IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________

m 00-10361

_______________

CHARLES ETTA WILLIAMS,

Plaintiff-Appellant,

VERSUS

DALLAS AREA RAPID TRANSIT,

Defendant-Appellee.

_________________________

Appeal from the United States District Court

for the Northern District of Texas

_________________________

February 22, 2001

Before POLITZ, SMITH, and PARKER,

Circuit Judges.

JERRY E. SMITH, Circuit Judge:

Charles Etta Williams appealsthe dismissal

of her suit against Dallas Area Rapid Transit

(“DART”) under the Age Discrimination in

Employment Act (“ADEA”), 29 U.S.C. § 621

et seq., arguing that the district court erred in

finding DART immune from suit under the

Eleventh Amendment. She contends both that

DART is not an arm of the state for purposes

of the Eleventh Amendment and that, even if

DART otherwise were entitled to such

immunity, it effectivelywaived it. Because we

agree that DART is not an arm of the state, we

do not reach waiver. We reverse the dismissal

and remand for further proceedings.

I.

DARTis a regionaltransportation authority

organized under TEX.TRANSP.CODEANN. ch.

452. Williams, a former DART employee, was

released as part of a reduction-in-force

program. Although DART allegedly found alternative employment positions for younger,

lesser-qualified employees, it offered no such
2

position to Williams, who sued, asserting a

claim for wrongful termination in violation of

the ADEA. After the parties conducted

discovery, the Supreme Court issued Kimel v.

Fla. Bd. of Regents, 528 U.S. 62, 82-83

(2000), holding that, because the ADEA is not

a proper exercise of Congress’s power under

the FourteenthAmendment, the statute cannot

abrogate a state’ssovereign immunitywithout

an express waiver by the state. 

Shortly thereafter, DART moved for

dismissal under FED.R.CIV.P. 12(b)(6), or alternatively, for judgment on the pleadings under rule 12(c). Concluding that judgment was

not proper under either rule, the court

nonetheless dismissed sua sponte under rule

12(h)(3) for lack ofsubject matter jurisdiction,

holding that DART, because it had not waived

its sovereign immunity, was not amenable to

suit in federal court under the ADEA. 

II.

The district court held, as a matter of law,

that because “DART is a governmental unit or

instrumentality of the state of Texas, . . . it is

entitled to assert Eleventh Amendment immunity” and that because DART had not waived

that immunity, Williams’s ADEA claim failed

for lack of subject matter jurisdiction.

Williams contests both that DART is entitled

to Eleventh Amendment immunity and that it

did not effectively waive immunity. When

addressing a dismissal for lack of subject

matter jurisdiction, we review application of

law de novo and disputed findings of fact for

clear error. See Williamson v. Tucker, 645

F.2d 404, 413 (5th Cir. May 1981).

“The Eleventh Amendment . . . barssuitsin

federal court by citizens of a state against their

own state or a state agency or department.”

Richardson v. S. Univ., 118 F.3d 450, 452

(5th Cir. 1996) (quotation marks omitted).

Moreover, “a plaintiff cannot avoid the

sovereign immunitybar bysuing a state agency

or an arm of the State rather than the State

itself.” Id. 

When confronted with a governmental entity asserting Eleventh Amendment immunity

as an arm of the state, we apply the test

established in Clark v. Tarrant County, 798

F.2d 736 (5th Cir. 1986). The district court

failed to analyze DART’s asserted immunity

under the Clark framework, instead relying on

three cases1for the proposition that DART is

1 Anderson v. DART, Civ. Ac. No. 3:97-CV1834-BC, 1998 WL 686782 (N.D. Tex. Sept. 29,

1998), aff’d, 180 F.3d 265 (5th Cir. 1999) (per

curiam) (unpublished), cert. denied, 528 U.S. 1062

(1999); Tolbert v. Vasquez,Civ. Ac. No. 3:93-CV1468-X, 1998 U.S. Dist. LEXIS 17616 (N.D. Tex.

Mar. 27, 1998), aff’d, 163 F.3d 1355 (5th Cir.

1998)(per curiam)(unpublished); Davis v. Mathis,

846 S.W.2d 84 (Tex. AppSSDallas 1992, writ

denied). These cases are neither binding nor

persuasive, because none properly examined the

issue of Eleventh Amendment immunity. See

Young v. DART, Civ. Ac. No. 3:95-CV-2596-X,

1999 U.S. Dist. LEXIS 4470, at *3 (N.D. Tex.

Mar. 24, 1999) (declining to follow Anderson and

Tolbert because “neither case delivers a thoughtful

and/or detailed argument” with respect to Eleventh

Amendment immunity, and ordering the parties to

brief the issue under the Clark framework). 

