Court Opinion

ID: 9485801
Source: CourtListenerOpinion
Date Created: 2023-08-05 11:30:15.965303+00
Date Added: 2024-06-11T17:51:21.961247
License: Public Domain

HORNBY, District Judge,
concurring.
it takes the court 38 typed pages (8/6 x 11") of closely reasoned text to decide whether the University of Rhode Island is a citizen — a determination that has nothing to do with the substance of the real world dispute between these parties, but simply resolves where to try their lawsuit. Is this approach really essential for determining whether a federal court has jurisdiction? Granted that our system limits the jurisdiction of federal courts, a rational observer might nevertheless expect simple gatekeeping rules for what gets in and what is kept out. A litigant should be able to ascertain, with relatively modest effort and legal fees, where to bring its lawsuit. But if the court’s analysis of a “myriad factors” — which are “by no means exhaustive” — is to be the governing standard, future litigants in cases involving similar state agencies had better be prepared to pay a lot of legal fees for their lawyers to (1) read and digest the prose; (2) gather the relevant information and apply the legal analysis to their client or opponent; (3) litigate the issues at pretrial, trial and on appeal. Those litigants had also better be prepared for delays in decisionmaking as lawyers and judges ponder the issue: the “myriad factors” will seldom yield a certain outcome until a court actually decides the issue.
To be sure, this court is not alone in adopting this approach. Other courts have *1220also applied a multitude of factors (with no particular weight assigned), in determining the status of a particular state agency. See, e.g., Hughes-Bechtol, Inc. v. West Virginia Bd. of Regents, 737 F.2d 540, 543-44 (6th Cir.), cert. denied, 469 U.S. 1018, 105 S.Ct. 433, 83 L.Ed.2d 359 (1984) (looking at several factors); Krieger v. Trane Co., 765 F.Supp. 756, 758 (D.D.C.1991) (examining seven factors); University Sys. of New Hampshire v. United States Gypsum Co., 756 F.Supp. 640, 645 (D.N.H.1991) (citing eight factors); University of Tennessee v. United States Fidelity & Guar. Co., 670 F.Supp. 1379, 1386-87 (E.D.Tenn.1987) (considering, arguendo, a nine-factor approach). The result is great unpredictability. As the commentaries recognize, “[t]here is no unanimity among the decisions as to whether state agencies or departments are citizens within the meaning of 28 U.S.C.S. § 1332, with some decisions holding that they are while others hold that they are not.” 1 Federal Proc.L.Ed. § 1:200. The ensuing extensive litigation over jurisdiction has undoubtedly caused substantial delay and consumed thousands of dollars in attorney fees where the real goal should have been speedy and inexpensive resolution of the merits of the underlying dispute.
The question is whether United States Supreme Court precedents really require such a complex analysis. I think not. I will concede that this court’s approach is one plausible reading of the precedents, but there is another plausible reading that keeps the subject matter jurisdiction issue in proper perspective as only a preliminary issue in the underlying economic dispute between the parties.
As the court recognizes, a couple of propositions are beyond debate, given United States Supreme Court decisions. First, a State cannot be a citizen of itself: “There is no question that a State is not a ‘citizen’ for purposes of the diversity jurisdiction.” Moor v. County of Alameda, 411 U.S. 693, 717, 93 S.Ct. 1785, 1800, 36 L.Ed.2d 596 (1973). Second, incorporated branches of state government (for example, cities and counties) are citizens of the state of their incorporation. See Cowles v. Mercer County, 74 U.S. (7 Wall.) 118, 122, 19 L.Ed. 86 (1869). This resulting principle of independent citizenship for a public corporation had become so “well settled” by 1972 that the Supreme Court no longer stopped to question it. See Moor, 411 U.S. at 718, 93 S.Ct. at 1800, quoting Illinois v. City of Milwaukee, 406 U.S. 91, 97, 92 S.Ct. 1385, 1389, 31 L.Ed.2d 712 (1972).
Here, the Rhode Island Board of Higher Education 1 is separately incorporated with the power to sue and be sued. The diversity statute provides: “[A] corporation shall be deemed a citizen of any state by which it has been incorporated....” 28 U.S.C. § 1332(c). What more need be said to conclude that the Rhode Island Board is a citizen for diversity purposes? The court apparently believes that its lengthy and complex analysis is required by Moor. But in Moor the Supreme Court spent only one paragraph summarizing California statutes to conclude that the county was a corporation with important powers independent of the state and a second paragraph summarizing a California Supreme Court decision finding California counties to be corporations. Based on those two summary paragraphs, the Supreme Court concluded that “the county has a sufficiently independent corporate character to dictate that it be treated as a citizen of California under our decision in Cowles v. Mercer County, supra." 411 U.S. at 721, 93 S.Ct. at 1802.
