Ronald HANKINS, Appellee, v. William C. FINNEL, State of Missouri, Appellants.
No. 91-1299.
United States Court of Appeals, Eighth Circuit.
Decided May 22, 1992.
Rehearing and Rehearing En Banc Denied June 25, 1992.
964 F.2d 853
Submitted Sept. 9, 1991.
Therese M. Schuele, Kansas City, Mo., for appellee.
Before ARNOLD,* JOHN R. GIBSON, and BEAM, Circuit Judges.
*JOHN R. GIBSON, Circuit Judge.
The State of Missouri and William Finnel appeal from a district court1 judgment enjoining the State of Missouri from attaching funds it had just paid Ronald Hankins to satisfy a judgment against its former employee, William Finnel. A jury had awarded Hankins $1 in nominal damages and $3,000 in punitive damages after finding that Finnel had sexually molested Hankins during the time that Finnel taught school at the Missouri State Penitentiary and Hankins was an inmate there. Shortly after this court affirmed the judgment, the State brought an ex parte action in the circuit court of Cole County, Missouri, seeking reimbursement for the cost of Hankins’ incarceration pursuant to the Missouri Incarceration Reimbursement Act,
In 1988, Hankins sued Finnel in the district court for the Western District of Missouri, alleging that while he was an inmate in the penitentiary, Finnel sexually harassed or molested him on four occasions. Hankins attended the penitentiary school where Finnel was an instructor. The case was tried to a jury, which found for Hankins on his
On July 31, 1990, the State initiated ex parte proceedings in the Cole County Circuit Court attempting to obtain ninety percent of the amount it was to pay to Hankins as a result of the judgment against Finnel. Under the Missouri Incarceration Reimbursement Act, the State may seek reimbursement of up to ninety percent of a prisoner‘s assets, which are defined to include a money judgment received from the State as a result of a civil action against one of its employees.
The circuit court appointed a receiver to hold the funds in Hankins’ inmate account and ordered Hankins to show cause why an
In November, Hankins returned to the district court, filing motions for a writ of mandamus to stay the state court proceedings and to proceed in aid of execution on the judgment. Before the district court could rule on the mandamus motion, the state court stayed its proceedings, making Hankins’ first motion moot. Hankins, 759 F.Supp. at 570.
Addressing Hankins’ other motion, the district court cited its authority under
The district court next concluded that the Eleventh Amendment did not bar enforcement of the judgment against the State, as the State had waived its immunity to the extent that it had voluntarily agreed to indemnify its employee, Finnel, and had acted in his stead. Id. at 572. The district court stated: “Where the State has stepped in to satisfy the judgment against Mr. Finnel, the State cannot then assert its Eleventh Amendment immunity to circumvent the Court‘s authority to enforce that judgment.” Id.
The district court next addressed the conflict between
The district court thus enjoined the State from attaching the funds the State had just paid Hankins. This appeal followed.
I.
Finnel and the State of Missouri3 argue that the district court erred in concluding that the State had waived its immunity under the Eleventh Amendment. The district court did not find a “general waiver,” but concluded that the State had waived its immunity with regard to the judgment in this case by “agree[ing] to indemnify” Finnel and then “stepp[ing] in to satisfy the judgment.” Hankins, 759 F.Supp. at 572.
The State asserts that its statute authorizing representation and indemnification of employees who are sued does not constitute an express or implied waiver of the State‘s Eleventh Amendment immunity. It
As the State acknowledges, the Eleventh Amendment bar is not absolute. Port Authority Trans-Hudson Corp. v. Feeney, 495 U.S. 299, 304 (1990). In certain instances, Congress may abrogate the states’ sovereign immunity, or a state may consent to suit in federal court. Id. Because the “Eleventh Amendment implicates the fundamental constitutional balance between the Federal Government and the States,” Atascadero State Hospital v. Scanlon, 473 U.S. 234, 238 (1985), the Supreme Court has prescribed a stringent test for determining the existence of a waiver. A waiver must be “‘stated by the most express language,‘” or, if implied, it must appear “‘by such overwhelming implication from the text as [will] leave no room for any other reasonable construction.‘” Feeney, 495 U.S. at 305 (quoting Atascadero State Hosp., 473 U.S. at 239-40, and Edelman v. Jordan, 415 U.S. 651, 673 (1974) (internal quotation omitted)).
