Opinion ID: 6333580
Heading Depth: 2
Heading Rank: 1

Heading: How Florida Law Defines NICA

Text: Whether an entity is an arm of the state ultimately presents a question of federal law. But we determine that answer “by carefully reviewing how the agency is defined by state law.” Versiglio v. Bd. of Dental Exam’rs of Ala., 686 F.3d 1290, 1291 (11th Cir. 2012). “The state law provides assistance in ascertaining whether the state intended to create an entity comparable to a county or municipality or one designed to take advantage of the state’s Eleventh Amendment immunity.” Tuveson v. Fla. Governor’s Council on Indian Affs., Inc., 734 F.2d 730, 732 (11th Cir. 1984). In ascertaining how the state treats the Association and the Plan, we look to both state-court precedent and legislative clues. We begin with state-court precedent. In Coy v. Florida Birth-Related Neurological Injury Compensation Plan, 595 So. 2d 943 (Fla. 1992), a group of non-obstetrician physicians challenged the annual assessment they must pay to USCA11 Case: 20-13448 Date Filed: 04/21/2022 Page: 10 of 21 10 Opinion of the Court 20-13448 NICA. The Florida Supreme Court characterized NICA as “a governmental enterprise, i.e., a state-created system for compensating certain individuals for certain types of birth-related injuries.” Coy, 595 So. 2d at 945. It then held that the assessments qualified as “taxes” under Florida law, but that the taxes were valid. Id.; id. at 948. And in Samples v. Florida Birth-Related Neurological Injury Compensation Association, 114 So. 3d 912, 917 (Fla. 2013), the Florida Supreme Court, in passing, called NICA a “state program” while upholding an award maximum. These cases tend to support the notion that Florida courts treat NICA as an arm of the state. Next, we consider any insight the Florida legislature may have provided. The Florida legislature enacted a provision stating that “[s]overeign immunity is hereby waived on behalf of the [Association] solely to the extent necessary to assure payment of compensation [by the Plan].” Fla. Stat. § 766.303(3). NICA argues that this shows that the Florida legislature believed it was creating a state entity that had sovereign immunity, or else there would have been nothing to waive. In response, the Arvens assert that NICA conflates sovereign immunity from suit in state court with Eleventh Amendment immunity from suit in federal court. The Arvens, of course, are right that “the Eleventh Amendment deals only with federal jurisdiction to hear suits against the state, not with the state’s immunity from suit in any forum.” Hufford v. Rodgers, 912 F.2d 1338, 1340–41 (11th Cir. 1990) (alteration omitted). But that does not mean the state statute has no significance. USCA11 Case: 20-13448 Date Filed: 04/21/2022 Page: 11 of 21 20-13448 Opinion of the Court 11 Here, though, the Florida legislature sent some mixed signals. On the one hand, the statute suggests the Florida legislature may have intended to create an arm of the state when it devised NICA. This logic especially makes sense when we remember that we’re using the Manders factors to determine whether NICA is a “person” under the FCA, not necessarily whether NICA is entitled to Eleventh Amendment immunity. But on the other hand, the Florida legislature characterized NICA as “not a state agency, board, or commission.” Fla. Stat. § 766.315(1)(a). This language tends to support the idea that Florida doesn’t consider NICA an arm of the state. Nevertheless, there’s no bright-line rule that an entity must be characterized as an agency, board, or commission to be an arm of the state. See, e.g., Lesinski, 739 F.3d at 606 (holding that the South Florida Water Management District was an arm of the state). In Florida’s False Claims Act, for example, “State” is defined as “the government of the state or any department, division, bureau, commission, regional planning agency, board, district, authority, agency, or other instrumentality of the state.” Fla. Stat. § 68.082(1)(f). On balance, we conclude this factor supports finding that NICA is an arm of the state. II. The Degree of Control Florida Maintains Over NICA USCA11 Case: 20-13448 Date Filed: 04/21/2022 Page: 12 of 21 12 Opinion of the Court 20-13448 Next, we review the degree of control Florida maintains over NICA. That is, we consider whether the legislature retained authority