MARY CASH, Plaintiff-Appellant, v. GRANVILLE COUNTY BOARD OF EDUCATION, Defendant-Appellee NORTH CAROLINA ASSOCIATION OF EDUCATORS; AMERICAN CIVIL LIBERTIES UNION OF NORTH CAROLINA LEGAL FOUNDATION, INCORPORATED; NORTH CAROLINA ACADEMY OF TRIAL LAWYERS; NORTH CAROLINA SCHOOL BOARDS ASSOCIATION, Amici Curiae.
No. 00-1496.
UNITED STATES COURT OF APPEALS, FOR THE FOURTH CIRCUIT.
Argued: December 6, 2000. Decided: March 1, 2001.
242 F.3d 219
Before NIEMEYER, MICHAEL, and MOTZ, Circuit Judges.
Appeal from the United States District Court for the Eastern District of North Carolina, at Raleigh. W. Earl Britt, Senior District Judge. (CA-99-408)[Copyrighted Material Omitted]
Reversed and remanded by published opinion. Judge Niemeyer wrote the opinion, in which Judge Michael and Judge Motz joined.
OPINION
NIEMEYER, Circuit Judge:
We are required to determine in this case whether the Granville County (North Carolina) Board of Education enjoys Eleventh Amendment immunity in a suit brought by an employee against it under the Fair Labor Standards Act for overtime pay. The district court, finding that the Board was “an arm of the State” and that any monetary award “would affect the State,” held the Board immune. Because we conclude, for the reasons that follow, that the Board is more like a county than an arm of the State, we reverse.
Mary Cash has, since 1975, been employed as a “Lead Secretary/Bookkeeper (Secretary V)” at J. F. Webb High School in Oxford, North Carolina. She alleges that during the period between 1996 and 1999 she often worked more than 40 hours per week and was not compensated with overtime pay. She commenced this action against the Granville County Board of Education (sometimes “School Board“) under the Fair Labor Standards Act,
The School Board asserted a defense of sovereign immunity under the Eleventh Amendment. On the School Board‘s motion for summary judgment, the district court dismissed the action. In doing so, the court assumed that Harter v. Vernon, 101 F.3d 334 (4th Cir. 1996), our most recent opinion on whether particular governmental entities are “arms of the State” for Eleventh Amendment purposes, “is no longer salient and [was] effectively overruled” by McMillian v. Monroe County, 520 U.S. 781 (1997), and Regents of the University of California v. Doe, 519 U.S. 425 (1997). The district court read Regents’ requirement that an analysis of Eleventh Amendment immunity consider “the provisions of State law that define the agency‘s character” to be in conflict with Harter‘s holding that the “most important consideration is whether the State treasury will be affected.” Similarly, it noted that the McMillian Court relied on “the character of the [sheriff‘s] office, rather than the impact of the judgment on the State treasury.”1 The district court then concluded: Thus, while the question of funding and who would pay for any monetary award is not the central question to be answered in evaluating immunity, it must be evaluated. It is clear that local school boards receive funds from the state and local governments. However, the ability of local boards to use those funds remains controlled by the state. Thus, it appears that any monetary award to plaintiff would affect the state.
Therefore, combining an analysis of the organizational and financial structure of the local school boards, in light of relevant case and statutory law, defendant is an arm of the state of North Carolina for purposes of this suit seeking FLSA damages. As such, it is entitled to sovereign immunity from a suit for monetary relief.
From the district court‘s judgment dismissing her claim, Cash noticed this appeal.
