Court Opinion

ID: 194893
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:27:27+00
Date Added: 2024-06-11T09:43:09.060954
License: Public Domain

August 26, 1993   UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT
                                           

No. 92-1034

                   UNIVERSITY OF RHODE ISLAND,

                      Plaintiff, Appellant,

                                v.

                    A. W. CHESTERTON COMPANY,

                       Defendant, Appellee.

                                           

                           ERRATA SHEET

     The  opinion of  this Court  issued on  August 16,  1993, is
amended as follows:

     Page  8,  line 5,  should read:    as the  nominal plaintiff
. . .

                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT
                                           

No. 92-1034

                   UNIVERSITY OF RHODE ISLAND,

                      Plaintiff, Appellant,

                                v.

                    A. W. CHESTERTON COMPANY,

                       Defendant, Appellee.

                                           

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                 FOR THE DISTRICT OF RHODE ISLAND

          [Hon. Ronald R. Lagueux, U.S. District Judge]
                                                      

                                           

                              Before

                  Cyr and Boudin, Circuit Judges,
                                                

                   and Hornby,* District Judge.
                                              

                                           

   Louis  J.  Saccoccio with  whom Merlyn  P.  O'Keefe and  Packer &
                                                                    
O'Keefe were on brief for appellant.
     
   Steven E. Snow with whom Partridge, Snow & Hahn was  on brief for
                                                  
appellee.
                                           

                         August 16, 1993
                                           

                

*Of the District of Maine, sitting by designation

          CYR,  Circuit Judge.   The  University of  Rhode Island
          CYR,  Circuit Judge.
                             

("URI")  appeals a  judgment disallowing  its breach  of warranty

claims against A.W. Chesterton Company ("Chesterton"), contending

that the  district court lacked subject  matter jurisdiction, and

challenging  various  rulings at  trial.   Finding  no  error, we

affirm.

                                I

                            BACKGROUND
                                      

          We  recite  only those  record  facts  essential to  an

understanding of the issues raised on appeal, drawing all reason-

able inferences  in favor  of plaintiff-appellant URI.   Richmond
                                                                 

Steel,  Inc. v. Puerto  Rican American Ins. Co.,  954 F.2d 19, 20
                                               

(1st Cir. 1992).   The R/V Endeavor is a  vessel chartered by the

National Science Foundation to  URI's Graduate School of Oceanog-

raphy  (GSO) for research purposes.   In the summer of 1985, John

Metz, the GSO's port  engineer, discovered serious rust corrosion

on  the inside of the  Endeavor's steel ballast  tanks, which are

submerged in  salt water during  normal operation of  the vessel.

Responding  to  a  Chesterton advertisement,  Metz  received test

samples of  "Rust Transformer,"  a Chesterton product  which pur-

portedly converts surface corrosion  into a rust-inhibitor, which

in turn serves  as a base for further coats  of paint.  Satisfied

with  the  test-sample  results,  Metz  invited Chesterton  sales

representatives  aboard  the  Endeavor.    After  inspecting  the

                                2

Endeavor's ballast tank  corrosion, Chesterton's  representatives

recommended that  Metz use Chesterton's 1-2-3  System (using Rust

Transformer,  a primer, and a final  enamel coat) to rehabilitate

the  tanks.   Metz  ordered the  1-2-3  System on  September  11,

1985.1   Six months after URI completed the 1-2-3 System applica-

tion, the  new coating on  the ballast tanks began  to loosen and

flake  off.    URI allegedly  expended  $100,000  to correct  the

problem.

          URI  brought suit  against Chesterton  in Rhode  Island

state  court  on   May 4,  1989,   alleging  negligence,   strict

liability,  and  breaches  of  an express  warranty  and  implied

warranties  of  merchantability  and  fitness  for  a  particular

purpose.    Chesterton promptly  removed  the  action to  federal

district court.   URI moved for remand on the ground that URI, as

an "alter  ego, arm, or agent"  of the State of  Rhode Island, is

not  a "citizen"  of Rhode  Island for  diversity purposes.   The

district court denied URI's  remand motion without an evidentiary

hearing,  relying  on an  earlier  district  court decision,  see
                                                                 

Vanlaarhoven v. Newman,  564 F. Supp.  145 (D.R.I. 1983)  (Selya,
                      

J.), which  determined that URI was not an "arm" of the State for

sovereign immunity purposes.

                    

     1The original URI complaint  alleged that Metz was reassured
by Chesterton  that  the 1-2-3  System would  work on  Endeavor's
ballast tanks.  On the other hand, the product's written instruc-
tions advised  that the system  was not recommended  for surfaces
regularly  immersed in sea water.   In an  amended complaint, URI
alleged that  Chesterton  representatives observed  the URI  crew
applying  the 1-2-3 System to the ballast tanks, but said nothing
to URI representatives  about the unsuitability of the  system or
its improper application.

                                3

          This  court declined  to entertain  URI's interlocutory

appeal  from the  jurisdictional  ruling  but noted  disagreement

among  the circuits as to the proper criteria for determining the

citizenship  of state  universities for  diversity purposes.   We

recommended that the district court conduct "limited factfinding"

on remand relating to several factors pertinent to URI's citizen-

ship,  including  (1)  "the degree  of  URI's  dependence on  and

functional integration  with the  state treasury," (2)  "the per-

centage of URI's annual budget that derives from state appropria-

tions,"  and (3)  "whether the legislature  bases levels  of such

appropriations  in part  on the  amount of  nonappropriated funds

available to URI."2   On remand, the district court  denied URI's

motion  for  a pretrial  evidentiary  hearing  relating to  these

jurisdictional  matters.   The  jury trial  began on  December 3,

1991.  After the  district court excluded the testimony  of URI's

only expert witness on the issue of contract damages, URI abrupt-

ly  rested its case.  Judgment  was entered for Chesterton on all

counts, as  a matter of law,  pursuant to Fed. R.  Civ. P. 50(a),

and URI appealed.

                                II

                            DISCUSSION
                                      

                    

     2As  an alternate  and independent  reason for  declining to
entertain  the interlocutory  appeal, this  court noted  that the
litigation  was unlikely to be so protracted as to warrant appel-
late   interruption, given the nature and scope of URI's contract
claims.

                                4

A.   Subject Matter Jurisdiction
                                

          URI urges us to  set aside the judgment and  remand the

case  to state court on  the ground that  Chesterton, a Massachu-

setts corporation,  has not established diversity.   URI contends

that it  is not a  Rhode Island  "citizen," but a  mere "arm"  or

"alter ego" of the  State.  See  Gibbs v. Buck,  307 U.S. 66,  69
                                              

(1939) (holding that party  invoking diversity jurisdiction  must

establish sufficient  facts to  warrant its exercise);  Bank One,
                                                                 

Texas, N.A. v.  Montle, 964 F.2d  48, 50 (1st Cir.  1992) (same);
                      

see also  Shamrock Oil Corp. &  Gas Co. v. Sheets,  313 U.S. 100,
                                                 

108-09  (1941)  (removal  statute  should  be strictly  construed

against removal); McNutt v.  General Motors Acceptance Corp., 298
                                                            

U.S. 178, 187 (1936);  Wilson v. Republic Iron  & Steel Co.,  257
                                                           

U.S. 92, 97 (1921).

          We  begin with first principles.   A State  cannot be a

"citizen"  of itself  for  purposes  of diversity  jurisdiction.3

Moor v. County of Alameda, 411 U.S. 693, 717  (1973); Postal Tel.
                                                                 

Cable Co.  v. Alabama, 155  U.S. 482, 487  (1894).  On  the other
                     

hand, a  political subdivision possessing the formal  status of a

"body politic and  corporate," such as a  county or municipality,

is  presumed a  "citizen"  for diversity  purposes "unless  it is

simply 'the arm or  alter ego of the State.'"   Moor, 411 U.S. at
                                                    

717, 721 (finding that Alameda  County had a "sufficiently  inde-

                    

     3Section 1332(a) provides that "[t]he district  courts shall
have original jurisdiction of  all civil actions . . . [involving
over $50,000]  . . . between  . . . citizens of  different States
. . . ."  28 U.S.C.   1332(a)(1).

                                5

pendent corporate character" to be a "citizen" of California  for

diversity  purposes) (citation  omitted) (emphasis  in original);

Illinois v. City of Milwaukee, 406 U.S. 91,  97 (1972); Cowles v.
                                                              

Mercer County, 74 U.S.  (7 Wall.) 118, 121-22 (1869).4   Thus, in
             

                    

     4A  political  subdivision's  "detachment"  from  the  State
generally will deprive it of the right to partake  of the State's
sovereign immunity under the  Eleventh Amendment. See U.S. Const.
                                                     
amend. XI  ("The judicial power of the United States shall not be
construed to extend to  any suit in law  or equity, commenced  or
prosecuted  against  one of  the  United  States  by citizens  of
another state . . . .").   Although we  have noted the  essential
similarity between  the immunity and diversity  tests, see George
                                                                 
R. Whitten, Jr. Inc.  v. State Univ. Constr. Fund,  493 F.2d 177,
                                                 
179  n.2 (1st  Cir.  1974) (tests  "closely  allied and  yet  not
identical"); cf. Krieger v. Trane Co.,  765 F. Supp. 756, 758 (D.
                                     
D.C. 1991) (rejecting any distinction  between the two tests), we
have  not  had occasion  to identify  the  precise nature  of any
differences.   In this case, however, we address, and reject, two
proposed  distinctions.    First,  Eleventh   Amendment  analysis
normally would focus  primary attention on any financial drain on
                                                              
the State treasury caused by a judgment adverse to URI, see Quern
                                                                 
v. Jordan, 440 U.S. 332, 337 (1979); Edelman  v. Jordan, 415 U.S.
                                                       
651, 663 (1974),  a concern which  obviously does not arise  in a
diversity case where the State-related plaintiff seeks to recover
                                                                 
a  monetary judgment.   Significantly,  however, courts  have not
accepted the notion  that sovereign immunity  exists only if  the
                                                         
State treasury is  threatened.  See Cory  v. White, 457 U.S.  85,
                                                  
90-91  (1982); Kroll v. Board  of Trustees of  Univ. of Illinois,
                                                                
934 F.2d  904,  908 (7th  Cir.),  cert. denied,  112  S. Ct.  377
                                              
(1991);  Harden v. Adams, 760  F.2d 1158, 1163  (11th Cir.) (Troy
                        
State University), cert. denied, 474  U.S. 1007 (1985).   Whether
                               
in  the  diversity or  the  immunity context,  the  analysis must
center on  the State-related party's enduring legal identity as a
juridical entity separate from the State.
     The second  possible distinction  we must consider  is that,
unlike sovereign  immunity, nondiversity cannot be  waived by the
State.  See State Highway Comm'n  of Wyoming v. Utah Constr. Co.,
                                                                
278 U.S. 194, 199 (1929); George R.  Whitten, Jr., Inc., 493 F.2d
                                                       
at 179.   Generally,  however, the  "waiver of  immunity" inquiry
would  follow the  initial determination  that the  State-related
             
entity was not sufficiently autonomous to escape characterization
as an "alter ego"  of the State.   For example, in  Vanlaarhoven,
                                                                
the court based   its holding on the alternate  ground that, even
if URI were  merely an "alter  ego" of the  State, the State  had
expressly waived  URI's immunity under  state law by  granting it
the authority to "sue or be sued" in its own name.  Vanlaarhoven,
                                                                
564 F. Supp. at 149; see also  infra note 7.  While such a bypass
                                    

                                6

principle at least, public  and private corporations are accorded

similar treatment as  "citizens" for diversity purposes.   See 28
                                                              

U.S.C.    1332(c)(1)  ("For  purposes  of this  section  . . .  a

corporation shall be deemed to be a citizen of any State by which

it has  been incorporated  . . . ."); see also  Media Duplication
                                                                 

Servs., Ltd. v. HDG Software, Inc., 928 F.2d 1228, 1236 (1st Cir.
                                  

1991).

