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Parties Involved:
City of Oakland
Petitioner
Federal Maritime Commission
Respondent
SSA Terminals (Oakland), LLC
Intervenor for Respondent
SSA Terminals, LLC
Intervenor for Respondent
United States of America
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 9, 2013 Decided July 26, 2013

No. 12-1080

CITY OF OAKLAND, ACTING BY AND THROUGH ITS BOARD OF 

PORT COMMISSIONERS,

PETITIONER

v.

FEDERAL MARITIME COMMISSION AND UNITED STATES OF 

AMERICA,

RESPONDENTS

SSA TERMINALS (OAKLAND), LLC AND SSA TERMINALS,

LLC,

INTERVENORS

On Petition for Review of an Order 

of the Federal Maritime Commission

Paul M. Heylman argued the cause for petitioner. With 

him on the briefs was Nicholas C. Stewart.

Tyler J. Wood, Deputy General Counsel, Federal 

Maritime Commission, argued the cause for respondents. 

With him on the brief were Joseph F. Wayland, Acting 

Assistant Attorney General, U.S. Department of Justice, 

Robert B. Nicholson and Robert J. Wiggers, Attorneys, 

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Rebecca A. Fenneman, General Counsel, Federal Maritime 

Commission, and Elisa P. Holland, Attorney-Advisor.

Marc J. Fink, Anne E. Mickey, and Robert K. Magovern

were on the brief for intervenors SSA Terminals (Oakland), 

LLC, et al. in support of respondent. 

Before: HENDERSON and BROWN, Circuit Judges, and 

GINSBURG, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge BROWN.

BROWN, Circuit Judge: The City of Oakland manages a 

port on lands granted by the State of California to benefit its 

citizens. This arrangement implicates the public trust doctrine, 

an ancient delineation of the states’ rights in (among other 

things) their tidelands. But what happens when the public 

trust doctrine bumps into the Eleventh Amendment? Oakland

believes it is entitled to a share of the State’s sovereign 

immunity for its management of the port and has asked us to 

review the Federal Maritime Commission’s contrary 

conclusion. We agree with the Commission, however, and 

deny Oakland’s petition.

I

A

When California joined the Union in 1850, it acquired 

ownership of all underwater land within its borders subject to 

the ebb and flow of the tide—otherwise known as “tidelands.”

See Phillips Petroleum Co. v. Mississippi, 484 U.S. 469, 476 

(1988). This was simply a consequence of joining the Union, 

though California, with its miles of coast, may have benefitted 

more than others.

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Yet California did not acquire proprietary rights in these

lands; instead, under the so-called public trust doctrine, it took

the tidelands in trust for its citizens. See Dist. of Columbia v. 

Air Fla., Inc., 750 F.2d 1077, 1082 (D.C. Cir. 1984). 

Although the trust objectives have evolved over time, 

California currently holds the tidelands in trust for “statewide 

public purposes” like commerce, navigation, fishing, natural 

preservation, and “other recognized uses.” CAL. PUB. RES.

CODE § 6009(a). See generally Nat’l Audubon Soc’y v. 

Superior Court, 658 P.2d 709, 718–24 (Cal. 1983) (describing 

the public trust doctrine and its application in California).1

California’s authority over the tidelands is subordinate to this 

trust but is otherwise absolute. CAL. PUB. RES. CODE

§ 6009(b).

California has repeatedly exercised its authority over the 

tidelands by granting discrete portions to various 

municipalities. We are concerned with only one of these 

grants. In 1911, it conveyed certain stretches to the city of 

Oakland to be maintained as a “public harbor for all purposes 

of commerce and navigation.” 1911 Cal. Stat. 1258.2 Oakland

did not thereby gain plenary authority over the tidelands, 

however; it took the land subject to the public trust, see Nat’l 

Audubon Soc’y, 658 P.2d at 721, as well as the conditions 

 1 The doctrine is not unique to California, see, e.g., Ill. Cent. 

R.R. Co. v. Illinois, 146 U.S. 387, 452 (1892), but its contours are 

defined by state law. Air Fla., Inc., 750 F.2d at 1082. 

2 In fact, California had already granted Oakland a stretch of 

land “between high tide and ship channel” in 1852, a portion of 

“salt, marsh and tide lands” in 1874, and a stretch of “salt marsh 

and tide lands” in 1909. See 1909 Cal. Stat. 665; 1874 Cal. Stat. 

132; 1852 Cal. Stat. 180. None of this land, we are told, has 

anything to do with the case. 

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expressly enumerated in the grant, which were generally 

consistent with the public trust doctrine. For example, the 

grant included a proviso retaining for the people of California 

an “absolute right to fish in the waters of said harbor, with the 

right of convenient access to said waters over said land.” 1911 

Cal. Stat. at 1259.