A state may also waive its Eleventh Amendment immunity through conduct. Garrity v. Sununu, 752 F.2d 727, 738 (1st Cir.1984). Courts have inferred a waiver when the State has made a general appearance in federal court and defended a lawsuit on the merits. See Sosna v. Iowa, 419 U.S. 393, 396 n. 2 (1975); Clark v. Barnard, 108 U.S. 436, 447-48 (1883). In Paul N. Howard Co. v. Puerto Rico Aqueduct Sewer Authority, 744 F.2d 880 (1st Cir.1984), cert. denied, 469 U.S. 1191 (1985), a governmental corporation “not only appeared but filed a counterclaim and a third-party complaint.” Id. at 886. The First Circuit thus had “little trouble concluding that [the corporation] voluntarily submitted to the jurisdiction of the federal court, thereby waiving any Eleventh Amendment immunity....” Id.
An Eleventh Amendment waiver need not be a general waiver, but may be a partial or limited one. See WJM, Inc. v. Massachusetts Dep‘t of Pub. Welfare, 840 F.2d 996, 1002-03 & n. 8 (1st Cir.1988) (by filing proofs of claim in debtors’ Chapter 11 bankruptcy proceedings, State of Massachusetts made a “partial” waiver of its Eleventh Amendment immunity, exposing itself only to the debtors’ claims that arose out of the same transaction or occurrence as its own claims against the debtor), overruled in part on other grounds, Reopell v. Massachusetts, 936 F.2d 12, 15 (1st Cir.), cert. denied, U.S., 112 S.Ct. 637, 116 L.Ed.2d 655 (1991); Moreno v. University of Maryland, 645 F.2d 217, 220 (4th Cir.1981) (state waived its immunity to the extent that it obtained a stay of a district court order pending appeal by agreeing to pay refunds to university students if the order was upheld on appeal), aff‘d, Toll v. Moreno, 458 U.S. 1 (1982). The district court here stressed the limited nature of the waiver, specifically stating that the State had not made a “general waiver.” Hankins, 759 F.Supp. at 572. The State waived its immunity only “as it pertains to the judgment in this case.” Id.
The State attacks the district court‘s determination, pointing to language in a Missouri state statute which declares that “[n]othing in sections 105.711 to 105.726 [the sections covering the State Legal Expense Fund] shall be construed to broaden the liability of the state of Missouri ... nor to abolish or waive any defense at law which might otherwise be available to any agency, officer, or employee of the state of Missouri.”
The State also relies on a trio of federal decisions in which the courts determined that statutes authorizing the state to represent or indemnify employees sued in connection with their official duties do not waive Eleventh Amendment immunity. For example, in Williams v. Bennett, 689 F.2d 1370 (11th Cir.1982), cert. denied, 464 U.S. 932 (1983), the court concluded that an Alabama statute authorizing the State to pay up to $100,000 for judgments awarded against officials and employees of the Board of Corrections did not waive the State‘s Eleventh Amendment immunity. Id. at 1377-78. The court relied in part on express language in the statute stating that “[n]othing in this section shall be deemed to waive the sovereign immunity of the [S]tate....” Id. at 1378 (citing
We recognize that the State of Missouri, in
The cases that the State cites also are not dispositive of the issue before us. Williams, DCS Development Corp., and Elliott all address the argument that a state indemnification statute waived the state‘s immunity so that the state or its agencies could be sued for money damages, or its employees could be sued for damages in their official5 rather than individual capacities. See Williams, 689 F.2d at 1376; DCS Dev. Corp., 590 F.Supp. at 1121; Elliott, 573 F.Supp. at 574-75. In both of these situations, the plaintiff seeks an award of damages from the state treasury. In this case, however, the state employee was sued in his individual capacity and damages were awarded against him as an individual. The State voluntarily entered the picture by agreeing to pay the judgment. The issue is not whether the State has waived its immunity so that it can be sued as a defendant in the main action, or its officials can be sued in their official capacity, but rather whether the State‘s actions in satisfying Hankins’ judgment and then immediately attempting to recoup it can be deemed a limited waiver of immunity solely with regard to the judgment.