          The Rhode Island Board of Higher Education ("Board") is

nominally constituted by the  State of Rhode Island as  the legal

entity which acts in behalf of URI and other public postsecondary

educational institutions  in Rhode Island.5   The Board  has been

constituted a  "public corporation,"  R.I. Gen. Laws    16-59-1,6

see  infra note  10, just  as the  County of  Alameda is  a "body
          

                    

argument is  impermissible where the sole issue is URI's citizen-
ship for diversity purposes, sovereign immunity case law, and its
identification of the relevant attributes of autonomy, is no less
probative  in diversity cases; hence,  we cite to  these cases as
apposite.

     5The  complaint mistakenly designates  URI as the plaintiff.
Since URI is not  a distinct legal entity under Rhode Island law,
we  treat the  Board as the  real party  in interest,  as did the
district court.

     6Section 16-59-1(a) provides,  in pertinent part: "There  is
hereby  created a board of governors  for higher education, some-
times hereinafter referred  to as  the 'board' or  the 'board  of
governors,' which  shall be  and hereby  is constituted 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 addi-
tion   to  those  hereinafter  specifically  enumerated,  usually
appertaining  to  public corporations  entrusted with  control of
postsecondary educational institutions and functions."  R.I. Gen.
Laws    16-59-1(a) (1992).    In all  significant respects,  this
section,  enacted  in 1988,  merely  extended  the extant  powers
possessed  by  the  Board's  immediate  predecessor,  the  entity
involved in Vanlaarhoven.
                        

                                7

corporate and politic" under  California law.  Moor, 411  U.S. at
                                                   

719 (citing Cal. Gov't Code   23003).

          Several  ancillary  principles derive  from Moor.   The
                                                          

criteria are  substantially  similar for  evaluating  whether  an

entity is  a citizen of  the State  for diversity purposes,  or a

State for  Eleventh Amendment  sovereign  immunity purposes,  see
                                                                 

Northeast Fed. Credit Union v. Neves, 837 F.2d 531, 534 (1st Cir.
                                    

1988)  (tests  "pretty much  the same");  see  supra note  4, and
                                                    

present the  same ultimate  question for  decision:   whether the

State  of Rhode Island remains  the real party  in interest, not-
                                                           

withstanding URI's designation as the nominal plaintiff.  See id.
                                                                 

at 533 ("For the purpose of diversity jurisdiction,  the determi-

native factor is whether  the state is the  real party in  inter-

est.") (quoting Krisel  v. Duran,  386 F.2d 179,  181 (2d  Cir.),
                                

cert.  denied, 390 U.S. 1042 (1967)); see also Kovats v. Rutgers,
                                                                

822  F.2d 1303, 1307 (3d Cir. 1987) (immunity), cert. denied, 489
                                                            

U.S. 1014 (1987);  Ronwin v.  Shapiro, 657 F.2d  1071, 1073  (9th
                                     

Cir. 1981) (Board  of Regents of Arizona)  (immunity and diversi-

ty);  Jagnandan v.  Giles, 538  F.2d 1166,  1173 (5th  Cir. 1976)
                         

(Mississippi State University) (immunity), cert. denied, 432 U.S.
                                                       

910  (1977); Krieger  v.  Trane Co.,  765  F. Supp.  756,  757-58
                                   

(D.D.C.  1991)  (diversity).   Thus,  most  unincorporated  state

agencies and departments are  readily recognizable as mere "arms"

or "alter egos" of the State.

          On the other hand, though the State's formal incorpora-

tion  of a State-related entity is not necessarily dispositive on

                                8

the  issue  of its  autonomy,  either for  immunity  or diversity

purposes, see, e.g., Jagnandan, 538  F.2d at 1174, 1176; Krieger,
                                                                

765  F. Supp. at 760,  762, the legislative  act of incorporation

should  prompt a thorough examination  into the precise nature of

the entity  established under state law.   See Moor, 411  U.S. at
                                                   

719 (undertaking  "a detailed examination of  the relevant provi-

sions  of California law" in  order to rule  out Alameda County's

"mere  agency"); id. at 721 n.54 (generally repudiating resort to
                    

"conclusory" determinations as to  entity's legal character); see
                                                                 

also  Lake  Country  Estates,  Inc. v.  Tahoe  Regional  Planning
                                                                 

Agency, 440 U.S. 391, 401 (1979); Mt. Healthy City Sch. Dist. Bd.
                                                                 

of Educ. v. Doyle, 429 U.S.  274, 280 (1977); Kovats, 822 F.2d at
                                                    

1307; Goss v. San  Jacinto Junior College, 588  F.2d 96, 98  (5th
                                         

Cir.  1979).   Accordingly,  comparing  the  incorporated  public

entity  to the  polar extremes  (the State on  the one  hand, and

political subdivisions  on the other), we  must determine whether

the nominal public corporation possesses "a sufficiently indepen-

dent  corporate  character to  dictate that  it  be treated  as a

citizen of [the State of incorporation]."  Moor, 411 U.S. at 721.
                                               

See Mt. Healthy, 429 U.S. at 280 (finding city board "more like a
                                                               

county or  city than it is  like an arm of  the State") (emphasis

added); see also Kashani v. Purdue Univ.,  813 F.2d 843, 845 (7th
                                        

Cir. 1987), cert. denied, 484 U.S. 846 (1988); Goss, 588 F.2d  at
                                                   

98.

          Often  these comparative appraisals unavoidably lead to

imprecise  distinctions  in  degree,  rarely  amenable  to  ready

                                9

resolution.  Cf.  Metcalf & Eddy, Inc. v.  Puerto Rico Aqueduct &
                                                                 

Sewer Auth.,     F.2d    ,     (1st Cir. 1993) [No. 91-1602, 1993
           

U.S. App. LEXIS 10064, at 10 (1st Cir. May 3, 1993)] (noting that

agency's entitlement to immunity "poses an essentially functional
                                                                 

inquiry, not easily amenable to bright-line answers or mechanical

solutions") (emphasis added).   Like their  private counterparts,

public  corporations are  hardly monolithic,  having  been vested

with whatever  powers, rights, and privileges  state legislatures

may  bestow to suit the  public purpose for  which the particular

corporation was commissioned. Although the vast majority of state

universities,  incorporated and  unincorporated alike,  have been

found  to be  "arms"  of the  State  for immunity  and  diversity

purposes, each state university must be evaluated in light of its

unique characteristics.  See Kovats,  822 F.2d at 1303;  Kashani,
                                                                

813 F.2d at  845; Hall v. Medical College of  Ohio, 742 F.2d 299,
                                                  

302 (6th Cir. 1984),  cert. denied, 469 U.S. 1113  (1985); United
                                                                 

Carolina Bank  v. Board of  Regents, 665 F.2d 553,  557 (5th Cir.
                                   

1982) (Austin  State University);  Soni v.  Board of  Trustees of
                                                                 

Univ.  of Tennessee,  513 F.2d  347, 352  (6th Cir.  1975), cert.
                                                                 

denied,  426 U.S. 919 (1976); University Sys. of New Hampshire v.
                                                              

United States Gypsum, 756 F. Supp. 640, 645 (D.N.H. 1991).7
                    

                    

     7Even if  it were presumed  that the immunity  and diversity
standards  converge,  see  supra  note 4,  Vanlaarhoven  was  not
                                                       
conclusive  as  to  URI's  citizenship  for  diversity  purposes.
Chesterton argues  that URI is  barred, by Vanlaarhoven  and col-
                                                       
lateral  estoppel,  from  litigating  the  diversity jurisdiction
issue.   We do not agree.   Chesterton did not raise the estoppel
issue  in the district court, nor did the court invoke collateral
estoppel by way  of reference to Vanlaarhoven.   Thus, Chesterton
                                             
waived the issue.   McCoy v.  Massachusetts Inst. of  Technology,
                                                                

                                10

          We have propounded an  illustrative list of criteria   

by no means exhaustive    often germane to the Eleventh Amendment

"arm" or "alter ego"  determination, including whether the entity

(1)  performs an "essential"  or "traditional" governmental func-

tion, as opposed to a nonessential or merely proprietary one; (2)

exercises  substantial autonomy over its internal operations; (3)

                    

950 F.2d  13, 22 (1st Cir.  1991), cert. denied, 112  S. Ct. 1939
                                               
(1992) (issues not "squarely" raised before trial court cannot be
raised  on appeal).  Moreover, the  "alter ego"  determination in
Vanlaarhoven was not "essential" to the judgment, in at least two
            
respects.  See Restatement  (Second) of Judgments   27  ("When an
                                                 
issue of fact  or law is actually litigated by  a valid and final
judgment, and the determination is essential to the judgment, the
                                                            
determination is  conclusive . . . .") (emphasis added).   First,
the Vanlaarhoven court, as an alternate holding, assumed arguendo
                                                                 
that URI might be  an "alter ego"  of the State,  but went on  to
hold that Rhode Island  law had recognized similar grants  of the
power to sue  and be sued as express  waivers by the State  of an
alter ego's  sovereign immunity from unconsented  suit.  Vanlaar-
                                                                 
hoven, 564 F. Supp. at 149;  see supra note 4.  Second,  URI, the
                                      
defendant in  Vanlaarhoven, prevailed on  the merits.   Except in
                          
limited circumstances  not present here, the  party that prevails
on the merits  is not obligated to appeal from  an adverse ruling
                                  
on a collateral  issue.  Cf. Deposit  Guar. Nat'l Bank v.  Roper,
                                                                
445 U.S. 326,  334-35 (1980) (noting that adverse  ruling presum-
ably would have no effect in later litigation).
     Although  not  binding,  Vanlaarhoven   nonetheless  remains
                                          
persuasive  precedent in its own right.   See Metcalf & Eddy,    
                                                            
F.2d  at     [No. 91-1602, 1993 U.S.  App. LEXIS 10064, at 13 n.4
(1st Cir. May 3, 1993)] (noting that immunity  of agency need not
always be considered de novo;  "[w]here the agency's activity and
                            
its  relation  to the  state remain  essentially the  same, prior
                                                          
circuit  precedent will  be controlling")  (emphasis  added); see
                                                                 
also  infra  note 16.   URI  argues  that much  of Vanlaarhoven's
                                                               
precedential weight was eroded  by the later repeal of  R.I. Gen.
Laws    16-31-1 to 15 in  1988, and its replacement  with the new
statutory scheme.  See R.I.  Gen. Laws   16-59-1.  We  agree with
                      
the  district court  that the  legislative modifications  in 1988
were largely inconsequential,  see infra  Section II.A.2.a.,  and
                                        
that Vanlaarhoven's  "lengthy description of the fiscal relation-
                 
ship between the University and  the State of Rhode Island is  as
accurate today as when it was written in 1983 . . . ."  Universi-
                                                                 
ty of  Rhode Island v. A.W. Chesterton Co., 721 F. Supp. 400, 402
                                          
(D.R.I. 1989).

