Court Opinion

ID: 2961925
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:49:54.573414+00
Date Added: 2024-06-11T11:33:11.069726
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                              _________________________          No. 91-1602                                METCALF & EDDY, INC.,                                 Plaintiff, Appellee,                                          v.                      PUERTO RICO AQUEDUCT AND SEWER AUTHORITY,                                Defendant, Appellant.                              _________________________                           ON REMAND FROM THE SUPREME COURT                                 OF THE UNITED STATES                              _________________________                                        Before                                 Breyer, Chief Judge,                                         ___________                            Aldrich, Senior Circuit Judge,                                     ____________________                              and Selya, Circuit Judge.                                         _____________                              _________________________               Perry M. Rosen,  Paige E.  Reffe, Thomas D.  Roth, Cutler  &               ______________   _______________  _______________  _________          Stanfield, Arturo Trias, Hector Melendez Cano, and Trias, Acevedo          _________  ____________  ____________________      ______________          & Otero on supplemental brief for appellant.          _______               Peter W.  Sipkins, Dorsey & Whitney,  Jay A. Garcia-Gregory,               _________________  ________________   _____________________          and  Fiddler,  Gonzalez &  Rodriguez  on  supplemental brief  for               _______________________________          appellee.                              _________________________                                     May 3, 1993                              _________________________                    SELYA, Circuit  Judge.   Notwithstanding that  trial is                    SELYA, Circuit  Judge.                           ______________          still  some distance  away, this  diversity case  alights on  our          doorstep for the second time.  The appellate roundelay began when          Metcalf  & Eddy,  Inc. (M&E)  sued the  Puerto Rico  Aqueduct and          Sewer  Authority (PRASA)  for  damages in  Puerto Rico's  federal          district court.  In the course of pretrial proceedings, the court          denied PRASA the  benefit of  Eleventh Amendment  immunity.   The          disappointed   defendant   essayed   an   interlocutory   appeal.          Following circuit precedent, see Libby  v. Marshall, 833 F.2d 402                                       ___ _____     ________          (1st   Cir.  1987),   we  dismissed  the   appeal  for   want  of          jurisdiction.  M&E  v. PRASA, 945  F.2d 10,  14 (1st Cir.  1991).                         ___     _____          The Supreme  Court granted certiorari and,  resolving an existing          split in  the circuits, determined that  pretrial orders granting          or  denying   Eleventh   Amendment  immunity   were   immediately          appealable.  PRASA v. M&E, 113 S. Ct. 684, 689 (1993).                       _____    ___                    PRASA's appeal returns to us on remand from the Supreme          Court.   This  time  around, we  must address  the merits  of the          ruling  below.      After  reviewing   supplemental  briefs   and          considering  PRASA's  overall   relationship  with  the   central          government of Puerto Rico, we  affirm the district court's denial          of Eleventh Amendment immunity.                                          I.                                          I.                                          __                                  Setting the Stage                                  Setting the Stage                                  _________________                    Puerto  Rico's  legislature  created PRASA  over  forty          years ago in order to provide safe drinking water for inhabitants          and  to manage wastewater treatment.  See P.R. Laws Ann. tit. 22,                                                ___                                          2             141-168 (1987 & Supp. 1989).  PRASA's stewardship has not been          without blemish.  The incident that sparked this suit occurred in          1985,  when  the United  States  Environmental  Protection Agency          (EPA)  brought an enforcement action  pursuant to the Clean Water          Act,  33  U.S.C.      1251-1376  (1988),  seeking  to  provoke  a          substantial   modernization   of  PRASA's   wastewater  treatment          facilities.                    In due  course, PRASA  and EPA signed  a consent  order          limning the  changes necessary to bring  PRASA's treatment system          into  compliance.     Toward  that  end,   PRASA  hired  M&E,   a          Massachusetts-based engineering firm with professed  expertise in          wastewater  management,  to  oversee  the  refurbishment.   M&E's          duties  included contracting for design and construction services          on PRASA's behalf, procuring necessary equipment, and supervising          work on the  project.  M&E was to be  remunerated on a time-plus-          expense basis, invoiced as  accrued.  Bills were due  and payable          within thirty days of presentment.                    Over time, project  expenditures mushroomed well beyond          budget.   As costs mounted, PRASA  grew increasingly inhospitable          to M&E's  invoices.  