Court Opinion

ID: 3025504
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:33:50.717491+00
Date Added: 2024-06-11T11:47:46.661188
License: Public Domain

United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                  _____________

                                  No. 00-1420EM
                                  _____________

Texas Community Bank, N.A.,             *
                                        *
             Appellee,                  *
                                        *
      v.                                * On Appeal from the United
                                        * States District Court
                                        * for the Eastern District
State of Missouri Department of         * of Missouri.
Social Services, Division of            *
Medical Services,                       *
                                        *
             Appellant.                 *
                                   ___________

                          Submitted: November 17, 2000
                              Filed: November 27, 2000
                                  ___________

Before McMILLIAN, RICHARD S. ARNOLD, and BEAM, Circuit Judges.
                           ___________

RICHARD S. ARNOLD, Circuit Judge.

       Plaintiff Texas Community Bank lent money to two companies that operated
several nursing homes in Missouri. When the companies went into receivership, the
bank intervened in the state receivership proceeding and also filed suit in the United
States District Court, naming as defendants the companies, the nursing homes, some
private individuals associated with the companies, and various governmental and
private debtors of the companies, including the Missouri Department of Social Services
(DSS). Here at issue are only the claims against the Missouri DSS. These claims
sought declaratory and injunctive relief, the effect of which would be to satisfy the
companies' debt to the bank by garnishing any Medicaid funds payable to the
companies by DSS.

       In its answer, the State of Missouri asserted affirmative defenses based on the
Eleventh Amendment's guarantee of state sovereign immunity and also on abstention
doctrine. It later reasserted its Eleventh Amendment argument in a motion for
judgment on the pleadings. The District Court denied that motion but decided to
abstain from the case in view of the state-court receivership action. The State appeals
from the denial of its motion. We reverse.

                                            I.

       The bank has not filed a brief in this Court, apparently believing that the District
Court's abstention renders the State's appeal inconsequential. It does not. Abstention
in deference to state proceedings does dispose of the federal case, but without
prejudice: there remains the possibility that the bank could re-file its federal claim. If
the State's Eleventh Amendment argument is meritorious, then it is entitled to close off
that possibility by having the bank's claim dismissed with prejudice.

       As to the merits of the State's argument, the law is clearly settled. The bank here
has brought a suit in equity, in a federal court, against a State agency. The cases relied
on by the District Court, which hold that State officials may be sued in their official
capacity provided that the plaintiff seeks injunctive relief rather than money damages,
are off point. The bank sued a State agency, not a State official, and State agencies
may assert the Eleventh Amendment immunity of the State. See, e.g., Edelman v.
Jordan, 415 U.S. 651 (1974). We therefore reverse the District Court's denial of
Missouri's motion for judgment on the pleadings. On remand, the State will be entitled
to a dismissal with prejudice to the re-filing of the federal-court suit.

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                                         II.

      The State has also asserted a claim for attorney's fees, arguing that its clear
immunity from suit renders frivolous the bank's joinder of DSS. The attorney's fee
dispute should be resolved, in the first instance, by the District Court.

      Reversed and remanded for further proceedings consistent with this opinion.

      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

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