Although the State agreed to pay Hankins’ judgment, it voluntarily and deliberately took actions designed to ensure that the money never reached Hankins’ hands. The State initiated the ex parte action in state court three weeks before it credited Hankins’ account. Although aware that Hankins was represented by appointed counsel, the State appeared ex parte before the state court and obtained orders to show cause and appointing a receiver. The State acted pursuant to the Missouri Incarceration Reimbursement Act, which specifically includes in its definition of assets “[a] money judgment received by the offender from the state as a result of a civil action” against the State or one of its agencies or employees and in which the claim arose from the performance of official duties on
The State cites no case that addresses whether a statute similar to Missouri‘s Incarceration Reimbursement Act waives sovereign immunity when state officials rely on that statute to recoup the judgment of an inmate who has successfully sued a state employee in federal court on a federal claim. In fact, one of the cases on which the State relies, DCS Development Corp., qualifies its holding by stating that the attorney general‘s mere appearance in a suit does not constitute waiver “unless the Attorney General seeks to take advantage of the suit for the benefit of the state, or unless state law otherwise provides.” 590 F.Supp. at 1121 (emphasis added). The DCS court then cites Sosna, in which the State of Iowa was deemed to have waived its Eleventh Amendment defense by entering a voluntary appearance and defending the case on the merits. 419 U.S. at 396 n. 2. Under Iowa law, such an action constituted a waiver of sovereign immunity.
Although the State of Missouri never entered a general appearance in this case, it did seek to take advantage of the suit for its own benefit. By representing and indemnifying Finnel, it provided what, in essence, amounted to an employment benefit for Finnel.
The State‘s actions left Hankins with little more than a “stealth” payment—the judgment proceeds vanished before Hankins even knew he had been paid. For Eleventh Amendment purposes, we see little difference between this situation and a case in which a state simply reneges on its promise to pay. In Moreno, the Fourth Circuit found that the University of Maryland “explicitly” waived its immunity when it obtained a stay of a district court order by agreeing to pay certain tuition refunds should the order be affirmed on appeal. 645 F.2d at 220. The university failed to vindicate its position on appeal, and “so it must pay the refunds to which it agreed.” Id. at 221.
We conclude, based on the combination of factors present here, that the State of Missouri made a limited waiver of its Eleventh Amendment immunity with regard to the judgment in this case.6 It is evident that the district court found a waiver only with respect to the narrow facts of this case, and we are convinced that it did not err. The State, acting under statutory authority, represented Finnel at all stages of the litigation and agreed to indemnify him. It then “paid” the judgment, but not before instituting a state court proceeding attempting to recoup it. The State took these actions ex parte despite its knowledge that Hankins was represented by counsel. The ledger sheet from Hankins’ inmate account lists a $3,234.22 debit for “Cell Reimbursement” just before it lists the credit from the State of Missouri in the identical amount. The debit and credit were both entered on August 20, 1990, about three weeks before the State notified Hankins of its actions. In sum, the State acted to the advantage of and for the benefit of itself.
The State of Missouri also argues that the Attorney General does not possess the
We further observe that even without the existence of the waiver, Hankins still would be entitled to proceed in district court. Although the district court could not, in the absence of a waiver, enjoin the State from attaching Hankins’ funds, it could enjoin state officials. See Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 100-03 (1984). The Eleventh Amendment bars a federal court from awarding retroactive monetary relief against a state or its officials (when sued in their official capacity), but it does not bar a federal court from issuing an injunction ordering a state official to comply in the future with federal law.7 Id. See also Edelman v. Jordan, 415 U.S. 651, 666-67 (1974). The State of Missouri, through its responsible officials, parted with the $3,234.22 at issue in this case when Hankins’ account was credited with this amount. That the same or other state officers then seized this fund under the Missouri Incarceration Reimbursement Act does not relieve the officials taking possession of this fund from liability to pay the money in response to a court order directed to those individuals, and limited to the funds seized. The type of relief sought here8 is prospective and injunctive, and thus is not barred by the Eleventh Amendment provided that the court directs any order toward state officials, not the State. Determining the identity of the necessary officials is a matter the district court may address if need be.