The  denouement occurred when  PRASA, amidst          charges  of  skulduggery,  suspended  all  payments  to  M&E  and          demanded a complete audit.   M&E consented to the audit,  but did          not acquiesce in the cessation of payments.  The audit dragged on          and  PRASA accumulated  a huge  stockpile of  M&E invoices.   Its          financial plight ingravescent, M&E sued before  the audit had run          its   course  to   force  payment   of  the   arrearage  (roughly                                          3          $52,000,000).                    Confronted  by  defendant's  motion  to   dismiss,  the          district court determined as a  matter of law that PRASA did  not          enjoy  Eleventh Amendment  immunity.   In so  holding,  the court          stressed  that PRASA possessed  the "ability  to raise  funds for          payment  of   its  contractual   obligations"   and,  thus,   its          obligations  "do not  affect  the Commonwealth's  funds."   PRASA          appeals  this decision as a  legal rather than  a factual matter.          Although there may  sometimes be genuine issues  of material fact          sufficient to preclude  brevis disposition in Eleventh  Amendment                                  ______          litigation,  there are none here.   Agreeing with  PRASA that the          issue in this case is one of law, we afford plenary review to the          district court's denial  of immunity.   See Dedham  Water Co.  v.                                                  ___ _________________          Cumberland  Farms Dairy, Inc., 972 F.2d 453, 457 (1st Cir. 1992);          _____________________________          New England  Legal Found. v.  Massachusetts Port Auth.,  883 F.2d          _________________________     ________________________          157, 167 (1st Cir. 1989).                                         II.                                         II.                                         ___                                       Analysis                                       Analysis                                       ________                                          A.                                          A.                                          __                         The Eleventh Amendment:  An Overview                         The Eleventh Amendment:  An Overview                         ____________________________________                    In Chisholm  v. Georgia, 2  U.S. (2 Dall.)  419 (1793),                       ________     _______          the  Supreme Court held that  the federal courts had jurisdiction          to  hear a  South Carolina  citizen's suit  against the  State of          Georgia.  This result,  popularly perceived as a threat  to state          autonomy  in   a  newly   minted  federal  system,   produced  an          overwhelmingly  negative reaction.   See  Edelman v.  Jordan, 415                                               ___  _______     ______                                          4          U.S.  651, 662  (1974).  Ratification  of the  Eleventh Amendment          followed apace.1                    On  its face,  the  amendment appeared  to introduce  a          fairly  simple proposition into our constitutional jurisprudence.          Nevertheless,  driven by  the  pressure of  pragmatic  necessity,          judicial sketching of the  amendment's scope and requirements has          displayed  a creative  bent.   Under the  gloss supplied  by this          abstract impressionistic  flair, the federal courts  now read the          Eleventh  Amendment,  notwithstanding   its  plain  language,  to          prohibit  them from hearing most suits brought against a state by          citizens  of that  or any  other state.2   See  De Leon  Lopez v.                                                     ___  ______________          Corporacion Insular de Seguros, 931 F.2d 116, 121 (1st Cir. 1991)          ______________________________          (collecting cases); see also Edelman, 415 U.S. at 662-63.                              ___ ____ _______                    Withal, there are apertures in the Eleventh Amendment's          protective  swaddling.  If a case falls within one of these gaps,          the Eleventh Amendment will not bar  maintenance of the suit in a          federal  court.  See Ramirez v.  Puerto Rico Fire Serv., 715 F.2d                           ___ _______     ______________________          694, 697, (1st Cir. 1983) (explaining that the Eleventh Amendment                                        ____________________               1The Amendment reads:                         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, or  by Citizens or Subjects                    of any Foreign State.          U.S. Const. amend. XI.               2There  is,   of  course,   an  exception   for  prospective          injunctive relief.  See, e.g., Ramirez v. Puerto Rico Fire Serv.,                              ___  ____  _______    ______________________          715 F.2d 694, 697 (1st Cir. 1983).                                          5          "bars federal  court lawsuits by private parties  insofar as they          attempt  to impose  liabilities necessarily  payable from  public          coffers, unless the  state has  consented to suit  or unless  the          protective  cloak of the amendment  has been doffed  by waiver or          stripped  away  by  congressional  fiat").    