Eleventh Amendment immunity of a public entity
Aguilar v. The New York Convention Center Operating Corp., USDC SDNY, Judge Motley, 2001 WL 1360229
The basic issue in the Aguilar case concerned a claim of immunity under the Eleventh Amendment.
Fifty individual plaintiffs, each of whom is either female or a member of a racial or ethnic minority, currently or formerly employed by the Jacob K. Javits Convention Center, sued the Center alleging that it is managed by a group of “white Irish males” who have engaged in widespread race and gender discrimination. The Javits Center asked the District Court Justice to dismiss the case, claiming it had Eleventh Amendment Immunity from such litigation.
The District Court said that “It is well settled that the Eleventh Amendment bars suits against a state in federal court unless Congress has abrogated or the state has waived its sovereign immunity,” citing Pennhurst State School and Hospital, 465 U.S. 89.
However, here the fifty complainants did not sue the State of New York but rather an entity created by the State -- the New York Convention Center Operating Corporation [NYCCOC] that operates the Javits Center. Accordingly, the initial for the court to resolve:
Is NYCCOC more like an “arm of the state,” in which case the Eleventh Amendment applies, or more like “a municipal corporation or other political subdivision,” in which case the Eleventh Amendment does not apply.
In Mancuso v New York State Thruway Authority, 86 F.3d 289, the Second Circuit affirmed its six-factor inquiry for determining whether a state-created entity enjoys Eleventh Amendment immunity under the “arm of the state” doctrine:
(1) how the entity is referred to in the documents that created it;
(2) how its governing members are appointed;
(3) how it is funded;
(4) whether its function is traditionally one of local or state government;
(5) whether the state has veto power over its actions; and
(6) whether the entity's financial obligations are binding upon the state.
The decision notes that if these factors point in different directions, the tension must be resolved mindful of the Eleventh Amendment's twin rationales -- protecting states' treasuries and protecting their dignity.
The first factor -- how the entity is referred to in the documents that created it -- did not support or defeat a finding of immunity. NYCCOC was created as a “body corporate and politic” constituting a “public benefit corporation.” On one hand, the statute creating the NYCCOC characterize its function as an “essential government function” while it then enumerates ways in which the state may “cooperat[e]” and “assist” the NYCCOC in the performance of its duties, suggesting that the legislature considered the NYCCOC and the state to be distinct entities.
The Court concluded that here the first Mancuso factor is neutral.
In contrast, the court found that the second factor -- how NYCCOC's governing members are appointed -- weighs squarely in favor of immunity as they were appointed by the governor and by leaders of the legislature.
The third factor -- how the NYCCOC is funded -- was also viewed a neutral by the court as NYCCOC could both issue bonds and collect rents and fees for the use of its facilities.
Was NYCCOC performing a role that “is traditionally one of state or local government?” No, said the court, the operation of a convention center cannot be considered a traditional state function.
As to the fifth factor, the absence of any power of the state to veto any NYCCOC weighed against a finding of immunity. Although the chair of the NYCCOC's board of directors serves at the pleasure of the governor, he or she does so only in his or her capacity as chair. No member of the board, including the chair with respect to his or her status as a “member of the board, may be removed from his or her office except for cause.
The sixth factor -- whether the entity's obligations are binding on the state -- weighs heavily against immunity. Here the court noted that because the “[t]he obligations of the corporation shall not be debts of the state,” that “the state shall not be liable thereon,” and that “such obligations shall not be payable out of any funds other than those of the corporation.”
The court's conclusion: NYCCOC should not be deemed an “arm of the state” for Eleventh Amendment purposes, i.e., it is more like a municipality or a political subdivision of a state than an entity acting as an alter ego of a state.