THE SUPREME COURT OF THE UNITED STATES
OCTOBER TERM 1992-1993
PUERTO RICO AQUEDUCT AND SEWER AUTHORITY
v.
METCALF & EDDY, INC.
506 U.S. 139
1993
* * *
SYLLABUS: PUERTO RICO AQUEDUCT AND SEWER
AUTHORITY v. METCALF & EDDY, INC.
certiorari to the united states court of appeals for the first circuit
No. 91-1010. Argued November 9, 1992-Decided January 12, 1993
Petitioner, an autonomous Puerto Rico government instrumentality, moved to dismiss the diversity action brought against it by respondent, a private firm, on the grounds that it was an ``arm of the State,'' and that the Eleventh Amendment therefore prohibited the suit. After the District Court denied the motion, the Court of Appeals dismissed petitioner's appeal for want of jurisdiction, concluding that Circuit precedent barred both States and their agencies from taking an immediate appeal on a claim of Eleventh Amendment immunity.
Held:States and state entities that claim to be ``arms of the State'' may take advantage of the collateral order doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, to appeal a district court order denying a claim of Eleventh Amendment immunity from suit in federal court. Although 28 U.S.C. Sec. 1291 requires that appeals be taken from ``final decisions of the district courts,'' Cohen, supra, at 546, provides that a ``small class'' of judgments that are not complete and final will be immediately appealable. Once it is acknowledged that a State and its ``arms'' are, in effect, immune from federal-court suit under the Amendment, see, e. g., Welch v. Texas Dept. of Highways and Public Transportation, 483 U.S. 468, 480, it follows that the elements of the collateral order doctrine necessary to bring an order within Cohen's ``small class,'' see Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, are satisfied. First, denials of Eleventh Amendment immunity claims purport to be conclusive determinations that States and their entities have no right not to be sued in federal court. Second, a motion to dismiss on Eleventh Amendment grounds involves a claim to a fundamental constitutional protection whose resolution generally will have no bearing on the merits of the underlying action. Third, the value to the States of their constitutional immunity-like the benefits conferred by qualified immunity to individual officials, see Mitchell v. Forsyth, 472 U.S. 511, 526-is for the most part lost as litigation proceeds past motion practice, such that the denial order will be effectively unreviewable on appeal from a final judgment. Respondent's claim that the Amendment does not confer immunity from suit, but merely a defense to liability, misunderstands the role of the Amendment in our system of federalism and is rejected. Moreover, there is little basis for respondent's alternative argument that a distinction should be drawn between cases in which the determination of an Eleventh Amendment claim is bound up with factual complexities whose resolution requires trial and cases in which it is not. In any event, the determination of petitioner's Eleventh Amendment status does not appear to implicate any extraordinary factual difficulty and can be fully explored on remand. Pp.3-7.
945 F.2d 10, reversed and remanded.
White, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Blackmun, O'Connor, Scalia, Kennedy, Souter, and Thomas, JJ., joined. Blackmun, J., filed a concurring opinion. Stevens, J., filed a dissenting opinion.
DISSENTING OPINION: Opinion of Stevens, J. (dissenting)
on writ of certiorari to the united states court of appeals for the first circuit
[January 12, 1993]
Justice Stevens, dissenting.
This case arises out of a commercial dispute between respondent, a private engineering firm, and the Puerto Rico Aqueduct and Sewer Authority (PRASA or Authority). The parties entered into a multimillion dollar contract providing for the construction of extensive improvements to Puerto Rico's wastewater treatment facilities. Respondent brought suit in the Federal District Court for the District of Puerto Rico alleging breach of contract. The Authority filed a motion to dismiss, claiming that the action was barred by the Eleventh Amendment. The District Court concluded that the claim had no merit and denied the motion to dismiss. The Court of Appeals dismissed PRASA's appeal from that order because it was not final within the meaning of 28 U.S.C. Sec. 1291.
If the Authority were a private litigant engaged in a commercial dispute, it would be perfectly clear that the dismissal of its appeal was required by our precedents. For the denial of a motion to dismiss on jurisdictional grounds-a motion that asserts that the defendant cannot be sued in a particular forum-is not a final order within the meaning of Sec. 1291. Van Cauwenberghe v. Biard, 486 U.S. 517, 526-527 (1988); Catlin v. United States, 324 U.S. 229, 236 (1945). In this case, PRASA makes the same assertion-namely, that it may not be sued in a federal forum but rather must be sued in another court. Brief for Petitioner 4-5.
Nonetheless, despite our decisions in Biard and Catlin, the Court holds that when a State or state entity claiming to be an "arm of the State" asserts that it cannot be sued in a federal forum because of the Eleventh Amendment, the "final decision" rule must give way and the claim must be subject to immediate appellate review. The Court reasons that such a claim is analogous to a government official's claim of absolute or qualified immunity, which we have held is subject to interlocutory appeal. Nixon v. Fitzgerald, 457 U.S. 731 (1982); Mitchell v. Forsyth, 472 U.S. 511 (1985). I cannot agree.