Specifically,   the          amendment's  raiment unravels  if any  one of  four circumstances          eventuates: a state  may randomly  consent to suit  in a  federal          forum, see,  e.g., Paul N. Howard Co. v. PRASA, 744 F.2d 880, 886                 ___   ____  __________________    _____          (1st Cir. 1984), cert. denied, 469 U.S. 1191 (1985); a  state may                           _____ ______          waive  its  own  immunity by  statute  or  the  like, see,  e.g.,                                                                ___   ____          Edelman, 415 U.S.  at 673; Congress may  sometimes abrogate state          _______          immunity (so long as it speaks clearly and acts in furtherance of          particular powers),  see, e.g.,  Fitzpatrick v. Bitzer,  427 U.S.                               ___  ____   ___________    ______          445,  451-54  (1976);  or   under  certain  circumstances   other          constitutional imperatives may take  precedence over the Eleventh          Amendment's federal-court  bar, see Pennhurst State  Sch. & Hosp.                                          ___ _____________________________          v.  Halderman,  465  U.S.  89, 99  (1984)  (involving  Fourteenth              _________          Amendment); Bitzer, 427 U.S. at 456 (same).                      ______                    Here,  M&E does  not argue that  PRASA consented  to be          sued,  that Puerto  Rico waived  PRASA's immunity,  that Congress          abrogated  PRASA's immunity, or that some  other provision of the          federal Constitution  has usurped  the field.   Hence, this  suit          skirts the gaps.  Rather, it is a "pure" Eleventh Amendment  case          in  which this  court  must focus  on  whether PRASA  enters  the                                          6          Eleventh Amendment's sphere at all.3                                          B.                                          B.                                          __                                       The Test                                       The Test                                       ________                    The mere imprimatur of state authority  is insufficient          to  inoculate  an agency  or  institution  against federal  court          jurisdiction.  A "slice  of state power," without more,  will not          sate the Eleventh Amendment.  Lake Country Estates, Inc. v. Tahoe                                        __________________________    _____          Regional Planning Agency, 440 U.S. 391,  401 (1979).  By the same          ________________________          token   and for much the same reasons   political subdivisions of          a state, such as  municipalities and counties, do not  lie within          the  Eleventh  Amendment's reach.   See,  e.g.,  Owen v.  City of                                              ___   ____   ____     _______          Independence,  445  U.S.  622,  650  (1980);  Moor  v. County  of          ____________                                  ____     __________          Alameda, 411 U.S. 693, 717-721 (1973).  Only the state itself and          _______          "arms" of the state receive  immunity.  See PRASA v. M&E,  113 S.                                                  ___ _____    ___          Ct.  at 689;  Alabama  v. Pugh,  438  U.S. 781,  782  (1978); see                        _______     ____                                ___          generally  De Leon Lopez, 931 F.2d at 121 (discussing coverage of          _________  _____________          Eleventh Amendment).  Because PRASA is not an organic part of the          central government of Puerto Rico, we must investigate whether it          is sufficiently a part of the central government to be considered          an arm  of the state.  Framed in this  way, the question poses an                                        ____________________               3We  have consistently treated Puerto  Rico as if  it were a          state for Eleventh Amendment purposes.  See, e.g., De Leon Lopez,                                                  ___  ____  _____________          931 F.2d at  121; Fred v. Roque, 916 F.2d 37, 38 (1st Cir. 1990);                            ____    _____          Paul N.  Howard Co., 744 F.2d  at 886; Ramirez, 715  F.2d at 697.          ___________________                    _______          Although  M&E invites us to revisit this position, we decline the          invitation.  In a  multi-panel circuit, newly constituted panels,          generally speaking, are bound by prior  panel decisions on point.          See United States v. Gomez-Villamizar, 981 F.2d 621, 623 n.9 (1st          ___ _____________    ________________          Cir. 1992); Jusino v.  Zayas, 875 F.2d 986, 993  (1st Cir. 1989).                      ______     _____          So it is here.                                          7          essentially functional  inquiry, not  easily amenable  to bright-          line answers or mechanical solutions.                    The Eleventh Amendment's primary concern is to minimize          federal courts' involvement in  disbursal of the state fisc.   It          follows that "when the action is  in essence one for the recovery          of money from the state, the state is the real, substantial party          in interest and is entitled to invoke its sovereign immunity from          suit . . . ."  Ford Motor Co. v. Department of Treasury, 323 U.S.                         ______________    ______________________          459, 464 (1945); see also Lake Country Estates, 440 U.S.  at 400-                           ___ ____ ____________________          01  (identifying  the desire  to  protect state  treasuries  as a          driving force  behind adoption of the  Eleventh Amendment); Dugan                                                                      _____          v. Rank, 372 U.S.  609, 620 (1963)  (recognizing "that a suit  is             ____          against the sovereign `if the judgment sought would expend itself          on the public treasury or domain'") (citation omitted); Ainsworth                                                                  _________          Aristocrat  Int'l Pty. Ltd. v.  