Court Opinion

ID: 2995845
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:22:52.243021+00
Date Added: 2024-06-11T09:18:53.022202
License: Public Domain

In the
 United States Court of Appeals
                For the Seventh Circuit
                        ____________

No. 02-1158
AMERITECH CORP.,
                                           Plaintiff-Appellant,
                              v.

E. MICHAEL MCCANN, in his official
capacity as District Attorney of
Milwaukee County,
                                          Defendant-Appellee.
                        ____________
          Appeal from the United States District Court
             for the Eastern District of Wisconsin.
           No. 99-675—Rudolph T. Randa, Judge.
                        ____________
      ARGUED JUNE 5, 2002—DECIDED JULY 22, 2002
                     ____________

 Before FLAUM, Chief Judge, and DIANE P. WOOD and
WILLIAMS, Circuit Judges.
  FLAUM, Chief Judge. Plaintiff-Appellant Ameritech
Corporation (“Ameritech”) sued E. Michael McCann, the
District Attorney of Milwaukee County, seeking a declara-
tion that McCann must comply with certain provisions of
the Electronic Communications Privacy Act (“ECPA” or
“the Act”), 18 U.S.C. § 2510 et seq. The district court
granted McCann’s motion to dismiss, holding that the
Eleventh Amendment barred Ameritech’s suit. Ameritech
appeals and, for the reasons stated herein, we reverse.
2                                                     No. 02-1158

                         I. Background
  In October 1986, Congress enacted the ECPA to “protect
against the unauthorized interception of electronic com-
munications.” S. Rep. No. 99-541, reprinted at 1986
U.S.C.C.A.N. 3555, 3555. The Act generally defines the
scope of a party’s ability to intercept personal and propri-
etary communications, while at the same time recognizing
the government’s legitimate law enforcement needs in
obtaining such information. To this end, Section 2703 of the
Act sets forth the requirements for government access to
private communications and states that electronic commu-
nications providers (such as Ameritech) shall furnish cer-
tain electronic records to governmental entities only under
specific circumstances. The current appeal deals with Sec-
tion 2706 of the ECPA, which obligates a governmental
entity obtaining electronic records under Section 2703 to
“pay the person or entity assembling or providing such
information a fee for reimbursement for such costs as are
reasonably necessary and which have been directly incurred
in searching for, assembling, reproducing, or otherwise pro-
viding such information.” The Act urges the governmental
entity and information provider to agree on the reimburse-
ment amount. 18 U.S.C. § 2706(b). If, however, the parties
cannot reach an agreement, the ECPA states that the court
that issued the order for production shall determine the
appropriate reimbursement calculation. See id.1

1
    Section 2706(b) states:
      The amount of the fee provided by subsection (a) shall be as
      mutually agreed by the governmental entity and the person
      or entity providing the information, or, in the absence of
      agreement, shall be as determined by the court which issued
      the order for production of such information (or the court
      before which a criminal prosecution relating to such informa-
                                                      (continued...)
No. 02-1158                                                      3

  As the District Attorney for Milwaukee County, Wiscon-
sin, McCann occasionally obtains court orders requesting
automated message accounting studies (“AMAs”), which
are compilations of information detailing the origin of
incoming telephone calls to a particular telephone number.
Pursuant to the ECPA, Ameritech requested reimburse-
ment for the costs associated with compiling AMAs. Mc-
Cann refused, maintaining that Ameritech is not entitled
to reimbursement.
   Ameritech sued McCann in his official capacity seeking
a declaratory judgment that McCann must comply with
§ 2706 of the ECPA. McCann answered the complaint and
filed a motion to dismiss arguing, inter alia, that the
district court lacked jurisdiction and that the Eleventh
Amendment barred Ameritech’s suit. The district court is-
sued a ruling concluding that a genuine case or contro-
versy existed; however, the court declined to address the
merits of the remaining issues within McCann’s motion to
dismiss. Instead, the district court requested supplemen-
tal briefing on two additional concerns: whether the ECPA
violated the Tenth Amendment and whether 18 U.S.C.
§ 2706 preempted state law regarding access to electronic
records. In a footnote, the district court briefly addressed
the Eleventh Amendment issue, stating:
      McCann also argues that Ameritech’s suit is barred by
      the Eleventh Amendment. Under the Eleventh Amend-
      ment, a state and its officials, as such, may not be sued
      for money damages for past conduct. Const., Amend. XI.
      However, the Eleventh Amendment does not bar suits,
      like this one, that seek only declaratory relief. Hadi v.
      Horn, 830 F.2d 779, 783 (7th Cir. 1987).