                                11

enjoys meaningful  access to, and control over,  funds not appro-

priated  from the State treasury;  (4) possesses the  status of a

separate "public corporation"; (5) may sue and be sued in its own

name; (6) can enter into contracts in its own name;  (7) has been

granted a  state tax exemption on  its property; or (8)  has been

expressly debarred  from incurring debts  in the State's  name or

behalf.   See Metcalf & Eddy,      F.2d at     [No. 91-1602, 1993
                             

U.S. App.  LEXIS 10064, at 11-12  (1st Cir. May 3,  1993)]; In re
                                                                 

San  Juan DuPont Plaza Hotel  Fire Litigation, 888  F.2d 940, 942
                                             

(1st Cir. 1989); Ainsworth Aristocrat Int'l Pty, Ltd. v.  Tourism
                                                                 

Co. of Puerto Rico, 818  F.2d 1034, 1038 (1st Cir. 1987).   These
                  

diverse  considerations are  designed to  disclose the  extent to

which state law endows the incorporated State-related entity with

the operational authority, discretion, and  proprietary resources

with which to function independently of the State.  See George R.
                                                                 

Whitten, Jr., Inc. v. State Univ. Constr. Fund, 493 F.2d 177, 180
                                              

(1st  Cir. 1974); cf.  Metcalf & Eddy,      F.2d at      [No. 91-
                                      

1602, 1993 U.S.  App. LEXIS 10064, at 12 (1st  Cir. May 3, 1993)]

("[T]he  more tightly the agency and the state are entangled, the

more  probable it  becomes  that the  agency  shares the  state's

Eleventh Amendment immunity.").8 

                    

     8URI argues that Rhode Island case law provides a definitive
statement on the functional interdependence of the  Board and the
State. See,  e.g., State  of  Maryland Cent.  Collection Unit  v.
                                                             
Board  of Regents, 529 A.2d 144, 145  (R.I. 1987); Opinion to the
                                                                 
Governor, 181  A.2d 618  (R.I. 1962).  State court  decisions are
        
entitled  to  great  deference  in our  diversity  and  sovereign
immunity determination.   See Ainsworth,  818 F.2d  at 1037;  see
                                                                 
also  Harden, 760  F.2d at  1163; Jackson  v. Hayakawa,  682 F.2d
                                                      
1344, 1350  (9th Cir.  1982) (California State  University); Jag-
                                                                 

                                12

     1.   The Board's Operational Autonomy
                                          

          After  reviewing  many  decisions  relating  to  public

postsecondary educational institutions, we are  impressed, as was

the  district  court in  this case  and  in Vanlaarhoven,  by the
                                                        

extraordinary  measure of  autonomy enjoyed  by the  Rhode Island

Board of  Higher Education.   As with most  "state" universities,

the Board is charged with an essential and traditional governmen-

                    

nandan, 538 F.2d at 1175-76; Brennan v. University of Kansas, 451
                                                            
F.2d 1287,  1290 (10th Cir. 1971).   But see Kovats,  822 F.2d at
                                                   
1310  (state case law treating entity as "arm" does not undermine
autonomy for diversity purposes).   Nevertheless, the "real party
in interest" analysis is ultimately a matter of federal law.  See
                                                                 
Moor,  411 U.S. at 720  (looking to California  state court deci-
    
sions merely to confirm  Court's independent diversity determina-
                       
tion, based on California statutes); Hughes-Bechtol, Inc. v. West
                                                                 
Va. Bd. of  Regents, 737  F.2d 540, 543  (6th Cir.)  (diversity),
                   
cert.  denied, 469 U.S. 1018 (1984); Long v. Richardson, 525 F.2d
                                                       
74, 79  (6th Cir.  1975) (Memphis  State University);  cf. Jacin-
                                                                 
toport  Corp. v. Greater Baton  Rouge Port Comm'n,  762 F.2d 435,
                                                 
439 (5th Cir. 1985).
     In the instant case,  we find the State of  Maryland and its
                                                         
predecessor  decisions inconclusive.    First, State  of Maryland
                                                                 
involved  the  distinct question  of  the  United States  Supreme
Court's original jurisdiction, not  the issue of diversity juris-
diction. State of Maryland, 529 A.2d at 147.  Second, the court's
                          
finding that URI  and the State were the  same "party" is dictum,
the State of Maryland having  conceded the point.  Id.   Finally,
                                                      
although State of  Maryland cites  to prior state  case law,  see
                                                                 
Opinion to the Governor,  181 A.2d 618, 621 (R.I.  1962), neither
                       
case  engages in  an extended  analysis of the  Board's corporate
powers  or characteristics.    See Moor,  411  U.S. at  721  n.54
                                       
(expressing  disfavor for "conclusory" determinations of entity's
legal character); Jacintoport Corp., 762 F.2d at 438 (refusing to
                                   
follow state case law on immunity question where cited cases "did
not  deal  with the  precise question  before  us, nor  was their
inquiry based on even analogous jurisprudential concerns"). Thus,
unlike the situation in  Moor, where the  Court was able to  find
                             
"the clearest indication possible from California's Supreme Court
                                 
of  the status of California's  counties," Moor, 411  U.S. at 720
                                               
(emphasis  added), neither the focus nor the nature of the analy-
sis in State of Maryland enables us to  derive a clear indication
                        
as  to the  Rhode Island  Supreme Court's  views on  the critical
factors controlling the "real party in interest" determination in
the context of federal diversity jurisdiction.

                                13

tal function    namely, the provision of postsecondary education-

al  facilities to the citizens of Rhode  Island.  See R.I. Const.
                                                     

art. XII,   1; Chang v. University of Rhode Island, 375 A.2d 925,
                                                  

933-34  (R.I. 1977); see also Kovats, 822 F.2d at 1310 (providing
                                    

educational facilities is an essential or traditional  governmen-

tal  function,  not a  proprietary one);  Hall,  742 F.2d  at 305
                                              

(same); Rutledge v. Arizona  Bd. of Regents, 660 F.2d  1345, 1349
                                           

(9th Cir. 1981) (same); cf. also  Kashani, 813 F.2d at 847-48 (if
                                         

entity serves entire state, instead of one region, more likely an

"arm" of  State).  As a  general rule, therefore, it  may well be

that an entity  established to conduct a  core governmental func-

tion is less  likely to  be vested with  meaningful freedom  from

governance by the State's  elected officials.  Nevertheless, this

isolated  factor is seldom  dispositive.9  An  exception must lie

                    

     9For example,  in Moor the county's  responsibility for many
                           
traditional and essential  governmental functions, including  the
provision of water services, flood control, rubbish disposal, and
harbor and airport  facilities, appears to have been  accepted by
the  Court as affirmative evidence of citizenship.  See Moor, 411
                                                            
U.S. at 720.   These governmental responsibilities  were noted by
the  Court in acknowledging the  county's power to  levy taxes to
finance  its functions.  Similarly,  URI is empowered  to fix and
collect tuitions and fees  and enjoys plenary control over  these
nonappropriated funds, as well as its educational functions.  Cf.
                                                                 
University of Tennessee v.  United States Fidelity &  Guar., Co.,
                                                                
670 F. Supp. 1379, 1384 (E.D. Tenn. 1987)  (legislature's control
of tuition rates suggests "arm").  We discern from Moor a general
                                                       
rule of thumb:   the State's delegation of essential governmental
functions, together  with the power  to generate and  control the
nonappropriated revenues with which to perform those governmental
functions,  normally will  be viewed  as supporting,  rather than
undermining,  the  entity's  independent status  for  citizenship
purposes.  Cf. Metcalf & Eddy,     F.2d at     [No. 91-1602, 1993
                              
U.S.  App. LEXIS  10064, at 17,  17 n.6  (1st Cir.  May 3, 1993)]
(noting that,  if all traditional government  functions triggered
immunity protection,  local school boards would  have been deemed
"arms"  of state, and that  agencies which derive revenue through

                                14

where the statutory scheme, as a whole, confutes any  legislative
                                      

intent to establish the entity as a mere "arm" of the State.  See
                                                                 

Kovats, 822 F.2d at 1312 (performance of governmental, nonpropri-
      

etary function  not necessarily indicative of  lack of autonomy).

Accordingly, we must examine the particular powers with which the

Board is endowed under its statute of "incorporation."

          From an operational standpoint, the Board is denominat-

ed  a  "public corporation,"  Moor,  411  U.S.  at 719  (county's
                                  

corporate  status  and  powers  "most  notabl[e]"  attributes  of

citizenship);  cf. Hall,  742 F.2d at  305 (noting  that school's
                       

lack  of  separate  corporate  status  suggests  mere  agency),10

which may "sue and be sued in its own name." R.I. Gen. Laws   16-

59-1(a).11   The Rhode Island  statutes elsewhere define the term

                    

"user  fees"  for  performance  of  "governmental" functions  are
unlikely  to be characterized as  "arms" merely by  virtue of the
traditional  nature of  their  mission) (citing  Royal  Caribbean
                                                                 
Corp. v. Puerto Rico Ports Auth., 973 F.2d 8 (1st Cir. 1992)).
                                

     10Some courts have  held that corporate status ought  not be
regarded as probative unless the legislature expresses its intent
to confer perpetual corporate status upon the entity.  See, e.g.,
                                                                
Hall, 742 F.2d at 299.   The rationale of these cases  appears to
    
be that the legislature reserves the right to revoke all delegat-
ed powers to such  a nonperpetual entity, at any time.   Id.  See
                                                                 
also Kashani,  813 F.2d at 847; Jackson,  682 F.2d at 1350; Bren-
                                                                 
nan, 451 F.2d at  1290.  As we  are unable to accept the  premise
   
that legislative  enactments can  be immunized from  amendment by
succeeding legislatures, let alone be perpetuated, we respectful-
ly decline to  follow these decisions.   We note also that  these
decisions conflict with  Moor, insofar as they  suggest that most
                             
political  subdivisions cannot  be "citizens"  because succeeding
legislatures retain  the power to alter or  rescind prior delega-
tions of the State's police power.

     11It is not always  clear in the Eleventh  Amendment context
whether  the court has already  determined that the  entity is an
"arm"  of the State, and is referring to this provision (power to
sue and  be sued) only as  evidence of an explicit  waiver of the

                                15

"public corporation" as "a corporate entity which is considered a

governmental agency but which has a distinct legal existence from
                                                                 

the state  or  any  municipality,  [and] does  not  constitute  a
                                

department of state or  municipal government . . . ."  Id.    16-
                                                          

62-4 (emphasis added).  See Harden  v. Adams, 760 F.2d 1158, 1163
                                            

(11th Cir. 1985) (Troy  State University) (holding that statutory

definitions of  "state" and "political subdivision"  may be rele-

vant  factors); compare Kovats,  822 F.2d at  1310 (evidence that
                              

entity  is "instrumentality,"  but otherwise  excluded from  some

statutory definitions of  "state," is  probative of  citizenship)

with  United Carolina Bank, 665  F.2d at 557  (noting that entity
                          

falls  clearly within statutory definition of  "state").  But cf.
                                                                 

                    

dependent  entity's  sovereign immunity.    See,  e.g., Rozek  v.
                                                             
Topolnicki,  865 F.2d 1154, 1158 (10th Cir. 1989); Long, 525 F.2d
                                                       
at 77; Soni, 513 F.2d at 352; see also supra notes 4 & 7 (discus-
                                            
sing  Vanlaarhoven's alternative  "waiver"  holding).   The  bare
                  
power to sue is unlikely to  hold complete sway in the  threshold
"alter ego" determination either  in diversity or immunity cases.
See  Kashani, 813  F.2d at  847  (power to  sue and  be sued  not
            
conclusive  of  autonomy); Jagnandan,  538  F.2d  at 1174,  1176;
                                    
Krieger,  765 F.  Supp. at 760,  762; cf.  Hall, 742  F.2d at 305
                                               
(deliberate withholding of power to  sue highly probative of lack
of  autonomy).  But  the power to  sue in the  entity's own name,
when coupled  with other powers  of self-determination  typically
held by  distinct juridical entities (power to contract, power to
buy, hold, and sell property), undeniably affords the entity some
additional independence from the State, since the entity need not
seek the State's consent  to bring, defend, or settle  a lawsuit.
In this  case, we note  in particular  that (1) URI  brought suit
exclusively in its own name, and (2) its counsel of record is not
a legal  officer of the  State of Rhode Island.   See Jacintoport
                                                                 
Corp., 762  F.2d  at 442  (noting commission's  right to  "employ
     
private  attorneys to  represent  it"  as  evidence that  it  has
separate legal identity from  State); Tradigrain, Inc. v. Missis-
                                                                 
sippi  State  Port Auth.,  701 F.2d  1131,  1136 (5th  Cir. 1983)
                        
(Thornberry,  J., dissenting) (noting  as evidence of citizenship
that  Authority "employs its own counsel,  and is not represented
by  the State of Mississippi in this action"); cf. Hall, 742 F.2d
                                                       
at 305 (university's counsel is state attorney general).