Tourism Co., 818  F.2d 1034, 1037          ___________________________     ___________          (1st Cir.  1987) (similar).   Generally, if  a state has  a legal          obligation  to satisfy  judgments against  an institution  out of          public  coffers,  the  institution  is  protected   from  federal          adjudication by the Eleventh Amendment.  See Quern v. Jordan, 440                                                   ___ _____    ______          U.S. 332, 337 (1979); Reyes v. Supervisor of DEA, 834  F.2d 1093,                                _____    _________________          1097-98 (1st Cir. 1987).                    Because it  is not  always limpid  whether, or to  what          extent, the state treasury must  stand behind the judgment  debts          of  a particular  institution, we  have identified  seven related          areas as prospects  for further  inquiry.  These  areas, each  of          which can  be  mined  for  information  that  might  clarify  the                                          8          institution's structure  and function, include:   (1) whether the          agency  has the funding power  to enable it  to satisfy judgments          without direct state participation or guarantees; (2) whether the          agency's function is governmental or proprietary; (3) whether the          agency is  separately incorporated; (4) whether  the state exerts          control  over the agency, and if  so, to what extent; (5) whether          the agency has the power to sue, be sued, and  enter contracts in          its  own name  and right;  (6) whether  the agency's  property is          subject  to  state  taxation;  and  (7)  whether  the  state  has          immunized  itself from  responsibility for  the agency's  acts or          omissions.     See  Ainsworth   Aristocrat,  818  F.2d   at  1037                         ___  ______________________          (collecting  cases from  other  circuits recounting  the same  or          similar  factors).  The list  is not an all-inclusive compendium,          for other  areas  of inquiry  may  prove fruitful  in  particular          circumstances.   It is,  however, clear  that  all the  pertinent          factors have a common  orientation:  the more tightly  the agency          and  the state are entangled,  the more probable  it becomes that          the agency shares the state's Eleventh Amendment immunity.                                          C.                                          C.                                          __                                  Applying the Test                                  Applying the Test                                  _________________                    In Paul N. Howard Co., supra, we adjudicated  a similar                       __________________  _____          dispute involving PRASA's  renitency to make payments due under a          construction  contract.    744  F.2d at  881-84.    The plaintiff          prevailed in the district  court.  On appeal, PRASA  advanced for          the first time  an added defense  premised on Eleventh  Amendment          immunity.  Although we suggested rather strongly that PRASA might                                          9          "not qualify  for immunity under the Eleventh  Amendment," id. at                                                                     ___          886,  we did not conclusively resolve the issue because PRASA had          purposefully availed itself of the federal forum and  had thereby          lost whatever entitlement to Eleventh Amendment immunity it might          have possessed with  respect to  that particular suit.   See  id.                                                                   ___  ___          The case before us today requires that we return to, and resolve,          the question deferred  in Howard.4   Faithful to the  explication                                    ______          of legal principles set out above, see supra Part II(B), we first                                             ___ _____          examine  PRASA's  access  to   the  public  fisc  and  thereafter          scrutinize  how  the  associated  factors  are  arrayed  in  this          particular situation.                    1.   Access  to  the Commonwealth's  Treasury.   On the                    1.   Access  to  the Commonwealth's  Treasury.                         ________________________________________          principal issue   PRASA's access to the Commonwealth's treasury            the  die  is quickly  cast.   Puerto  Rico's legislature  made it          readily evident that PRASA                    shall have no  power at  any time  or in  any                    manner to pledge  the credit or  taxing power                    of the Commonwealth of  Puerto Rico or any of                    its  other political subdivisions.  The bonds                    and other obligations issued by the Authority                    shall not  be a  debt of the  Commonwealth of                    Puerto Rico nor of any of its  municipalities                    nor of  its other political  subdivisions and                    neither  the Commonwealth of  Puerto Rico nor                    any   such   municipalities  nor   its  other                    political   subdivisions   shall  be   liable                    thereon,  nor  shall  such  bonds   or  other                    obligations be  paid out  of any  funds other                                        ____________________               4In  this quest,  we give  no weight  to the  Howard court's                                                             ______          comments concerning  PRASA's immunity, for we  recognize that, as          dictum,  the comments  are  not binding.   