BENJAMIN KOHN, Plaintiff-Appellant, v. STATE BAR OF CALIFORNIA; CALIFORNIA COMMITTEE OF BAR EXAMINERS, and Their Agents in Their Official Capacity, Defendants-Appellees.
No. 20-17316
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
December 6, 2023
D.C. No. 4:20-cv-04827-PJH
Before: Mary H. Murguia, Chief Judge, and Johnnie B. Rawlinson, Sandra S. Ikuta, John B. Owens, Daniel A. Bress, Danielle J. Forrest, Patrick J. Bumatay, Jennifer Sung, Gabriel P. Sanchez, Holly A. Thomas and Salvador Mendoza, Jr., Circuit Judges.
FOR PUBLICATION
Argued and Submitted En Banc September 20, 2023 San Francisco, California
Opinion by Judge Owens; Partial Concurrence by Judge Mendoza; Partial Concurrence and Partial Dissent by Judge Bumatay
SUMMARY*
Eleventh Amendment Immunity
The en banc court (1) affirmed in part the district court‘s dismissal of attorney Benjamin Kohn‘s action against the State Bar of California and the California Committee of Bar Examiners under Title II of the Americans with Disabilities Act, Section 504 of the Rehabilitation Act, and California law; and (2) remanded to the original three-judge panel for consideration of the remaining issues.
In the State Bar‘s role in the admission of attorneys, it acts under the authority and at the direction of the California Supreme Court. Kohn sought monetary damages and other relief based on the State Bar‘s refusal to provide him with certain test-taking accommodations for the bar exam. The district court dismissed the action on the basis of Eleventh Amendment immunity.
The en banc court reaffirmed that the California State Bar enjoys Eleventh Amendment immunity from suit in federal court. The en banc court held that Eleventh Amendment immunity extends not only to suits in which a state itself is a named party, but also to suits against an “arm of the state.” The Ninth Circuit‘s version of the test for determining whether an entity is an arm of the state applied the so-called Mitchell factors. The en banc court concluded that the Mitchell factors test should be reshaped in light of developments in Supreme Court doctrine and the Ninth Circuit‘s experience applying the Mitchell factors. Accordingly, the en banc court adopted the D.C. Circuit‘s three-factor test, which considers: (1) the state‘s intent as to the status of the entity, including the functions performed by the entity; (2) the state‘s control over the entity; and (3) the entity‘s overall effects on the state treasury.
Applying this updated three-factor test, the en banc court held that the California State Bar is an arm of the state and entitled to sovereign immunity. The en banc court concluded that the first factor, California‘s intent as to the State Bar, strongly favored the conclusion that it is an arm of the state, as did the second factor, the state‘s control over the State Bar. The en banc court concluded that the third factor, the State Bar‘s effects on the state treasury, presented a closer call but was not dispositive.
Concurring in part, Judge Mendoza agreed with the majority that the Mitchell factors were out of step with the Supreme Court‘s jurisprudence and that the California State Bar is an arm of the state for sovereign immunity purposes. He wrote separately to caution against adopting the D.C. Circuit‘s approach to weighing the sovereign immunity factors, and he disagreed with the majority‘s wholesale embrace of the D.C. Circuit‘s entity-based approach to sovereign immunity.
Concurring in part and dissenting in part, Judge Bumatay, joined by Judge Sung, wrote that he agreed with the majority‘s abandonment of the Mitchell factors in favor of the D.C. Circuit‘s more streamlined approach, looking at intent, control, and overall effects on a state‘s treasury to determine whether an entity is an arm of the state. Judge Bumatay, however, disagreed with the majority‘s application of this new approach, and he would hold that each of its factors cuts against finding sovereign immunity for the California State Bar.
COUNSEL
Gregory R. Michael (argued) and Dorothy C. Yamamoto, Michael Yamamoto LLP, Berkeley, California, for Plaintiff-Appellant.
Brady R. Dewar (argued), Ellin Davtyan, Robert G. Retana, Rita K. Himes, and Jean R. Krasilnikoff, Office of General Counsel, The State Bar of California, San Francisco, California; for Defendants-Appellees.
Julian Sarkar, SarkarLaw, San Francisco, California, for Amicus Curiae SarkarLaw.
Claudia Center, Disability Rights Education and Defense Fund, Berkeley, California; Jinny Kim, Disability Rights Advocates, Berkeley, California; Laura A. Scalia, Legal Aid At Work, San Francisco, California; for Amici Curiae Disability Rights Education and Defense Fund, Inc., Legal Aid Work, et. al.
OPINION
OWENS, Circuit Judge:
For nearly forty years, the California State Bar has enjoyed Eleventh Amendment immunity in federal court. See, e.g., Lupert v. Cal. State Bar, 761 F.2d 1325, 1327 (9th Cir. 1985); Hirsh v. Justs. of the Sup. Ct. of Cal., 67 F.3d 708, 715 (9th Cir. 1995) (per curiam). Appellant Benjamin Kohn, a licensed California attorney, seeks to change that. He contends that the State Bar is not an “arm of the state,” and he can sue it without restriction. Consistent with every other circuit, we reaffirm that the State Bar enjoys Eleventh Amendment protection in federal court and update our arm of the state jurisprudence to better reflect the Supreme Court‘s most recent guidance.
The California State Bar is the “administrative arm” of the California Supreme Court “for the purpose of assisting in matters of admission and discipline of attorneys.” In re Rose, 993 P.2d 956, 961 (Cal. 2000) (quoting In re Att‘y Discipline Sys., 967 P.2d 49, 59 (Cal. 1998)); see also
The claims in this case stem from the State Bar‘s admission function. Kohn filed a federal complaint against the State Bar seeking monetary damages and other relief. He alleged that its refusal to provide him with certain test-taking accommodations violated Title II of the Americans with Disabilities Act, Section 504 of the Rehabilitation Act, sections of the California Government Code, and California‘s Unruh Civil Rights Act.1 The State Bar moved to dismiss the lawsuit on several grounds, including that the Eleventh Amendment prohibited the action from going forward.2
The district court agreed with the State Bar. It granted the motion to dismiss and quoted Hirsh‘s clear holding for support: “The Eleventh Amendment‘s grant of sovereign immunity bars monetary relief from state agencies such as California‘s Bar Association and Bar Court.” Hirsh, 67 F.3d at 715. Hirsh relied exclusively on Lupert for its holding. Id; see also Lupert, 761 F.2d at 1327 (“The Eleventh Amendment bars this suit against the named agencies as the state did not consent to being sued.“).
Normally that would be the end of the story. A nearly forty-year-old precedent that largely has gone unchallenged3 would
Lupert and Hirsh were largely silent as to why the State Bar enjoyed Eleventh Amendment immunity, and Hirsh ignored a long line of caselaw setting out our test (often called the Mitchell factors) for determining whether a state agency, like the State Bar, is an arm of the state entitled to such protection. See, e.g., Jackson v. Hayakawa, 682 F.2d 1344, 1349–50 (9th Cir. 1982); Mitchell v. L.A. Cmty. Coll. Dist., 861 F.2d 198, 201–02 (9th Cir. 1988). We have applied the Mitchell factors and the Eleventh Amendment to
a wide range of state entities.4 Yet we have spent little time over these decades considering whether our law accurately captures the latest Supreme Court thinking.
We sua sponte took this case en banc to decide whether (1) the Mitchell factors, described infra pp. 11–17, remain the optimal means to conduct an arm of the state analysis; and (2) the California State Bar enjoys Eleventh Amendment protection under a more rigorous scrutiny than it received in Lupert and Hirsh.
II. DISCUSSION
A. Standard of Review
“We review de novo a dismissal on the basis of sovereign immunity or for failure to state a claim upon which relief can be granted.” Ariz. Students’ Ass‘n v. Ariz. Bd. of Regents, 824 F.3d 858, 864 (9th Cir. 2016). Whether an entity is an arm of the state within the meaning of the Eleventh Amendment is a question of federal law. Regents of the Univ. of Cal. v. Doe, 519 U.S. 425, 429 n.5 (1997) (“Regents“).
B. The Arm of the State Doctrine and the Mitchell Factors
The Eleventh Amendment provides that “[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.”