Davis, 846 S.W.2d at 87, held merely that

DART “[a]s a governmental unit,” was entitled to

the protections of the Texas Tort Claims Act

(“TTCA”), Tex. CIV. PRAC. & REM. CODE ch.

101. That holding is not probative for our

purposes, because the TTCA defines

“governmental unit” as

A) thisstate and all the several agencies of

(continued...)
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indeed a state agency and therefore is entitled

to sovereign immunity. Although all three

cases upheld DART’simmunityfromsuit, they

are neither binding nor persuasive in this

context. The court erred in failing properly to

analyze, under Clark, DART’s amenability to

suit.

A proper inquiry under Clark considers six

factors:

(1) whether the state statutes and case

law characterize the agency as an

arm of the state; 

(2) the source of funds for the entity; 

(3) the degree of local autonomy the

entity enjoys; 

(4) whether the entity is concerned primarily with local, as opposed to

statewide, problems; 

1

(...continued)

government that collectively constitute

the government of this state, including

other agencies bearing different

designations, and all departments,

bureaus, boards, commissions, offices,

agencies, councils, and courts;

(B) a political subdivision of this state,

including any city, county, school district, junior college district, levee improvement district, drainage district, irrigation district, water improvement

district, water control and improvement

district, water control and preservation

district, freshwater supply district,

navigation district, conservation and

reclamation district, soil conservation

district, communication district, public

health district, and river authority;

(C) an emergency service organization; and

(D) any other institution, agency, or organ

of government the status and authority

of which are derived from the

Constitution of Texas or from laws

passed by the legislature under the

constitution.

TEX. CIV. PRAC. & REM. CODE § 101.001. The

TTCA’s definition of “governmental unit” is unquestionably broader than the term “arm of the

state,” as used for purposes of the Eleventh

Amendment, in that it includes cities, counties,

school boards, and other governmental entities that

are not entitled to Eleventh Amendment immunity.

See, e.g., Mt. Healthy City Sch. Dist. Bd. of Educ.

v. Doyle, 429 U.S. 274, 280-81 (1977) (“[A] local

school board such as petitioner is more like a

county or city than it is like an arm of the State.

We therefore hold that it was not entitled to assert

any Eleventh Amendment immunity from suit in

the federal courts.”).

(continued...)

1

(...continued)

Anderson and Tolbert held that DART, as a

“politicalsubdivision of the state” is not a “person”

within the meaning of 42 U.S.C. §§ 1981, 1983.

See Anderson v. DART, 1998 WL 686782 at *7;

Tolbert, 1998 LEXIS 17616, at *19-20. Although

it is not at all certain that “political subdivision,”

as used by those courts, is coextensive with “arm

of the state,” as used in analyzingEleventh Amendment immunity, to the extent that the two terms are

interchangeable, the district courts in Anderson v.

DART and Tolbert erred in failing to analyze

DART under theClark framework, relying instead

on the Davis court’s characterization of DART.

Moreover, while the district court in Anderson v.

DART did find DART immune from suit under the

Eleventh Amendment, that finding is merely an

erroneous dictum, because the court already had

decided the case on the § 1983 issue. See

Anderson v. DART, 1998 WL 686782, at *7.
4

(5) whether the entity has authority to

sue and be sued in its own name;

and 

(6) whether the entity has the right to

hold and use property.

Anderson v. Red Riv. Waterway Comm’n, 231

F.3d 211, 214 (5th Cir. 2000). Although none

ofthe six factorsis dispositive,2some are more

important than others: The secondSSthe

source of fundsSSis the most important, while

the fifth and sixthSSwhether the agency has

authorityto enterinto litigation and hold propertySSare less so. See Hudson, 174 F.3d at

681-82. “Rather than forming a precise test,

[the Clark] factors help us balance the equities

and determine as a generalmatter‘whetherthe

suit is in reality a suit against the state itself.’”

Id. (quoting Laje v. R.E. Thomason Gen.

Hosp., 665 F.2d 724, 727 (5th Cir. 1982)). 

A proper Clark analysis compels the

conclusion that DART is not an arm of the

state for purposes of the Eleventh

Amendment. The first factorSS“whether the

state statutes and case law characterize the

agency as an arm of the state”SSweighs

against immunity, if anything. Neither party

can point to definitive authority establishing

DART’s status under Texas law. As DART

points out, it is an “authority” under Texas

law, and assuch, is a “governmental unit under

Chapter 101, Civil Practice and Remedies

Code . . . .” TEX. TRANSP. CODE ANN.