over NICA or whether it is instead more autonomous. NICA argues that Florida exercises substantial control over NICA for two primary reasons: (1) Florida’s CFO appoints the members of the Association, and (2) Florida statutes carefully prescribe all NICA’s operational aspects. We disagree. In Lesinski, we found that state control of the Water District was “pervasive and substantial” where several conditions existed: the District was governed by a board whose members and Executive Director were appointed by the Governor and approved by the Florida Senate; the Governor was empowered to remove any officer of the District; the District’s budget had to be submitted to the Governor, Senate President, Speaker of the House, the Secretary of the Department of Environmental Protection, and various legislative committees; the District’s budget was subject to approval by the Governor; and the Florida Land and Water Adjudicatory Commission had the exclusive authority to review the District’s rules. Lesinski, 739 F.3d at 603. NICA has some of these qualities, but it lacks others. Its board is appointed by Florida’s CFO, who is a constitutional officer elected state-wide, like the Governor. But Florida’s Senate does not have the power to approve (or disapprove) NICA’s board members. And the Governor and CFO can remove board directors only “for misconduct, malfeasance, misfeasance, or neglect of duty in office,” Fla. Stat. § 766.315(2)(c)—in other words, only “for USCA11 Case: 20-13448 Date Filed: 04/21/2022 Page: 13 of 21 20-13448 Opinion of the Court 13 cause.” That is a significant limitation on the Governor’s and CFO’s removal power. Cf. Seila Law LLC v. Consumer Fin. Prot. Bureau, 140 S. Ct. 2183, 2198 (2020) (discussing importance of President’s unfettered removal powers). As for the review of NICA’s rules, NICA doesn’t make any rules for anyone to review, but it is required to annually submit audited financials to the Florida Joint Legislative Auditing Committee and the Office of Insurance Regulation, both of which may audit NICA whenever they wish. Fla. Stat. § 766.315(5)(e). And since November 2021, NICA has been required to annually submit a report with information about claimants and compensation to the Governor, President of the Senate, Speaker of the House, and CFO. Id. § 766.315(8). But unlike with the Water District in Lesinski, NICA doesn’t have to get its budget approved by anyone. And NICA is greatly autonomous when it comes to its dayto-day operations of administering claims. The board of directors of NICA has the following enumerated powers: (a) Administer the plan. (b) Administer the funds collected on behalf of the plan. (c) Administer the payment of claims on behalf of the plan. (d) Direct the investment and reinvestment of any surplus funds over losses and expenses, if any USCA11 Case: 20-13448 Date Filed: 04/21/2022 Page: 14 of 21 14 Opinion of the Court 20-13448 investment income generated thereby remains credited to the plan. (e) Reinsure the risks of the plan in whole or in part. (f) Sue and be sued, and appear and defend, in all actions and proceedings in its name to the same extent as a natural person. (g) Have and exercise all powers necessary or convenient to effect any or all of the purposes for which the plan is created. (h) Enter into such contracts as are necessary or proper to administer the plan. (i) Employ or retain such persons as are necessary to perform the administrative and financial transactions and responsibilities of the plan and to perform other necessary and proper functions not prohibited by law. (j) Take such legal action as may be necessary to avoid payment of improper claims. (k) Indemnify any employee, agent, member of the board of directors or alternate thereof, or person acting on behalf of the plan in an official capacity . . . . Id. § 766.315(4)(a)–(k). It also chooses how to invest the Plan’s funds, subject to statutory limitations. Id. § 766.315(5)(f). The legislature always has to delegate some authority and power to agencies for them to work. But when the legislature does USCA11 Case: 20-13448 Date Filed: 04/21/2022 Page: 15 of 21 20-13448 Opinion of the Court 15 so to such a significant degree as it has here, that militates in favor of the conclusion that the entity is autonomous. So this factor weighs against finding that NICA is an arm of the state.