There is no standard test for determining whether an entity is an arm of the state for purposes of sovereign immunity. See Fresenius Med. Care Cardiovascular Res., Inc. v. P.R. & Caribbean Cardiovascular Ctr. Corp., 322 F.3d 56, 61 (1st Cir. 2003) (“The arm of the state analytical doctrine has moved freely . . . applying common principles.“). The circuits have developed different approaches to this question based on considerations the Supreme Court has identified as relevant, including “the nature of the entity created by state law,” Mt. Healthy City Sch. Dist. Bd. of Educ., 429 U.S. at 280, whether the state “structured” the entity to “enjoy the special constitutional protection of the [s]tate[] [itself],” Hess, 513 U.S. at 43–44 (citation omitted), and the state‘s legal liability for judgments against the entity, Lake Country Ests., Inc. v. Tahoe Reg‘l Plan. Agency, 440 U.S. 391, 401–02 (1979).5
The Supreme Court has directed that “[w]hen indicators of immunity point
Our version of the arm of the state test, the so-called Mitchell factors, arose from a grab bag of Supreme Court and Ninth Circuit precedent and is normally reduced to the following:
[1] whether a money judgment would be satisfied out of state funds, [2] whether the entity performs central governmental functions, [3] whether the entity may sue or be sued, [4] whether the entity has the power to take property in its own name or only the name of the state, and [5] the corporate status of the entity.
Belanger v. Madera Unified Sch. Dist., 963 F.2d 248, 250–51 (9th Cir. 1992) (quoting Mitchell, 861 F.2d at 201).
This case presents the question of whether we ought to reshape the Mitchell factors in light of developments in Supreme Court doctrine and our experience applying them. We conclude that we should.
First, the Mitchell factors are out of step with current Supreme Court jurisprudence. Under Mitchell, we have placed the greatest weight on the first factor—whether a money judgment would be satisfied out of state funds. See, e.g., Durning v. Citibank, N.A., 950 F.2d 1419, 1424 (9th Cir. 1991) (“[T]he source from which the sums sought by the plaintiff must come is the most important single factor in determining whether the Eleventh Amendment bars federal jurisdiction.” (citations omitted)). Our decision to prioritize the first factor was a “recognition of Edelman [v. Jordan],” which held that the Eleventh Amendment bars suits that seek to impose liability that “would have to be satisfied out of public funds from the state treasury.” Id. (citing Edelman v. Jordan, 415 U.S. 651, 663 (1974)).
But, since Edelman and Mitchell, the Supreme Court has clarified that “[t]he Eleventh Amendment does not exist solely in order to ‘preven[t] federal-court judgments that must be paid out of a [s]tate‘s treasury.‘” Seminole Tribe, 517 U.S. at 58 (second alteration in original) (quoting Hess, 513 U.S. at 48). “[I]t also serves to avoid ‘the indignity of subjecting a [s]tate to the coercive process of judicial tribunals at the instance of private parties.‘” Id. (quoting P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 146 (1993)).
Consequently, the inquiry into whether a state is legally liable for judgments against an entity is important not as “a formalistic question of ultimate financial liability,” but because it is “an indicator of the relationship between the [s]tate and its creation.” Regents, 519 U.S. at 431. Taking heed of this doctrinal development, our sister circuits have moved away from an excessive emphasis on the treasury factor.6 We, however, have never considered what the Supreme Court‘s more recent cases require, instead maintaining a primary focus on the treasury
Kohn asserts that we should continue to prioritize the treasury factor. He anchors his argument in Hess‘s statement that the “vast majority of Circuits . . . have concluded that the state treasury factor is the most important.” 513 U.S. at 49 (ellipsis in original) (citation omitted). But he ignores that Hess attached the same level of importance to state dignity. See id. at 41, 47, 52. Hess involved the potential immunity of a bistate entity created under the Compact
Clause. Id. at 35. The Supreme Court recognized that, because bistate entities “occupy a significantly different position in our federal system than do the [s]tates themselves,” “[s]uit in federal court is not an affront to the dignity of a Compact Clause entity” or to “the integrity of the compacting States.” Id. at 40–41.
But this acknowledgment—that a suit against a bistate entity does not threaten its parent state‘s dignity interest in the same way that a suit against that state itself would—does not mean that the state‘s dignity interest is less important in determining whether a suit against an entity is a suit against the state itself. Therefore, we read Hess for what it says: that state dignity and solvency are the Eleventh Amendment‘s “twin reasons for being” and entitled to equal weight. Id. at 47, 52; see also P.R. Ports Auth. v. Fed. Mar. Comm‘n, 531 F.3d 868, 874 (D.C. Cir. 2008) (”Hess does not require a focus solely on the financial impact of the entity on the [s]tate. Rather, Hess ‘pays considerable deference to the dignity interests of the state, focusing on both explicit and implicit indications that the state sought to cloak an entity in its Eleventh Amendment immunity.‘” (quoting Fresenius Med. Care Cardiovascular Res., Inc., 322 F.3d at 67)). As a result, our continued elevation of state solvency under the Mitchell factors conflicts with the Supreme Court‘s guidance.
The Mitchell factors are not only inconsistent with Supreme Court arm of the state doctrine—they also generate a muddled arm of the state analysis within our Circuit. For example, some of the Mitchell factors are of questionable relevance. Consider the third factor, “whether the entity may sue or be sued.” Belanger, 963 F.2d at 250. Under California law, a variety of state entities, including the State Bar,
The Supreme Court has explicitly held that a state does not “consent to suit in federal court merely by stating its intention to ‘sue and be sued . . . .‘” Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 676 (1999) (citing Fla. Dep‘t of Health & Rehab. Servs. v. Fla. Nursing Home Ass‘n, 450 U.S. 147, 149–50 (1981) (per curiam)).7 Thus, “[a] mere statutory
district in its own name are subject to the same Eleventh Amendment constraints as suits against the state.“).
Similar problems arise under factor four—whether the entity has the power to take property in its own name or only the name of the state. Even where an entity can hold property in its own name and thus satisfies factor four, we have said “the property ownership analysis is a close question” if “[state] law . . . treats such property as state property.” Id. As a result, this factor is also “entitled to little weight.” Id. Therefore, at least two of the Mitchell factors do not do much, if any, work. The caselaw bears this out: While factors three and four are almost invariably satisfied, they do not have a predictable effect on the outcome of any individual case.8
We also have wavered as to whether we evaluate the second Mitchell factor—whether the entity performs central governmental functions—at the entity or activity level. If the Mitchell analysis is entity based, then an entity is either immune or not. But, if the Mitchell analysis is activity based, then an entity‘s immunity from suit may vary depending on the function it performs. In applying Mitchell, we have said both that we cannot “hold that [an entity] is immune from suit with respect to some of its activities . . . but not others”
because “[t]o do so would impermissibly qualify sovereign immunity, which by its nature is absolute,” Durning, 950 F.2d at 1426, and that “we look to whether the [entity], in performing the particular function at issue, performs a central government function,” rather than “whether the [entity] performs central government functions in general,” Ray, 935 F.3d at 710. Scholarly criticism has focused on this inconsistency and argued that it allows lower courts in our Circuit to “twist” the arm of the state doctrine depending on the defendant. See Kelsey Joyce Dayton, Tangled Arms: Modernizing and Unifying the Arm-of-the-State Doctrine, 86 U. Chi. L. Rev. 1603, 1633 (2019) (arguing that lower courts in the Ninth Circuit “brush aside aspects of” the Mitchell factors “in cases that prove especially troublesome“).
Notably, we did not always apply the Mitchell factors mechanically as a five-part test. For example, in Franceschi v. Schwartz, 57 F.3d 828 (9th Cir. 1995) (per curiam), we cited Mitchell but analyzed only how “state law treats the entity . . . in an effort to assess the extent to which the entity ‘derives its power from the [s]tate and is ultimately regulated by the [s]tate.‘” Id. at 831 (citations omitted). Thus, our determination that a municipal court was an arm of the state turned on “the extensive control exercised by the state over the municipal courts.” Id. Likewise, in Rounds v. Or. State Bd. of Higher Educ., 166 F.3d 1032 (9th Cir. 1999), we cited Mitchell solely for the proposition that we must look to an entity‘s “nature as created by state law” and “whether [it] performs central governmental functions” to conduct the arm of the state analysis. Id. at 1035.
