Stewart v. North Carolina , 393 F.3d 484 ( 2005 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
CHARLES K. STEWART, 
Plaintiff-Appellee,
v.
STATE OF NORTH CAROLINA; NORTH
CAROLINA DEPARTMENT OF
CORRECTION; THEODIS BECK,
Secretary of North Carolina
Department of Correction; LAVEE
HAMER, General Counsel, North
Carolina Department of Correction;
DANIEL L. STIENEKE, Chief Deputy  No. 04-1138
Secretary, North Carolina
Department of Correction; JAMES
BOYD BENNETT, Director of Prisons,
North Carolina Department of
Correction; GEORGE T. SOLOMON;
GRAHAM PICKETT,
Defendants-Appellants,
and
JOHN DOE, #1; JANE DOE, #2,
Defendants.

2 STEWART v. STATE OF NORTH CAROLINA
CHARLES K. STEWART, 
Plaintiff-Appellee,
v.
STATE OF NORTH CAROLINA; NORTH
CAROLINA DEPARTMENT OF
CORRECTION; THEODIS BECK,
Secretary of North Carolina
Department of Correction; LAVEE
HAMER, General Counsel, North
Carolina Department of Correction;
DANIEL L. STIENEKE, Chief Deputy  No. 04-1166
Secretary, North Carolina
Department of Correction; JAMES
BOYD BENNETT, Director of Prisons,
North Carolina Department of
Correction; GEORGE T. SOLOMON;
GRAHAM PICKETT,
Defendants-Appellants,
and
JOHN DOE, #1; JANE DOE, #2,
Defendants.

Appeals from the United States District Court
for the Eastern District of North Carolina, at New Bern.
Malcolm J. Howard, District Judge.
(CA-03-55-4)
Argued: September 28, 2004
Decided: January 3, 2005
Before WILKINS, Chief Judge, and LUTTIG and
GREGORY, Circuit Judges.
STEWART v. STATE OF NORTH CAROLINA 3
Reversed in part, affirmed in part, and remanded by published opin-
ion. Chief Judge Wilkins wrote the opinion, in which Judge Luttig
and Judge Gregory joined.
COUNSEL
ARGUED: Thomas Henry Moore, NORTH CAROLINA DEPART-
MENT OF JUSTICE, Raleigh, North Carolina, for Appellants.
Anthony M. Brannon, BRANNON STRICKLAND, P.L.L.C.,
Raleigh, North Carolina, for Appellee. ON BRIEF: Roy Cooper,
Attorney General of North Carolina, Thomas J. Pitman, Special Dep-
uty Attorney General, NORTH CAROLINA DEPARTMENT OF
JUSTICE, Raleigh, North Carolina, for Appellants. Eugene G. Boyce,
BOYCE & ISLEY, Raleigh, North Carolina, for Appellee.
OPINION
WILKINS, Chief Judge:
The North Carolina Department of Correction (NCDOC), NCDOC
officials (the officials), and the State of North Carolina (the State)
(collectively, "Appellants") appeal a district court decision denying
their motion to dismiss on the ground of sovereign immunity. For the
reasons stated below, we reverse in part, affirm in part, and remand.
I.
During spring 2002, NCDOC investigated potential misconduct by
Appellee Charles Stewart, who was then chief of security of NCDOC.
The investigation culminated in a report implicating Stewart in a
double-billing scheme. The report was leaked to the Raleigh News &
Observer, allegedly by NCDOC officials. The News & Observer ran
an article on July 17, 2002, detailing the findings of the report.
Although a follow-up investigation exonerated Stewart, he was none-
theless reassigned by NCDOC from Raleigh to Smithfield, North Car-
olina, a move Stewart alleged to be a demotion.
4 STEWART v. STATE OF NORTH CAROLINA
Stewart filed an action in North Carolina state court against Appel-
lants in their official and individual capacities, seeking money dam-
ages for violations of both federal and state law. Specifically, Stewart
alleged federal claims under 42 U.S.C.A. § 1983 (West 2003) and
state law claims for defamation, tortious interference with contract,
civil conspiracy, intentional infliction of emotional distress, tortious
invasion of privacy, gross negligence, and for violations of the North
Carolina Whistleblower Act, see N.C. Gen. Stat. § 126-85 (2003), and
the North Carolina Constitution.
Appellants removed the case to federal court and moved to dismiss
all of Stewart’s claims. The district court granted the motion to dis-
miss with respect to the § 1983 claims, the tortious invasion of pri-
vacy claims, the civil conspiracy claims against Appellants in their
official capacities, and the state constitutional claims against the offi-
cials in their individual capacities. The district court denied the
motion to dismiss as to the balance of the claims.
