United States Ex Rel. Fields v. Bi-State Development Agency
2017 U.S. App. LEXIS 13925
| 8th Cir. | 2017Background
- Bi‑State Development Agency (interstate compact agency created by Missouri and Illinois and Congress) operates public transit in St. Louis area; Fields (relator) sued under the False Claims Act alleging Bi‑State falsely certified compliance with Hatch Act/Missouri law.
- Government declined to intervene; relator proceeded qui tam. District court denied Bi‑State’s summary judgment asserting Eleventh Amendment immunity (and earlier denial on whether Bi‑State is a “person” under the FCA was separately litigated).
- Bi‑State asserts it is an arm of the states and thus entitled to Eleventh Amendment immunity; the relator argues Bi‑State is more like a local government (no immunity).
- The Eighth Circuit applies the six‑factor Barket test (and related two‑factor inquiry) examining: state characterization, funding, liability for judgments, appointment of commissioners, veto/oversight powers, and functions performed.
- Court finds factors split but concludes state funding and obligation factors (most important: risk to state treasury) weigh against immunity: state funding is minimal (~1.3%) and states are not legally obligated to satisfy Bi‑State liabilities.
- Court affirms denial of summary judgment for immunity and remands for further proceedings.
Issues
| Issue | Plaintiff's Argument (Fields) | Defendant's Argument (Bi‑State) | Held |
|---|---|---|---|
| Whether Bi‑State is an "arm of the state" entitled to Eleventh Amendment immunity | Bi‑State is a local entity, not an arm; its actions threaten no state treasury | Bi‑State is structured to be an arm of Missouri and Illinois and thus immune | Denied: Bi‑State is more like a local governmental entity; no immunity |
| Effect of changes in Missouri law (removal of §537.600.4) on state characterization factor | Missouri now treats compact agencies more like state entities, favoring immunity | Barket’s other indicators still show municipal characteristics | Factor is neutral; overall does not support immunity |
| Whether appointment and veto powers demonstrate state control | Appointment/veto structure does not make Bi‑State an arm because local actors dominate | Governor appointment power and veto/approval rights show state control | Mixed: appointment and veto powers favor arm‑of‑state, but overall insufficient |
| Whether judgments could be paid from state treasury (financial responsibility) | States are functionally liable (SLEF access and statutory links) | States are not legally obligated; state funding is minimal and federal funds irrelevant | Weighs against immunity: judgment would not be paid from state treasury |
Key Cases Cited
- P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, 506 U.S. 139 (interlocutory appeal allowed from denial of summary judgment based on sovereign immunity)
- Barket, Levy & Fine, Inc. v. St. Louis Thermal Energy, 948 F.2d 1084 (8th Cir. 1991) (six‑factor test for whether bistate compact agency is an arm of the state)
- Hess v. Port Auth. Trans‑Hudson Corp., 513 U.S. 30 (compact entities occupy a different position; treasury risk is controlling Eleventh Amendment concern)
- Lake Country Estates, Inc. v. Tahoe Reg’l Planning Agency, 440 U.S. 391 (Compact Clause agencies not automatically entitled to Eleventh Amendment protection)
- State Street Bank & Trust Co. v. Pub. Sch. Ret. Sys. of Mo., 640 F.3d 821 (8th Cir. 2011) (two‑factor test emphasizing independence and financial responsibility)
- Christy v. Penn. Turnpike Comm’n, 54 F.3d 1140 (3d Cir. 1995) (federal funds and self‑generated revenues are not state funds)