These cases suggest an earlier recognition that the best arm of the state test is not a multi-factor checklist involving potentially irrelevant factors but an analysis that drills down on whether the state “structured” the entity to enjoy immunity from suit. Hess, 513 U.S. at 43 (citation omitted). The D.C. Circuit‘s test fits the bill. In an opinion by then-Judge Kavanaugh, the D.C. Circuit distilled the developments in the Supreme Court‘s more recent caselaw into a three-factor test: “(1) the [s]tate‘s intent as to the status of the entity, including the functions performed by the entity; (2) the [s]tate‘s control over the entity; and (3) the entity‘s overall effects on the state treasury.” P.R. Ports Auth., 531 F.3d at 873 (citing Hess, 513 U.S. at 44–46; Lake Country Ests., Inc., 440 U.S. at 401–02; Mt. Healthy City Sch. Dist. Bd. of Educ., 429 U.S. at 280–81).
The first factor of intent turns on whether state law expressly characterizes the entity as a governmental instrumentality rather than as a local governmental or non-governmental entity; whether the entity performs state governmental functions; whether the entity is treated as a governmental instrumentality for purposes of other state law; and state representations about the entity‘s status. Id. at 874. The second factor depends on how members of the governing body of the entity are appointed and removed, as well as whether the state can “directly supervise and control [the entity‘s] ongoing operations.” Id. at 877. And, the third factor, though relevant, is not dispositive. While Kohn argues that this factor is the most important, we agree with the D.C. Circuit that the Eleventh Amendment “does not require a focus solely on the financial impact of the entity on the [s]tate” because the Eleventh Amendment is equally concerned with “the dignity interests of the state.” Id. at 874 (citation omitted) (interpreting Hess).
We have not updated the Mitchell factors since we first articulated them in 1982 in Jackson, despite the Supreme Court‘s intervening decisions in seminal sovereign immunity cases such as Regents, Hess, and Seminole Tribe. Had we revisited our arm of the state jurisprudence after these cases, as several of our sister circuits have, see supra note 6, we would have realized that the Mitchell factors had failed to keep up.
By contrast, the D.C. Circuit test is consistent with current Supreme Court precedent. The intent and control factors advance the states’ dignity interests, and the treasury factor protects the states’ financial solvency. As a result, this test best promotes the Eleventh Amendment‘s “twin reasons for being.” Hess, 513 U.S. at 47. Since the D.C. Circuit‘s three-factor test better encapsulates the current state of the law than the Mitchell factors and avoids their problems, we adopt it here and no longer endorse the Mitchell factors.
The entity-based approach also makes sense as a matter of principle. We agree with our statement in Durning that “sovereign immunity . . . by its nature is absolute.” 950 F.2d at 1426. The possibility that immunity may be waived or abrogated does not diminish this point. Waiver and abrogation are second-stage inquiries as to whether, if an entity is immune, that immunity may be overcome. See Torres v. Tex. Dep‘t of Pub. Safety, 142 S. Ct. 2455, 2462 (2022); cf. Fin. Oversight & Mgmt. Bd. v. Centro de Periodismo Investigativo, Inc., 598 U.S. 339, 346 (2023) (“[W]e assume without deciding that Puerto Rico is immune from suit in federal district court, and that the Board partakes of that immunity. We address only whether, accepting those premises, [the statute] effects an abrogation.“). But waiver and abrogation do not undermine the absolute nature of the first-stage question of whether immunity exists.
An entity-based approach also better promotes consistency, predictability, and finality because it settles an entity‘s immunity “unless and until there are relevant changes in the state law governing the entity.” P.R. Ports Auth., 531 F.3d at 873. By contrast, an activity-based approach would allow parties to relitigate an entity‘s immunity simply by articulating the challenged activity at a different level of generality. Thus, even once an entity was deemed immune, it still could be “subject[ed] . . . to the coercive process of judicial tribunals at the instance of private parties,” undermining the very purpose of immunity. Seminole Tribe, 517 U.S. at 58 (quoting P.R. Aqueduct &
Sewer Auth., 506 U.S. at 146); cf. Maliandi v. Montclair State Univ., 845 F.3d 77, 92–93 (3d. Cir. 2016) (rejecting the approach of parsing claim-specific Eleventh Amendment immunity as “untenable—both practically and in principle“).
Though our decision to implement the D.C. Circuit‘s test represents a change in our jurisprudence, this new framework is unlikely to lead to different results in cases that previously applied the Mitchell factors and held an entity entitled to immunity. The D.C. Circuit test does not overemphasize the treasury factor or rely on considerations that are minimally relevant to the immunity analysis, aspects of Mitchell that could erroneously lead to a conclusion of
C. Applying the Updated Three-Factor Test Confirms that the California State Bar is an Arm of the State
Though we update our test, the California State Bar‘s status remains the same: It is an arm of the state and entitled to sovereign immunity.
i. Intent
First, California‘s intent with respect to the State Bar supports immunity. California law “characterizes” the State Bar as a “governmental instrumentality.” P.R. Ports Auth., 531 F.3d at 874 (citing Hess, 513 U.S. at 44–45 (considering whether legislation “type[d]” the entity “as a state agency“)). The State Bar is codified in the
The state legislature‘s characterization of an entity is not the only important metric for the intent factor—state court treatment is also relevant. See, e.g., Hess, 513 U.S. at 45 (“State courts . . . repeatedly have typed the Port Authority an agency of the [s]tates . . . .“). The California Supreme Court‘s description of the State Bar as its “administrative arm” for attorney discipline and admission purposes cuts decisively in favor of the State Bar‘s immunity. E.g., In re Rose, 993 P.2d at 961, 974; In re Att‘y Discipline Sys., 967 P.2d at 59. As does the California Supreme Court‘s reference to the State Bar as “a constitutional entity within the judicial article of the California Constitution.” Obrien v. Jones, 999 P.2d 95, 100 (Cal. 2000).
The dissent focuses on the State Bar‘s status as a “public corporation” under the California Constitution to argue that “California law treats the State Bar the same way as it treats independent municipalities,” which “cuts strongly against sovereign immunity.” But, as the various definitions of “public corporation” cited by the dissent indicate, the term “public corporation” can mean different things in different places. For example, as the dissent acknowledges, while certain provisions of California law define “public corporation[s]” as “municipal corporation[s]” or “political subdivision[s],” see, e.g.,
These varied definitions indicate that the designation “public corporation” merely means that something is not private. See, e.g.,
The dissent‘s reliance on Keller v. State Bar of California, 496 U.S. 1 (1990), is likewise misplaced because the California state legislature has since restructured the State Bar in ways that indicate a stronger intent to treat it as an arm of the state. After Keller, the state legislature converted the State Bar‘s conference of delegates into a private entity. 2002 Cal. Stat. 2355, 2356–58 (amending
Moreover, the State Bar “performs functions typically performed by state governments.” P.R. Ports Auth., 531 F.3d at 875 (citing Hess, 513 U.S. at 45). “Since the founding of the Republic, the licensing and regulation of lawyers has been left exclusively to the [s]tates . . . . The [s]tates prescribe the qualifications for admission to practice and the standards of professional conduct. They also are responsible for the discipline of lawyers.” Leis v. Flynt, 439 U.S. 438, 442 (1979). “The interest of the [s]tates in regulating lawyers is especially great since lawyers are essential to the primary governmental function of administering justice . . . .” Goldfarb v. Va. State Bar, 421 U.S. 773, 792 (1975).
The state legislature has tasked the State Bar with the “[p]rotection of the public” in its “licensing, regulatory, and disciplinary functions.”
We also consider whether the State Bar is “treated as a governmental instrumentality for purposes of other [California] laws.” P.R. Ports Auth., 531 F.3d at 874, 876 (citing Hess, 513 U.S. at 44–45). The State Bar is subject to California public-records and open-meeting laws.
Though California law authorizes the State Bar to “sue and be sued,”
The dissent asserts that California law treats the State Bar “as distinct from state agencies” because it provides that “[n]o law of this state, restricting, or prescribing a mode of procedure for the exercise of powers of state public bodies or state agencies . . . shall be applicable to the State Bar, unless the [l]egislature expressly so declares.”
