11 States Ask High Court to Respect Immunity

(CN) - The Supreme Court should not force state agencies to waste time and money on federal lawsuits because they are entitled to sovereign immunity, 11 states argued in an amicus brief.

Virginia resident Lee Pele sued the Pennsylvania Higher Education Assistance Agency (PHEAA) dba American Education Services in Federal Court, alleging it wrongly listed him as having defaulted on over $137,000 in student loans.

But on Oct. 7, 2014, U.S. District Judge James Cacheris in Alexandria, Va., granted summary judgment to PHEAA, which services millions of student loans in Virginia, West Virginia, Delaware, Georgia, and Pennsylvania.

Cacheris held that the agency is an "arm of the state" of Pennsylvania and thus entitled to immunity under the 11th Amendment, since all its revenues go to the state treasury.

On appeal, however, the Fourth Circuit let Pele's case proceed, holding that PHEAA does not qualify for immunity because it is not truly a part of the Pennsylvania state government.

That led Wisconsin Attorney General Brad Schimel to file an amicus curiae brief this week in the U.S. Supreme Court on behalf of his state, as well as Arizona, Hawaii, Idaho, Indiana, Louisiana, Michigan, South Carolina, South Dakota, Utah and West Virginia.

"If allowed to stand, this decision (and similar cases like it) could allow some state agencies and universities, including the University of Wisconsin-Madison, the Public Service Commission, or the Department of Employee Trust Funds, to be sued in far-flung federal courts around the country without any regard for states' rights and their sovereign immunity," a Wisconsin Justice Department statement reads. "Agencies and universities could therefore be subject to expensive and time-consuming discovery as well as money judgments, which could further strain agency and university budgets." (Parentheses in original.)

Appeals courts are "hopelessly splintered" on how to determine whether a state entity can benefit from 11th Amendment immunity, according to this week's amicus brief. This confusion has allegedly led to "extensive discovery incompatible with the very notion of immunity."

That is, states have been "forced to produce reams of documents, submit extensive declarations, and offer up their officials to time-consuming and intrusive depositions," the brief claims.

Courts therefore need to apply a "predictable, uniform rule" for determining when state entities are protected by 11th Amendment immunity, the states argued.

The courts have so far employed inconsistent two- to six-factor tests, the brief states.

"The various circuits consider divergent, fact-intensive factors such as the defendant entity's funding, liabilities, functions, and autonomy, with different circuits looking at different sets of factors, often analyzing each of the factors in different ways," the amici states claim. "Subjecting states to this uncertain litigation fails to 'accord states the dignity that is consistent with their status as sovereign entities.'"

The 11 states named in the amicus brief say that Supreme Court intervention alone can cure the problem.

"While we many times focus on the encroaching power of Congress and the president, it is also important to protect Wisconsin from the growing power of the federal judicial branch," Schimel said in a statement. "I will continue to fight for Wisconsin's rights under the Constitution and for a limited federal government."

One of Pele's attorneys, Scott Michelman with the D.C.-based Public Citizen Litigation Group, said in an email that "PHEAA and its amici are wrong that the circuits disagree about when an entity is an arm of the state."

According to Michelman, "all circuits apply a multi-factor analysis, and they look at the same types of factors."

Thus, "the concern about wasting time and money on lawsuits is not a legitimate one," Michelman said.

Noting that "sovereign immunity is a powerful defense," Michelman said, "it is not too much to ask that defendants claiming this immunity prove that they are actually entitled to it."

But Indiana Attorney General Gregory Zoeller's spokesman, Bryan Corbin, said in an email that "the multistate group does not take a position on the underlying dispute" regarding Pele, and that Indiana "often joins Supreme Court amicus briefs that other state governments author," referring Courthouse News to Schimel's office for further comment.

Utah Attorney General Sean Reyes' spokesman, Daniel Burton, said in an email that the office "has no comment at this time, but if the petition is granted, if we join a merits amicus brief, or after or around a merits argument, we may be willing to comment."

Michigan Attorney General Bill Schuette's spokeswoman, Megan Hawthorne, said in an email that "the brief stands for itself," and declined to comment further at this time.

Wisconsin Solicitor General Misha Tseytlin; Attorneys General Mark Brnovich (Arizona), Douglas Chin (Hawaii), Lawrence Wasden (Idaho), Jeff Landry (Louisiana), Alan Wilson (South Carolina), Marty Jackley (South Dakota), and Patrick Morrisey (West Virginia); and PHEAA's attorneys, William Potts Jr., Erin Pence Thompson, and Jill de Graffenreid with Hunton & Williams in McLean, Va., did not return requests for comment emailed Tuesday.

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