II
Even though the language of the Eleventh Amendment preserves sovereign immunity of only the States of the Union,2 it is settled that this protection extends also to “state agents and state instrumentalities,” Regents, 519 U.S. at 429, or stated otherwise, to “arm[s] of the State” and State officials, Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280 (1977). But Eleventh Amendment immunity “does not extend to counties and similar municipal corporations.” Id. This is so, even if the counties and municipalities exercise a “slice of State power.” Lake Country Estates, Inc. v. Tahoe Reg‘l Planning Agency, 440 U.S. 391, 401 (1979) (citing Mt. Healthy). In Mt. Healthy, the Supreme Court held that a local school board, as constituted by Ohio law, is “more like a county or city than it is like an arm of the State.” 429 U.S. at 280. Accordingly, the Court denied the local school board Eleventh Amendment immunity.
Before elucidating the factors necessary to resolve this question, it is worthwhile to recognize that the immunity in question derives from the original sovereignty of the states and not from the Eleventh Amendment. “The Eleventh Amendment confirmed, rather than established, sovereign immunity as a constitutional principle.” Alden v. Maine, 527 U.S. 706, 728-29 (1999). And, “it follows that the scope of the States’ immunity from suit is demarcated not by the text of the Amendment alone but by fundamental postulates implicit in the constitutional design.” Id. at 729. That design reserves to States “a substantial portion of the Nation‘s primary sovereignty, together with the dignity and essential attributes inhering in that status,” id. at 714, and preserves “a system in which the State and Federal Governments would exercise concurrent authority over the people,” id. (quoting Printz v. United States, 521 U.S. 898, 919-20 (1997)). The States thus “retain the dignity, though not the full authority, of sovereignty.” Id. at 715. Central to the dignity of a State‘s sovereignty is the proposition that the State not be amenable to suit without its consent. At the time the federal Constitution was proposed, the fear expressed during the debates was that adoption of the new Constitution would strip States of their sovereign immunity, thereby exposing them to lawsuits for collection of Revolutionary War debts. Id . at 716-17.
Even with a clear understanding of the source and nature of a State‘s sovereign immunity, no bright line of demarcation can be drawn separating “state agents and state instrumentalities,” which partake of the State‘s Eleventh Amendment immunity, from local governmental entities, which do not. But when the factors for resolving whether a governmental entity is an arm of the State or more like a county or municipality point in different directions, our inquiry seeks guidance in the “twin reasons” for the Eleventh Amendment: (1) “the States’ fears that ‘federal courts would force them to pay their Revolutionary War debts, leading to their financial ruin,‘” and (2) “the integrity retained by each State in our federal system,” including the States’ sovereign immunity from suit. Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30, 39 (1994) (quoting Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 151 (1984)). Indeed, these twin reasons must “dominate” any analysis of whether a governmental entity is to be accorded Eleventh Amendment immunity. See Gray v. Laws, 51 F.3d 426, 432 (4th Cir. 1995).
Consistent with the twin purposes of the Eleventh Amendment, when we have asked the question of whether a governmental entity within a State is an arm of the State, various factors have been identified for consideration. The principal factor, upon which courts have virtually always relied, is whether a judgment against the governmental entity would have to be paid from the State‘s treasury. See Regents, 519 U.S. at 430 (pointing out that “whether a money judgment against a state instrumentality or official would be enforceable against the State is of considerable importance“); Hess, 513 U.S. at 49 (agreeing with “the vast majority of Circuits” that “the State treasury factor is the most important factor to be considered” (internal quotation marks omitted)); Harter v. Vernon, 101 F.3d 334, 338 (4th Cir. 1996) (noting that the “state treasury factor is the most important“); Gray, 51 F.3d at 434 (noting that the State treasury factor “is generally the most important consideration” (internal quotation marks omitted)); Ram Ditta v. Md. Nat‘l Park & Planning Comm‘n, 822 F.2d 456, 457 (4th Cir. 1987) (concluding that the State treasury factor generally is “most important consideration“). Indeed, it is because the State treasury factor may be dispositive that it is primary. Consequently, if the State treasury will be called upon to pay a judgment against a governmental entity, then Eleventh Amendment immunity applies to that entity, and consideration of any other factor becomes unnecessary. See Hess, 513 U.S. at 50 (“Where an agency is so structured that . . . a judgment must expend itself against state treasuries, common sense and the rationale of the eleventh amendment require that sovereign immunity attach to the agency” (internal quotation marks omitted)); Harter, 101 F.3d at 340 (holding that once the court concludes that the State‘s treasury is affected by a law suit, the officer or entity is immune); Gray, 51 F.3d at 434 (observing that if “the state‘s treasury will not be affected by a judgment in the action, then the availability of immunity . . . must be determined by resort to the other relevant considerations” affecting the integrity retained by a State within the federal system); Bockes v. Fields, 999 F.2d 788, 791 (4th Cir. 1993) (“When the action seeks damages that would be satisfied by state funds, however, no further inquiry is necessary“).