Appellants challenge the district court decision only with regard to
the intentional tort and gross negligence claims, arguing that the dis-
trict court erroneously relied on Lapides v. Board of Regents, 535
U.S. 613 (2002), in holding that Appellants waived sovereign immu-
nity by voluntarily removing the case to federal court. The officials
argue additionally that while the complaint purports to assert claims
against them in their official and individual capacities, it is at bottom
a complaint only against them in their official capacities. Thus, the
officials maintain that they are entitled to dismissal of the claims
against them in their individual capacities.1
II.
The first issue presented is whether a state waives its sovereign
immunity by voluntarily removing an action to federal court when it
would have been immune from the same action in state court. This is
1
Appellants invoked sovereign immunity as a defense to both the offi-
cial capacity and individual capacity claims. We therefore have jurisdic-
tion over this interlocutory appeal by virtue of the collateral order
doctrine. See P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506
U.S. 139, 147 (1993).
STEWART v. STATE OF NORTH CAROLINA 5
an issue of first impression in the federal circuits. Because it is a legal
question, our review is de novo. See Wessel v. Glendening, 306 F.3d
203, 207 (4th Cir. 2002).
A.
We find it useful at the outset to distinguish the related but not
identical concepts of Eleventh Amendment immunity and state sover-
eign immunity. This distinction has generated confusion in the past:
We have . . . sometimes referred to the States’ immunity
from suit as "Eleventh Amendment immunity." The phrase
is convenient shorthand but something of a misnomer, for
the sovereign immunity of the States neither derives from,
nor is limited by, the terms of the Eleventh Amendment.
Rather, as the Constitution’s structure, its history, and the
authoritative interpretations by this Court make clear, the
States’ immunity from suit is a fundamental aspect of the
sovereignty which the States enjoyed before the ratification
of the Constitution, and which they retain today (either liter-
ally or by virtue of their admission into the Union upon an
equal footing with the other States) except as altered by the
plan of the Convention or certain constitutional Amend-
ments.
Alden v. Maine, 527 U.S. 706, 713 (1999).
State sovereign immunity is "based on the logical and practical
ground that there can be no legal right as against the authority that
makes the law on which the right depends." Nevada v. Hall, 440 U.S.
410, 416 (1979) (internal quotation marks omitted). In that sense,
state sovereign immunity was not created by the Eleventh Amend-
ment, but rather predated it. See Alden, 527 U.S. at 728-29 ("The
Eleventh Amendment confirmed, rather than established, sovereign
immunity as a constitutional principle."); Hans v. Louisiana, 134 U.S.
1, 16 (1890) ("The suability of a state, without its consent, was a thing
unknown to the law."). In contrast, by the terms of the Eleventh
Amendment, an unconsenting state is immune from suit filed in fed-
eral court by a citizen of another state. See U.S. Const. amend. XI.
The purpose of the Eleventh Amendment was to overrule Chisholm
6 STEWART v. STATE OF NORTH CAROLINA
v. Georgia, 2 U.S. (2 Dall.) 419 (1793), not to define the contours of
state sovereign immunity generally. See Alden, 527 U.S. at 723
("[T]he Eleventh Amendment did not redefine the federal judicial
power but instead overruled the Court."). Thus, Eleventh Amendment
immunity is but an example of state sovereign immunity as it applies
to suits filed in federal court against unconsenting states by citizens
of other states. See Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S.
261, 267-68 (1997) (discussing "the broader concept of immunity,
implicit in the Constitution, which we have regarded the Eleventh
Amendment as evidencing and exemplifying").
B.
The district court relied exclusively on Lapides for the conclusion
that "[b]y removing this case to federal court, the defendants voluntar-
ily invoke[d] federal court jurisdiction and are thereby deemed to
have waived immunity." J.A. 87. We believe the district court read
the rule of Lapides too broadly. Lapides addresses whether a state that
removes an action to federal court having already consented to suit in
its own courts can invoke Eleventh Amendment immunity; it does not
resolve whether a state that has not consented to suit in its own courts
maintains either the broader concept of sovereign immunity or Elev-
enth Amendment immunity upon voluntarily removing a case to fed-
eral court.
Paul Lapides filed an action in state court against the State of Geor-
gia, alleging claims in respect to which the state had already con-
sented to suit in its own courts. See Lapides, 535 U.S. at 616. The
state removed the case to federal court and sought dismissal on the
basis of Eleventh Amendment immunity. See id. Because Georgia had
already consented to suit in its own courts, the only issue was whether
the state could regain immunity by removing the case to federal court
and invoking the Eleventh Amendment. See id. at 617, 622. The
Court soundly rejected that possibility, holding that "removal is a
form of voluntary invocation of a federal court’s jurisdiction suffi-
cient to waive the State’s otherwise valid objection to litigation of a
matter . . . in a federal forum." Id. at 624.