II.
The State next argues that the district court lacked jurisdiction under
The district court primarily relied on Argento v. Village of Melrose Park, 838 F.2d 1483 (7th Cir.1988), in which the Seventh Circuit held that a district court could properly retain jurisdiction under Rule 69(a) to enforce a judgment against nonparties that were responsible for indemnifying the judgment debtors. Id. at 1487-90. The Seventh Circuit saw “no reason” to draw a distinction, for purposes of supplemental jurisdiction, between parties and nonparties, id. at 1488, as the nonparties’ liability to the defendants was “related to the same events that underlie the original ... action.” Id. at 1490.9
The State challenges the district court‘s reliance on Argento, arguing that: (1) a
Most of these arguments do not demand extensive discussion. The fact that Argento dealt with a municipality rather than a state is irrelevant for purposes of Rule 69. The State‘s Eleventh Amendment concerns simply do not bear on this issue.
We need not answer the State‘s argument that it is not under a judicially enforceable obligation to pay, as the State claims throughout its brief that the judgment has been satisfied and the record of Hankins’ account shows a $3,234.22 credit from the State of Missouri on August 20, 1990.
The State next asserts that once a judgment is paid, Rule 69 is no longer applicable. We are not persuaded by this argument. The State has, in essence, devised what the district court called a “shell game” that allows it to “pay” a judgment while simultaneously recouping the proceeds. The actions of the State, in commencing the ex parte proceedings in state court and making its deposit in Hankins’ overdrawn account, must be seen as an effort to prevent Hankins from collecting his judgment in the first place.
The State characterizes its claim for reimbursement as a completely independent claim brought under state law and properly adjudicated in state court. We reject this characterization. The issue is whether the State‘s claim for reimbursement is “adequately related,” see Argento, 838 F.2d at 1490, to Hankins’ original civil rights action to fall within the parameters of ancillary jurisdiction pursuant to Rule 69.
The State‘s statutory scheme—authorizing indemnification of state employees who are sued in connection with their official duties and then targeting such judgment proceeds for a reimbursement claim by the State—has the effect of defeating the efforts of any inmate to actually collect his judgment and completely vitiates any deterrent value these judgments possess. Because the State‘s scheme has the potential to severely frustrate the enforcement of federal rights in prisons, we conclude that the State‘s claim under the Missouri Incarceration Reimbursement Act is sufficiently related to Hankins’ original civil rights action that it may properly be addressed in ancillary proceedings.10 We observe that our discussion here necessarily touches on some of the issues that we address regarding preemption in Part III, infra.
Finally, the State attacks the district court‘s reliance on
We need not address the applicability of section 530.010 to this case. Even accepting the State‘s argument that it is irrelevant, we conclude that the district court retains “plenary power to enforce its commands.” Spain v. Mountanos, 690 F.2d 742, 747 (9th Cir.1982). Where state law fails to supply the necessary procedure, or actually stands in the way of enforcement, the district court may take the necessary steps to ensure compliance with its judgment. See Gary W. v. Louisiana, 622 F.2d 804, 806-07 (5th Cir.1980), cert.
III.
Under the Supremacy Clause, state law is preempted whenever it “contradicts or interferes with an Act of Congress.” Hayfield Northern R.R. v. Chicago & N.W. Transp. Co., 467 U.S. 622, 627 (1984). See also Rose v. Arkansas State Police, 479 U.S. 1, 3 (1986). Federal law preempts state law not only where the two are plainly contradictory but also where “the incompatibility between [them] is discernible only through inference.” Hayfield Northern R.R. Co., 467 U.S. at 627. When federal law does not expressly preempt state law, the court “must inquire more deeply into the intention of Congress and the scope of the pertinent state legislation.” Id. at 628. Preemption in this instance will arise when “state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 300 (1988) (citing Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).
