Public School Retirement System v. State Street Bank & Trust Co.
640 F.3d 821
| 8th Cir. | 2011Background
- State Street Bank & Trust Company (State Street) managed and invested assets for the Public School Retirement System of Missouri (PSRS) and the Public Education Employee Retirement System of Missouri (PEERS).
- The Retirement Systems invested heavily in State Street’s Quality D Fund (over $7 billion in 2008); a subsequent withdrawal of assets prompted State Street to demand transfers back into the fund in 2009.
- PSRS and PEERS filed suit in Missouri state court in October 2009 alleging fiduciary, contract, and related duties were violated by State Street.
- State Street removed the case to federal court twice (and the district court remanded twice to state court), with the district court ultimately deciding to remand based on a forum-selection clause.
- The district court’s remand orders were challenged by State Street; the Eighth Circuit consolidated the appeals and ultimately affirmed remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1447(d) bars appellate review of remand orders. | Systems contend § 1447(d) precludes review. | State Street argues § 1447(d) permits review when remand rests on forum‑selection. | § 1447(d) does not bar review when remand rests on a forum‑selection clause. |
| Whether the district court had original jurisdiction; are PSRS and PEERS arms of the State for diversity purposes. | Systems contend they are not arms of the State; thus diversity exists. | State Street argues the Systems are arms of the State, destroying diversity. | The Retirement Systems are arms of the State; they are not citizens for § 1332(a)(1) diversity, so no original jurisdiction existed in district court. |
Key Cases Cited
- Regents of the Univ. of Cal. v. Doe, 517 U.S. 425 (1997) (11th Amendment/arm-of-state analysis; money judgments impact state treasury considered important)
- Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30 (1994) (state-treasury exposure as a key factor in arm‑of‑the‑state determinations)
- Hadley v. N. Ark. Cmty. Technical Coll., 76 F.3d 1437 (8th Cir. 1996) (money‑treasury exposure as a critical arm‑of‑the‑state factor)
- McGinty v. New York, 251 F.3d 84 (2d Cir. 2001) (arm-of-state analysis; state funding and control are relevant)
- Univ. of R.I. v. A.W. Chesterton Co., 2 F.3d 1200 (1st Cir. 1993) (employees and state relationship factors in 11th amendment/diversity context)