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LEWIS v. NORTHERN INDIANA COMMUTER TRANSP. DIST.

June 22, 1995

DAVID LEWIS, Plaintiff,
v.
NORTHERN INDIANA COMMUTER TRANSPORTATION DISTRICT, Defendant.



The opinion of the court was delivered by: JAMES B. MORAN

 David Lewis brings this action against the Northern Indiana Commuter Transportation District (NICTD or the District), seeking damages for injuries he suffered while employed by the District. NICTD has moved to dismiss the complaint for lack of jurisdiction or, in the alternative, to transfer the case to the Northern District of Indiana. For the reasons set forth below, the motion to dismiss is granted and the motion to transfer is denied.

 FACTS1

 NICTD is an Indiana municipal corporation comprised of four Indiana counties. It operates a railroad that runs from Chicago, Illinois, to South Bend, Indiana, passing through the four counties. It is not a Compact Clause entity. On February 21, 1993, while working as a carman for NICTD, Lewis was on his way to disengage a car from a commuter train when he slipped and fell on an icy stairway, injuring his back, leg, and foot. He claims that the District's negligent failure to maintain a reasonably safe workplace by not keeping the stairway free of ice caused his injuries.

 NICTD argues that because it is an agency of the State of Indiana, the Eleventh Amendment renders it immune from suit in federal court and deprives us of jurisdiction over this action. *fn2" In the alternative, it asks us to transfer the case to the Northern District of Indiana. Lewis responds that NICTD is not immune from suit because the Fair Employment Labor Act (FELA) covers all railroads, public or private, and, in any event, the Eleventh Amendment is inapplicable because NICTD is not a state agency. He also asserts that venue is proper here.

 DISCUSSION

 Lewis' first argument in response to NICTD's motion to dismiss is easily set aside. He claims that because FELA covers "every common carrier by railroad," whether the carrier is state-owned or not, it does not matter whether the District is an arm of the State of Indiana, a political subdivision of the state, or a private entity. However NICTD is characterized, Lewis says, he is "entitled to every right and protection granted by [FELA]" (Pl. Resp. at 3).

 In effect, Lewis' argument is that NICTD is not entitled to Eleventh Amendment immunity from suit in federal court because FELA abrogates state sovereign immunity. He claims that Parden v. Terminal Railway of Alabama Docks Department, 377 U.S. 184, 12 L. Ed. 2d 233, 84 S. Ct. 1207 (1964), and Hilton v. South Carolina Public Railways Commission, 502 U.S. 197, 112 S. Ct. 560, 116 L. Ed. 2d 560 (1991), support this position. We disagree, finding that Lewis misreads the cases.

 In Parden, the Supreme Court held that Congress made FELA applicable to state-owned railroads, as well as private ones, and that in so doing Congress intended to abrogate the states' Eleventh Amendment immunity. 377 U.S. at 187-89. But the abrogation aspect of Parden was overruled in Welch v. Texas Department of Highways and Public Transportation, 483 U.S. 468, 97 L. Ed. 2d 389, 107 S. Ct. 2941 (1987). Recognizing that "Parden's discussion of congressional intent to negate Eleventh Amendment immunity is no longer good law," the Welch Court held that "to the extent that Parden... is inconsistent with the [new] requirement that an abrogation of Eleventh Amendment immunity by Congress must be expressed in unmistakably clear language, it is overruled." Id. at 478. Thus FELA, which lacks the required language, did not abrogate the states' sovereign immunity. Hilton, the other case Lewis cites, addressed an issue left untouched in Welch: the viability of Parden's statutory interpretation holding. *fn3" But it did not disturb Welch's conclusion that FELA does not abrogate state sovereign immunity. In fact, the Hilton Court's statement that "to confer immunity from state-court suit would strip all FELA ... protection from workers employed by the States" indicates that no federal court suit is available against state-owned railroads. Hilton, 112 S. Ct. at 564.

 Thus, although Parden's holding that state-owned railroads can be sued under FELA survived Welch and Hilton, that holding does not support Lewis' argument here. After all, the District acknowledges that it can be sued under FELA. The issue is whether such a suit can be brought in federal court.

 Our resolution of that issue depends on whether NICTD is a state agency. If it is, it is entitled to immunity from suit in federal court under the Eleventh Amendment. If not, we can take jurisdiction over Lewis' case. Precedent indicates that in deciding whether an entity is immune from suit, we must determine whether it "is more like a county or city [or more] like an arm of the State." Mount Healthy City School District v. Doyle, 429 U.S. 274, 280, 50 L. Ed. 2d 471, 97 S. Ct. 568 (1977) (local school board resembled a county or city more than an arm of the state); see also Kashani v. Purdue University, 813 F.2d 843, 845 (7th Cir.) (state university resembled an arm of the state more than a city or county), cert. denied, 484 U.S. 846, 108 S. Ct. 141, 98 L. Ed. 2d 97 (1987). Our guidepost in making that determination is Kashani, a section 1983 case in which Purdue University successfully invoked immunity under the Eleventh Amendment. *fn4" Kashani sets forth three factors for us to consider: "the extent of the entity's financial autonomy from the state," its "general legal status," and "whether it serve[s] the state as a whole or only a region." 813 F.2d at 845-47. We address each in turn.

 A. Financial Independence

 An entity's financial autonomy is the most important of the three factors. 813 F.2d at 845; see also Hess v. Port Authority Trans-Hudson Corp., 130 L. Ed. 2d 245, 115 S. Ct. 394, 404-06 (1994) (explaining that financial independence is the most important factor because "the prevention of federal court judgments that must be paid out of a State's treasury," id. at 404, is the Eleventh Amendment's impetus and core concern). In evaluating autonomy, courts consider "the extent of state funding, the state's oversight and control of the [entity's] fiscal affairs, the [entity's] ability independently to raise funds, whether the state taxes the [entity], and whether a judgment against the [entity] would result in the state increasing its appropriations to the [entity]." 813 F.2d at 845.

 In Kashani, Purdue received 36 percent of its income from state appropriations. Indiana paid close attention to the university's finances, requiring it to submit a detailed statement of expenditures made in each budgetary period and anticipated in the next period, including an explanation of any requested increase in state appropriations. The state budget agency analyzed Purdue's statements and presented its findings to the legislature. The Indiana Commission for Higher Education also reviewed appropriation requests and made recommendations. Purdue had no power to levy taxes, which in the Kashani court's view "ensured [the university's] ultimate reliance upon the state." Id. at 846. Similarly, although Purdue could issue bonds, it was not authorized to do so in order to satisfy a judgment against it. Finally, the Kashani court noted that although "the state treasury would not write out a check" if a judgment were awarded against Purdue, "it is apparent that the ...


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