart remains the
law of the circuit, though the third Stewart factor (the entity’s fiscal autonomy—
i.e., where the entity derives its funds and who is responsible for judgments against
the entity) has now been subdivided into a third factor (where the entity derives its
funds) and a fourth factor (who is responsible for judgments against the entity).
See, e.g., Manders v. Lee, 338 F.3d 1304, 1309 (11th Cir. 2003) (en banc); Ross v.
Jefferson Cnty. Dep’t of Health, 701 F.3d 655, 660-61 (11th Cir. 2012).3
B
We have recognized that “[i]f state law changes or is clarified in a way that
is inconsistent with the state law premise of one of our earlier decisions, the prior
panel precedent rule does not bind us to follow our earlier decision.” Johnson, 528
F.3d at 1320. The Boards believe that Alabama law has changed significantly with
respect to how school boards are characterized, and that as a result Stewart is no
longer binding.
3
We therefore do not address whether (or how) the prior panel precedent rule applies
when one or more factors of a multi-factor test have changed.
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Quoting one of our recent cases, the Boards begin by pointing out that
whether an entity “qualifies as an arm of the state is a federal question with a
federal standard, but whether that standard is met will be determined by carefully
reviewing how the [entity] is defined by state law.” Versiglio II, 686 F.3d at 1291.
In that case the panel initially ruled that, “[d]espite the strength of [its] claim” to
Eleventh Amendment immunity under our four-factor test, the Alabama Board of
Dental Examiners did not enjoy such immunity because one factor “weigh[ed]
heavily” against it: the Alabama Court of Civil Appeals had ruled that the Board of
Dental Examiners was not entitled to sovereign immunity under state law. See
Versiglio v. Bd. of Dental Exam’rs of Ala., 651 F.3d 1272, 1276-77 (11th Cir.
2011) (Versiglio I). The Versiglio I panel thought it would be wrong to rule on
Eleventh Amendment immunity in a way that was “diametrically opposed” to the
ruling of the Alabama Court of Civil Appeals on state sovereign immunity. Id. at
1277.
The Versigilio I panel later granted rehearing, vacated Versiglio I, and ruled
that the Board of Dental Examiners was entitled to Eleventh Amendment immunity
from a claim asserted under the FLSA. It did so because, after issuance of the
initial panel opinion, the Alabama Supreme Court ruled that the Board of Dental
Examiners was a state agency that was immune from a breach of contract suit
based on state law. See Versiglio II, 686 F.3d at 1292. The Versiglio II panel
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explained that it did not want to have “the incongruous result of having a ‘state
agency’ that is immune from suit under state law but not federal law.” Id. It
concluded by saying that we “give[ ] great deference to how state courts
characterize the entity in question,” and that “[t]his practice is in keeping with the
ordinary deference granted state courts when they interpret matters of state
concern.” Id. at 1292-93.
C
We have no quarrel with the general proposition, as expressed in Versiglio
II, that how state law defines an entity is significant for purposes of the Eleventh
Amendment. See Mt. Healthy, 429 U.S. at 280 (“The answer depends, at least in
part, upon the nature of the entity created by state law.”). Accord Manders, 338
F.3d at 1309 (“Given these [four] factors, the resolution of the Eleventh
Amendment issue . . . depends, in part, on state law.”). But we do not think this
proposition helps the Boards here.
The Alabama Supreme Court ruled in 2009 and again in 2012 that county
school boards enjoy sovereign immunity, under § 14 of the Alabama Constitution,
from suits based on state tort or contract law. See Ex Parte Hale Cnty. Bd. of
Educ., 14 So. 3d 844, 848 (Ala. 2009) (“Because county boards of education are
local agencies of the [s]tate, they are clothed in constitutional immunity from
suit[.]”); Ex Parte Montgomery Cnty. Bd. of Educ., 88 So. 3d 837, 841 (Ala. 2012)
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(“It is well settled in Alabama that ‘[l]ocal school boards are agencies of the state,
and not of the local governmental units they serve, and they are entitled to the
same absolute immunity as other agencies of the state.’”) (citation omitted). As the
Boards see it, the Alabama Supreme Court’s decisions in Hale County and
Montgomery County require us to revisit our ruling in Stewart, and under Versiglio
II we should overrule Stewart so that we do not have the incongruous situation of
having Alabama school boards enjoying sovereign immunity under state law but
being denied Eleventh Amendment immunity under federal law. Versiglio II,
however, is not as sweeping as the Boards think.