1
    (...continued)
       tion would be brought, if no court order was issued for pro-
       duction of the information).
4                                                No. 02-1158

Ameritech Corp. v. McCann, No. 99-C-675, slip op. at 10 n. 3
(N.D. Ill. July 20, 2000). The parties subsequently sub-
mitted supplemental briefs pursuant to the district court’s
order.2
  In December 2001, the district court issued an order
granting McCann’s motion to dismiss, stating that in the
course of considering the parties’ supplemental briefs, the
court changed course and decided that the Eleventh
Amendment barred Ameritech’s suit. The district court
noted that a state’s sovereign immunity generally bars
declaratory judgment actions and that Congress lacked
the power to abrogate that immunity when it passed the
Declaratory Judgment Act in 1934. More important to the
present appeal, the district court also held that the excep-
tion to Eleventh Amendment immunity announced by the
Supreme Court in Ex Parte Young, 209 U.S. 123 (1908),
was inapplicable for several reasons. First, the court ruled
that, as a technical matter, the Young exception did not
apply because Ameritech named McCann in his official
and not individual capacity. Second, the district court
reasoned that the res judicata effect of a declaration of
rights under § 2706 would translate into a monetary dam-
ages award against the state. As a result, the court stated
that although Ameritech requested prospective injunctive
relief, its suit was the “functional equivalent” of a suit for
damages and therefore barred by Idaho v. Coeur d’Alene
Tribe of Idaho, 521 U.S. 261, 267-69 (1997). Finally, the
court found that § 2706 impermissibly burdened the state’s
special sovereign interest in law enforcement by requir-
ing the expenditure of state funds in an area tradition-
ally reserved to the states. The district court then granted

2
   In the meantime, Ameritech had filed a motion for summary
judgment. Ameritech, however, later withdrew the motion when
it acknowledged that the deposition testimony of one of its em-
ployees created a genuine issue of material fact.
No. 02-1158                                                  5

McCann’s motion to dismiss the complaint, and Ameritech
appeals.

                      II. Discussion
  We review a district court’s grant of a motion to dismiss
de novo, accepting as true all well-pleaded facts and draw-
ing all reasonable inferences in the nonmoving party’s
favor. McLeod v. Arrow Marine Transp., Inc., 258 F.3d
608, 614 (7th Cir. 2001). In this case, the district court dis-
missed Ameritech’s complaint based upon the Eleventh
Amendment, which states:
    The judicial power of the United States shall not be
    construed to extend to any suit in law or equity, com-
    menced or prosecuted against one of the United States
    by Citizens of another State, or by Citizens or Subjects
    of any Foreign State.
U.S. Const. amend XI. Although the Amendment’s terms do
not bar suits against a State by its own citizens, the
Supreme Court “has consistently held that an unconsenting
state is immune from suits brought in federal courts by
her own citizens as well as by citizens of another State.”
Edelman v. Jordan, 415 U.S. 651, 662-63 (1974) (citing
cases). However, a state’s sovereign immunity is not ab-
solute. In some cases, a suit against a state or its officials
may proceed despite the Eleventh Amendment’s proscrip-
tion. For example, “a state may waive the protections of
the amendment and consent to suit in federal court, or
Congress may use its enforcement powers under the four-
teenth amendment to abrogate the states’ eleventh amend-
ment immunity.” MSA Realty Corp. v. Illinois, 990 F.2d
288, 291 (7th Cir. 1993). In addition, a suit against state
officials may proceed in the limited circumstances identified
by the Supreme Court in Ex Parte Young, 209 U.S. 123
(1908). Because Eleventh Amendment immunity applies
to injunctive suits against the states as well as those
6                                                 No. 02-1158