The purpose of section 1983 is two-fold: to compensate victims and to deter future deprivations of federal constitutional rights. Owen v. City of Independence, 445 U.S. 622, 651 (1980); Bell v. City of Milwaukee, 746 F.2d 1205, 1239 (7th Cir.1984). In Bell, the Seventh Circuit refused to apply a Wisconsin statute that precluded damages to an estate for loss of life and also precluded recovery of punitive damages. The court concluded that both provisions undermined the purpose of section 1983. Id. at 1236-41. With regard to the punitive damages provision, the court stated: “To disallow punitive damages in Section 1983 actions solely on the basis of restrictive state tort law would seriously hamper the deterrence effect of Section 1983.” Id. at 1241.
The jury in this case awarded Hankins $1 in nominal damages and $3,000 in punitive damages. To allow the State to largely recoup this award would be inimical to the goals of the federal statute. As the district court observed, “neither the State nor its employees would have the incentive to comply with federal and constitutional rights of prisoners.” Hankins, 759 F.Supp. at 574.
We thus conclude that section 1983 preempts the Missouri Incarceration Reimbursement Act as it is applied in this case. To the extent that the Act permits the State to recoup the very monies it has paid to satisfy a section 1983 judgment against one of its employees, the Act is invalidated under the Supremacy Clause.
The State also argues that its claim under the Reimbursement Act is analogous to a counterclaim or setoff and should be permitted on that basis. This argument is beside the point when the issue is one of preemption.
IV.
The State finally asserts that the district court erred in failing to abstain in deference to pending state judicial proceedings. We see no reason to apply the abstention doctrine where important federal interests are at stake and where the proceedings were ancillary to a judgment awarded in federal court.
For the foregoing reasons, we affirm the judgment of the district court.
BEAM, Circuit Judge, dissenting.
Because the majority opinion disregards accepted legal principles applicable to cases such as this, I respectfully dissent. Without reason or precedent, the district court, advancing dubious policy justifications, has
Finnel was an employee of the State of Missouri and, while serving in this capacity, violated the constitutional rights of Hankins. The cause of action was against Finnel in his personal capacity and sought to (and did) impose personal liability. The suit was not and could not have been an official capacity case. “[O]fficial capacity suits ... represent only another way of pleading an action against an entity of which an officer is an agent.” Monell v. Department of Social Servs., 436 U.S. 658, 690 n. 55 (1978). Of course, the Eleventh Amendment precluded a suit by Hankins directly against the State of Missouri. Edelman v. Jordan, 415 U.S. 651, 663 (1974). To repeat, the State of Missouri was not and could not have been the object of Hankins’ claim.
The state enters the picture in only a limited way—through its statute-making powers. Missouri, furnishing an additional benefit to its workers, provides and pays for a lawyer when a state employee is sued for task-related activities and, through the State Legal Expense Fund,
The judgment was entered and the State paid off. It satisfied the judgment, as Finnel‘s indemnitor, by paying the money into Hankins’ account at the institution. Since Hankins could not carry cash around in prison, it was necessary for the money to be handled this way. Perhaps if he had had another bank account or a legal guardian, his lawyer could have had the tender transferred to him in some other way. Presumably Missouri could also have paid the money into the registry of the federal court. In any event, Missouri had (and should have had) access to the funds now owned by Hankins. That the satisfaction of judgment was handled through Hankins’ prison account or in any other way is irrelevant to the legitimate issues in this case.
In a separate state court proceeding, under the Missouri Incarceration Reimbursement Act,
The majority relies upon Argento v. Village of Melrose Park for support of the use of a Rule 69(a) procedure. Beyond the fact that the dissent in Argento presents the better reasoned argument, the case, and all the cases cited by the Argento majority, are inapposite here. None of the actions involved a sovereign state with Eleventh Amendment protections, they involved governmental subdivisions subject to being made parties to the action in the first instance. Further, Argento presented a situation where the section 1983 judgment against the employees remained unsatisfied, a scenario, as earlier indicated, we do not face in this matter.