First, the Boards’ suggestion that our 2012 decision Versiglio II can be read
as collapsing the entire Eleventh Amendment multi-factor test into a single
dispositive inquiry—whether the state courts grant state law immunity to the entity
for suits based on state law—conflicts not only with our 1990 decision Stewart, but
also with our 2003 en banc decision in Manders. As the district court in Weaver
explained, “[h]ow the state courts treat an entity is only one part of the first factor
of the Stewart and Manders analysis. Within the first factor the court also weighs
how state statutes treat the particular entity.” Weaver, 947 F. Supp. 2d at 1311
(emphasis and footnote omitted). We decline to read Versiglio II in a way which
violates our prior panel precedent rule and creates interpretive problems for panels
in the future. See Dippin’ Dots, Inc. v. Frosty Bites Distribution, LLC, 369 F.3d
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1197, 1208 n.13 (11th Cir. 2004) (refusing, given prior panel precedent rule, to
modify multi-factor test previously established by circuit). See also United States
v. Mozie, 752 F.3d 1271, 1285 (11th Cir. 2014) (“Under the prior panel precedent
rule, when two of our decisions conflict, we are obligated to follow the earlier
one.”); Offshore of the Palm Beaches, Inc. v. Lynch, 741 F.3d 1251, 1256 (11th
Cir. 2014) (“[W]hen faced with an intracircuit split, we look to the earliest case not
abrogated by the Supreme Court or by this Court sitting en banc.”). 4
Second, at the time we decided Stewart, Alabama courts had already held
that school boards were state entities entitled to sovereign immunity from tort suits
based on state law. See, e.g., Brown v. Covington Cnty. Bd. of Educ., 524 So. 2d
623, 625 (Ala. 1988). Although we recognized that principle of state sovereign
immunity law in Stewart, we did not find it determinative, and held that Alabama
school boards could not assert Eleventh Amendment immunity:
That Alabama state courts provide county boards of education
with sovereign immunity in state tort law actions does not require a
similar treatment under the Eleventh Amendment. The Supreme
Court’s resolution in Mt. Healthy is instructive. At the time that Mt.
Healthy was decided, the case law in Ohio was clear that a local
4
In declining to follow Stewart, the district court in Walker relied in part on Huber, Hunt
& Nichols, Inc. v. Architectural Stone Co., 625 F.2d 22, 24 (5th Cir. 1980) (stating that whether
an entity is a “‘second self’ of the state or a ‘separate and distinct’ entity subject to suit ‘must be
determined by the law of the state’”) (citation omitted). To the extent that Huber held that
Eleventh Amendment immunity is governed solely by how state law characterizes an entity, it
has been superseded by the later en banc decision in Manders, 338 F.3d at 1309 (setting out four-
part Eleventh Amendment immunity test).
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school board was cloaked in sovereign immunity to the same degree
as the state itself[.]
Stewart, 908 F.2d at 1510 n.6 (citing cases). We closed by saying that the school
board’s “attempt to conflate [state] sovereign immunity with regard to a state-
created tort with Eleventh Amendment immunity for a federal cause of action is
unavailaing.” Id.
Given decisions like Brown, the Alabama Supreme Court’s 2009 decision in
Hale County and 2012 decision in Montgomery County do not constitute new
pronouncements of Alabama law on the question of the state sovereign immunity
enjoyed by local school boards, and did not permit our Versigilio II decision to
implicitly overrule or prior decision in Stewart. They likewise do not provide a
basis for us to conclude that Stewart has been abrogated. Cf. Howlett ex rel.
Howlett v. Rose, 496 U.S. 356, 377-78 (1990) (“To the extent that the [state] law
of sovereign immunity reflects a substantive disagreement with the extent to which
governmental entities should be held liable for their constitutional violations, that
disagreement cannot override the dictates of federal law.”). We note, as well, that
the Alabama courts do not view state sovereign immunity and Eleventh
Amendment immunity as one and the same. See Ex Parte Ala. Dep’t of Youth
Servs., 880 So. 2d 393, 404 (Ala. 2003) (“State law sovereign immunity is relevant
[in the Eleventh Amendment context] only as it indicates whether the state
considers the entity to be part of the state. It is at best only a rough, overly
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inclusive gauge of the arm-of-the-state status under the Eleventh Amendment[.]”)
(citation omitted).
D
Even assuming that Versiglio II now requires us to give more weight to how
state courts treat the entity in question, the Boards’ attempt to sink Stewart with a
Versiglio II broadside fares no better. The problem for the Boards is Ex Parte
Madison Cnty. Bd. of Educ., 1 So. 3d 980, 989-90 (Ala. 2008), a post-Stewart case
in which the Alabama Supreme Court held that a local school board is “not an arm
of the [s]tate for the purposes of § 1983 liability and is not entitled to Eleventh
Amendment immunity.” In coming to this conclusion, the Alabama Supreme
Court—which like any state court is generally presumed competent to interpret and
apply federal law, see Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290,
1301 (11th Cir. 2008)—did not just defer to our decision in Stewart. Instead, it
correctly recognized that Eleventh Amendment immunity is a question of federal
law, and independently applied our Manders test over the course of several pages,
ultimately concluding that “application of [that] test to the facts before us does not
support a finding that the [school board] has established a right to Eleventh
Amendment immunity.” Madison County, 1 So. 3d at 987-89.