Accordingly, the first factor—California‘s intent as to the State Bar—favors the conclusion that the State Bar is an arm of the state and entitled to its immunity.
The second factor of control considers, first, “how the directors and officers” of the entity “are appointed.” P.R. Ports Auth., 531 F.3d at 877 (citing Hess, 513 U.S. at 44). Again, this factor cuts in favor of immunity. The California Supreme Court, the state legislature, and the governor appoint the State Bar‘s Board of Trustees.
Beyond appointment, the California Supreme Court exercises significant control over the State Bar‘s functioning. The California Supreme Court has “inherent jurisdiction over the practice of law” in the state, so the State Bar “acts under the authority and at the direction of the Supreme Court.”
Presented with a comparably close relationship between the Arizona Supreme Court and the Arizona State Bar, the Supreme Court concluded that the Arizona State Bar‘s actions were state action and therefore exempt from antitrust law. Bates v. State Bar of Ariz., 433 U.S. 350, 361 (1977). The Supreme Court reasoned that where the Arizona State Bar‘s role was “completely defined” by the Arizona Supreme Court, and it acted “as the agent of the court under its continuous supervision,” claims arising from that role were “against the State. The Arizona Supreme Court [was] the real party in interest.” Id. Likewise, the California Supreme Court‘s significant degree of control over the State Bar strongly suggests that the State Bar is an arm of the judicial branch of California.
The dissent recognizes that the State Bar is subject to the Supreme Court‘s “supervision.” However, it contends that “supervision is not control” because the Supreme Court of California “does not veto the decisions of the State Bar” but “merely chooses whether to adopt the State Bar‘s recommendations as to admission and discipline.” This is a distinction without a difference, as the Supreme Court of California need not have the power to veto the decisions of the State Bar when it has total control over which of those decisions will be adopted in the first place.
The California state legislature also controls the State Bar‘s ability to raise revenue. Though the legislature has authorized the State Bar to raise its own funds, which are “paid into the treasury of the State Bar,”
Thus, the second factor of control also favors the State Bar‘s immunity.
iii. Treasury
Finally, we consider the State Bar‘s financial relationship to California and its overall effects on California‘s treasury. P.R. Ports Auth., 531 F.3d at 878 (citing Hess, 513 U.S. at 43–44). “In analyzing this third factor . . . the relevant issue is a [s]tate‘s overall responsibility for funding the entity or paying the entity‘s debts or judgments, not whether the [s]tate would be responsible to pay a judgment in the particular case at issue.” Id. (emphasis in original) (citations omitted).
There is no dispute that California law makes the State Bar responsible for its own debts and liabilities, so California would not be liable for a judgment against the State Bar.
The State Bar also relies on cases where we considered whether the State, even if not directly liable for a judgment against an entity under state law, would be the “real, substantial party in interest,” Regents, 519 U.S. at 429 (citation omitted), because the entity performed essential governmental functions that the state could not do without. For example, in Alaska Cargo Transport, Inc. v. Alaska R.R. Corp., 5 F.3d 378 (9th Cir. 1993), Alaska would not have been liable for a judgment against a state-created railroad. Id. at 380–81. But the railroad was “a unique and essential fixture in the lives of thousands of widely dispersed Alaskans” and “perform[ed] a vital governmental function.” Id. Therefore, we concluded that, in the face of a large judgment, the railroad “would be compelled to turn to legislative appropriation in order to remain in business, and the legislature would have to respond favorably so that the ‘essential’ transportation function would continue to be performed . . . .” Id. at 381 (citation omitted).
Similarly, in Aguon v. Commonwealth Ports Auth., 316 F.3d 899 (9th Cir. 2003), we determined that the Commonwealth Ports Authority of the Northern Mariana Islands, a public corporation created to operate and manage the Northern Mariana Islands’ ports, “perform[ed] a central governmental function,” so that if it “were to be faced with a large money judgment which it could not pay, the Commonwealth would be compelled to protect its island economy by responding with an appropriation to provide the citizens of the Commonwealth with essential seaport and airport services.” Id. at 902–03.
The State Bar presses a similar argument. As a surrogate for the California Supreme Court, the State Bar performs “a
This factor presents a closer call. The State Bar‘s functions are “essential to the primary governmental function of administering justice . . . .” Goldfarb, 421 U.S. at 792. However, we also have said that “in the absence of a showing that money used to pay a judgment will necessarily be replaced with state funds, ‘we adhere to our basic proposition that the fact that the state may ultimately volunteer to pay the judgment . . . is immaterial . . . .‘” Beentjes, 397 F.3d at 781 (quoting Holz, 347 F.3d at 1185).
Either way, despite Kohn‘s arguments to the contrary, this third factor is not dispositive. See supra pp. 13–14. Given that the intent and control factors strongly favor the conclusion that California “structured” the State Bar to “enjoy the special constitutional protection of the [s]tate[] [itself],” the third factor, placed in its proper context, cannot overcome the first two. Hess, 513 U.S. at 43–44 (citation omitted). We see no reason to disturb our nearly forty-year-old determination that the California State Bar is an arm of the state and entitled to immunity in federal court.
***
This conclusion puts us in good company. In the years since we last considered the State Bar‘s immunity in Lupert and Hirsh, all the other federal circuits to have considered the question have agreed: State bars are arms of the state and enjoy sovereign immunity under the Eleventh Amendment.11
The one circuit court decision that bucks this trend is our own. In Crowe v. Or. State Bar, 989 F.3d 714 (9th Cir. 2021) (per curiam), we applied the Mitchell factors to conclude that the Oregon State Bar is not an arm of the state. Id. at 731–33. Although there may be some differences between the California and Oregon State Bars, whether the Oregon State Bar would be an arm of the state under the three-factor test we now employ, rather than the Mitchell factors, is not before us today. Any future case brought against the Oregon State Bar will need to be analyzed under the new test we articulate in this decision.
III. CONCLUSION
In sum, we update our arm of the state jurisprudence to better reflect the Supreme Court‘s latest guidance and affirm our precedent that the California State
AFFIRMED IN PART and REMANDED to the three-judge panel.
MENDOZA, Circuit Judge, concurring in part:
I agree with the majority that the factors set out in Mitchell v. Los Angeles Community College District are out of step with the Supreme Court‘s jurisprudence. I also agree that, in this case, the California Bar is an arm of the state for sovereign immunity purposes. I write separately for two reasons. First, I probe the panel‘s adoption of the D.C. Circuit‘s sovereign immunity test and its reading of Hess v. Port Authority Trans-Hudson Corp. The D.C. Circuit‘s three-factor test makes good legal and practical sense. But that circuit‘s approach to weighing the sovereign immunity factors hews far more closely to Justice O‘Connor‘s dissenting opinion in Hess than Justice Ginsburg‘s majority. I do not read our majority opinion as adopting that aspect of the D.C. Circuit‘s reasoning, and I caution against doing so. Second, I disagree with the majority‘s wholesale embrace of the D.C. Circuit‘s entity-based approach to sovereign immunity. This case was a close call, and I urge my colleagues to be wary of deeming certain state instrumentalities—which often perform functions unrelated to the express delegation of state power—categorically immune from every federal suit. Doing so lacks good cause in either precedent or fact.
I
The scope of state sovereign immunity extends more broadly than the Eleventh Amendment‘s text. See Alden v. Maine, 527 U.S. 706, 713 (1999); Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 54 (1996) (“[W]e have understood the Eleventh Amendment to stand not so much for what it says, but for the presupposition . . . which it confirms.” (quoting Blatchford v. Native Vill. of Noatak, 501 U.S. 775, 779 (1991))). The Eleventh Amendment, passed by Congress in 1794 and ratified by the states in 1795, accomplishes more than nullifying Chisholm v. Georgia to protect states’ purses and restricting the Article III diversity jurisdiction of the federal courts. See Seminole Tribe, 517 U.S. at 54, 68 (citing Chisholm v. Georgia, 2 U.S. 419 (1793)). Its “object and purpose” is “to prevent the indignity of subjecting a state to the coercive process of judicial tribunals at the instance of private parties.” Ex parte Ayers, 123 U.S. 443, 505 (1887); see also Alden, 527 U.S. at 715. The Eleventh Amendment thus confirms the centuries-old presupposition that “each State is a sovereign entity in our federal system,” Seminole Tribe, 517 U.S. at 54 (citing Hans v. Louisiana, 134 U.S. 1, 10 (1890)), and that “courts may not ordinarily hear a suit brought by any person against a nonconsenting state,” Torres v. Tex. Dep‘t of Pub. Safety, 597 U.S. --, 142 S. Ct. 2455, 2461–62 (2022). At its core, Eleventh Amendment immunity is rooted in the “respect owed [the states] as members of the federation.” P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 146 (1993).