                                16

Lewis  v. Midwestern State Univ.,  837 F.2d 197,  198 (5th Cir.),
                                

cert. denied, 488  U.S. 849 (1988) (mere  statutory definition as
            

"agency" suggests "alter ego"); Kashani, 813 F.2d at 847 (holding
                                       

that  entity's  designation as  "separate"  from  State for  some

purposes is inconclusive of autonomy);  Krieger, 765 F. Supp.  at
                                               

759(findingterm"independent
                          agency"inconclusiveevidenceofautonomy).

          Ten of the thirteen Board members  are appointed by the

Governor,12 with the advice  and consent of the senate,  see R.I.
                                                            

Gen. Laws   16-59-2(a), a legislative design most courts routine-

ly  view as  evidence of  an entity's  lack of  independence from

State control.  See,  e.g., Lewis, 837 F.2d at 198;  Kashani, 813
                                                            

F.2d at  847 (7  of 10 members  appointed); Harden,  760 F.2d  at
                                                  

1163; Hall, 742 F.2d  at 306; Gay Students Servs. v.  Texas A & M
                                                                 

Univ.,  737 F.2d 1317, 1333  n.28 (5th Cir.  1984), cert. denied,
                                                                

471  U.S. 1001  (1985); United  Carolina Bank,  665 F.2d  at 558;
                                             

Rutledge,  660 F.2d at 1347  (all 8 appointed);  Prebble v. Brod-
                                                                 

rick, 535 F.2d 605, 610 (10th Cir. 1976) (University of Wyoming).
    

But  see Kovats,  822  F.2d at  1311  (concluding that,  even  if
               

majority is appointed by governor, that fact is not conclusive of

"alter ego"  status).  The  power of appointment  (and reappoint-

ment)  is significant, and may entail risks of subtle or indirect

manipulation of the entity's  decisionmaking processes by elected

officials.

                    

     12The Governor appoints the chairperson  as well, and two ex
                                                                 
officio positions on  the Board  are occupied by  members of  the
       
legislative branch. Cf. Harden, 760 F.2d at 1163 (noting the fact
                              
that  executive branch officials  serve as ex  officio members of
                                                      
Board as evidence of "alter ego" status).

                                17

          On the other hand, the Rhode Island statutory scheme is

somewhat unusual in the  respect that it attempts to  protect the

Board  from "partisan or personal"  pressures.  R.I.  Gen. Laws  

16-59-3 ("removal  solely for partisan or  personal reasons unre-

lated  to capacity or fitness for the office shall be unlawful").

Although individual  Board members  might be vulnerable  to pres-

sure,  the Board  as a  whole is  insulated  to some  degree from

sudden "reversal[s]  of policy"  by fixed (three-year)  and stag-
                                         

gered terms. Id.    16-59-1.   Cf. Jacintoport  Corp. v.  Greater
                                                                 

Baton  Rouge Port  Comm'n,  762 F.2d  435,  442 (5th  Cir.  1985)
                         

(focusing on autonomy  of Commission  as an entity,  not only  on
                                                  

independence  of the  individual  commissioners).   Board members

receive minimal compensation  ($50 per day of actual service, not

to  exceed $3000  annually).   Since it  is highly  unlikely that

members  would depend  on their  Board compensation as  a primary

source of income, the  economic coercion attending the  threat of

removal  would be minimal.   R.I. Gen. Laws    16-59-1(e).  Aside

from the power of  appointment, the governor has no  direct voice

in  Board decisionmaking.    Cf.,  e.g.,  Fitchik v.  New  Jersey
                                                                 

Transit  Rail  Operations, Inc.,  873  F.2d  655, 663  (3d  Cir.)
                               

(finding  entity not  "alter  ego,"  despite  gubernatorial  veto

power), cert. denied,  493 U.S.  850 (1989).   Finally, and  most
                    

significantly, individual Board members  are provided with signi-

ficant insulation  from partisan or personal pressure, in that no

Board  member may  be  removed except  for  cause, after  a  full
                                                 

hearing and appellate review.  R.I. Gen. Laws   16-59-2, 3.

                                18

           As a corporate entity,  the Board's supervisory powers

are  pervasive.  It unilaterally appoints, and may dismiss at its

pleasure, the commissioner of higher education and the presidents

of the  individual educational institutions it  oversees, see id.
                                                                 

  16-59-4(5),  (6).  It  possesses plenary  power over  the post-

secondary school organizational structure, accounting procedures,

the creation  and abolition  of all postsecondary  school depart-

ments  and programs of study, as well as their affirmative action

hiring practices.  Id.   16-59-4(10), (11).  See Kovats, 822 F.2d
                                                       

at 1311-12 (finding that  minimal state supervision over entity's

operations suggests autonomy); cf. Hall,  742 F.2d at 306 (noting
                                       

that state  control through  mandated programs of  study suggests

lack of  independence); University of Tennessee  v. United States
                                                                 

Fidelity & Guar, Co., 670  F. Supp. 1379, 1384 (E.D. Tenn.  1987)
                    

(observing that entity must comply with controller's regulations,

and  legislature controls  physical  plant  operations). But  see
                                                                 

Kashani, 813  F.2d at  847 (finding entity's  power to  prescribe
       

curricula not probative of its autonomy).  The Board is expressly

exempted  from compliance  with  the Rhode  Island Administrative

Procedures Act, R.I. Gen.  Laws   16-59-12, see Kovats,  822 F.2d
                                                      

at 1312 (APA exemption suggests autonomy); cf. Fitchik,  873 F.2d
                                                      

at 663  (APA applicability suggests "arm");  Jackson v. Hayakawa,
                                                                

682 F.2d 1344, 1350 (9th Cir. 1982) (California State University)

(same); Krieger,  765 F.  Supp. at  760 (same),  as well as  from
               

certain  personnel employment  and equipment  requisition regula-

tions, R.I. Gen. Laws    16-59-21 (providing Board with exemption

                                19

from R.I. Gen.  Laws   35-3-1(5), (6) in  "the interest of educa-

tional efficiency").   See  Kovats, 822  F.2d at  1313 (exemption
                                  

from civil service rules  suggests autonomy); cf. United Carolina
                                                                 

Bank, 665  F.2d at  558 (applicability of  employment regulations
    

suggests  dependence); Krieger, 765  F. Supp. at  759-60 (lack of
                              

exemption  from  general budget  controls  and procurement  rules

suggests "arm"); University  of Tennessee, 670  F. Supp. at  1384
                                         

(legislature's control of employee compensation suggests "arm").

          The  Board holds full legal  title to all  URI real and

personal property, with the attendant power to acquire, hold, and

dispose  of  URI property  and  "other  like property  as  deemed

necessary for  the execution of  its corporate  purposes."   R.I.

Gen. Laws    16-59-1.   See Moor,  411 U.S.  at 719 (noting  that
                                

county may "sell, hold, or otherwise deal in property"); see also
                                                                 

Fitchik,  873 F.2d  at 663  (power to purchase  property suggests
       

citizenship); cf. Hall, 742 F.2d at 306 (unlike community college
                      

which holds title to  property, no independence where educational

entity may sell property  only with State's approval); University
                                                                 

of Tennessee, 670  F. Supp. at  1384 (legislature's control  over
            

all  physical  plants  and  leases  indicates  lack  of  indepen-

dence).13   Although URI's real  and personal property  is exempt

                    

     13Since  the Board's legal title to URI property is held "in
trust"  for the State,  R.I. Gen.  Laws   16-59-1(a),  URI argues
that the Board's fiduciary duty to the State, the equitable owner
of  the  property,  inhibits  its discretion  to  administer  the
property  as record owner.  The language of the statute neverthe-
less suggests  that the  Board's business decisions  to purchase,
administer, and dispose of URI property are largely unrestricted,
and  absent misfeasance would  be impervious to  challenge by the
State.  See  Kovats, 822 F.2d at  1309 (legal title  to property,
                   

                                20

from  taxation, see R.I. Gen. Laws   44-3-3(1); Powers v. Harvey,
                                                                

103  A.2d 551,  552 (R.I.  1954), in  many cases  this  factor is

considered minimally  probative.  Often,  tax policy  is used  by

States to  encourage certain  types of  activity even though  the

target  entities  are  otherwise  entirely  independent  of state

government.  Rhode Island is no exception in this  respect.  See,
                                                                

e.g.,  R.I. Gen.  Laws    44-3-3(11)  (cemeteries), (12)  (incor-
    

porated or free libraries),  (13) (veterans' organizations), (15)

(volunteer fire departments),  (21) (water treatment facilities).

Moreover,  nonpublic educational  institutions  in  Rhode  Island
                    

partake  of a similar tax exemption, albeit narrower than that of

the Board.  R.I.  Gen. Laws   44-3-3(8) (private  school property

is tax exempt to  the extent it is  used "exclusively for  educa-

tional  purposes").  Arguably,  of course,  tax exemption  may be

attributable to  the State's equitable title to the URI property.
                                      

We  think it  at least  as plausible,  however, that  the general

assembly exempts  Board  property from  taxation  as a  means  of

fostering performance  of the  Board's corporate functions.   See
                                                                 

Kovats,  822 F.2d at 1311 (autonomy not fatally undermined by tax
      

exemption); Kashani, 813 F.2d at  846 (less probative where State
                   

grants tax  exemption to political subdivisions);  Hall, 742 F.2d
                                                       

at 307 (tax exemption  relevant only if it is not  accorded other

entities  which are  not "alter  egos").   But see  University of
                                                                 

                    

though held in  trust, coupled with  discretionary power to  dis-
pose, and to control both proceeds and income therefrom, suggests
independence);  cf. Hall,  742 F.2d  at 306  (entity is  "arm" if
                        
property held in State's name).

                                21

Tennessee, 670 F. Supp.  at 1384 (university is an  "arm" because
         

it is fully  tax exempt,  while private schools  enjoy a  partial

exemption only).

          As  a natural  corollary to  its power  to  control URI

property,  the  Board  possesses,14  and  freely  exercises,  its

corporate power  to enter into  contracts in its  own name.   See
                                                                 

State  of Maryland Cent. Collection Unit v. Board of Regents, 529
                                                            

A.2d  144, 145 (R.I. 1987);  cf. Hughes-Bechtol, 737  F.2d at 544
                                               

(lack  of power to contract without invoking State as named party

indicates entity is "arm"); Tradigrain, Inc. v. Mississippi State
                                                                 

Port  Auth., 701  F.2d 1131,  1133 (5th  Cir. 1983)  (noting that
           

authority's power  to enter into  contract was limited;  any con-

tract in excess of $2500 must be advertised and awarded to lowest

bidder); University of Tennessee, 670 F. Supp. at 1384 (entity is
                                

"arm" where legislature exerts control over its personal services

contracts). But cf. Kashani, 813 F.2d at 847 (power to enter into
                           

contracts not  conclusive of independent status);  Hall, 742 F.2d
                                                       

                    

     14The  Board's   power  to  contract   is  not  specifically
enumerated in the statute, but  is implicit in the grant of  "all
the [other]  powers . . .  usually pertaining to  public corpora-
tions  . . . ."   R.I. Gen.  Laws   16-59-1.   Contrary  to URI's
contention, we see  no reason to infer that this general grant of
corporate power  is  contradicted by  other statutory  provisions
which specifically  authorize the  Board to  guarantee particular
loans in the state's name, see, e.g., R.I. Gen.  Laws    16-32-11
                                    
(Board empowered to guarantee student loans), 16-32-12, 14 (Board
empowered  to guarantee,  "in the  name of  the state,"  loans to
"societies of students"  up to  a total of  $1.2 million; at  de-
fault, loans  "shall become state  obligations in like  manner as
any state bond"); Jacintoport Corp., 762 F.2d at 439, 441 (State-
                                   
's  mere guarantee of agency's bonds is too "ancillary" an effect
to subvert agency's independence from State); see also infra note
                                                            
17.