§ 452.052. The statutory characterization of

DART as a “governmental unit” is not

probative of DART’s status for Eleventh

Amendment purposes, however. See supra

note 1. 

On the other hand, Texas statute defines

“state government” as “an agency, board,

commission, department, or office . . . that:

(A) was created by the constitution or a

statute of this state; and (B) has statewide

jurisdiction.” TEX. CIV. PRAC. & REM. CODE

§ 101.001(5).3 Thus, the controlling factor in

analyzing DART's status as a “state agency”

under the TTCA is whether it has statewide

jurisdiction. 

In its answer, DART conceded that “all of

2

Importantly, neitherthe state’s approach to the

issue of sovereign immunity nor the state’s

characterization of the entity in question controls

our inquiry. See Hudson v. City of New Orleans,

174 F.3d 677, 684-85 (5th Cir.), cert. denied, 528

U.S. 1004 (1999).

3 DART contends that the characterization of §

101.001(5) is not applicable in the Eleventh

Amendment context, because § 101.001’s

definitions are limited by their terms to chapter

101, which codified the TTCA, which DART

argues, deals only with governmental entities’

amenability to suit in state courts, ignoring any

federal immunity. Section 101.025(a) states that

“[s]overeign immunity to suit is waived and

abolished to the extent of liability created by this

chapter,” however, plainly contemplatingSSand by

implication, leaving intactSSthe state’s immunity

under the Eleventh Amendment. 

To the extent the statute can be considered ambiguous, the Revisor’s Note to that section is instructive: “Only the state and its agencies have

sovereign immunity. The revised law omits the

phrase ‘with reference to units of government’ to

avoid the implication that sovereign immunity

applies to local governmental units.” Moreover,

DART’s abandonment of the TTCA strikes us as

peculiar, given its reliance on Anderson v. DART,

Tolbert, and Davis, all of which (improperly) construed the TTCA in finding DART immune from

federal suit as a “governmental unit.” See supra

note 1.
5

its operations and actionstake place within the

counties encompassed in the Northern District

of Texas.” Nowhere does DART assert that it

does have statewide jurisdiction. Thus, at

least for purposes of the TTCA, DART is not

a state agency. Admittedly, Texas law is not

unambiguous with respect to DART’s status,

but to the extent it favors either party, the first

factor weighs against characterizing DART as

an arm of the state.

The second factor in theClark inquirySSthe

source of the funds for the governmental

entitySSis the most important one. See

Hudson, 174 F.3d at 687. Although we also

consider the source of general operating funds

for the entity, “because an important goal of

the eleventh amendment is the protection of

states’ treasuries, the most significant factor in

assessing an entity’s status is whether a

judgment against it will be paid with state

funds.” Richardson, 118 F.3d at 455 (quoting

McDonald v. Bd. of Miss. Levee Comm’rs,

832 F.2d 901, 907 (5th Cir. 1987)). It is

undisputed that DART receives funding from

several sources, including passenger fares,

bond revenues, and local sales and use tax

revenues,4but DART concedes on appeal that

it receives no appropriated funds from the

state of Texas. It does contend, however, that

its authorized use of bond and tax revenues

constitutes state funding. We disagree.

DART is authorized by state statute to issue bonds for capital improvement projects;

we cannot, however, infer merely from such

authorization that the state actually provides

funding to DART. The bonds must be

approved by the state attorney general and

registered by the state comptroller,5

butSSimportantlySSthe state does not

guarantee the bonds. Moreover, although

DART is authorized to pledge its tax and

operating revenues or mortgage its assets to

secure the bonds,6 DART can point to no

statute indicating that the state would back the

bonds with its full faith and credit. We find

nothing that we can interpret asindicating that

the State of Texas funds or guarantees

DART’s bond obligations.

DART also argues that the characteristics

of its sales and use tax render the tax a source

of state funding. This argument proves too

much, however. While it is true that DART’s

sales and use tax is administered by the state

comptroller and passesthrough the state treasury before being rebated to DART, municipal

taxes in Texas are administered in the same

way.7 Nonetheless, it is undisputed that

municipalities are not arms of the state for

purposes of the Eleventh Amendment. No.

99-41444, Evans v. City of Bishop, 2000 U.S.

App. LEXIS 34479, at *5-*7 (5th Cir. Dec.

11, 2000) (per curiam). Moreover, except for

the mere administration of the tax by the state,

there is nothing to suggest that DART’s sales

and use tax is anything other than the

collection of local funds authorized by a local

election to accomplish a local objective. 

Finally, DART arguesthat, ifit were unable

4

See TEX. TRANSP. CODE ANN. §§ 452.055

(grants), 452.061 (fares), 452.352 (bonds), 452.-

401 (sales and use tax).