The Eleventh Amendment sometimes extends sovereign immunity to state instrumentalities that operate as arms of the state, barring valid abrogation or waiver. See P.R. Aqueduct & Sewer Auth., 506 U.S. at 144 (“Absent waiver, neither a State nor agencies acting under
A
Hess v. Port Authority Trans-Hudson Corp. is a notable exception. 513 U.S. 31 (1994). In Hess, the Court addressed whether the Eleventh Amendment immunized a bistate Port Authority, charged with coordinating transport through a port on the New York-New Jersey border, from a personal injury suit brought by railroad workers under federal law. Id. at 32. It answered “no.” Id. at 32–33. Guided by Lake Country Estates’ examination of a bistate entity, the Hess Court first focused on the entity‘s “structure,” examining various “indicators” of immunity, including: (1) the entity‘s “function“; (2) the nature of the entity‘s governing body; (3) the entity‘s implementing legislation; and (4) whether the states have “financial responsibility” for the entity, including “legal liability.” Id. at 43–46. Unlike the bistate entity in Lake Country Estates, where the factors disfavored sovereign immunity, the Hess Court concluded that those factors “point[ed] in different directions” for the Port Authority‘s immunity from suit. Id. at 47. The Court thus needed a tiebreaker.
So it invoked the Eleventh Amendment‘s “twin reasons for being” to guide its analysis: “solvency” and “dignity.” Hess, 513 U.S. at 47, 52. Those twin reasons, however, have a critical factor in common: the practical and legal effect of a judgment on a state‘s treasury, which trumped concerns over “control” of the entity. See
B
Three years later, the Court issued its decision in Regents of the University of California v. Doe, 519 U.S. 425 (1997). Like Hess, the Court in Regents addressed when to apply Eleventh Amendment immunity to a state instrumentality, zeroing in on “the relationship between the State and the entity in question.” Id. at 429. To determine whether this relationship gives rise to immunity, the Regents Court examined (1) “the essential nature and effect of the proceeding“; (2) “the nature of the entity created by state law“; and, as in Lake Country Estates and Hess, (3) “whether a money judgment against a state instrumentality or official would be enforceable against the State . . . .” Id. at 429–30 (citing, among other cases, Hess, 513 U.S. 30; Mt. Healthy, 429 U.S. at 274; Kennecott Copper Corp. v. State Tax Comm‘n, 327 U.S. 573 (1946); Ford Motor Co. v. Dep‘t of Treasury of State of Ind., 323 U.S. 459 (1945)). And the Regents Court reaffirmed the “considerable importance” of that last consideration. 519 U.S. at 430.
II
Despite the Court‘s guidance in Regents and Hess, the circuit courts have struggled to translate that precedent into a workable, arm-of-the-state standard for Eleventh Amendment sovereign immunity. Most have revised or expanded upon existing, factor-based tests to assess whether subjecting a state agency to suit in federal court would infringe on the “dignity,” “solvency,” and “respect” concerns underpinning the Eleventh Amendment. Some follow Hess quite faithfully. They examine the sovereign nature of the entity using factor-based tests; if those factors point in different directions, they determine whether “solvency” and dignity” concerns compel an answer, while recognizing that a judgment‘s impact on the state‘s treasury is the most important factor. See, e.g., Fresenius Med. Care Cardiovascular Res., Inc. v. P.R. & Caribbean Cardiovascular Ctr. Corp., 322 F.3d 56, 61 (1st Cir. 2003). Other circuits employ balancing tests—or in the Second Circuit‘s case, nesting, factor-based, balancing tests—to assess whether the Eleventh Amendment shields a state instrumentality from suit. See, e.g., Leitner v. Westchester Cmty. Coll., 779 F.3d 130, 135–36 (2d Cir. 2015) (citing Clissuras v. City Univ. of N.Y., 359 F.3d 79 (2d Cir. 2004) and Mancuso v. N.Y. State Thruway Auth., 86 F.3d 289 (2d Cir. 1996)); Sw. Bell Tel. Co. v. City of El Paso, 243 F.3d 936, 938 (5th Cir. 2001). Some abandon a test altogether, see Takle v. Univ. of Wis. Hosp. & Clinics Auth., 402 F.3d 768, 769–81 (7th Cir. 2005), or, following Regents’ lead, focus primarily on the relationship between the entity and the state, Duke v. Grady Mun. Schs., 127 F.3d 972, 974 (10th Cir. 1997).
Our decision in Mitchell, which preceded Regents and Hess, was just such a factor-based test—an imperfect vehicle, perhaps, but one that we repeatedly defended as compatible with Supreme Court precedent. See, e.g., Ray v. Cnty. of L.A., 935 F.3d 703, 711 (9th Cir. 2019); see also Crowe v. Or. State Bar, 989 F.3d 714, 731 (9th Cir. 2021), cert denied 142 S. Ct. 79 (Mem). Today, we reverse course and align ourselves with the D.C. Circuit‘s approach in Puerto Rico Ports Authority v. Federal Maritime Commission, 531 F.3d 868 (D.C. Cir. 2008). That decision directs courts to examine: “(1) the State‘s intent as to the status of the entity, including the functions performed by the entity; (2) the State‘s control over the entity; and (3) the entity‘s overall effects on the state treasury.” Id. at 873. I concur in that choice—the D.C. Circuit‘s test is a fair one. But I caution us from taking the D.C. Circuit‘s decision too far by adopting (1) its approach to weighing the sovereign immunity factors, which curiously departs from Hess‘s majority in favor of its dissent; or (2) its entity-based approach to sovereign immunity.
A
The Eleventh Amendment‘s “twin reasons for being“—“state dignity” and “solvency“—ought to be afforded equal weight in our sovereign immunity analysis. See Hess, 513 U.S. at 47, 52; see also Auer v. Robbins, 519 U.S. 452, 456 n.1 (1997) (affording equal weight to treasury and dignity considerations). I like the majority‘s analytical framework for these concerns, which neatly parses the “intent” and “control” factors as advancing the state‘s dignity interest, while the “treasury” factor protects the states’ financial solvency. But I am concerned by the equal weight that the D.C. Circuit and, by implication, the majority, appear to give the intent, control, and treasury factors, respectively. I read the D.C. Circuit‘s decision as putting its thumb on the scale for “state dignity” (which, adding together its attendant factors, would get approximately two-thirds of the immunity vote), veering quite far from Hess and Regents. In my view, control and intent should count for half the vote, and the treasury factor should be weighed equally against them. To be consistent with the Court‘s guidance, I urge my colleagues not to read our decision today as de-emphasizing solvency concerns in favor of those that implicate dignity.
