U.S. Oil Recovery Site Potentially Responsible Parties Grp. v. R.R. Comm'n of Tex., 898 F.3d 497

Background

PRP Group (over 100 entities) sued ~1,200 potentially responsible parties under CERCLA and Texas Solid Waste Disposal Act to recover cleanup costs at a Pasadena, TX Superfund site, including several Texas state agencies and public university systems.
Defendants included the Railroad Commission of Texas; Texas Dept. of Criminal Justice; Texas Dept. of Transportation; Texas General Land Office; Texas Commission on Environmental Quality (TCEQ); and multiple state university systems (e.g., UT, A&M, UH, Stephen F. Austin).
Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(1), asserting state sovereign (Eleventh Amendment) immunity; the district court denied the motion without adequate analysis, prompting interlocutory appeal.
The Fifth Circuit reviewed de novo whether the agencies and universities are "arms of the state" and thus immune from suit in federal court, and whether CERCLA or other conduct waived immunity.
The Fifth Circuit concluded (based on precedent and state-law attributes) that the challenged agencies and universities are arms of the state and entitled to sovereign immunity; no clear waiver or abrogation applied.
Because federal jurisdiction over the CERCLA claims is lacking, the district court also lacked authority to exercise supplemental jurisdiction over the related Texas-law claims.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the state agencies/universities are entitled to sovereign immunity as arms of the state	PRP Group largely "assumed" they were arms but argued immunity shouldn’t bar CERCLA claims here	Agencies/universities argued they are arms of the state under Texas law and precedent, so immune	Held: They are arms of the state and entitled to sovereign immunity; dismissal required
Whether CERCLA abrogates state sovereign immunity	PRP Group relied on CERCLA to pursue claims in federal court	Defendants argued CERCLA (Article I) does not validly abrogate state immunity	Held: CERCLA does not abrogate state sovereign immunity; defendants immune from CERCLA suit
Whether participation in EPA cleanup (TCEQ involvement) or engaging in proprietary functions waives immunity	PRP Group argued TCEQ’s participation in cleanup waived immunity or that proprietary conduct defeats immunity	Defendants argued waiver requires an unequivocal, voluntary submission to federal jurisdiction; proprietary-function argument not recognized	Held: No waiver — participation does not constitute clear waiver; immunity applies regardless of alleged proprietary acts
Whether the district court may exercise supplemental jurisdiction over state-law TSWDA claims	PRP Group argued TSWDA waives Texas's immunity in state court so federal court could hear related claims	Defendants argued federal court lacks original jurisdiction over federal claims, so no supplemental jurisdiction exists	Held: Because federal jurisdiction over CERCLA claims is lacking, the district court cannot exercise supplemental jurisdiction over state-law claims; those claims must be dismissed as to these defendants

Key Cases Cited

Alden v. Maine, 527 U.S. 706 (recognizing states' retained sovereign immunity)
Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (legislation under Article I cannot abrogate state immunity)
Hans v. Louisiana, 134 U.S. 1 (historical recognition that states are not suable without consent)
Clark v. Tarrant County, 798 F.2d 736 (test for determining whether an entity is an arm of the state)
Pennhurst State School & Hospital v. Halderman, 465 U.S. 89 (state waiver of immunity must be unequivocally expressed)
Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (standards on waiver and abrogation of state immunity)
Moore v. La. Bd. of Elementary & Secondary Educ., 743 F.3d 959 (standard of review for Eleventh Amendment issues)
Arena v. Graybar Elec. Co., 669 F.3d 214 (supplemental jurisdiction requires original federal jurisdiction)