for damages, see Pennhurst State School & Hosp. v. Halder-
man, 465 U.S. 89, 100 (1984), we must determine whether
the Young exception applies in this case and thus preserves
Ameritech’s suit.
   Under the Young doctrine, “a private party can sue a
state officer in his or her official capacity to enjoin prospec-
tive action that would violate federal law.” Dean Foods Co.
v. Brancel, 187 F.3d 609, 613 (7th Cir. 1999). Young involved
a suit against state officials to enjoin enforcement of a
railroad commission’s order requiring a reduction in rates.
209 U.S. at 129. In finding that the Eleventh Amend-
ment did not bar the plaintiffs’ suit, the Supreme Court
held that when a state official violates the Constitution or
federal law, he acts outside the scope of his authority and
is no longer entitled to the State’s immunity from suit. Id.
at 155-56; see also Gibson v. Arkansas Dep’t of Correction,
265 F.3d 718, 720 (8th Cir. 2001). Young thus creates a legal
fiction—the “state official who acts in violation of the fed-
eral Constitution is ‘stripped of his official or representa-
tive character and is subjected in his person to the conse-
quences of his individual conduct.’ ” MSA Realty Corp., 990
F.2d at 291 (citing Young, 209 U.S. at 159-60)). This al-
lows federal courts to “vindicate federal rights and hold
state officials responsible to the supreme authority of the
United States.” MCI Telecomm. Corp. v. Illinois Bell Tel.
Co., 222 F.3d 323, 345 (7th Cir. 2000). Accordingly, under
Young, “state officials may be sued in their official capaci-
ties for injunctive relief, although they may not be sued
for money damages.” MSA Realty Corp., 990 F.2d at 291.
  The foregoing discussion brings us to the first point of
error. The district court held that “as a technical matter,
the [Young] exception does not apply because McCann is
named in his official and not his individual capacity.”
Ameritech v. McCann, No. 99-C-675, slip op. at 12 (N.D. Ill.
December 17, 2001) (emphasis in original). Contrary to the
district court’s assertion, the fact that Ameritech sued
No. 02-1158                                                   7

McCann in his official capacity does not render Young
inapposite. In fact, the opposite is true—a case may pro-
ceed under the Young exception only when a state official
is sued in his official capacity. Young, 209 U.S. at 155-56;
Luder v. Endicott, 253 F.3d 1020, 1024 (7th Cir. 2001); MCI,
222 F.3d at 345. The twin goals served by the Young ex-
ception to Eleventh Amendment immunity—vindicating
federal rights and holding state officials responsible to
federal law—cannot be achieved by a lawsuit against a
state official in his or her individual capacity. The reason
is that individual (or personal) capacity suits do not seek
to conform the State’s conduct to federal law; rather,
such suits seek recovery from the defendant personally. See
Alden v. Maine, 527 U.S. 706, 757 (1999); Kentucky v.
Graham, 473 U.S. 159, 167-68 (1985) (“a victory in a per-
sonal-capacity action is a victory against the individual
defendant, rather than against the entity that employs
him.”); Luder, 253 F.3d at 1022-23. As a consequence,
individual capacity suits do not implicate the Eleventh
Amendment’s protections, making an exception to Eleventh
Amendment immunity obviously unnecessary. In contrast,
because the Eleventh Amendment bars suits against
both the States, see Halderman, 465 U.S. at 106, and state
officers acting in their official capacities, see Edelman v.
Jordan, 415 U.S. at 663, we must determine whether Amer-
itech’s suit satisfies the remaining requirements of the
Young exception. We turn now to resolution of that issue.
  In a recent pronouncement, the Supreme Court helped
define precisely when the Ex Parte Young exception ap-
plies.3 In Verizon Maryland, Inc. v. Public Service Comm.
of Maryland., the Court stated:
    In determining whether the doctrine of Ex Parte Young
    avoids an Eleventh Amendment bar to suit, a court