In my and most circuit courts’ view, Supreme Court precedent is clear: whether the state legally or practically pays a money damages judgment against the entity is central to the sovereign immunity analysis. See supra Section I; see also Fresenius Med. Care, 322 F.3d at 66, 68; Leitner, 779 F.3d at 134 (“The first factor, ‘the vulnerability of the State‘s purse,’ is ‘the most salient factor in Eleventh Amendment determinations.‘” (quoting Hess, 513 U.S. at 47–48)); Md. Stadium Auth. v. Ellerbe Becket Inc., 407 F.3d 255, 261 (4th Cir. 2005) (“[T]he most important consideration is whether the state treasury will be responsible for paying any judgment that might be awarded.” (citation omitted)); Sw. Bell Tele. Co., 243 F.3d at 938 (“[C]ourts must review . . . whether a money judgment against the instrumentality would be enforceable against the state.“); Waskul v. Washtenaw Cnty. Cmty. Mental Health, 979 F.3d 426, 443 (6th Cir. 2020) (reciting that the “state‘s potential legal liability for a judgment against the defendant ‘is the foremost factor’ to consider in our sovereign immunity analysis“); Takle, 402 F.3d at 769 (noting that an entity would be immune if it “were financed by the state . . . so that any judgment against it would be paid out of state funds“); Thomas v. St. Louis Bd. of Police Comm‘rs, 447 F.3d 1082, 1084 (8th Cir. 2006) (noting that courts assess autonomy and control and, “more importantly, whether a money judgment against the agency will be paid with state funds“); Duke, 127
F.3d at 975 (“The Supreme Court has indicated more recently that ‘the vulnerability of the State‘s purse [i]s the most salient factor in Eleventh Amendment determinations.‘“) quoting Hess, 513 U.S. at 48)) (alteration in Duke). We said the same two years ago. See Crowe, 989 F.3d at 731. And while solvency is not the sole concern that we address when considering an entity‘s sovereign immunity, see Seminole Tribe, 517 U.S. at 58 (considering what protections a state is owed by the
To read otherwise, as the D.C. Circuit does, draws far closer to Hess‘s dissent than its majority. In dismissing a party‘s outsized reliance on treasury considerations, the D.C. Circuit reasoned that predominantly focusing on a state‘s financial liability in the lawsuit “would inappropriately convert a sufficient condition for sovereign immunity into the single necessary condition for arm-of-the-state status.” P.R. Ports Auth., 531 F.3d at 879 (emphasis in original). Citing Hess, the D.C. Circuit further stated: “That is not the law[.]” Id. at 879. But under a plain reading of Hess‘s majority, that was the law; it was Justice O‘Connor‘s dissent that sought to limit such an approach. Hess, 513 U.S. at 59 (O‘Connor, J., dissenting). Criticizing the majority‘s “conclusion that the vulnerability of the state treasury is determinative,” she wrote that its treasury-focused analysis “takes a sufficient condition for Eleventh Amendment immunity, and erroneously transforms it into a necessary condition.” Id. at 59 (emphasis in original). Like the D.C. Circuit in Puerto Rico Ports Authority, Justice O‘Connor‘s dissent in Hess thus championed state “control” as either co-extensive with, or more important than, “treasury” concerns when assessing sovereign immunity. Compare Hess, 513 U.S. at 61 (O‘Connor, J. dissenting) (reasoning that “control can exist even where the State assumes no liability for the entity‘s debts“) with P.R. Ports Auth., 531 F.3d at 879 (rejecting the argument “that there is no sovereign immunity if the State is not obligated to pay a judgment in a particular case“).
But the Supreme Court has expressly declined to embrace Justice O‘Connor‘s attempts in Hess to “look beyond the potential impact of an adverse judgment on the state treasury, and examine the extent to which the elected state government exercises ‘real, immediate control and oversight’ over the [entity.]” Regents, 519 U.S. at 431-32 (quoting Hess, 513 U.S. at 62 (O‘Connor, J., dissenting)). And the Court reaffirmed the critical role played by the treasury consideration to
Thankfully, our decision today does not reach this issue and the D.C. Circuit‘s decision does not foreclose our approach to weighing these factors. Here, the first two factors weigh strongly in favor of immunity, and the third factor, though “mixed,” indicates a significant financial relationship between the State Bar and California. So we need not and, as I read the majority, do not determine the exact weight that we should ascribe to each factor. To remain consistent with Hess and Regents, I encourage us not to neglect solvency for
B
Unlike the majority, I hesitate to embrace the D.C. Circuit‘s conclusion that “once an entity is determined to be an arm of the State under the three-factor test, that conclusion applies unless and until there are relevant changes in the state law governing the entity.” P.R. Ports Auth., 531 F.3d at 873. In my view, we need not reach this issue today, given that it was neither briefed nor argued. And while this categorical approach to sovereign immunity may make our job easier as judges, it lacks consistent support in our precedent or practice and would lead to anomalous results.
The majority is right that our Mitchell-based precedent on the question of “entity versus activity” immunity is mixed. Compare Durning v. Citibank, N.A., 950 F.2d 1419, 1426 (9th Cir. 1991), with Ray, 935 F.3d at 710. In 1995, however, we held that state entities that function in various capacities are “not entitled to Eleventh Amendment immunity” with respect to every function; instead, the indicia of sovereign immunity “must be examined closely to ascertain that the [entity] is indeed functioning as an arm of the state.” Doe v. Lawrence Livermore Nat‘l Lab‘y, 65 F.3d 771, 775 (9th Cir. 1995), rev‘d sub nom. on other grounds by Regents of the Univ. of Cal. v. Doe, 519 U.S. 425 (1997). When the Supreme Court reversed our decision in Doe, it declined to disturb that holding. See Regents, 519 U.S. at 425 n.2. This might well be because the “function” of an entity, including the function that “g[ives] rise to the specific controversy at issue in [the] litigation,” sheds significant light on the sovereign immunity analysis. See Lake Country Ests., 440 U.S. at 402; Hess, 513 U.S. at 43-46; c.f., N. Ins. Co. of N.Y. v. Chatham Cnty., GA., 547 U.S. 189, 197 (2006) (phrasing the relevant immunity question as whether “the County . . . was acting as an arm of the State . . . in operating the drawbridge“); Regents, 519 U.S. at 431-32 (leaving open whether it is appropriate to consider, for sovereign immunity purposes, “the character of the function that gave rise to the litigation“). See also Walker v. Jefferson Cnty. Bd. of Educ., 771 F.3d 748, 757 (11th Cir. 2014) (tethering the sovereign immunity analysis to “the particular function in which the [entity] was engaged when taking the actions out of which liability is asserted to arise“) (alteration in original). After all, contrary to our reasoning in Durning, sovereign immunity is not always absolute; it is subject to waiver and valid abrogation. See Lapides v. Bd. of Regents of Univ. Sys. of Ga., 535 U.S. 613, 618, 620 (2002). And while a state‘s immunity may well be absolute as a first-stage inquiry, I do not see why a state instrumentality‘s immunity necessarily follows suit.
Preserving a function-based approach instead of the D.C. Circuit‘s entity-based approach serves the
Second, a function-based approach avoids a far-ranging inquiry into potentially irrelevant aspects of an entity‘s legal structure, which might be leveraged to immunize that entity for conduct otherwise divorced from or beyond the state‘s mandate. State instrumentalities are, increasingly, sprawling institutions with generalized state mandates, attending to a myriad of far narrower state, local, and even private interests. And it is not hard to imagine a scenario in which a state instrumentality is deemed immune as an “arm of the state” in one case, despite administering to a host of local and private interests not at issue in that litigation. Our new entity-based approach would broadly immunize that entity‘s conduct and any future conduct, categorically granting or denying immunity regardless of that instrumentality‘s activity. Indeed, the entity-based approach could, ostensibly, immunize a state instrumentality even when it acts contrary to or in excess of the direction and authority it received from the state. On balance, a function-based approach thus avoids over-and under-categorizations of sovereign immunity, aligning our doctrine with Hess‘s and Regents’ goals.
These theoretical concerns have practical implications. Take, for example, public universities, which have long been afforded sovereign immunity under the
Or consider the challenge posed by county sheriffs’ departments. They are often structured as quasi-local and quasi-state entities, following mandates issued by both governments. Yet, when they are categorically deemed arms of the state, plaintiffs are “unable to sue” over “entirely locally dictated policies.” See Kelsey Joyce Dayton, Tangled Arms: Modernizing and Unifying the Arm-of-the-State Doctrine, 86 U. Chi. L.R. 1604, 1650 (2019) (citing Cromer v. Brown, 88 F.3d 1315, 1332 (4th Cir. 1996)). Adopting an explicit, entity-based approach to sovereign immunity only magnifies these concerns because it permits a state instrumentality to avoid federal lawsuits in perpetuity—regardless of the roles it chooses to play or the actions it chooses to take.