                                22

at 305 (same);  Krieger, 765 F.  Supp. at 760,  762 (same).   The
                       

Board's  capacity to contract for the maintenance and repair of a

federally  funded  GSO research  vessel likewise  suggests opera-

tional autonomy.  See Moor, 411 U.S. at 719 (county "may contract
                          

for  the  construction  and  repairs  of  structures")  (emphasis
                                                    

added);  cf. State Highway Comm'n of Wyoming v. Utah Constr. Co.,
                                                                

278  U.S. 194,  199 (1929)  (finding that  entity is  "arm" where

"contract  for  the construction  of  the  work  was between  the

[defendant] and the State").

          Thus, the Board's  operational autonomy,  approximating

that of the  political subdivision  in Moor, sets  it apart  from
                                           

most  entities with  similar  educational missions  and tips  the

balance in favor of  the district court's finding that  the Board

is a "citizen" of Rhode Island for diversity purposes.

     2.   The Board's Fiscal Autonomy15 
                                     

          a.   Statutory Scheme
                               

          Like most other  public universities, URI's  operations

are financed  in part by State  appropriations, approved annually

by the  general assembly ("appropriated" funds), R.I. Gen. Laws  

16-59-9  (such  appropriations  as  the general  assembly  "deems

necessary"),  and in part  by non-State sources,  such as tuition

                    

     15Although  the multi-factor  test  is  nonweighted,  courts
generally agree on the  primacy of the financial autonomy  factor
in the overall balance.  See  Ainsworth, 818 F.2d at 1038 (finan-
                                       
cial accountability      who pays  or gets  paid     is the  most
                                                                 
important factor in  test); see  also Fitchik, 873  F.2d at  664;
                                             
Kashani, 813 F.2d at 846 (same); Hall, 742 F.2d at 304; Rutledge,
                                                                
660 F.2d at 1349.

                                23

charges, fees, and donations  ("nonappropriated" funds).  As with

all state universities, the  legislature has the final say  as to

the  size of the  annual appropriation.  The  Board, on the other

hand, prepares the  five-year funding plan and budget for submis-

sion  to the general  assembly, and  the Board  alone "determines

priorities  of expenditures."    Id.    16-59-4(4).   Cf.  United
                                                                 

Carolina  Bank, 665  F.2d at  558  (legislature's "comprehensive"
              

control of appropriated funds  suggests entity's financial depen-

dence); Prebble, 535 F.2d at 610 ("No expenditure may be  made in
               

excess  of an appropriation and no money appropriated may be used

for  any purpose  other  than for  which  it is  appropriated.").

Furthermore,  the  Board  has  plenary  authority  to  reallocate

appropriated  funds among  its various programs,  facilities, and

agencies.  R.I. Gen. Laws   16-59-9(c). Cf. Krieger, 765 F. Supp.
                                                   

at 760 (lack of  power to reallocate appropriated funds  suggests

entity  is  "arm").   And, as  noted,  the Board  has substantial

income from  sources other than State  appropriations, see Kroll,
                                                                

934 F.2d  at 908  n.3 (availability  of substantial  revenue from

other sources may be very relevant to autonomy inquiry),  includ-

ing tuition  charges, housing,  dining  and administrative  fees,

donations, bequests and devises, the income and proceeds from URI

property, and federal grants.

          URI's tuition and  fees are  set by the  Board.   URI's

housing,  dining,  and  auxiliary  facilities are  totally  self-

supporting, with no State appropriations slated for these purpos-

es after 1987.   R.I. Gen. Laws   16-59-9(d).   Thus, much of its

                                24

nonappropriated funding  is roughly analogous to  revenues raised

by  means of a political subdivision's power to impose taxes upon

its  constituents to defray the  costs of the  public services it

provides,  a power delegated by the State to enable the political

subdivision to  finance its "corporate"  public service  mission.

See Moor, 411 U.S.  at 719-20 (county "authorized to  levy taxes"
        

and  to  "issue  general  obligation bonds  payable  from  county

taxes"); Metcalf & Eddy,     F.2d  at     [No. 91-1602, 1993 U.S.
                        

App.  LEXIS 10064,  at 19 (1st  Cir. May  3, 1993)]  (in immunity

context,  "[t]he  power and  opportunity  to  generate a  revenue

stream  [through  user  fees]  and thereby  finance  an  agency's

operations  is an  important attribute  of the  agency's separate

identity");  Fitchik, 873 F.2d at  663 (power to  set and collect
                    

fares  and fees tilts  balance toward  autonomy); see  also supra
                                                                 

note 9;  cf. Kashani, 813  F.2d at 846  (lack of power  to impose
                    

taxes  is  equivalent to  ultimate  financial  dependence on  the

State); Hall, 742 F.2d  at 304 (same); United Carolina  Bank, 665
                                                            

F.2d at 558 (same); University of Tennessee, 670 F. Supp. at 1384
                                           

(legislature's control of tuition fees suggests "arm").

          There is  no provision  in Rhode Island  law permitting

State  intervention  in URI's  income  stream  from inception  to

expenditure.    The  Board's nonappropriated  funds  are  neither

"covered into," nor merged  with, the general fund, but  are kept

in segregated accounts pending discretionary  disbursement by the

Board "without the necessity of appropriation  or reappropriation

by  the general assembly."   R.I. Gen. Laws    16-59-18.  Compare
                                                                 

                                25

Kovats,  822 F.2d  at  1308-09 (financial  accounts not  "within"
      

control  of State  treasury indicate  autonomy), with  Lewis, 837
                                                            

F.2d  at 197 (finding  evidence of lack  of autonomy  in the fact

that funds must  go back into  State treasury, their  expenditure

extremely  restricted); Hall, 742 F.2d at 304 (entity is an "arm"
                            

of the State if it has power to issue bonds, but disbursements of

bond  proceeds  are restricted,  and  if  State merely  "permits"

formal  segregation as  matter of  convenience); United  Carolina
                                                                 

Bank, 665 F.2d at 558 (nonappropriated funds deposited into State
    

treasury, then reappropriated  for disbursement); Jagnandan,  538
                                                           

F.2d at  1176 (nonappropriated funds go  directly into commingled

treasury account);  Krieger, 765 F.  Supp. at  760 (where  entity
                           

does not  "control" expenditure of funds,  segregation not proba-

tive of autonomy); University of Tennessee, 670 F. Supp. at 1383-
                                          

84 (all  university funds commingled  in one account,  subject to

state comptroller's regulations and "regular" audits).  Unexpend-

ed  balances  in  the  Board's segregated  nonappropriated  funds

account are carried  forward from year to  year, awaiting discre-

tionary  disbursement by  the Board  for "nonrecurring"  items, a

practice which effectively allows the  Board to exceed its annual

appropriation and its annual budget if necessary.  R.I. Gen. Laws

  16-59-9(b).  Cf. Jagnandan, 538 F.2d at 1175 (lack of authority
                            

to  "exceed"  budgeted  expenditures,  even  from nonappropriated

funds, without approval  of executive  or legislature,  indicates

dependency); Prebble, 535 F.2d at 610 (same).
                    

                                26

          Finally,  the  State of  Rhode  Island  engages in  but

limited  monitoring  of  Board  revenues  and  expenditures,  see
                                                                 

Harden, 760  F.2d at 1163-64  (the more financial  oversight, the
      

more  likely the university's debts  are state's debts), though a

few  statutory  provisions  serve  to keep  the  State  generally

apprised of the Board's financial decisions, enabling the type of
                                                              

financial monitoring  usually considered indicative of  a lack of

meaningful  fiscal autonomy.  See,  e.g., Lewis, 837  F.2d at 199
                                               

(regular auditing of both  appropriated and nonappropriated funds

suggests  "arm"); Kashani, 813 F.2d at 845-46 (entity is "arm" as
                         

it  submits budget,  and "Indiana  examines [its]  finances care-

fully"); Harden, 760 F.2d at 1163 (submission of annual financial
               

reports suggests "arm");  United Carolina Bank,  665 F.2d at  558
                                              

("extensive"  reporting requirements  suggest lack  of autonomy);

Rutledge, 660  F.2d at  1349-50 ("detailed" report  to governor);
        

Krieger, 765 F. Supp.  at 756 (annual report to  "general public"
       

suggests "alter ego");  University of Tennessee, 670 F.  Supp. at
                                               

1379  (submission of  annual report  to governor  or legislature,

with "detailed statement" of receipts and expenditures, indicates

"arm").  On the other hand, the level of State  fiscal monitoring
                                     

of  the Board is comparatively unintrusive.   For example, though

URI's  treasurer  must  submit  financial reports  to  the  state

controller for  "preaudit," the purely "ministerial"  audit moni-

tors Board  expenditures only for possible  illegality and avail-

ability of funds, not with a view to the prudence  of the Board's

financial decisions.  R.I. Gen. Laws   16-59-20.  See Kovats, 822
                                                            

                                27

F.2d at 1311 (mere "reporting" of spending decisions not  indica-

tive  of lack of  autonomy).  URI  makes a rather  wan attempt to

undermine Vanlaarhoven by citing a  subsequently enacted "limita-
                      

tion" on the Board's purchasing power.  See R.I. Gen. Laws    37-
                                           

2-1  and 37-2-7(11) (Board's  purchases can be  made only through

State Purchasing agent's office).   As the district court  found,

however, nothing in this  statutory requirement portends  quality

review or rejection  of purchase orders by the  purchasing agent.

R.I. Gen. Laws   16-59-20  ("controller [shall not] interpose his

or  her judgment").   See supra  note 7.   Far  from a meaningful
                               

limitation  on the  Board's  power to  disburse  its funds,  this

measure  appears to have been designed solely to enable the Board

to  avail itself of the  financial savings associated with pooled

purchasing power.

          With Moor as our benchmark, therefore, we conclude that
                   

the Rhode  Island statutory  scheme demonstrates that  the Board,

unlike more "typical"  state educational entities, possesses  the

essential attributes of operational and financial autonomy needed

to qualify as a Rhode Island "citizen" for diversity purposes.

          b.  "Functional Integration"
                                     

          In a  resourceful  effort to  avoid  Vanlaarhoven,  URI
                                                           

urges its  "functional integration" theory,  whose genesis appar-

ently lay  in our earlier "recommendation" to  the district court

following dismissal of URI's interlocutory  appeal.  See supra p.
                                                              

4.  URI argues, for example, that the Board's ostensible indepen-

dence  in financial matters would prove illusory if, in fact, (1)

                                28

the  Board's  annual  budget were  funded  by  State-appropriated

monies to such  an extent that its  nonappropriated revenues were

rendered  functionally  insignificant, or  (2)  the  Rhode Island

general assembly  were to  employ its statutory  pre-audit proce-

dures to attune the  Board's annual State appropriation so  as to

force the  Board to expend its anticipated and accumulated nonap-

propriated revenues in lieu  of a more ample annual  State appro-

priation.  See,  e.g., Krieger, 765 F. Supp. at  761 (evidence of
                              

actual control by State would trump evidence of formal autonomy).

          We emphasize that URI does not assert the existence  of
                                                             

budgetary data which would demonstrate that the Board enjoys less

financial autonomy  than the  enabling statute indicates.   More-

over, notwithstanding its efforts  to persuade the district court

to conduct a separate  evidentiary hearing on diversity jurisdic-

tion, URI has taken no initiative to substantiate its "functional

integration"  theory, either  by  way of  an evidentiary  proffer

below,  or even by way of  the barest allusion to supportive data

in its  brief or oral argument  before this court.   Instead, URI

insists  that Chesterton,  as the  party requesting  removal, see
                                                                 

supra Section II.A,  was required  to bear the  entire burden  of
                                                      

proof and production on every conceivable fact     even including

"negative" facts     which  might prove  relevant to the  Board's
                                       

citizenship  status.  Thus, even  after trial on  the merits, URI

speculates that  there may  be evidence  which  would preclude  a

reliable determination as to federal diversity jurisdiction.  For

the  reasons  hereinafter  explained,  we  think  URI inadvisably

                                29

banked on a cramped view of the proper allocation of the  burdens

of  proof and  production relating  to the  jurisdictional issue,

misapprehended the proper role of  "functional integration" data,

and exaggerated the import of our earlier "recommendation" to the

district court for further factfinding on remand.