5

See id. § 452.355.

6

See id. § 452.357.

7 Compare TEX. TAX CODE ANN. §§ 321.301-

.302, 321.306, 321.501-.505 (administration provisions for municipalsales and use tax), with id. §§

322.201-.203, 322.301-.305 (administration

provisions for special purpose sales and use tax).
6

to pay a judgment from its own funds, it could

seek additional funding from the legislature.

DART does not contend that the legislature

would be obligated to provide the additional

funding, however, and we do not consider “a

state’s voluntary, after-the-fact payment” of a

judgment to be a liability against the state’s

treasury. Hudson, 174 F.3d at 689. There is

nothingSSeither in the record or of which we

can take judicial noticeSSindicating either that

DART receives state funding as a general

matter or that a judgment against it would be

satisfied out of the state treasury.

The third factor is the degree of local autonomy. DART argues that this factor weighs

in its favor, because it is subject to the Texas

Sunset Act, TEX. GOV’TCODE. ANN. ch. 325.

That fact alone does not dispose of the issue:

The Sunset Act deals with the orderly closure

of obsolete state agencies, not the oversight of

agencies’ daily operations. See id. § 325.008

(detailing the duties of the Sunset Advisory

Commission). Moreover, DART must report

to the Sunset AdvisoryCommission only once

every twelve years. See TEX. TRANSP. CODE

ANN. § 452.453. 

DART argues further that, because it is

subject to fiscal audits every year and

performance audits every fourth year,8it falls

under state control. Like the Sunset Act, the

audit requirements are some evidence of state

oversight, but they are not dispositive with

respect to the issue of local control.

On the other side of the scale, the

responsibilityfor the “management, operation,

and control” of DART is vested in an

executive committee,9 which consists of

members appointed by the municipalities

served by DART. See id. §§ 452.502, 452.-

562, 452.572. Thus, the day-to-day

operations of DART fall under purely local

control. Moreover, any municipality served by

DART may hold an election to withdraw from

DART if it chooses to do so. See id. §

452.651. In this way, the localities also

control DART’s ultimate disposition. While

there is some state oversight of DART’s

operations, it enjoys considerable local

autonomy; thisfactor therefore weighsslightly

against Eleventh Amendment immunity, if

anything.

The fourth factor looks at whether DART

is concerned primarily with local or statewide

problems. DART concedes that its authority

is limited to the Dallas-Forth Worth region.

Although there is some authority for viewing

regional entities merely as local solutions to

statewide problems,10 the fourth factor

properly centers on “whether the entity acts

for the benefit and welfare of the state as a

whole or for the special advantage of local

inhabitants.” Pendergrass v. Greater New

8

See TEX. TRANSP. CODE ANN. §§ 452.451,

452.454.

9

See id. § 452.053; see also id. §§ 452.101-13

(empowering the executive committee, inter alia,

to create a budget, investfunds, establish a security

force, and appoint auditors and attorneys).

10 Cf. Clark, 798 F.2d at 745. Clark addressed

the state probation system, concluding that the

relevant statute “was enacted to address a

statewide problem and to put control of

probationers in the hands of state officers.

Dividing the responsibilities into judicial districts

is merely an administrative tool for handling a

statewide, state program.” Id. (citation omitted).

In contrast, DART is not an administrative division

of a statewide transportation systemSSit is an

entity unto itself.
7

Orleans Expressway Comm’n, 144 F.3d 342,

347 (5th Cir. 1998) (citing Jacintoport Corp.

v. Greater Baton Rouge Port Comm’n, 762

F.2d 435, 443 (5th Cir. 1985)). DART plainly

acts for the benefit of the residents of Dallas,

Fort Worth, and the surrounding communities,

as distinguished from that of the state as a

whole; thus, the fourth factor also cuts against

DART.

The fifth and sixth factors weigh in favor of

Williams’s contention that DART is not an

arm of the state. DART has statutory

authority both to hold and use property and to

sue and be sued. See TEX. TRANSP. CODE.

ANN. §§ 452.054(b) & (d). Such abilities

favor categorization of DART as an

independent entity, not an arm of the state.

See Hudson, 174 F.3d at 691.

Taken as a whole, the Clark analysis

compel the conclusion that DART is not

immune from Williams’s claim. Though some

of the factors may be indeterminate, none

weighs strongly in DART’s favor. Moreover,

the most important second factor weighs

against considering DART an armofthe state.

The district court therefore erred in finding

DART immune from suit under the ADEA.

We REVERSE the dismissal and REMAND

for further proceedings.