Today‘s case illustrates the value of a function-based approach that accounts for the conduct at issue in the dispute. Consistent with the D.C. Circuit‘s test, both the majority and the dissent address the “intent” factor by devoting considerable attention to the “functions” performed by the State Bar. The dissent, relying on Keller v. State Bar of California, 496 U.S. 1 (1990) and Crowe, 989 F.3d at 732, construes “function” broadly, and it discusses the State Bar‘s largely “advisory” role, which points away from immunity. By contrast, the majority focuses on the State Bar‘s role in licensing and regulating lawyers, including its “core functions of admission and discipline of attorneys.” In finding the State Bar immune, the majority draws particular attention to the State Bar‘s job of “examin[ing] candidates’ qualifications for admission and administer[ing] the bar exam.” In my view, the majority‘s approach is more persuasive because it examines the State Bar‘s function as it relates to the conduct at issue here—namely, the State Bar‘s allegedly discriminatory administration of the bar exam. An entity-based approach, by contrast, provides little means of resolving the sovereignty dispute teed up by the majority and dissent over the State Bar‘s broad function. In essence, it leaves parties to dredge up aspects of that entity‘s legal status to make their case for or against immunity, without reference to the challenged conduct at hand.
It seems logical to me that consideration of the function at-issue must remain relevant to the sovereign immunity analysis. Nor does it seem particularly unworkable. We managed to successfully grapple with “the function at issue” analysis for many years—even finding it consistent with Supreme Court precedent. See Ray, 935 F.3d at 710 (reasoning that the “function at issue” test “fits with the Court‘s statement in Chatham“); see also Streit v. Cnty. of L.A., 236 F.3d 552, 567 (9th Cir. 2001). So I would not abandon it now.
* * *
In sum, I do not see our decision today as a Trojan horse, carrying Hess‘s dissent in its stomach. It is, instead, a faithful translation of the Supreme Court‘s arm-of-the-state precedent, and a long overdue update to our sovereign immunity case law. Although I depart from the majority‘s reasoning with respect to entity-based immunity, so long as we continue to appropriately weigh the sovereign immunity factors, I am pleased to concur in the outcome.
BUMATAY, Circuit Judge, joined by SUNG, Circuit Judge, concurring in part and dissenting in part:
Our court rightly abandons the multi-factor test from Mitchell v. Los Angeles Community College District, 861 F.2d 198 (9th Cir. 1988), in favor of the D.C. Circuit‘s more streamlined approach articulated
But I part ways with the majority‘s application of this new approach to the facts before us. In my view, each of its factors cuts against finding sovereign immunity for the State Bar of California. First, California has made evident its intent to treat the State Bar more like an independent state-created entity, such as a municipality, rather than an “arm of the State.” Second, California has relinquished nearly all direct and immediate control over the Bar. And finally, California is not on the hook for the Bar‘s funding or its debts. With these considerations in mind, we should have recognized that the State Bar is not entitled to the sovereign immunity reserved only for the State and its instrumentalities.
For these reasons, I join Parts I, II.A, and II.B of the majority‘s opinion and respectfully dissent from the rest.
I.
The
We, along with several other federal courts, have long struggled to formulate a consistent test for determining whether a state-created entity should be afforded sovereign immunity. But as the majority explains, today we adopt the D.C. Circuit‘s approach, which follows the Supreme Court‘s guidance in this difficult area of law. See Maj. Op. 18-19. That approach requires us to look at (1) whether the State has expressed its intent to treat the entity like an arm of the State, (2) whether the State exercises significant control over the entity, and (3) whether private suits against the entity would impact the State‘s treasury. P.R. Ports Auth., 531 F.3d at 873.
The question here is whether the State Bar of California enjoys the State of California‘s sovereign immunity. Following our newly adopted analysis, I would hold that it does not.
A.
Start with intent. We must look first at how state law characterizes the “nature of the entity” and whether the State treats the entity “more like a county or a city than . . . like an arm of the State.” Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280 (1977). That involves determining whether the entity is a legal entity that exists “separate” from the State. Lake Country Ests., Inc. v. Tahoe Reg‘l Plan. Agency, 440 U.S. 391, 401 (1979). From there, we can assess whether the State intended for the entity to enjoy sovereign immunity. Here, California law classifies the State Bar much like a municipality, the Bar operates unlike a state agency, and even the California Supreme Court has disclaimed the State Bar‘s role in state governance. This factor thus cuts against immunity here.
State Bar as a Municipality-like Public Corporation
California law treats the State Bar the same way as it treats independent municipalities. California‘s Constitution establishes the State Bar as a “public corporation.”
And historically, “neither public corporations nor political subdivisions [were] clothed with that immunity from suit which belongs to the state alone by virtue of its sovereignty.” Hopkins v. Clemson Agric. Coll. of S.C., 221 U.S. 636, 645 (1911); Lincoln County v. Luning, 133 U.S. 529, 530 (1890) (observing that even though counties are “integral to the State,” they are still unprotected by sovereign immunity); Mt. Healthy, 429 U.S. at 280 (stating sovereign immunity does not extend to “municipal corporation[s] or political subdivision[s]“). So classification as a “public corporation” cuts strongly against sovereign immunity.
Here, the State Bar was established as a “public corporation” in 1927—not to imbue it with State authority but to recognize its importance to the public interest. See State Bar of Cal. v. Superior Ct. of L.A. Cnty., 207 Cal. 323, 328 (1929).1 Back then, a superior court judge challenged the State Bar‘s classification as a “public corporation.” Id. at 328-30. Given “its membership,” “its function,” and “its independence of public regulation and control,” amici for the judge argued that it should be considered a “private corporation.” Id. at 329. The Supreme Court of California rejected that view. While California‘s highest court recognized that the “profession and practice of the law” involves “in a limited sense a matter of private choice and concern,” it is also “essentially and more largely a matter of public interest and concern.” Id. at 330. That‘s because of the “integral
And the same understanding of the State Bar‘s classification as a “public corporation” exists today. The State Bar is statutorily established as a “public corporation” in the Business and Professions Code—not the Government Code. See
- The Government Code defines “public corporation” as “any county, city and county, city, town, municipal corporation, district of any kind or class, authority, redevelopment agency or political subdivision of this state.”
Cal. Gov. Code § 67510 (as codified in the San Francisco Bay Area Transportation Terminal Authority Act). - That definition was carried over to the Financial Code. See
Cal. Fin. Code § 22050(f) (“This division does not apply to any public corporation as defined in [§] 67510 of the Government Code[.]“). - The Government Code defines “local agency” to include municipalities and other “public corporation[s].” See, e.g.,
Cal. Gov. Code §§ 53069 ,53200(a) ,53215 ,53227.2(a) ,53460(a) ,53820 ,53850(a) ,54307 . - Definitions of “political subdivision” often equate “public corporation[s]” with municipalities. See, e.g.,
Cal. Pub. Util. Code § 21010 (“‘Political subdivision’ means any county, city, city and county, public corporation, district or other political entity or public corporation of this State.“). - As do definitions of “[l]ocal public entity,” which “includes [any] county, city district, public authority, public agency, and any other political subdivision or public corporation in the State, but does not include the State.”
Cal. Gov. Code § 940.4 ;id. § 970(c) (similar); see alsoid. § 5600 (defining “[p]ublic body” as “any county, city and county, city, public district, public authority or other public corporation“). - And the Labor Code distinguishes the “State” from “public corporations” for employment purposes. See
Cal. Lab. Code § 3300 (separating “Employer” into distinct categories of “(a) [t]he State and every State agency” and “(b) [e]ach county, city, district, and all public and quasi public corporations“); see alsoid. § 9006 (same).
To be sure, California law also defines “public corporation” to include the State in some limited circumstances. See, e.g.,
Thus, under California law, the State Bar‘s classification as a “public corporation” only signifies that it should be treated like a municipality—not an arm of the State. So it‘s a red herring to rely on assumptions about the term “public corporation” to find immunity here. We‘ve not made these assumptions about public corporations before. See Crowe v. Or. State Bar, 989 F.3d 714, 720, 733 (9th Cir. 2021) (acknowledging the Oregon State Bar‘s status as a “public corporation” but ruling that it was not entitled to immunity).