          For some  reason, our  earlier invitation to  engage in

additional factfinding  on remand  went unheeded.   URI intimates

that it did  all it  could by requesting  a separate  evidentiary
                                                    

hearing,  and  that  the  district court  simply  discounted  our

recommendation  as  to  the  possible  relevance  of  "functional

integration"  evidence.   In  our view,  however, URI  mischarac-

terizes the remand order.  While we suggested the desirability of

supplementary factfinding, the  precise factfinding procedure  to
                                                             

be employed always rests within the sound discretion of the trial

court.  See Foman v. Davis,  371 U.S. 178, 182 (1962); O'Toole v.
                                                              

Arlington Trust Co., 681 F.2d 94,  98 (1st Cir. 1982) (finding no
                   

abuse of discretion,  as "the  court was under  no obligation  to

require  an evidentiary  hearing  . . . [but]  has  the right  to

determine the procedures it will employ to decide a jurisdiction-

al issue")  (citation omitted).    At no  time did  we require  a

separate  evidentiary   hearing  on  the   jurisdictional  issue.
        

Indeed, given our alternative  ground for dismissing URI's inter-

locutory appeal    namely, that it appeared unlikely that a trial

on the merits would be prolonged    the district court's decision

to defer its jurisdictional determination until trial was entire-

ly consistent with the remand order.

                                30

          Nor did the district court prevent URI from introducing
                                            

any such statistical evidence at  trial.  Following an unrecorded

pretrial  conference with  counsel, the  district court  did deny

URI's motion for a separate evidentiary hearing.  In that connec-

tion,  URI has provided  no indication  of the  legal contentions

advanced by either party  at the pretrial conference, nor  of the

grounds for the  district court's decision  to bypass a  pretrial

evidentiary hearing.  Chesterton, on the other hand, asserts that

the conference  involved an extended discussion  about the appro-

priateness  of a  separate pretrial hearing,  but that  the court

opted to permit the presentation of evidence on the jurisdiction-

al issue at trial.
                 

          Viewed  in  proper procedural  context,  therefore, the

present claim hinges entirely  on URI's unremitting allocation of

the burdens of persuasion  and production to Chesterton, and  not

on  any lack of opportunity  to raise or  substantiate its "func-

tional integration" claim.   Significantly, our remand order took

no position  as to which party  would be obliged  to come forward
                        

with evidence of functional integration, nor did it suggest  that

proof of  lack of  functional integration  was required  in every

case.  

          Of  course,  Chesterton, the  party  invoking diversity

jurisdiction, bears  the ultimate burden of  proving diversity of
                                 

citizenship.   See Topp v. Compair, Inc.,  814 F.2d 830, 839 (1st
                                        

Cir.  1987).  Nevertheless, there  is more to  be said concerning

the burden of production:

                                31

          [T]he  party  who  invoked  diversity  juris-
          diction has  the burden of  proving all facts
          upon which jurisdiction  could be  sustained.
          If  [the invoking  party]  does  construct  a
          prima facie showing  of diversity, [the chal-
          lenging  party] must  overcome or  rebut this
          showing  in order  to  dismiss  the  [removal
          petition].    Support for  [the challenger's]
          position  may  be  derived  from  affidavits,
          depositions,  and  sworn statements  filed by
          the  parties from which the Court can examine
          and  evaluate all  relevant factors  and sur-
          rounding circumstances but  the exact  method
          of determining the jurisdictional  issue lies
          within  the sound discretion  of the district
          court.

United States Fidelity & Guar. Co. v. Di Massa, 561 F. Supp. 348,
                                              

350  (E.D.  Pa.  1983)  (citation  omitted).    Although  neither

Chesterton nor  URI submitted  affidavits, depositions,  or sworn

statements, the  district court  properly conducted  inquiry into

the  controlling  jurisdictional  facts,  pursuant  to  Moor,  by
                                                            

examining the Rhode Island enabling statute.  Under Moor, such an
                                                        

inquiry  is designed primarily to provide the court with a compe-

tent  basis for determining the legal  framework within which the

relationship  between  a State  and  a  State-created entity  are

required  to function.   In  the present  case, the  Rhode Island

enabling statute constituted a sufficient proffer on the issue of

the Board's financial autonomy.  See,  e.g., Tradigrain, 701 F.2d
                                                       

at  1132 ("the state's  constitutional, statutory, and decisional

law" comprise source material  for the court's citizenship analy-

sis);  see also Indiana Port Comm'n v. Bethlehem Steel Corp., 702
                                                            

F.2d 107, 109 (7th Cir. 1983); cf. supra note 8.
                                        

          As  noted, see  supra  Section  II.A.2.a, the  enabling
                               

statute's  broad  grant   of  control  to  the  Board  over  non-

                                32

appropriated revenues  weighs heavily  in Chesterton's  favor and

satisfied  its  prima facie  burden  on  the issue  of  financial

autonomy.   Furthermore, financial autonomy is  but one component

of the  fact-intensive citizenship inquiry mandated  by Moor, and
                                                            

Chesterton prevailed on most other relevant jurisdictional  facts

as well.   See supra  Section II.A.1.   It was incumbent  on URI,
                    

therefore, to mount  an effective  challenge to  the prima  facie

showing of financial autonomy.  See  Ohio Nat'l. Life Ins. Co. v.
                                                              

United States,  922 F.2d 320, 327 n.7  (6th Cir. 1990) ("That the
             

burden of  proof is always on the  [party asserting jurisdiction]

does not mean that a [challenger], without any proof on his part,

can put the [party asserting jurisdiction] to proof  by affidavit

of  jurisdictional facts  sufficiently alleged in  the complaint.

The  [challenger] must at least submit some proof that the juris-
                                                 

dictional  facts so  alleged do  not exist.")  (citation omitted)

(emphasis added).  Absent evidence or  a compelling argument that

the fiscal autonomy  permitted the Board under Rhode  Island law,

as determined  by the district  court, does not  actually obtain,

URI failed to overcome Chesterton's prima facie showing.16

                    

     16Moreover,  in  view  of  the   presumptive  deference  due
Vanlaarhoven  in the  present  context, see  supra note  7, URI's
                                                  
"functional  integration" theory was not being written on a blank
slate.    See, e.g.,  Rollins v.  Board  of Governors  for Higher
                                                                 
Educ., 761 F.  Supp. 930, 931 (D.R.I.  1990) (citing Vanlaarhoven
                                                                 
as precedent);  cf.  Cowan v.  University of  Louisville Sch.  of
                                                                 
Medicine, 900  F.2d 936, 940 (6th  Cir. 1990) (proper  to rely on
        
federal court  precedent finding school not  autonomous); Dube v.
                                                              
State Univ.  of New York, 900 F.2d 587, 594 (2d Cir. 1990) (SUNY)
                        
(same), cert. denied, 111 S. Ct. 2814 (1991); Thompson v. City of
                                                                 
Los Angeles, 885 F.2d  1439, 1443 (9th Cir. 1989)  (University of
           
California) (same); Schuler v.  University of Minnesota, 788 F.2d
                                                       
510,  516 (8th  Cir. 1986)  (same), cert.  denied, 479  U.S. 1056
                                                 

                                33

          Furthermore, challenges to subject  matter jurisdiction

typically arise early in the litigation, and even though Eleventh

Amendment immunity and  diversity jurisdiction may require  fact-

intensive  inquiries, see Kroll, 934  F.2d at 908  n.2, we see no
                               

justification  for  requiring the  removing  party  to resort  to

formal discovery before the opposing party    with readier access
                       

to the evidence    raises  a specific dispute relating to  a duly

alleged  jurisdictional fact.   Such  a requirement  would invite

needless waste of  judicial resources on a  threshold issue which

must be resolved as expeditiously as practicable.  See  Tanzymore
                                                                 

v. Bethlehem Steel Corp., 457 F.2d 1320,  1323 (3d Cir. 1972) (no
                        

need  for evidentiary  hearing on  jurisdictional question  if no

facts are in genuine dispute).

          Without  statistical  evidence,   URI's  rebuttal   was

exceedingly  thin.   Nevertheless, because  it is clear  that the

Board is "dependent" on the State for some unknown portion of its

revenues, we  will assume,  arguendo, that certain  provisions of
                                    

the enabling  statute cited  by URI  did give rise  to a  genuine

dispute  over an  important  jurisdictional fact     whether  the

Board actually  enjoys financial autonomy  from the State.   See,
                                                                

e.g., R.I. Gen. Laws   16-59-5 (Board must hold annual meeting to
    

discuss  budget and "invite" members  of general assembly); id.  
                                                               

16-59-9(c)  (all proposals  for  tuition increases  must be  made

before State appropriates funds for fiscal year).
      

                    

(1987); Goss, 588 F.2d at 98-99 (same).
            

                                34

          As  far as we  can discern from  the case law,  in only

three  situations has  the  financial autonomy  authorized by  an

enabling statute been  considered illusory.   First,  "functional

integration"  may  obtain  if  the State  nonetheless  bears  the

ultimate  legal responsibility to  answer for debts  on which the
        

state university defaults.  Thus, the very financial independence

accorded  the  Board  under  the Rhode  Island  enabling  statute

ultimately might expose  the State treasury to liability  for the

Board's  financial obligations.  In Kovats, 822 F.2d at 1309, the
                                          

Third Circuit flatly rejected such a functional integration claim

where the  legislature's decision to answer  for the university's

debts  appeared to be purely discretionary  and not legally bind-

ing.   Cf. also Fitchik, 873 F.2d  at 661 (the State's disclaimer
                       

of  any obligation to  "cover" is the  primary consideration, not

the relative size (50-70%)  of the state appropriation); but  cf.
                                                                 

Hall, 742 F.2d  at 304-05 (no  statute prohibits university  from
    

incurring debt in state's name, and fact that state  will have to
                              

"cover" debt by law  is indicative of "alter ego"  status); Krie-
                                                                 

ger, 765 F.  Supp at  761 (where District  of Columbia  expressly
   

committed  itself to funding, agency not wholly "self-supporting"

is "mere arm").