A parallel short treatment of Rhode Island law can dispose of the jurisdictional issue in this case. The Board that governs the University of Rhode Island is a “public corporation, empowered to sue and be sued in its own name, to have a corporate seal, and to exercise all the powers, in addition to those hereinafter specifically enumerated, usually appertaining to public corporations entrusted with control of post-secondary educational institutions and functions.” R.I. General Laws § 16-59-1(a) (1992). Under Rhode Island law, a “public corporation” is “a corporate entity which is considered a governmental agency but which has a distinct legal *1221existence from the state or any municipality, [and] does not constitute a department of state or municipal government....” Id. 22-10—2(f). The Board has the corporate power to acquire, hold, and dispose of real and personal property (albeit in trust for the state). Id. § 16—59—1(b). The Board is entitled to levy tuition and other fees in order to obtain funds to carry out its activities. Id. § 16-59-9. Its receipts from sources other than state appropriations do not go into the state’s general fund and are subject to use at the Board’s order. Id. § 16-59-18. It appoints the presidents of postsecondary institutions and has a great deal of authority in determining what postsecondary education will be available to Rhode Island citizens. Id. §§ 16-59-4, 8. This summary paints a picture of a “sufficiently independent corporate character” to match that of the California county at issue in Moor. No more should be necessary.2 I therefore concur in the court’s evaluation that jurisdiction exists, but not in the prolonged reasoning by which it reaches that conclusion.
I add one postscript: The careful reader will observe that neither I nor the court have articulated any jurisdictional policy arguments in determining the citizenship of the Board. The policy interests behind the court’s myriad factor approach are borrowed — I believe ill-advisedly — from Eleventh Amendment cases where the primary goal is to protect the state treasury. Perhaps the court’s complex analysis and case-by-case approach are justified there. The policy goals in diversity jurisdiction analysis are somewhat different, involving availability of an unbiased forum. The Supreme Court has not addressed them in its analysis of what is a citizen and neither do I. In any event, such interests can best be served by clear rules for the generality of cases; every single piece of litigation need not require a return to first principles. Probably, the major policy interest at stake lies in how the conclusion is reached. Simplicity from the courts of appeals (and the Supreme Court) on these gatekeeping and procedural issues will permit lawyers and judges — and most importantly, the parties — to deal with the merits of disputes in a simple and less costly manner. Needlessly complex jurisdictional rules like those the court advances here can only perplex the litigants as they pay mounting attorney fees and suffer through procedural delays. Congress has ordered district courts to pay heed to such concerns in the Civil Justice Reform Act of 1990, 28 U.S.C. §§ 471-482. Appellate courts can make that task easier by resisting unnecessary subtleties and focusing instead on rules that ensure predictability and certainty, as well as fairness.
In all other respects, I join the court’s opinion.

. I agree with the court that there is no legal entity under Rhode Island law known as the University of Rhode Island.

. Since the Board is a public corporation, it seems unnecessary to pursue the "arm or alter ego" alternative set forth in State Highway Comm'n of Wyoming v. Utah Constr. Co., 278 U.S. 194, 199, 49 S.Ct. 104, 106, 73 L.Ed. 262 (1929). There, a lawsuit was brought against the Wyoming State Highway Commission (an unincorporated state agency) and its individual members, premised on diversity of citizenship. The Supreme Court found no diversity jurisdiction. Primarily, the Court determined that the suit was not really against the Highway Commission but against the State of Wyoming itself, because it was the State that was actually a party to the contract in dispute and neither the Commission nor any of its members had assumed any responsibility. The sentence most often quoted (and referred to in Moor) states: "The Commission was but the arm or alter ego of the State with no funds or ability to respond in damages.” 278 U.S. at 199, 49 S.Ct. at 106.