The Supreme Court of California once relied on the State Bar‘s superficial classification as a “public corporation” to consider it a “governmental agency“—only to be unanimously reversed by the U.S. Supreme Court. See Keller v. State Bar, 47 Cal. 3d at 1162-63. In that case, members of the State Bar sued the Bar for forcing them to pay dues to advance political ideas the members disagreed with, in violation of their First and
State Bar‘s Statutory Functions
Beyond California‘s express designation of the State Bar as something like a political subdivision not entitled to sovereign immunity, the State Bar does not function like a state agency. By statute, it‘s treated as distinct from state agencies. The California Legislature expressly withheld “the exercise of powers of state bodies or state agencies” from the Bar.
On the other hand, California law imbues the Bar with other powers typically indicative of its separate corporate status. For example, the Bar can issue bonds in
California law also gives the State Bar the power to sue and be sued, which again is “strongly suggestive of . . . autonomy and independence” from the State. Durning, 950 F.2d at 1427 n.4. In Durning, our court held that the Wyoming Community Development Authority did not enjoy sovereign immunity in part because the Wyoming Legislature “unequivocally grant[ed] the Authority the power to ‘[s]ue and be sued’ in its own right.” Id. at 1427 (quoting
Of course, California law subjects the State Bar to some of the same government-only laws as state agencies. For instance, the State Bar must comply with California public-records and open-meetings laws.
State Bar as an Administrative Assistant
Likewise, the Supreme Court of California has disclaimed the State Bar‘s role as a government decisionmaker. The California Supreme Court has said that the “State Bar is not in the same class as state administrative agencies placed within the executive branch.” In re Rose, 22 Cal. 4th 430, 439 (2000) (simplified). That‘s because the “State Bar Court exercises no judicial power.” Id. at 436 (emphasis added). Rather, the State Bar “makes recommendations” to the California Supreme Court, “which then undertakes an independent determination of the law and the facts, exercises its inherent jurisdiction over attorney discipline, and enters the first and only disciplinary order.” Id. So even though the California court has described the State Bar as its
* * *
Taken together, the State Bar‘s classification as a municipality-like public corporation, the State Bar‘s statutory functions separate from the State and its agencies, and the California Supreme Court‘s descriptions of the Bar as merely advisory all weigh strongly against immunity.
B.
Next, we look at the amount of control California exercises over the State Bar. Admittedly, this factor is a closer call. But ultimately, this factor also cuts against immunity.
While somewhat opaque, control can be assessed based on whether the State may “appoint and . . . remove” the entity‘s officers, whether the State may “veto [the entity‘s] actions,” and whether “the State[‘s] legislature[] can determine the projects the [entity] undertakes.” Hess, 513 U.S. at 47. But, as the Court warned, “[g]auging actual control . . . can be a perilous inquiry, an uncertain and unreliable exercise.” Id. (simplified). And, of course, “ultimate control of every state-created entity resides with the State” given the State‘s power to “destroy or reshape any unit it creates.” Id. So “ultimate control” is not dispositive. After all, “[p]olitical subdivisions exist solely at the whim and behest of their State . . . yet cities and counties do not enjoy Eleventh Amendment immunity.” Id. (simplified).
So we‘re not looking for just any kind of control; we‘re looking for the kind that demonstrates that “the State ‘clearly structured the entity to share its sovereignty.‘” P.R. Ports Auth., 531 F.3d at 874 (simplified). It “should turn on real, immediate control and oversight, rather than on the potentiality of a State taking action to seize the reins.” Hess, 513 U.S. at 62 (O‘Connor, J., dissenting). Indeed, in Hess, even with the States’ power to appoint and remove officers, the States’ veto power, and the States’ determination of the entity‘s projects, that level of control wasn‘t enough to establish sovereign immunity. Id. at 48-53 (majority opinion).
Here, the State Bar‘s Board of Trustees is appointed by all three branches of California‘s government—the Supreme Court of California, the State Legislature, and the Governor. See
Looking beyond appointment power, California has far less control over the Bar‘s Board. For instance, unlike the officers in Puerto Rico Ports Authority or in Hess, the Board‘s members and officers are not removable at will. So once they‘ve appointed members to the Board, California‘s state officials lose the power to “directly supervise and control [the Bar‘s] ongoing operations” by way of removal. P.R. Ports Auth., 531 F.3d at 877. And unlike in Puerto Rico Ports Authority, no government official serves in the Bar‘s leadership. In fact, the Board consists of only attorneys and members of the public—not judges—which strongly suggests the California Legislature intended the Bar to be advisory. See
True, the Board is under the supervision of the Supreme Court of California. But supervision is not control. For instance, unlike the States in Hess, the Supreme Court of California does not veto the decisions of the State Bar. See Hess, 513 U.S. at 37; see also Lake Country Ests., 440 U.S. at 402 (noting that the State‘s lack of veto power over the entity made the entity more like a municipality). Rather, the California court merely chooses whether to adopt the State Bar‘s recommendations as to admission and discipline. So although the Bar reports to California‘s highest court, the court does not exercise direct control over how the Bar operates or what recommendations it may ultimately make. Such an advisory role cuts against immunity here. As in Oregon, the State Bar is “not the typical government official or agency, but rather a professional association that provides recommendations to the ultimate regulator of the legal profession.” Crowe, 989 F.3d at 732 (simplified).
Nor does the State Legislature‘s regulation of the State Bar change the calculus. It should be of no surprise that the State has the authority to regulate the State Bar. As Justice O‘Connor observed, “[v]irtually every enterprise, municipal or private, flourishes in some sense at the behest of the State.” Id. at 62 (O‘Connor, J., dissenting). So the mere fact that the State Bar is subject to California legislation does not automatically make it an instrumentality of the State. Far from it. Indeed, the indirect nature of legislative action over the State Bar underscores how little control the State has over the Bar. Unlike with state agencies, the California Legislature does not appropriate State Bar funds. At most, the California Legislature can cap the amount the State Bar collects in licensing fees. See Maj. Op. 29 (citing
The Bar is thus not subject to a level of State control that would cloak it in sovereign immunity.
C.
Finally, we analyze the Bar‘s impact on the State‘s treasury. Here, we ask whether the entity “generates its own revenues” and whether the State bears legal liability for the entity‘s debts. Hess, 513 U.S. at 45, 52. This factor cuts decisively against immunity.
It is inescapable that this suit—or any other—against the State Bar would not impact the State‘s treasury. As the majority admits, “California law makes the State Bar responsible for its own debts and liabilities.” Maj. Op. 29 (citing
The impact on the State‘s treasury is a big deal even if it‘s not dispositive. While the
With this framing, we should readily acknowledge the treasury factor‘s import—not downplay it—in assessing whether the Bar is an arm of the State. Given that intent and control together represent one half of sovereign immunity‘s purpose—the State‘s dignity interest—the overall effects on the State‘s treasury make up the other half. See P.R. Ports Auth., 531 F.3d at 874. So while perhaps not dispositive, the treasury factor must at least be treated as equally important to the intent and control factors when combined. Whenever intent and control together cut only weakly in favor of immunity, the twin concern for treasury should win the day. Here, the answer should have been even more obvious because all the factors point the same way: no immunity.
II.
California law lays out a structure for the State Bar like an independent municipality. By creating that structure, California has shown an intent not to clothe the State Bar with the immunity that California enjoys. More than that, California has treated the State Bar as a separate entity by allowing it to operate without significant control or direction. And finally, the State Bar‘s liabilities are independent of the State. Each of these factors strongly
Unfortunately, our court failed to recognize the clear signs that California has laid out before us and thus the majority mistakenly affords the State Bar total immunity from suit. I would have paid due respect to the sovereign‘s wishes.
I respectfully dissent.
Notes
We generally have taken the same approach with respect to other state bars. See, e.g., O‘Connor v. Nevada, 686 F.2d 749, 750 (9th Cir. 1982) (State Bar of Nevada); Strojnik v. State Bar of Ariz., 829 F. App‘x 776, 776 (9th Cir. 2020); Block v. Wash. State Bar Ass‘n, 761 F. App‘x 729, 731 (9th Cir. 2019). But see Crowe v. Or. State Bar, 989 F.3d 714, 733 (9th Cir. 2021) (per curiam); infra pp. 32–33.