III
With these principles in hand, we turn first to the question of whether a judgment in this case against the Granville County Board of Education will affect the North Carolina State treasury. Only if this question is answered in the negative do we proceed to inquire whether a judgment would otherwise affront the sovereign dignity of North Carolina by demeaning its right not to be sued without its consent. And this second inquiry raises the subsidiary question of whether, under North Carolina law, the School Board functions more like a county or municipality than like an arm of the State itself.
The parties agree that the State would not be legally obligated to pay any judgment rendered against the School Board in this case. The School Board is a corporate entity that can sue and be sued, and no State law indicates that a judgment against it can be enforced against the State. See
The first of these remaining factors addresses the degree of control that the State has over the Board and, correspondingly, the degree of autonomy exercised by the School Board. As the parties acknowledge, school boards in North Carolina are independent corporate bodies within each county that may sue and be sued, and, to respond to the risk of being sued, they are authorized to purchase liability insurance to answer for any judgments against them. See
The second of the factors directs us to consider whether the School Board is involved with local or statewide concerns. The evidence relevant to this factor clearly points to local concerns as the School Board‘s jurisdiction is limited to Granville County. The fact that education is a statewide concern does not indicate otherwise. Just as law enforcement can be thought of as a statewide concern, we have nevertheless concluded that a county sheriff‘s duties in North Carolina can be primarily local. See Harter, 101 F.3d at 342.
The final factor directs us to consider how North Carolina law characterizes its local school boards -an inquiry that overlaps with our analysis of State control versus local autonomy. It appears almost without exception that State law treats local school boards as local entities, that is, more as counties than as arms of the State. Unlike the State Board of Education, whose immunity to suit is waived in a limited sense by the North Carolina Tort Claims Act,
In short, we conclude that upon our consideration of each of the factors identified for determining whether a governmental entity is an arm of the State and therefore one of the United States within the meaning of the Eleventh Amendment, the Granville County Board of Education appears much more akin to a county in North Carolina than to an arm of the State. See Regents, 519 U.S. at 429 & n.5; Mt. Healthy, 429 U.S. at 280. Indeed, it is a part of the county‘s governmental structure that can look to the county for part of its funding. The Supreme Court “has consistently refused to construe the [Eleventh] Amendment to afford protection to political subdivisions such as counties and municipalities, even though such entities exercise a ‘slice of State power.‘” Lake Country Estates, 440 U.S. at 401. The circumstances presented here are similar to those presented in Mt. Healthy, where the Supreme Court denied a local school board sovereign immunity.
In reaching our conclusion in this case, we continue to follow our jurisprudence, as stated in Harter, Gray, Bockes, and Ram Ditta, and in doing so, we believe that we are faithfully applying the relevant Eleventh Amendment jurisprudence announced by the Supreme Court in Regents, Hess, Lake Country Estates, and Mt. Healthy. We therefore reject the district court‘s view that the Supreme Court‘s recent decisions in Regents and McMillian overruled our decisions in Harter, Gray, Bockes, and Ram Ditta. Accordingly, for the reasons given, the judgment of the district court is reversed, and the case is remanded for further proceedings.
REVERSED AND REMANDED