The defense of absolute or qualified immunity is designed to shield government officials from liability for their official conduct. In the absence of such a defense, we have held, "officials would hesitate to exercise their discretion in a way injuriously affecting the claims of particular individuals even when the public interest required bold and unhesitating action." Nixon v. Fitzgerald, 457 U.S., at 744-745 (internal quotation marks and citation omitted). Because the specter of a long and contentious legal proceeding in and of itself would inhibit government officials from exercising their authority with the freedom and independence necessary to serve the public interest, we have held that claims of absolute or qualified immunity are subject to immediate appeal. Id., at 742-743; Mitchell v. Forsyth, 472 U.S., at 526-527.
While the Eleventh Amendment defense available to States and state entities is often labeled an "immunity," that label is virtually all that it has in common with the defense of absolute or qualified immunity. In contrast to the latter, a defense based on the Eleventh Amendment, even when the Amendment is read at its broadest, does not contend that the State or state entity is shielded from liability for its conduct, but only that the federal courts are without jurisdiction over claims against the State or state entity. See ante, at 4. Nothing in the Eleventh Amendment bars respondent from seeking recovery in a different forum. Indeed, as noted above, petitioner acknowledges that it is not seeking immunity for its conduct, but merely that the suit be brought in the courts of the Commonwealth of Puerto Rico. Brief for Petitioner 4-5.
Plainly, then, the interests underlying our decisions allowing immediate appeal of claims of absolute or qualified immunity do not apply when the so-called "immunity" is one based on the Eleventh Amendment. Whether petitioner must bear the burden, expense, and distraction of litigation stemming from its contractual dispute with respondent has nothing whatsoever to do with the Eleventh Amendment; the Eleventh Amendment only determines where, or more precisely, where not, that suit may be brought.[1] Because the Amendment goes to the jurisdiction of the federal court, as opposed to the underlying liability of the State or state entity, Biard and Catlin, not Nixon and Mitchell, are the relevant precedent for determining whether PRASA's claim is subject to interlocutory appeal.
If indeed the interests underlying our decisions permitting immediate appeal of claims of absolute or qualified immunity do not apply to a State or state entity's objection to federal jurisdiction on Eleventh Amendment grounds, what then is driving the Court to hold that PRASA's claim under the Eleventh Amendment is subject to immediate appeal? The Court tells us, ante, at 7: "[The] ultimate justification is the importance of ensuring that the State's dignitary interests can be fully vindicated." Whereas a private litigant must suffer through litigation in a federal tribunal despite his claim that the court lacks jurisdiction, e.g., Biard and Catlin, a State or state entity must be protected from the "indignity" of having to present its case-as to both the court's jurisdiction and the underlying merits-in the neutral forum of a federal district court.
I find that rationale to be embarrassingly insufficient. The mandate of Sec. 1291 that appellate jurisdiction be limited to "final decisions of the district courts" is not predicated upon "mer[e] technical conceptions of `finality,'" Catlin, 324 U.S., at 233, but serves important interests concerning the fair and efficient administration of justice. The "final decision" rule preserves the independence of the trial judge and conserves the judicial resources that are necessarily expended by piecemeal appeals. Moreover, and of particular relevance to this case, it serves an important "fairness" purpose by preventing "the obstruction to just claims that would come from permitting the harassment and cost of a succession of separate appeals from the various rulings to which a litigation may give rise . . . ." Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374 (1981) (internal quotation marks and citation omitted). Sacrificing those interests in the name of preserving the freedom and independence that government officials need to carry out their official duties is one thing; doing so out of concern for the "dignitary" interest of a State or, in this case, a state aqueduct and sewer authority, is quite another.
For me, the balance of interests is easy. The cost to the courts and the parties of permitting piecemeal litigation of this sort clearly outweighs whatever benefit to their "dignity" States or state entities might derive by having their Eleventh Amendment claims subject to immediate appellate review. I would therefore hold, as did the court below, that the denial of a motion to dismiss on Eleventh Amendment grounds is not subject to immediate appellate review. Accordingly, I respectfully dissent.
[1] Not surprisingly, we have expressly characterized the Eleventh Amendment defense, albeit in a different context, as "partak[ing] . . . of a jurisdictional bar." Edelman v. Jordan, 415 U.S. 651, 678 (1974).
TOC: Syllabus > Stevens, J. (dissenting) >
CASE STATISTICSCASES: 486 U.S. 517; 483 U.S. 468; 472 U.S. 511; 457 U.S. 731; 449 U.S. 368; 437 U.S. 463; 415 U.S. 651; 337 U.S. 541; 324 U.S. 229; 945 F.2d 10;
STATUTES: 28 U.S.C. Sec. 1291;
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