As in Kashani, the Indiana statutes applicable to this case do not conclusively resolve the question of whether NICTD is an agency of the state or an independent entity. The legislation establishing commuter transportation districts describes them as municipal corporations, Ind. Code § 8-5-15-2, and the Indiana Tort Claims Act (ITCA) defines them as political subdivisions. Ind. Code § 34-4-16.5-2. But Purdue is also a political subdivision under the ITCA, id., and in any event Kashani requires us to look to the substance of the entity's legal status rather than its form. 813 F.2d at 847.
NICTD's governing body is comprised of nine members. Of those, eight represent the four member counties and one is selected by the governor of Indiana. Clearly, the District's board is not as closely controlled by the state as Purdue's. Nonetheless, the state subjects it to substantial oversight in other ways. The state attorney general must approve any legal services it obtains, the Department of Transportation reviews its finances and operations, and the state board of accounts audits its books.
NICTD's powers are not as general as those exercised by a city or county. It cannot levy taxes, has limited powers to issue bonds, and can act only in the narrow sphere of railroad operations. In light of these limits and the oversight exercised by the state, it is apparent that the District's powers, unlike those of a city or county, do not derive from an independent source but are delegated to it by the state.
Other evidence reinforces the conclusion that NICTD is best characterized as a state agency. Board members receive per diem allowances at the standard state rate and their travel expenses are reimbursed only if state travel policies and procedures have been met. Moreover, although an earlier provision that allowed the legislature to dissolve NICTD at any time has been repealed, a statutory note refers the reader to Ind. Code §§ 2-5-21-1 to -19 (Chapter 21), which covers "Legislative Evaluation of Oversight of Agencies and Programs." The fact that the District is covered under that chapter, which requires a committee of the legislature to evaluate state agencies and recommend changes (which may include abolishing the agency), reveals that the legislature considers it a state agency. Similarly, § 8-5-15-5(d), which mandates that the state receive 90 percent of the proceeds if NICTD is dissolved and the member counties only 10 percent, suggests that the District is first and foremost a state institution.
C. Area of Service
The third and final factor we must consider is the entity's area of service, i.e., whether it serves "the state as a whole or only a region." Kashani, 813 F.2d at 847. The fact that Purdue educated students from throughout Indiana, not just from one particular region, suggested to the Kashani court that the university was a state agency rather than a local one.
Although NICTD is comprised of only four counties, its purpose is to serve the state as a whole: "The exercise of the powers granted by this [enabling legislation] is in all respects for the benefit of the people of Indiana, for the increase of their commerce and prosperity, and for the improvement of their health and living condition." Ind. Code § 8-5-15-16(a). Residents of the four-county region obviously receive the greatest benefit from the District, but people from anywhere in Indiana can use its services. In fact, the board member selected by the governor is entrusted with "representing the rest of the state." Ind. Code § 8-5-15-3(a)(3). Illinois residents also frequently ride NICTD's trains. Clearly, it serves an area considerably larger than a single county or city.
As the above analysis reveals, NICTD has attributes of both a state agency and a political subdivision. Nevertheless, we are persuaded that it is sufficiently dependent on the State of Indiana that it should be viewed as an arm of the state for Eleventh Amendment purposes. Although its board members are not as beholden to the governor as those of many other state agencies (including Purdue), NICTD's mission and powers resemble those of a state body more than those of a city or county, and it is subject to considerable state oversight. Moreover, it serves a far larger area than a city or county would, and (most importantly) it relies heavily on the state for financial support. Therefore, we follow the two district courts that have addressed this issue and hold that NICTD is an agency of the State of Indiana entitled to Eleventh Amendment immunity from suit by a citizen in federal court. See Gouge v. Chicago, South Shore and South Bend Railroad, 1992 U.S. Dist. LEXIS 1024, No. 91 C 1134, 1992 WL 25374, at *5 (N.D.Ill. Jan. 29, 1992); Phillips v. Northern Indiana Commuter Transportation District, No. 2:92-CV-286, slip op. at 6 (N.D.Ind. May 11, 1994). Because we hold that this action belongs in state court, not federal court, we need not decide whether to transfer the case to the Northern District of Indiana, and we deny that aspect of NICTD's motion.
NICTD's motion to dismiss on grounds of sovereign immunity is granted. Its motion to transfer is denied.
JAMES B. MORAN,
Chief Judge, U.S. District Court
June 22, 1995.