The district court failed to acknowledge the limited scope of
Lapides. The Court in Lapides did not resolve the effect, if any, of a
STEWART v. STATE OF NORTH CAROLINA 7
state’s voluntary decision to remove an action from which it would
have been immune in its own courts. See id. at 617-18 (stating that
the Court was not addressing "the scope of waiver by removal in a
situation where the State’s underlying sovereign immunity from suit
has not been waived or abrogated in state court").2 To rely exclusively
on Lapides for the conclusion that North Carolina waived its sover-
eign immunity by voluntarily removing an action from which it would
have been immune in its own courts fails to take into account that
Lapides dealt with the availability of the narrow immunity provided
by the Eleventh Amendment upon removal of "state-law claims, in
respect to which the State has explicitly waived immunity from state-
court proceedings," id. at 617, not the portability of sovereign immu-
nity more generally.
Nevertheless, the principles animating Lapides shed light on the
issue we resolve today. As a basis for its holding, the Lapides Court
first examined decisions in which waivers of Eleventh Amendment
immunity were found to be effected by a state’s voluntary entry into
litigation. See Gardner v. New Jersey, 329 U.S. 565, 573-74 (1947)
(holding that when a state files a claim in bankruptcy court "it waives
any immunity which it otherwise might have had respecting the adju-
dication of the claim"); Gunter v. Atl. Coast Line R.R. Co., 200 U.S.
273, 284-85, 289 (1906) (holding that state participation in tax collec-
tion litigation waived Eleventh Amendment immunity); Clark v. Bar-
nard, 108 U.S. 436, 447 (1883) (holding Eleventh Amendment
immunity waived "by the voluntary appearance of the state in inter-
vening as a claimant of the fund in court"). These cases, the Court
explained, stood for the general principle that "‘where a State volun-
tarily 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.’" Lapides, 535 U.S. at 619 (quoting Gunter, 200 U.S. at
284).
2
Indeed, other circuits that have interpreted Lapides in similar contexts
have recognized its limited scope. See, e.g., Omosegbon v. Wells, 335
F.3d 668, 673 (7th Cir. 2003); Estes v. Wyo. Dep’t of Transp., 302 F.3d
1200, 1204 (10th Cir. 2002); Watters v. Wash. Metro. Area Transit Auth.,
295 F.3d 36, 42 n.13 (D.C. Cir. 2002); cf. New Hampshire v. Ramsey,
366 F.3d 1, 15 (1st Cir. 2004).
8 STEWART v. STATE OF NORTH CAROLINA
Having established this general principle, the Court next acknowl-
edged that unlike the state defendants in Gardner, Gunter, and Clark,
Georgia "was brought involuntarily into the case as a defendant in the
original state-court proceedings." Id. at 620. However, the Court
noted, Georgia "then voluntarily agreed to remove the case to federal
court. In doing so, it voluntarily invoked the federal court’s jurisdic-
tion." Id. (citations omitted). The Court was thus faced with determin-
ing whether Georgia’s actions fell within the general rule of Gardner,
Gunter, and Clark, even though Georgia’s original entry into litiga-
tion had been involuntary. See id. ("[U]nless there is something spe-
cial about removal or about this case, the general legal principle
requiring waiver ought to apply."). The Court concluded that Geor-
gia’s decision to remove the action triggered the general rule that
when a state voluntarily becomes a party to a cause, it cannot then
invoke Eleventh Amendment immunity to avoid the litigation. See id.
The reasons given by the Court in reaching this conclusion serve
to distinguish Lapides from the case at bar. The Court explained:
[A]n interpretation of the Eleventh Amendment that finds
waiver in the litigation context rests upon the Amendment’s
presumed recognition of the judicial need to avoid inconsis-
tency, anomaly, and unfairness, and not upon a State’s
actual preference or desire, which might, after all, favor
selective use of "immunity" to achieve litigation advantages.
Id.; see id. at 623 ("A rule of federal law that . . . denies waiver
despite the state attorney general’s state-authorized litigating decision,
does the opposite."). Indeed, the focus throughout the Eleventh
Amendment inquiry was on consistency, fairness, and preventing
States from using the Amendment "to achieve unfair tactical advan-
tages." Id. at 621. "And that being so," the Court explained, "the ratio-
nale for applying the general ‘voluntary invocation’ principle is as
strong here, in the context of removal, as elsewhere." Id.