That  is  not to  say,          however, that  Eleventh Amendment issues must  always be resolved          de novo.   Where the agency's  activity and its  relation to  the          __ ____          state remain  essentially the same, prior  circuit precedent will          be controlling.                                          10                    than those of the Authority.          P.R. Laws Ann. tit. 22,   144.  The statute erects a wall between          the agency's appetite and the public fisc.  The existence of this          statutory  barrier presages the result  we must reach:   PRASA is          not an arm of the state for Eleventh Amendment purposes.5                    PRASA argues that,  notwithstanding the  Commonwealth's          disavowal  of its  liabilities,  the  Commonwealth's  significant          financial support  of PRASA's activities constitutes  the sort of          access  to   public  funds   that  triggers   Eleventh  Amendment          protection.   We do not  agree.  Although  the central government          subsidizes the agency to some extent, PRASA relies mostly on user          fees  and bonds to support  its operations.   The government does          not  give PRASA a blank  check or an  indeterminant carte blanche          allowing  it  to  draw  on  the  public  treasury  as  it  thinks          necessary.  Thus, control  of the money flow from  tax dollars is          unilateral; if the Commonwealth  chooses not to open  the faucet,          the agency must go thirsty or else, by resort to its own devices,          procure the funds needed to stay liquid.                    We think  PRASA'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          independently.   Despite this dual  funding, such entities do not                                        ____________________               5The statutory barrier is especially important in this case,          for  Puerto Rico's  legislature  has demonstrated  that, when  it          wishes  to  do   so,  it   knows  exactly  how   to  pledge   the          Commonwealth's resources in security for PRASA's debts.  See P.R.                                                                   ___          Laws  Ann. tit. 22,    168 (explicitly agreeing  to reimburse the          Farmers  Home  Administration  if  PRASA should  default  on  two          particular loans).                                          11          automatically  (or   even  usually)  come  within   the  zone  of          protection demarcated  by the Eleventh  Amendment.  Thus,  in Mt.                                                                        ___          Healthy City  Sch.  Dist. Bd.  of Educ.  v. Doyle,  429 U.S.  274          _______________________________________     _____          (1977), the Supreme Court  denied Eleventh Amendment sanctuary to          a school  board  despite the  "significant  amount of  money"  it          received  from the  state.   Id.  at 280;  accord Fitchik  v. New                                       ___           ______ _______     ___          Jersey Transit Rail Operations, Inc., 873 F.2d 655, 660 (3d Cir.)          ____________________________________          (denying  immunity to  a  regional rail  authority despite  state          funding while noting "that  an entity derives some of  its income          from the  state does not mean  that it is entitled  to partake of          the  state's immunity"), cert. denied, 110 S. Ct. 148 (1989); see                                   _____ ______                         ___          also  Blake  v.  Kline,   612  F.2d  718,  723  (3d   Cir.  1979)          ____  _____      _____          (recognizing  that  "the  nature  of the  state's  obligation  to          contribute   may  be  more   important  than  the   size  of  the          contribution"), cert. denied, 447  U.S. 921 (1980).  The  case at                          _____ ______          bar is cut from much the same cloth.                    We hold,  therefore, that  a state agency  cannot claim          Eleventh Amendment  immunity solely  on the basis  that judgments          against  it may  absorb unrestricted funds  donated by  the state          and,  in that  way, redound  indirectly to  the depletion  of the          state's treasury.  It follows that PRASA's assertion  of Eleventh          Amendment immunity in this case is severely flawed.                    2.  Other Factors.  Although PRASA's  inability to draw                    2.  Other Factors.                        _____________          on the public fisc  cripples its immunity defense, we turn to the          other  factors  mentioned  in the  case  law  in  order that  our          investigation may  be complete.   In the  circumstances at  hand,                                          12          these factors,  taken as an aggregate, corroborate  the view that          PRASA does not dwell within the Eleventh Amendment's shelter.                    To  be  sure,  the  two  pans  of  the  scale  are  not          completely  out  of balance.   PRASA  to  some extent  wields the          state's  power; after  all,  the enabling  legislation  describes          PRASA's mission to provide water and sewer services as fulfilling          "an  essential government function."   P.R. Laws Ann.  tit. 22,            142.   Additionally,  neither PRASA  nor  its revenue  bonds  are          taxable, see id.   155; PRASA enjoys the power of eminent domain,                   ___ ___          see id.   144(e); and the  Governor of Puerto Rico appoints  five          ___ ___          of PRASA's seven board members, see id.   143.                                          ___ ___                    PRASA places  particular emphasis on the  fact that its          water   and  sewage   functions  are  governmental   rather  than          proprietary and insists that this circumstance renders  it an arm          of the  state.6  But the  nature of PRASA's function  is only one                                        ____________________               6In arguing this point, PRASA leans heavily on  our decision          in  Puerto Rico Ports Auth. v.  M/V Manhattan Prince, 897 F.2d 1,              _______________________     ____________________          12 (1st  Cir. 1990).   This reliance  is mislaid.   In  Manhattan                                                                  _________          Prince,  the Ports Authority was  acting only as  the licensor of          ______          harbor  pilots for whom it provided no  training and over whom it          exercised no assignment power.  The Authority derived no  revenue          from  the  licensing function.    Moreover,  the legislature  had          explicitly  made  Authority  members'  misfeasance  of  the  kind          alleged   in   Manhattan   Prince   attributable  only   to   the                         __________________          Commonwealth.   See  P.R. Laws  Ann. tit.  23,    2303(b) (1987).                          ___          PRASA's situation is much different; it charges for its services,          controls its total  operations, and answers  for its own  bevues.          Thus,  a more  apt  Ports Authority  analogy  is found  in  Royal                                                                      _____          Caribbean Corp. v. Puerto Rico Ports Auth., 973 F.2d 8 (1st  Cir.          _______________    _______________________          1992).   That case involved  not licensing, but  operation of the          ports.  See  id. at 9.  Because the  Ports Authority charged user                  ___  ___          fees  that supported  the costs  of its  port operations  and was          relatively free of central  government control, we ruled  that it          did not  enjoy Eleventh Amendment  immunity with  respect to  its          management of the ports.  Id. at 12.                                    ___                                          13          part  of the equation, and, standing alone, it is insufficient to          bring PRASA behind the  Eleventh Amendment's shield.  Educational          services, for  example, are, like water  treatment, a traditional          governmental function.   Education, however, has  an even longer,          stronger  governmental  history  than  water  treatment,  and  as          attendance requirements attest, a  more entrenched place in state          government.  Yet, despite  these more evocative  characteristics,          school boards  are not immune from  suits in federal court.   See                                                                        ___          Mt. Healthy, 429 U.S. at 280-81 (holding that school board is not          ___________          entitled to assert Eleventh Amendment immunity).                    On  the other  side of  the scale,  a heftier  array of          indicators  suggests that  PRASA is  distinct from  Puerto Rico's          central government.  PRASA  has the power to raise  funds through          user fees  (which, significantly,  the Commonwealth, as  a water-          and-sewer  user, must  pay with  respect to its  own operations).          See P.R. Laws Ann.  tit. 22,   158.  PRASA also  has the right to          ___          raise funds by issuing revenue bonds independently of the central          government.   See  id.     152.   The  power and  opportunity  to                        ___  ___          generate  a  revenue  stream  and  thereby  finance  an  agency's          operations  is an  important attribute  of the  agency's separate          identity.   Cf. Hernandez-Tirado v. Artau, 874 F.2d 866, 872 (1st                      ___ ________________    _____                                        ____________________                    We  recognize the  seeming anomaly  in a  single agency          being  held  to  possess  Eleventh Amendment  immunity  for  some          functions but not for others.  However, the two cases cited above          turned on the nature  of the function involved in  each instance,          presumably  because, in  light  of the  Authority's portfolio  of          diverse operations, the question  of access to the Commonwealth's          treasury  was fuliginous.  The  case before us  is free from this          strain of uncertainty.                                          14          Cir.  1989)  (finding agency  to be  an  arm of  the Commonwealth          because  the central government had the sole power to raise money          for the agency).   Moreover, bondholders must look only  to PRASA          for recompense in the event of default.  See P.R.  Laws Ann. tit.                                                   ___          22,   152(I).  Then, too, PRASA is separately incorporated as "an          autonomous  government instrumentality."  Id.   142.  It may sue,                                                    ___          be  sued,   and  enter   contracts  without  the   Commonwealth's          particular permission.   See id.    144(c),  (d).  Its  funds are                                   ___ ___          kept entirely separate  from the funds of  the central government          and are totally  controlled by its own  board.  