3
  The district court did not have the benefit of Verizon when it
issued its order on December 17, 2001.
8                                                No. 02-1158

    need only conduct a straightforward inquiry into wheth-
    er [the] complaint alleges an ongoing violation of fed-
    eral law and seeks relief properly characterized as
    prospective.
Nos. 01-1531 & 00-1711, ___ U.S. ___, 2002 WL 1008485
(May 20, 2002) (citing Coeur d’Alene, 521 U.S. at 296
(O’Connor, J., concurring in part and concurring in judg-
ment) (internal quotations omitted)). That Ameritech’s
complaint alleges an ongoing violation of federal law—
McCann’s refusal to comply with Section 2706 of the
ECPA—is beyond dispute.
   The only possible area of controversy is whether Ameri-
tech’s complaint seeks relief “properly characterized as
prospective.” McCann argues that although Ameritech’s
suit seeks a declaratory judgment, it is the functional
equivalent of a claim for monetary damages because the
“real purpose of seeking to compel compliance with § 2706
is to obtain payment from the state.” Resp. Br. at 12. While
it is true that a declaration may require the expenditure of
state funds, the Supreme Court has recognized that virtu-
ally all declaratory judgment actions have some effect
on the public fisc. See Verizon, supra, at *6 (“But no past
liability of the State, or of any of its commissioners, is at
issue. It does not impose upon the State ‘a monetary loss
resulting from a past breach of a legal duty on the part of
the defendant state officials.’ ”) (quoting Edelman v. Jordan,
415 U.S. 651, 668 (1974) (emphasis in original)); see also
Papasan v. Allain, 478 U.S. 265, 278 (1986) (“relief that
serves directly to bring an end to a present violation of
federal law is not barred by the Eleventh Amendment
even though accompanied by a substantial ancillary effect
on the state treasury.”). Thus, the critical issue is not
whether a declaration of rights will have some effect on
State expenditures, but rather whether the declaratory
judgment imposes upon the State a monetary loss result-
ing from a past breach of a legal duty on the part of defen-
No. 02-1158                                                  9

dant state officials. Coeur d’Alene, 521 U.S. at 282. In this
case, no past breach of Section 2706 is at issue because
Ameritech seeks only a declaration of rights that will force
McCann to conform his future conduct to federal law.
  McCann argues that unlike other cases, the potential
monetary impact on the State is not ancillary to the relief
requested, but rather the true focus of the present lawsuit.
In support of this proposition, McCann relies principally on
MSA Realty Corp. v. Illinois, 990 F.2d 288 (7th Cir. 1993).
In that case, Plaintiffs sought to enforce legislation that
promised a 5 percent return on municipal bonds issued un-
der Illinois’ Tax Increment Allocation Redevelopment Act.
When the State later amended the Act and reduced the rate
or return, Plaintiffs filed suit seeking (1) a declaration that
the amended Act was an unconstitutional impairment of
contract, and (2) an injunction requiring the State officials
to pay the original amount to the affected municipality. Id.
at 289-90. Although Plaintiffs cast their Complaint as seek-
ing declaratory and injunctive relief, they really sought
to enforce a preexisting legal duty that was later amended
by legislative action. We upheld the district court’s dis-
missal based on Eleventh Amendment grounds primarily
because we recognized that a federal court cannot force
the State to perform an alleged contract that would involve
the collection of taxes and allocation of funds to a specific
purpose. Id. at 295. In contrast, Ameritech’s suit seeks
no reimbursement for McCann’s previous noncompliance,
but rather a declaration that he must comply with Section
2706 in the future. This is the very nature of prospective
relief, and the fact that the federal statute at issue
creates a right to reimbursement does not alter the analy-
sis. See Edelman, 415 U.S. at 667-68 (recognizing no
Eleventh Amendment immunity in cases where the “fiscal
consequences to state treasuries . . . were the necessary
result of compliance with decrees which by their terms were
prospective in nature.”). In addition, nothing in the relief
10                                               No. 02-1158