          Even if a state's  ultimate legal obligation to "cover"

a university's financial obligations  were the controlling consi-

deration  in the  diversity context,  however, but see  Moor, 411
                                                            

U.S. at 719 (noting that  the county, "and from all that  appears
                                                                 

the  county  alone, is  liable  for  the  judgments against  it")

                                35

(emphasis added),  the Rhode  Island statutory scheme  evinces no

conclusive answer as to  whether the State is  so obligated.   We

have neither been cited to, cf.  supra note 8, nor have we found,
                                      

statutory language  governing whether  the State of  Rhode Island

ultimately is   responsible  for the Board's  corporate financial

obligations.   Cf. Metcalf & Eddy,      F.2d at     [No. 91-1602,
                                 

1993 U.S.  App. LEXIS  10064, at  13-14 (1st Cir.  May 3,  1993)]

(statute  explicitly  divested  Puerto Rico  Aqueduct  and  Sewer

Authority of  power "to pledge the credit  or taxing power of the

Commonwealth," thereby "erect[ing]  a wall  between the  agency's

appetite and the public fisc.").17

          Second,  the  amount  of  the  Board's  nonappropriated

funding,  either in absolute or  relative terms, might be consid-

ered so insubstantial as to leave the Board financially dependent

on  the State.    But even  assuming,  arguendo, that  an  entity
                                               

receiving  any State  funding  or subsidy  is thereby  inevitably

rendered  susceptible  to State  pressure, two  principles remain

constant.   First, an  incorporated entity dependent  entirely on
                                                              

State appropriations rarely (if ever) would escape  characteriza-

tion as the  State's "alter ego,"  since the hand that  holds all
                                                                 

the purse strings presumably controls the dependent entity.  See,
                                                                

                    

     17The only provision remotely  on point empowers the general
assembly  to appropriate such funds  to the Board  as the general
assembly "deems  necessary," R.I.  Gen. Laws    16-59-9 (emphasis
                          
added),  as distinguished  from  such amount  as "is  necessary."
Furthermore, as  we have noted, the  general assembly purposively
delineated narrow categories of Board "debts" (e.g., student loan
                                                   
guarantees) which  would become "state obligations,"  a seemingly
superfluous undertaking  if the State  implicitly underwrites all
Board financial obligations.  See supra note 14.
                                       

                                36

e.g., State Highway Comm'n, 278 U.S. at 199 (finding no diversity
                          

where Highway Commission, despite  its power to sue and  be sued,

"had no funds or ability to respond in damages"); Neves, 837 F.2d
                                                       

at  534 (where monies "will  inure exclusively to  the benefit of

the public fisc," the  diversity inquiry is at an  end); Culebras
                                                                 

Enters. Corp. v. Rios, 813 F.2d 506, 517 (1st  Cir. 1987) (Puerto
                     

Rico conservation  authority is  "alter ego" notwithstanding  its

power  to sue and be  sued, where agency  directors attested, and

plaintiffs did not dispute,  that "the agency would not  have the

funds  to satisfy  a judgment  and  that such  would  have to  be

satisfied from  the general budget  of [Puerto Rico]");  see also
                                                                 

Kashani, 813 F.2d at 846 (lack of other funding "ensures ultimate
       

fiscal reliance on state"); Gay Students Servs., 737 F.2d at 1333
                                               

n.28 (same); Hughes-Bechtol, 737 F.2d at 543 ("board has no funds
                           

or  ability to  respond in  damages"); Ronwin,  657 F.2d  at 1073
                                             

(given State's comprehensive provisions  for risk management, "no

evidence  that the Board, acting in its corporate capacity, could

satisfy a libel judgment in any  way other than by turning to the

state of  Arizona").  URI  must concede  that the Board  does not

fall within this bright-line category.

          On the other hand, mere receipt of state appropriations

is not conclusive  evidence of the recipient entity's "alter ego"
      

status.   Many  (if  not most)  political subdivisions  routinely

receive significant  state appropriations, but  are characterized
                   

as autonomous entities for immunity and diversity purposes.  See,
                                                                

e.g., Mount Healthy, 429 U.S. at 280-81 (city board of education,
                   

                                37

which received  "significant amount" of state  funding, not enti-

tled to immunity where State granted board the power to raise its

own revenue); Gary A. v. New Trier High Sch. Dist., 796 F.2d 940,
                                                  

945  (7th Cir. 1986) (noting  that the "fact  that a local school

district receives 'a significant amount of money  from the state'
                                                

does not mean  that it is an arm of  the state") (emphasis added)

(citation omitted).  In  the Eleventh Amendment immunity context,

we recently rejected just such a contention:

          We think  [that the Puerto Rico  Aqueduct and
          Sewer  Authority's]  situation is  not unlike
          that of a typical political subdivision. Such
          an entity often receives  part of its  budget
          from  the state and  raises the rest indepen-
          dently. Despite this dual funding, such enti-
          ties do  not automatically (or  even usually)
          come within the zone of protection demarcated
          by the Eleventh  Amendment . . . despite  the
          "significant amount of money" [they] received
          from the state.

Metcalf  & Eddy,      F.2d  at     [No.  91-1602, 1993  U.S. App.
               

LEXIS 10064, at 15 (1st Cir. May 3, 1993)] (citations omitted).

          Nevertheless, under Moor,  the courts  are expected  to
                                  

consider  available statistical  evidence in  arriving at  a more
                   

precise assessment  of the relative "significance"  of the appro-

priated and nonappropriated funding which goes into the universi-

ty budget.   See  Kovats, 822 F.2d  at 1308 (entity  is "citizen"
                        

even though  state appropriation is "large,"  or approximately 50

to 70% of budget). But  see Kashani, 813 F.2d at 845  (33% appro-
                                   

priation suggests  "arm"); Hall,  742 F.2d  at  304 (average  64%
                               

state appropriation suggests "arm");  Jagnandan, 538 F.2d at 1175
                                               

(maximum 72% state  appropriation suggests "alter ego").   In the

                                38

present case,  however, neither the amount nor  the percentage of

the Board's nonappropriated revenues  can be ascertained from the

record.   Thus, argues URI,  the district court  was compelled to

find that Chesterton did  not sustain its burden of  proof on the

Board's financial autonomy.

          In characterizing  such statistical data  as indispens-

able jurisdictional "facts," however,  URI misconstrues our  case

law,18 as well  as Supreme Court precedent.  We  have never inti-

mated that such statistical information is itself a jurisdiction-

al fact,  the absence of which would  invariably defeat diversity

jurisdiction.    The  core  jurisdictional fact,  after  all,  is

financial autonomy.   Under  the seminal Supreme  Court decisions

                    

     18On occasion, we have adverted to this  kind of statistical
evidence in the  appellate record, as  confirmation that a  party
                                 
could not establish diversity.   See Perez v. Rodriguez  Bou, 575
                                                            
F.2d 21, 25  (1st Cir. 1978) (in  dicta, noting that  the "extent
and nature" of the  Commonwealth's support for the  University of
Puerto Rico  suggested lack  of autonomy, but  without describing
precise statistics, or stating whether University had other forms
of substantial  nonappropriated income).  On  other occasions, we
have remanded for further factfinding  where it appeared that the
autonomy  equation was so  evenly balanced that  the proponent on
the jurisdictional issue  could not meet  its ultimate burden  of
proof without resort to  such statistical information, see, e.g.,
                                                                
Ainsworth, 818 F.2d at 1038-39 (noting various factors supporting
         
and  undermining autonomy,  and remanding  to district  court for
hearing on whether entity receives "significant funding" from the
Commonwealth),  and that the parties had not been afforded a full
and  fair opportunity to present evidence in the trial court. Id.
                                                                 
at  1038 n.23 (as an  alternative reason for  remand, noting fact
that proponent had  not raised  the "alter ego"  issue until  its
appellate reply brief, denying opponent "the opportunity to argue
. . .  or to rebut" the  proponent's contentions).   Thus, in our
earlier denial of the interlocutory appeal in this case, we acted
on  the side of caution and judicial economy in recommending that
the district  court allow the  parties an opportunity  to present
                                                     
this kind of evidence, on  the chance that it might be  needed to
tip the "alter ego" balance in the final analysis.

                                39

dealing with  both immunity and diversity, there  is a noticeable

lack  of reliance on such statistical data, a fact which confutes
    

its indispensability.  See, e.g., Mount Healthy, 429 U.S. at 280-
                                               

81  (noting  only "significant  amount  of  money" received  from
                              

State)  (emphasis added);  Moor, 411  U.S. at  719-20 (discussing
                               

county's  ability to  raise  its own  funds,  not whether  county

received any funds from State); see also Metcalf & Eddy,     F.2d
                                        

at      [No. 91-1602, 1993 U.S. App. LEXIS 10064, at 15 (1st Cir.

May  3, 1993)].    Unsurprisingly, as  the divergent  conclusions

reached  on essentially  similar "statistical"  evidence suggest,

see supra pp. 37-38,  a closely calibrated" statistical" approach
         

in these cases entails its own impediments to  reliable decision-

making; namely, at  what levels should  the absolute or  relative

size  of an entity's  appropriated funding be  considered so sub-

stantial, or  its nonappropriated funding so  insubstantial, that

"functional integration" is to  be presumed, or a  previous judi-

cial determination  of the  entity's citizenship set  aside?   We

believe a wide margin  of variance would need to  be demonstrated

before it could  be found to  have effected a  sea change in  the

entity's jurisdictional status.   After all, while not immutable,

the  citizenship  of a  public  corporation,  like its  domicile,

should be  accorded a  reasonable measure  of permanence; at  the

very  least, ordinary  fluctuations  in  the university's  budget

ought not occasion continual  judicial reevaluation.  Thus, trial

court rulings  on subject matter jurisdiction  normally ought not

await  budgetary  data  and  oscillations  absent  an evidentiary

                                40

proffer of sufficient import to alter a determination based on an

analysis of state  statutory and  decisional law.   In our  view,

this  approach best  comports with  the analysis  contemplated in

Moor. 
    

          In considering whether Chesterton carried its burden of

persuasion on the  issue of  financial autonomy, we  think it  is

inescapable that the Board's nonappropriated revenues represent a

substantial budget component; tuition, housing, dining and admin-

istrative  fees, donations,  bequests,  federal  grants, and  the

proceeds from discretionary sales and leases of URI property  are

not  insubstantial  revenue sources.    Thus,  on its  face,  the

enabling statute demonstrates Board  access to, and control over,

substantial amounts  of nonappropriated  revenues.   Following  a

trial on the merits, and  absent any indication that URI did  not

have  a  fair opportunity  to  identify  and produce  statistical

evidence which  might rebut  Chesterton's demonstration  that the

enabling  statute  confers the  requisite  financial  autonomy to

qualify the  Board for citizenship  under Moor, we  conclude that
                                              

URI's appellate challenge comes too late.

          Finally, in a similar vein,  URI suggests that it might
                                                                 

be  that the State routinely attunes  its annual appropriation to

the  Board in  response to  the total  amount  of nonappropriated

funds available to the Board, including the nonappropriated funds

accumulated from  prior fiscal years and those anticipated in the

current  fiscal  year.   Under this  "linkage" theory,  the State

could  compel the Board to expend all accumulated and anticipated
                                 

                                41

nonappropriated funds  merely by  limiting its  annual appropria-

tions to the  difference between the Board's  fiscal year revenue

requirements and the total available nonappropriated funds.

          URI's contention  that the State might  link its appro-

priations to  the availability of nonappropriated  Board funds is

pure  conjecture.    Arrayed  against URI's  conjecture  are  the

explicit provisions of the enabling statute,  as amended in 1988,

which expressly  state that all nonappropriated  funds, including

accumulated  nonappropriated  funds, are  to  be  deposited in  a

segregated account under the exclusive control of the Board.  See
                                                                 

Kovats,  822 F.2d at 1308-09 (mere possibility of offset by state
      

appropriations not  especially probative of  "alter ego" status).

Appropriated  funds, on the other hand, are  to be set apart in a

separate account, and all unexpended balances in the appropriated
                                                                 

funds account are to  be redeposited to the general  fund.  Unex-
                                                         

pended nonappropriated funds, however, are carried over from year
                      

to year  in  the Board's  nonappropriated  funds account.    This

separate  treatment of  appropriated  and nonappropriated  funds,

deliberately mandated  by the  general assembly, would  have been

both superfluous and  contraindicated had routine  "linkage" been

intended.  Cf. Allende v. Shultz,  845 F.2d 1111, 1117 (1st  Cir.
                                

1988)  (in general,  courts  should  avoid interpretations  which

would render a statutory provision meaningless).   In the absence

of any countervailing showing, the Board's financial autonomy, as

ordained by the  general assembly  in the  enabling statute,  was

                                42

sufficient to sustain Chesterton's burden of proof on the central

jurisdictional fact at issue under 28 U.S.C.   1332.

          Accordingly, having weighed  the myriad factors contem-

plated by  Moor, we  conclude that  the district court  correctly
               

determined  that Chesterton  met  its ultimate  burden of  estab-

lishing that the Board  enjoys "a sufficiently independent corpo-

rate character  to dictate  that it  be treated as  a citizen  of

[Rhode Island]."  Moor, 411 U.S. at 721.
                      

B.   Evidence of Damages
                        

          In  a ruling  that  proved fatal  to  URI's claims  for

damages for breach of warranties, the district court excluded the

testimony of URI's longtime  controller, Ronald Osborne, a certi-

fied public accountant in charge of all URI financial information

and  accounting practices.    URI  called  Osborne as  an  expert

witness to establish  the amount of money it spent to correct the

corrosion problem allegedly left unremedied by Chesterton's 1-2-3

System.  URI  proffered no  other evidence on  damages.   Osborne

testified on direct examination  that he previously had performed

cost assessments  on various  URI projects,  and  that his  usual

procedure  was  to  consult  URI financial  records  and  conduct

interviews with URI personnel involved in the particular project.