Oakland responded to the grant in 1927 by establishing 

the Port Department, a municipal agency charged with “the 

comprehensive and adequate development of the Port of 

Oakland through continuity of control, management and 

operation.” Charter of the City of Oakland § 700 (2008). The 

Port Department is run by the Board of Port Commissioners, a 

seven-member body of “bona fide” Oakland residents

nominated by the city mayor and appointed and removable by 

the city council. Id. §§ 701–03. It acts “for and on behalf of”

Oakland. Id. § 706.

It also acts subject to the oversight of California’s State 

Lands Commission, the agency vested with “[a]ll jurisdiction 

and authority remaining in the State” over granted tidelands. 

CAL. PUB. RES. CODE § 6301.3 The State Lands Commission

monitors and audits public land grantees like the Port 

Department to ensure compliance with the public trust 

doctrine and land grant. See id. §§ 6009(c), 6301.

B

SSA Terminals, LLC (“SSA”), occupies three berths in 

the Oakland port. At some point SSA concluded the Port 

 3 The three-member State Lands Commission consists of two 

statewide elected officers and one member of the governor’s 

cabinet. See CAL. PUB. RES. CODE § 6101; see also CAL. CONST.

art. 5, §§ 2, 9, 11; CAL. GOV. CODE § 13000 et seq.

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Department failed to consider it when looking for a tenant to 

occupy five open berths of choice port real estate. To make 

matters worse, the Port Department ultimately leased those 

berths to one of SSA’s competitors under terms more

favorable than those governing SSA’s lease. SSA therefore 

filed a complaint with the Federal Maritime Commission 

alleging the Port Department violated the Shipping Act. See 

46 U.S.C. §§ 41102(c), 41106(2)–(3) (requiring marine 

terminal operators to follow “just and reasonable” regulations 

and practices, and prohibiting them from discriminating 

against or “unreasonably” refusing to deal with a party). 

Oakland tried to, but could not, convince the 

Administrative Law Judge to dismiss the complaint on 

grounds of sovereign immunity. Much to Oakland’s dismay, 

the Commission was equally unsympathetic and rejected its 

sovereign immunity argument on appeal, so Oakland filed this 

petition for review.

II

The Eleventh Amendment protects states from suit 

without their consent. Alden v. Maine, 527 U.S. 706, 730 

(1999). The sovereign immunity provided by the Amendment 

draws on principles of federalism and comity, see Alden, 527 

U.S. at 728–29; Idaho v. Coeur d’Alene Tribe of Idaho, 521 

U.S. 261, 268 (1997), and protects both state dignity and state 

solvency, see Hess v. Port Auth. Trans-Hudson Corp., 513 

U.S. 30, 52 (1994). It restrains not only the courts, but also 

certain federal agencies like the Commission. Fed. Mar.

Comm’n v. S.C. State Ports Auth., 535 U.S. 743, 760 (2002).

Determining what entities are entitled to claim immunity 

tracks a simple constitutional line: Eleventh Amendment 

sovereign immunity belongs to the states. Lake Country 

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Estates, Inc. v. Tahoe Reg’l Planning Agency, 440 U.S. 391, 

400 (1979); see LaShawn A. v. Barry, 87 F.3d 1389, 1393 n.4 

(D.C. Cir. 1996) (en banc). This means that when the state is 

not named as a defendant, sovereign immunity attaches only 

to entities that are functionally equivalent to states (often 

called “arms of the state”) or when, despite procedural 

technicalities, the suit effectively operates against the state as 

the real party in interest. See N. Ins. Co. of N.Y. v. Chatham 

Cnty., 547 U.S. 189, 193 (2006); Regents of Univ. of Cal. v. 

Doe, 519 U.S. 425, 429 (1997); Lake Country Estates, Inc., 

440 U.S. at 400. These kinds of suits may offend the state’s 

dignity or assault its solvency no less than if the state were 

itself the named defendant. See, e.g., Coeur d’Alene Tribe of 

Idaho, 521 U.S. at 269–70, 281–82.

And so a puzzle. Oakland recognizes, as it must, that 

municipalities are not protected by the Eleventh Amendment 

even though they exercise a “slice of state power,” Lake 

Country Estates, Inc., 440 U.S. at 400 (internal quotation 

marks omitted); see also P.R. Ports Auth. v. Fed. Mar.

Comm’n, 531 F.3d 868, 881–84 (D.C. Cir. 2008) (Williams, 

J., concurring), and it neither denies it is a municipality nor 

claims the Port Department is anything other than a municipal 

agency. Oakland likewise concedes it is not an arm of the 

State, thereby surrendering its ability to argue that the Port 

Department is structurally entitled to sovereign immunity. See

P.R. Ports Auth., 531 F.3d at 873 (“[A]n entity either is or is 

not an arm of the State: The status of an entity does not 

change from one case to the next based on the nature of the 

suit, the State’s financial responsibility in one case as 

compared to another, or variable factors.”). And the Port 

Department’s funds—which are managed by the city 

treasurer—are used only to finance bonds, maintain and 

operate Port Department facilities, and compensate 

employees, with any surplus potentially going into Oakland’s 

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general treasury. See Charter of the City of Oakland §§ 717, 

720. Why, then, would Oakland be entitled to Eleventh 

Amendment protection?