With respect to the risk of inconsistency and unfair tactical advan-
tage, this case is very different from Lapides. Unlike Georgia in
Lapides, North Carolina had not consented to suit in its own courts
for the relevant claims asserted by Stewart. See Collins v. N.C. Parole
STEWART v. STATE OF NORTH CAROLINA 9
3
Comm’n, 473 S.E.2d 1, 3 (N.C. 1996) (gross negligence); Kawai Am.
Corp. v. Univ. of N.C. at Chapel Hill, 567 S.E.2d 215, 218 (N.C. Ct.
App. 2002) (intentional torts). Therefore, by removing the case to fed-
eral court and then invoking sovereign immunity, North Carolina did
not seek to regain immunity that it had abandoned previously.
Instead, North Carolina merely sought to have the sovereign immu-
nity issue resolved by a federal court rather than a state court.
By permitting defendants to remove to federal court "any civil
action brought in a State court of which the district courts of the
United States have original jurisdiction," 28 U.S.C.A. § 1441(a)
(West 1994), the removal statute makes available a federal forum in
which defendants can assert substantive defenses, so long as one or
more of the claims fall within the subject matter jurisdiction of the
district courts.4 Here, the district court possessed jurisdiction over
Stewart’s § 1983 claims, see 28 U.S.C.A. § 1331 (West 1993), and
thus the entire case met the criteria for removal, see 28 U.S.C.A.
§ 1441(c) (West 1994). North Carolina chose to employ the removal
device to have the issue of sovereign immunity resolved in a federal,
rather than a state, forum. We see nothing inconsistent, anomalous, or
unfair about permitting North Carolina to employ removal in the same
manner as any other defendant facing federal claims. We therefore
hold that North Carolina, having not already consented to suit in its
own courts, did not waive sovereign immunity by voluntarily remov-
ing the action to federal court for resolution of the immunity question.5
3
As to claims sounding in negligence, North Carolina has vested exclu-
sive jurisdiction in the North Carolina Industrial Commission. See N.C.
Gen. Stat. § 143-291(a) (2003).
4
See Erwin Chemerinsky, Federal Jurisdiction § 5.5 (4th ed. 2003)
("The existence of removal jurisdiction reflects the belief that both the
plaintiff and the defendant should have the opportunity to benefit from
the availability of a federal forum.").
5
To be precise, by "sovereign immunity" we are referring to the long-
standing principle of state sovereign immunity implicit in constitutional
order, not the more narrow principle of Eleventh Amendment immunity.
See supra Part II.A. As the issue is not presented by this case, we express
no opinion as to the effect, if any, of voluntary removal on the availabil-
ity of Eleventh Amendment immunity where the State has not already
consented to suit in its own courts.
10 STEWART v. STATE OF NORTH CAROLINA
For these reasons, we reverse the denial of the motion to dismiss
the intentional tort and gross negligence claims against the State,
NCDOC, and the officials in their official capacities.
III.
The district court also denied the motion to dismiss the claims
against the NCDOC officials in their individual capacities. The offi-
cials argue that although the caption of Stewart’s complaint purports
to name the officials in their individual and official capacities, the
allegations of the complaint concern only official conduct. However,
under North Carolina law "[t]he crucial question for determining
whether a defendant is sued in an individual or official capacity is the
nature of the relief sought, not the nature of the act or omission
alleged." Meyer v. Walls, 489 S.E.2d 880, 887 (N.C. 1997) (internal
quotation marks omitted). "A suit against a defendant in his individual
capacity means that the plaintiff seeks recovery from the defendant
directly; a suit against a defendant in his official capacity means that
the plaintiff seeks recovery from the entity of which the public ser-
vant defendant is an agent." Id. The body of Stewart’s complaint
reveals that he is seeking relief not only "from the entity of which the
public servant defendant[s are] agent[s]," id.—here, NCDOC—but
also "from the defendant[s] directly," id. At this early stage in the liti-
gation, Stewart’s allegations sufficiently assert claims against the offi-
cials in their individual capacities. Still to be resolved is whether the
officials are immune from liability as public officials under North
Carolina law. See, e.g., id. at 888-89; Epps v. Duke Univ., Inc., 468
S.E.2d 846, 851-52 (N.C. Ct. App. 1996). As the parties and the dis-
trict court have yet to address this issue, we leave its resolution to the
district court on remand.
IV.
In sum, we reverse the district court decision as to the intentional
tort and gross negligence claims against the State, NCDOC, and the
officials in their official capacities. We affirm the district court deci-
sion as to the claims against the officials in their individual capacities,
and we remand for further proceedings consistent with this opinion.
REVERSED IN PART, AFFIRMED IN PART,
AND REMANDED