Last,  but surely          not least, the Commonwealth  has explicitly insulated itself from          any financial responsibility with respect to PRASA's general debt          and ordinary bonded indebtedness.7  See id.   144.                                              ___ ___                    One more item deserves mention.   Whether an agency  is          an  arm of the state  vel non is a matter  of federal, not local,                                ___ ___          law.   See Blake, 612 F.2d  at 722.  Nevertheless,  it is notable                 ___ _____          that the district court's  view of PRASA as a  separate political          subdivision  rather than  as  a part  of  the central  government          comports with that of Puerto Rico's highest tribunal.  The Puerto          Rico Supreme Court  has consistently concluded that  PRASA is not          an alter ego  of the central government.  The court observed over                                        ____________________               7PRASA  argues that  because  its  generated revenues  (bond          monies  and  user  fees)  are  "pledged"  to  current  debts  and          projects,  it  will  have no  money  to  pay a  judgment  and any          judgment  creditor  must,  therefore, look  to  the Commonwealth.          This  is specious reasoning.   If M&E prevails  in this suit, it,          like  unsecured judgment  creditors from  time immemorial,  would          bear  the risk that it might find few assets available to satisfy          the judgment.                                          15          forty years ago  that the  legislature intended PRASA  to "be  as          amenable to judicial  process as any private  enterprise would be          under like  circumstances . . .  ."  Arraiza v.  Reyes, 70 P.R.R.                                               _______     _____          583,  587 (1949).  More recently, the court reiterated that PRASA          has  a  "personality  separate  and   apart  from  that  of   the          government,"     and  does  not  have   the  "sovereign  immunity          traditionally enjoyed by the  State."  Canchani v.  C.R.U.V., 105                                                 ________     ________          P.R. Dec.  352, 489  n.2, 490  (1976); see  also A.A.A.  v. Union                                                 ___  ____ ______     _____          Empleados A.A.A.,  105 P.R.  Dec. 605,  628 (1976)  (stating that          ________________          PRASA  is  "unquestionably  framed  as a  private  enterprise  or          business  and in fact operates as such").  While not dispositive,          consistent  decisions of  a state's  highest court  construing an          agency's   or   institution's  relationship   with   the  central          government  are important  guideposts  in a  reasoned attempt  to          locate the agency's or  institution's place within the scheme  of          things.  See Ainsworth Aristocrat, 818 F.2d at 1037.                   ___ ____________________                    3.   Assessing the Balance.   The upshot  is that PRASA                    3.   Assessing the Balance.                         _____________________          lacks eligibility  for  Eleventh Amendment  immunity  on  several          levels.  First, and most fundamentally, PRASA's inability to  tap          the Commonwealth  treasury or  pledge  the Commonwealth's  credit          leaves it  unable to exercise  the power of  the purse.   On this          basis, PRASA is ill-deserving of Eleventh Amendment protection.                    Even putting  aside PRASA's fiscal separation  from the          central government, we find  that the sum total of  the secondary          factors preponderates against immunity.  While PRASA indisputably          operates with some quantum  of state authority, as do  many other                                          16          public  utilities,  it is  readily  apparent  that Puerto  Rico's          legislature  chose  to  structure  an  arm's-length  relationship          between  PRASA and  the  central government.   To  implement this          relationship,  the  legislature gave  PRASA  the  power to  raise          funds,  enter contracts, conceive  strategy, and to  make its own          operational  decisions.   As  a  consequence  of the  legislative          design, the central  government does business  with PRASA in  the          same manner as with other  vendors:  it pays for the  services it          receives  and  does not  extend  any  credit or  generic  funding          guarantees.    When all  the  relevant factors  are  weighed, the          indicia of separateness countervail the indicia of togetherness.                                         III.                                         III.                                         ____                                      Conclusion                                      Conclusion                                      __________                    We  need go no further.  The profound impact of PRASA's          inability  to  reach   the  Commonwealth's   treasury,  and   our          calibrating  measurement of the  secondary factors,  dictate that          PRASA's assertion of immunity must fail.  Consequently, we  today          confirm the suspicions adumbrated in Howard, 744 F.2d at 886:  in                                               ______          its  current  incarnation, the  Puerto  Rico  Aqueduct and  Sewer          Authority is  not safeguarded from federal  court jurisdiction by          the Eleventh  Amendment.  Therefore, the  district court's denial          of PRASA's motion to dismiss must be          Affirmed.          Affirmed.          ________                                          17