Oakland seeks safe passage through these shoals by 

relying on a novel reading of the public trust doctrine. Its 

argument has two parts, each of which it believes sufficient to 

trigger the Eleventh Amendment. First, Oakland explains, the 

Port Department functions as a “subordinate governmental 

agenc[y] of the state” because the State of California 

exercises “virtually complete control” over Port Department’s 

administration of the tidelands—which because of the public 

trust doctrine is essentially a non-delegable state duty. Pet’r’s 

Br. 36, 38, 40 (internal quotation marks omitted). Second, 

Oakland reasons, any judgment against the Port Department 

would be paid with State funds because revenues generated 

from public trust lands are part of the public trust and must be 

used for “State purposes.” Pet’r’s Br. 42. Unfortunately for 

Oakland, its reliance on cases granting immunity to state 

agents adds nothing to the conversation. Those cases establish 

the unremarkable proposition that but for Eleventh 

Amendment protection, a state, which can act only through its 

agents, may be liable for (or otherwise impacted by) the 

actions of one. See P.R. Ports Auth., 531 F.3d at 878–79 

(“[S]overeign immunity can apply in a particular case if the 

entity was acting as an agent of the State or if the State would 

be obligated to pay a judgment against an entity in that 

case.”); see also Alden, 527 U.S. at 756–57; Shands Teaching 

Hosp. & Clinics, Inc. v. Beech St. Corp., 208 F.3d 1308, 1311

(11th Cir. 2000) (holding that a Medicare fiscal intermediary

may be immune “only to the extent that a judgment would 

expose the government to financial liability or interfere with 

the administration of government programs”). And worse, we 

do not think the public trust doctrine changes Oakland’s

Eleventh Amendment calculus: it appears California’s dignity 

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and fisc would survive any suit against the Port Department 

untroubled. See Hess, 513 U.S. at 47 (invoking state dignity 

and solvency as analytical lodestars). 

California retains ultimate responsibility for protecting its 

public trust property, see Ill. Cent. R.R. Co. v. Illinois, 146 

U.S. 387, 453–54 (1892); Nat’l Audubon Soc’y, 658 P.2d at 

723–24, and it may vindicate its responsibility by passing 

legislation modifying or terminating the tidelands grant to 

Oakland, see Mallon v. City of Long Beach, 282 P.2d 481, 

487 (Cal. 1955). The legislature has in fact tweaked 

Oakland’s grant twenty-four times during the past century, 

and if it revokes the grant entirely, the tidelands will revert to 

the State. Id. The same holds true for port revenues, which are 

part of the public trust. City of Long Beach v. Morse, 188 P.2d 

17, 20 (Cal. 1947).

But until California exercises this authority, the Port 

Department will continue to manage the tidelands however it 

sees fit within the limits fixed by the public trust and tidelands 

grant. See Nat’l Audubon Soc’y, 658 P.2d at 723; People ex. 

rel. Webb v. Cal. Fish Co., 138 P. 79, 83, 88 (Cal. 1913). All 

liability for port-related debts likewise belongs to the Port 

Department, and nothing in the record suggests California 

must or would intervene if the Port Department cannot handle 

its debts. See 1911 Cal. Stat. at 1259 (requiring Oakland to 

improve the port “without expense to the state”); Charter of 

the City of Oakland § 717(3)(Ninth) (permitting transfer of 

surplus revenue and income generated by the port to the 

“General Fund of the City” to the extent the surplus is not 

needed for port-related purposes).

4

 

 4 Oakland believes a judgment against the Port Department 

would operate against the state treasury under California probate 

law, which grants trustees the right to repayment from the trust for 

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Thus, while the State may alter certain parameters 

constraining the Port Department’s actions, the record 

contains no reason to think it can do more. Certainly none of 

the twenty-four amendments to the tidelands grant have 

affected the day-to-day management of the port.

5 See also 

 

expenditures that either were “properly incurred in the 

administration of the trust” or that “benefited the trust.” CAL. PROB.

CODE § 15684. We are unpersuaded that the public trust doctrine 

implies a trust relationship within the meaning of the probate code.