sought by Ameritech impermissibly “inserts” the federal
courts into “management of the state’s fiscal affairs. . . .”
MSA Realty, 990 F.2d at 295.
  McCann also suggests that Ameritech’s lawsuit cannot
proceed because it impermissibly burdens the state’s sov-
ereign interest in law enforcement. In doing so, McCann
urges this court—like the district court—to examine the
underlying nature of Ameritech’s suit and its concomitant
impact on the State’s sovereign interests. While the Su-
preme Court in a relatively recent Eleventh Amendment
case seemed to advocate this balancing approach, see
Coeur d’Alene, 521 U.S. at 267-80 (principal opinion of
Kennedy, J., joined by Rehnquist, C.J.), a majority of the
Court in Verizon rejected it in favor of the straightforward
inquiry described above. See Verizon Maryland, 2002 WL
1008485 at *6. As a result, we need not assess the precise
nature of the State’s sovereign interest in law enforce-
ment—so long as Ameritech’s complaint seeks prospective
injunctive relief to cure an ongoing violation of federal law,
the Eleventh Amendment poses no bar.
   Finally, McCann asks this court to determine whether
AMAs really fall within the purview of Section 2706. The
parties dispute whether an AMA is an existing record with-
in Ameritech’s databases or whether production of an AMA
requires additional compilation beyond the information
stored by Ameritech. The precise nature of an AMA is
important because reimbursement under the Act is unnec-
essary for “records or other information maintained by a
communications common carrier that relate to telephone
toll records and telephone listings obtained under Section
2703.” 18 U.S.C. § 2706(c). While recognizing the obvious
importance of the issue on remand, we are unwilling to
decide here whether Ameritech “maintains” AMAs, or
whether they “relate to telephone toll records and telephone
listings.” First, resolution of these two issues—while im-
portant in determining the applicability of § 2706(c)—is
No. 02-1158                                                 11

irrelevant to the Eleventh Amendment issue presented
by this appeal. See Verizon Maryland, 2002 WL 1008485
at *6 (inquiry into whether the suit lies under Ex Parte
Young does not include an analysis of the merits of the
claim). Second, we have before us an undeveloped record
that contains conflicting information regarding the true
character of an AMA. For example, Beverly Gore, an Ameri-
tech employee, testified in a deposition that Ameritech com-
piles the data used to generate a telephone bill from the
same source as that used to generate an AMA, and that
Ameritech occasionally creates AMAs for internal use.
(R. at 19; Gore Depo. at 38 and 43). Ameritech disputes
Gore’s ability to testify about these facts and offers an af-
fidavit from at least one employee who stated that “Ameri-
tech does not have any business records that contain in-
coming call detail.” (R. at 13; Scott Aff. ¶ 4). At the very
least, and as Ameritech conceded in withdrawing its motion
for summary judgment (R. at 28, pages 1 and 2), this is an
issue of material fact that may not be resolved given the
procedural posture of this case.

                      III. Conclusion
  The Eleventh Amendment does not bar Ameritech’s law-
suit, which seeks prospective injunctive relief for an on-
going violation of federal law. As a result, the opinion of the
district court is REVERSED and the case is REMANDED for
further proceedings consistent with this opinion.

A true Copy:
       Teste:

                         ________________________________
                         Clerk of the United States Court of
                           Appeals for the Seventh Circuit

                    USCA-97-C-006—7-22-02