The second error more directly involves the Eleventh Amendment. In support of some supposed public policy consideration involving section 1983 actions,3 the district court and the majority seek to blur the line drawn by the Supreme Court which separates a state from its employees in this kind of litigation. The reasoning employed by the district court and the majority runs upstream from the unambiguous holdings of the Supreme Court. For instance, in Kentucky v. Graham, 473 U.S. 159 (1985), a successful section 1983 plaintiff sought to collect attorney fees allowed by
The majority contends, in the face of this concept, that the Missouri indemnity fund legislation and/or the Missouri Reimbursement Act, jointly or severally, work an implied waiver of Eleventh Amendment immunity sufficient to bring the State into this federal court garnishment proceeding. The law is to the contrary. If waiver occurred as a result of the indemnity scheme or the Reimbursement Act, Missouri should have been made a party defendant in the underlying suit, not brought in through the back door as a quasi party. More importantly, however, applying solidly established precedent, waiver did not occur.
The Supreme Court has repeatedly rejected constructive waiver arguments such as those made here and has established that waiver can be found “only where stat-
Here, the Missouri indemnity statute goes even a step further, it specifically disavows any waiver of Eleventh Amendment immunity. Even ignoring the express disavowal of waiver, the holdings of the district court and the majority are wrong given the nearly insurmountable presumption against constructive waivers of Eleventh Amendment immunity. See Edelman, 415 U.S. at 671-74.
In Williams v. Bennett, 689 F.2d 1370, 1377-79 (11th Cir.1982), and Gamble v. Florida Dep‘t of Health & Rehab. Servs., 779 F.2d 1509, 1516-18 (11th Cir.1986), the Eleventh Circuit has twice considered whether indemnity statutes waive immunity. Williams examined an Alabama statute, and, Gamble, as indicated, analyzed Florida law. The Alabama statute discussed in Williams is comparable to the Missouri legislation; it contains an express disavowal of waiver. The Eleventh Circuit found the indemnity language to be an employee benefit “analogous to liability insurance for any ... correctional employee ... sued individually for acts arising in the course of employment.” Williams, 689 F.2d at 1377. A situation squarely on point with this case. Our holding should be the same as that of the Williams court in terms of employee benefits and waiver of immunity.
The majority‘s use of the Reimbursement Act as a source of limited waiver is puzzling, especially since Rule 69(a) is used as the vehicle to force payment of this judgment. Although the Act‘s definition of “assets” includes “[a] money judgment received by the offender from the state as a result of a civil action,”
The majority nonetheless finds an implied waiver of immunity by concluding that Missouri seeks to take advantage of the judgment in Hankins’ section 1983 suit through the Reimbursement Act. The majority cites United States v. DCS Dev. Corp. and Sosna v. Iowa to support its finding. The majority ignores, however, that the fundamental question addressed in these cases was the extent to which a state waives its immunity once it has voluntarily made an appearance in a suit. An appearance in the litigation is a prerequisite to applying the waiver standard, i.e., whether the state seeks to take advantage of the suit. As discussed above, Missouri did not waive its immunity in the section 1983 suit by satisfying Hankins’ judgment. Missouri, therefore, has not appeared in the suit and does not seek to take advantage of it in the sense that DCS Dev. Corp. and Sosna contemplate. Instead, Missouri‘s position is comparable to that of a tort victim who decides to sue a previously insolvent tortfeasor in another court upon learning that the tortfeasor has received a judgment from a third party. By overlooking the lack of an appearance by Missouri
In sum, the majority now establishes precedent for this circuit based upon erroneous policy arguments and a misapplication of established law.4 Accordingly, I would reverse the district court, set aside the Fed.R.Civ.P. 69(a) proceeding and let Hankins and the state settle their differences in the proper forum, the Missouri courts.