5 Through these amendments, the legislature granted additional 

land, reserved for itself mineral rights and the right to use the land 

for highways, permitted Oakland to convey land to various military 

and educational institutions, extended the allowed length of granted 

franchises and leases, approved land use relating to other public 

trust purposes and certain land exchanges, and authorized use of 

revenue generated by public trust land for certain additional 

purposes that would nonetheless promote the public trust. See 2005 

Cal. Stat. 5244; 2004 Cal. Stat. 4233; 1986 Cal. Stat. 5065; 1981 

Cal. Stat. 3919; 1965 Cal. Stat. 3892; 1961 Cal. Stat. 2553; 1960 

Cal. Stat. 319; 1957 Cal. Stat. 1902; 1955 Cal. Stat. 1936; 1953 

Cal. Stat. 1908; 1945 Cal. Stat. 686; 1943 Cal. Stat. 2189; 1941 

Cal. Stat. 2236; 1939 Cal. Stat. 1261; 1939 Cal. Stat. 1260; 1939 

Cal. Stat. 1258; 1937 Cal. Stat. 2500; 1937 Cal. Stat. 752; 1937 

Cal. Stat. 335; 1937 Cal. Stat. 115; 1931 Cal. Stat. 1346; 1923 Cal. 

Stat. 416; 1919 Cal. Stat. 1088; 1917 Cal. Stat. 63. Suggestively, 

one of these modifications purported to permit, but not require, 

Oakland to convey particular parcels of the public trust lands to the 

State for various transportation projects. See 1937 Cal. Stat. 335 

(characterizing the legislation as an “urgency measure necessary for 

the immediate preservation of the public peace, health and safety”). 

If the legislature has the sort of control Oakland believes, one might 

wonder why it did not just reach out and take the land. Of course, if 

the State can modify Oakland’s land grant, one might also wonder 

whether it could simply run the port directly—but we have no 

reason to explore these what-ifs.

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CAL. PUB. RES. CODE § 6308 (requiring joinder of the state as 

a “necessary party defendant” in any proceeding “involving 

the title to or the boundaries of tidelands” (emphasis added)). 

To the extent the State can do more, its power appears to 

derive from the State’s general relationship with 

municipalities rather than the public trust doctrine. See, e.g.,

Mallon, 282 P.2d at 487. And that is not enough to claim the 

attention of the Eleventh Amendment. See Hess, 513 U.S. at 

47.

It is perhaps for these reasons that the State Lands 

Commission, though vested with all of California’s 

jurisdiction and authority over the tidelands, has limited and 

only indirect control of the Port Department—and apparently 

only to the extent necessary to ensure compliance with the 

public trust and land grant. See CAL. STATE LANDS COMM’N, 

PUBLIC TRUST POLICY 3 (2001); see also CAL. PUB. RES.

CODE § 6305. If it concludes the Port Department violated the 

terms of the public trust or land grant, it may advise the Port 

Department of that fact, report the violation to the state 

legislature, or sue to enjoin the violation. CAL. STATE LANDS 

COMM’N, PUBLIC TRUST POLICY 3; see CAL. PUB. RES. CODE

§ 6306. The State Lands Commission, as the California 

attorney general put it in an amicus brief to the Commission, 

is simply the legislature’s “day-to-day eyes and ears.” Far 

from establishing an agency relationship, California’s 

relationship with the Port Department—its ability to control 

Oakland’s management of the port only to the extent Oakland

violates the public trust or tidelands grant—suggests the 

opposite. See, e.g., RESTATEMENT (THIRD) OF AGENCY

§§ 1.01 cmts. f, g, 1.04(10) (2006).

Without any record evidence suggesting suits against the 

Port Department effectively target the State of California, we 

will not distort the Eleventh Amendment by mantling 

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Oakland with sovereign immunity. Cf. Fresenius Med. Care 

Cardiovascular Res., Inc. v. P.R. & Caribbean 

Cardiovascular Ctr. Corp., 322 F.3d 56, 63 (1st Cir. 2003) 

(“It would be every bit as much an affront to the state’s 

dignity and fiscal interests were a federal court to find 

erroneously that an entity was an arm of the state, when the 

state did not structure the entity to share its sovereignty.”). 

The State of California had the opportunity to claim a dignity 

or financial interest when the Commission invited it to submit 

an amicus brief explaining the Port Department’s status under 

state law, but nowhere did the State assert any interest in 

Oakland’s immunity—a strong signal that California does not 

view suits against the Port Department as a threat to its 

sovereign interests. Cf. Lake Country Estates, Inc., 440 U.S. 

at 401, 407 (looking to state briefs disclaiming intent to 

confer immunity on bi-state compact); Morris v. Wash. Metro 

Area Transit Auth., 781 F.2d 218, 224–25 (D.C. Cir. 1986) 

(similar). Indeed, the State spoke up only after the 

Commission affirmatively asked it to do so, and it fell silent 

after Oakland filed its petition for review. This is telling and, 

we think, representative of Oakland’s rights in and 

responsibilities for the tidelands.

III

For the reasons stated, Oakland’s petition for review is

Denied.

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