He consulted GSO  records to ascertain the  overtime hours worked

in 1985, and conducted several interviews with URI employees  and

various "private vendors" to  ascertain which overtime hours were

attributable to  the correction of Endeavor's  corrosion problem.

To these figures he added the  cost of fringe benefits (22%)  for

                                43

overtime  employees,  and  "indirect costs,"  at  an  unspecified

percentage rate,  which included  expenses for  "accounting, pur-

chasing,  maintenance,  [and] utilities."   Before  Osborne could

state an opinion concerning  the total monetary damages sustained

by URI, Chesterton objected  on the grounds that (1)  Osborne was

not a  qualified expert on  damages calculation, (2)  the factual

bases for his calculation  included inadmissible hearsay, and (3)

the damages  calculation included inappropriate factors,  such as

"indirect costs."

          URI  relied on Federal Rules of Evidence 703 and 705 as

grounds  for the admission of Osborne's expert opinion.  Rule 703

provides that "[t]he  facts or  data . . . upon  which an  expert

bases an opinion or inference . . . [,] [i]f of a type reasonably

relied upon by experts  in the particular field in  forming opin-

ions or inferences upon the subject, . . . need not be admissible

in evidence."  Fed. R. Evid. 703.  Rule 705  provides that "[t]he

expert  may testify  in terms  of opinion  or inference  and give

reasons therefor without prior disclosure of the underlying facts

or data, unless the court requires  otherwise.  The expert may in
                                             

any event be required to disclose the underlying facts or data on

cross-examination."   Fed. R. Evid.  705 (emphasis  added).   The

court sustained Chesterton's objection on the ground that URI had

not demonstrated that the  facts relied on  by Osborne were of  a

type reasonably relied on by experts in damages assessment.19

                    

     19The court  also expressed a firm  preference for requiring
preliminary  disclosure of  the factual  "background" for  an ex-
pert's opinion on  direct examination.  The court considered this

                                44

          URI's central  arguments on  appeal are: (1)  Rules 703

and 705 afford the right to present unsubstantiated expert testi-
                        

mony on  direct examination without first  disclosing its factual

underpinnings, and  (2) the district court  abused its discretion

by adhering to its self-imposed rule  of exclusion, a per se rule
                                                            

which, according  to URI, runs  counter to the  "burden shifting"

implicit in Rule 705  and disregards the obligation  to predicate

its exclusionary ruling on the particular circumstances.

          We have no doubt  that Rules 703 and 705  permitted the
                                                             

district  court  to   admit  Osborne's  opinion  testimony,   see
                                                                 

International Adhesive  Coating Co. v. Bolton  Emerson Int'l, 851
                                                            

F.2d 540, 545 (1st Cir. 1988) (business and financial records are

"obvious"  sources  relied  on  by  accountants  in  ascertaining

damages),  subject of course  to Chesterton's right  to probe the

premises  of the opinion on  cross-examination.  But  that is not

the question presented.   Rather, the issue on appeal  is whether

the district court abused  its considerable discretion by exclud-

ing the evidence.  We think not.

          Rules  703 and  705 normally  relieve the  proponent of

expert testimony from engaging in the awkward art of hypothetical

questioning, which  involves the  somewhat meticulous, and  often

tedious, process  of laying  a full  factual foundation prior  to
                                                             

                    

procedure preferable to the alternatives, which were (1) to allow
the evidence in on direct, then exclude it later if it were found
wholly unreliable, or  (2) to permit  Chesterton to shoulder  the
burden of testing the reliability of Osborne's methods  on cross-
examination, leaving the  ultimate weight of the evidence  to the
jury.

                                45

asking  the expert  to state  an  opinion.   In the  interests of

efficiency, the Federal Rules  of Evidence deliberately shift the

burden  to the  cross-examiner to  ferret out  whatever empirical

deficiencies may lurk in the expert opinion.  Nevertheless, Rules

703 and 705 do not afford automatic entitlements to proponents of

expert  testimony.   Rule 703  requires the  trial court  to give

"careful consideration" to any  inadmissible facts upon which the

expert will  rely,  in order  to  determine whether  reliance  is

"reasonable." Id. at  545.  Similarly, under  the broad exception
                 

to Rule 705  ("unless the court  otherwise requires"), the  trial

court  is given  considerable latitude  over the  order in  which

evidence will  be presented to the  jury.  See Fed.  R. Evid. 705
                                              

advisory  committee's note  ("[S]afeguards [to  minimize 'unfair'

burden  on cross-examiner]  are reinforced  by  the discretionary

power  of the  judge  to require  preliminary  disclosure in  any
                                                                 

event.") (emphasis added).  While the trial court's discretion is
     

not unfettered, at a minimum the rules suggest that the proponent

must  be prepared,  if the court  so requires, to  make a limited

offer of proof to aid the court in its assessment.  Cf. Ambrosini
                                                                 

v. Labarraque, 966  F.2d 1464,  1469 (D.C. Cir.  1992) ("A  court
             

must know the  basis for an expert's opinion before it can deter-

mine  that the  basis is not  of a  type reasonably  relied on by

experts  in the field."); Head  v. Lithonia Corp.,  881 F.2d 941,
                                                 

944 (10th Cir. 1989)  (despite the  liberality of Rule 703, court

must  not abdicate  its responsibility  to assure  "minimum stan-

dards" for admissibility as required by Rule 104(a)).

                                46

          Even though URI's threshold burden was minimal, and may

have been readily met, it made no attempt whatever to assuage the

district court's  legitimate concerns, but chose  instead to rely

on its perceived "right" to have Osborne's opinion admitted under

Rule  703.   Apparently,  URI came  to  trial with  no supporting

documentation  whatever to  substantiate Osborne's  assessment of

damages.  Based on what can be gleaned from Osborne's preliminary

testimony,  URI's apparent  unpreparedness and  recalcitrance may

have  given the  district  court real  concerns  as to  Osborne's

methodology.   Unlike the  expert witness in  International Adhe-
                                                                 

sive, Osborne's "damages" assessment was  not based solely on the
    

conventional examination and compilation of documents from  which

an expert  objectively might  ascertain the overtime  labor costs

incurred in  repairing Endeavor's ballast tanks, as distinguished

from  various other projects at URI and the GSO.  Rather, Osborne

relied on  "interviews" with undisclosed URI  employees and "out-

side vendors," conducted either by himself or other URI officials

who reported to him.   The trial court quite  reasonably expected

URI  to explain,  out  of the  presence of  the  jury, the  basic

assumptions  undergirding  its  witness's   seemingly  unorthodox

method of reconstruction.

          Rather than provide an explanation, however, URI simply

accepted a directed verdict  on the issue of damages.   Moreover,

when pressed  by the district court, URI indicated no inclination

to  pursue a claim  for nominal damages.   Although  we are given

some  pause by  the district  court's  blanket statement  that it

                                47

"always requires" the proponent to disclose on direct examination

the factual basis for an expert opinion, cf., e.g., Lis v. Robert
                                                                 

Packer Hosp.,  579 F.2d 819,  822, 822-23  (3d Cir.)  (expressing
            

disapproval of  trial court's statement that  it invariably exer-

cises its discretion to invoke the Rule  611(b) exception), cert.
                                                                 

denied, 439  U.S. 955 (1978),  there was no abuse  of the court's
      

broad  discretion  in this  case, as  a  sound basis  existed for

requiring disclosure.

                               III

                            CONCLUSION
                                      

          We  need  proceed  no  further  with  this  endeavor.20

                    

     20URI raises  two  other arguments  on  appeal.   First,  it
contends that the district court abused its discretion by denying
its motion to file a second amended complaint in November 1991   
eighteen months after  the filing of its  original complaint, and
following jury  impanelment     since URI asserted  valid reasons
for its lack of  diligence.  See Quaker State Oil  Refining Corp.
                                                                 
v. Garrity  Oil Co., 884  F.2d 1510,  1517 (1st  Cir. 1989)  (due
                   
diligence  required for amendments).   As far as  we can discern,
the  amendment's only significant  factual supplementation to the
original complaint would allege that Chesterton's representatives
"came aboard the Research vessel Endeavor while the Chesterton 1-
2-3 System was actually being applied and said  nothing as to its
not being  equal to the task of painting the ballast tanks."  The
amended complaint  generally shifted  the focus of  URI's allega-
tions  from Chesterton's  defective manufacture  of a  product to
Chesterton's negligence in recommending an ill-suited product, or
its failure to  give adequate or  continuing instructions on  its
use.  Chesterton suffered no prejudice, however, as most of these
new factual matters  were in  fact "tried by  express or  implied
                                  
consent of the parties," Fed. R. Civ. P. 15(b).  In any event, as
the substance  of the proposed amendments was wholly unrelated to
the  issue of  damages, amendment  would have  been futile.   See
                                                                 
Arzuaga-Collazo  v. Oriental Fed. Sav.  Bank, 913 F.2d  5, 7 (1st
                                            
Cir.  1990) (amendment futile if there  is no "meaningful indica-
tion"  that  amendment  would  make  a  "dispositive difference")
(citing  The Dartmouth Review v.  Dartmouth College, 889 F.2d 13,
                                                   

                                48

Absent competent evidence of damages, the district court properly

granted judgment as  a matter  of law in  favor of Chesterton  on

URI's breach of warranty claims.

          The judgment of the district court is affirmed.
                                                        

                  - Concurring Opinion Follows -

                    

22-23 (1st Cir. 1989)). 
     Similarly, URI  contends that the  district court improperly
directed  a verdict for Chesterton on Count III of the complaint,
which  alleged Chesterton's breach of a warranty of fitness for a
particular purpose.  URI  merely argues that it presented  suffi-
cient evidence  to establish that  Chesterton had reason  to know
that URI intended to use the product on salt water ballast tanks,
and that  URI specifically  relied on Chesterton's  assurances of
suitability.  Once again, however, absent proof of damages, URI's
argument is to no avail.

                                49

          HORNBY, District Judge, concurring.  It takes the court
          HORNBY, District Judge, concurring.  
                                            

38 typed pages (8-1/2 x  11") of closely reasoned text to  decide

whether the University of Rhode Island is a citizen -- a determi-

nation 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 deter-

mining  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 also applied a multitude of factors

(with no  particular weight assigned), in  determining the status

                                50

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 (1984) (looking at several factors);
             

Krieger  v. Trane Co., 765 F. Supp. 756, 758 (D.D.C. 1991) (exam-
                     

ining 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) (con-
           

sidering, 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 econom-

ic dispute between the parties.

                                51

          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  (1973). Second, incorporated branches  of state govern-

ment (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 (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, quoting Illinois v. City of Milwaukee,
                                                                

406 U.S. 91, 97 (1972).

          Here, the  Rhode Island  Board of Higher  Education1 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

                    

     1I  agree with the court that there is no legal entity under
Rhode Island law known as the University of Rhode Island.

                                52

Court decision  finding California  counties to  be corporations.

Based on those two summary paragraphs, the Supreme Court conclud-

ed  that "the  county  has a  sufficiently independent  corporate

character  to dictate that it be treated as a citizen of Califor-

nia under our  decision in Cowles v. Mercer County,  supra."  411
                                                          

U.S. at 721.

     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, empow-

ered 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 existence 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 person-

al 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
                   

                                53

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 evalua-

tion 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  Amend-

ment cases where the primary  goal is to protect the state  trea-

sury.   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 avail-

ability of  an unbiased  forum.   The Supreme Court  has not  ad-

                    

     2Since the  Board is a public corporation, it seems unneces-
sary 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 (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 con-
tract  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.

                                54

dressed 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 litiga-

tion  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 unneces-

sary subtleties and  focusing instead on  rules that ensure  pre-

dictability and certainty, as well as fairness.

          In all other respects, I join the court's opinion.

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