With respect to the first factor of the test, which asks how state law
characterizes school boards, the Alabama Supreme Court in Madison County
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explained that a school board’s members are elected by voters in the relevant
county; that a school board determines its own educational policy and prescribes
rules and regulations for the schools in its jurisdiction; that a school board may
suspend or dismiss superintendents, principals, teachers, and other employees; and
that a school board may transfer teachers as needed to different schools or grades.
Id. at 987-88. Thus, the Alabama Supreme Court held that the first factor “len[t]
little weight to the [school board] being considered an ‘arm of the [s]tate’ and
thereby entitled to Eleventh Amendment immunity.” Id. at 988.
As for the second factor of the test, which looks at the degree of control
asserted by the state, the Alabama Supreme Court concluded in Madison County
that “the legislature . . . specifically vested in county boards of education the
authority to transfer, suspend, or dismiss teachers[.]” Id. As a result, this “second
factor d[id] not weigh in favor of the [b]oard’s being considered an ‘arm of the
[s]tate’ and thereby entitled to Eleventh Amendment immunity.” Id.
The third and fourth factors (where the board of education derives its funds
and who is responsible for judgments against the board) also did not weigh in favor
of according Eleventh Amendment immunity. The Alabama Supreme Court ruled
that the school board failed to explain from where it derived its funds, and further
failed to provide any evidentiary support for its assertion that any judgment against
it would be paid from the state treasury. Id.
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Madison County is the Alabama Supreme Court’s latest word on whether
local school boards are entitled to Eleventh Amendment immunity for federal
causes of action, and its ruling on that issue is consistent with (and identical to) our
ruling in Stewart. So, even if we were to read Versigilio II as broadly as the
Boards urge us to do, and look to the more recent decisions of the Alabama
Supreme Court for definitive guidance on the Eleventh Amendment question
before us, the result would be the same. Simply stated, we do not create an
incongruous result by adhering to our Stewart decision because the Alabama
Supreme Court’s Madison County decision agrees with Stewart that, with respect
to employment decisions, a local school board in Alabama is not an arm of the
state for purposes of Eleventh Amendment immunity. See Madison County, 1 So.
3d at 988-89 (explaining that local school boards have statutory authority to
transfer, suspend, or dismiss teachers and employees). See also Ala. Code § 16-
11-17 (“The city board of education shall fix the salaries of all employees and may
suspend or dismiss any principal or teacher or supervisor or attendance officer or
other regular employee so appointed on the written recommendation of the city
superintendent of schools for immorality, misconduct in office, incompetency,
willful neglect of duty or when, in the opinion of the board, the best interests of the
schools may require[.]”); Ala. Code § 16-8-23 (“The county board [of education]
may suspend or dismiss for immorality, misconduct in office, insubordination,
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incompetency or willful neglect of duty, or whenever, in the opinion of the board,
the best interests of the school require it, superintendents, principals, teachers or
any other employees or appointees of the board[.]”). 5
E
At oral argument, counsel for the Boards represented that the decision to
compensate employees based upon an allegedly illegal formula in Walker was
made by the state of Alabama, which had assumed control of the Jefferson County
Board of Education pursuant to a state financial intervention law. We do not know
if this factual assertion is correct or not, because the necessary information is not in
the record. We therefore do not address it. On remand the parties are free to
pursue discovery on this issue, and to make whatever arguments they deem
appropriate to the district court in their summary judgment filings.
III
“Whether [an entity] is an ‘arm of the [s]tate’ must be assessed in light of the
particular function in which the [entity] was engaged when taking the actions out
of which liability is asserted to arise.” Manders, 338 F.3d at 1308. Both of the
5
The Boards may think that the Alabama Supreme Court’s decisions denying Eleventh
Amendment immunity but granting state sovereign immunity to local school boards are
schizophrenic, but the “Supreme Court has repeatedly recognized that sovereign immunity is a
flexible defense with multiple aspects that states can independently relinquish without affecting
others.” Stroud v. McIntosh, 722 F.3d 1294, 1301 (11th Cir. 2013). And, as we have explained,
the Alabama courts do not view Eleventh Amendment immunity and state sovereign immunity
as coterminous concepts. See Ala. Dep’t of Youth Servs., 880 So. 2d at 404.
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cases before us concern employment-related decisions (i.e., hiring, assignment, and
compensation), and under Stewart, 908 F.2d at 1509-11, local school boards in
Alabama are not arms of the state with respect to such decisions. Accordingly, the
Jefferson County Board of Education and the Madison City Board of Education are
not immune under the Eleventh Amendment from suits challenging those decisions
under federal law. The district court’s dismissal of the complaint in Walker is
reversed, and the district court’s denial of the motion to dismiss in Weaver is
affirmed.
REVERSED and REMANDED in Walker, and AFFIRMED in Weaver.
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