Court Opinion

ID: 9377925
Source: CourtListenerOpinion
Date Created: 2023-03-09 01:00:30.256654+00
Date Added: 2024-06-11T17:17:17.947615
License: Public Domain

Case: 21-40333    Document: 00516670330        Page: 1    Date Filed: 03/08/2023

          United States Court of Appeals
               for the Fifth Circuit
                                                                    United States Court of Appeals
                                                                             Fifth Circuit

                                                                           FILED
                                                                       March 8, 2023
                                No. 21-40333                          Lyle W. Cayce
                                                                           Clerk

   Springboards to Education, Incorporated,

                                         Plaintiff—Appellant/Cross-Appellee,

                                    versus

   McAllen Independent School District,

                                       Defendant—Appellee/Cross-Appellant,

                                No. 21-40334

   Springboards to Education, Incorporated,

                                                         Plaintiff—Appellant,

                                    versus

   IDEA Public Schools,

                                                         Defendant—Appellee.

                 Appeal from the United States District Court
                     for the Southern District of Texas
                           USDC No. 7:16-CV-523
                           USDC No. 7:16-CV-617
Case: 21-40333     Document: 00516670330          Page: 2   Date Filed: 03/08/2023

                             Nos. 21-40333 and 21-40334

   Before Smith, Duncan, and Oldham, Circuit Judges.
   Stuart Kyle Duncan, Circuit Judge:
         Springboards for Education (“Springboards”) brought trademark
   infringement claims against McAllen Independent School District
   (“MISD”), a public school district in Texas, and IDEA Public Schools
   (“IDEA”), a nonprofit organization operating charter schools in Texas. The
   district court dismissed the suit against IDEA, concluding it was an arm of
   the state and therefore shared Texas’s sovereign immunity. As for MISD,
   the court found that it did not have sovereign immunity but ultimately
   granted summary judgment in MISD’s favor. Agreeing that MISD does not
   have sovereign immunity and that it was entitled to summary judgment on
   the merits, we affirm the district court’s judgment for MISD. Although we
   disagree with the district court’s conclusion that IDEA has sovereign
   immunity, we affirm the judgment for IDEA on alternate grounds.
                                        I.
         Springboards is a Texas corporation that sells educational materials
   designed to encourage schoolchildren to read. At issue in this case is
   Springboards’ Read a Million Words Campaign (“Campaign”), which urges
   students to read one million words over the course of the schoolyear.
   Participating schools receive a customized kit with Springboards’
   educational materials, and students who successfully meet their reading goals
   become Millionaire Readers and are inducted, with much fanfare, into the
   Millionaire’s Reading Club. Springboards has registered several trademarks
   in connection with the Campaign, including “Read a Million Words,”
   “Million Dollar Reader,” and “Millionaire Reader.”
         Springboards has been vigilant in combatting what it perceives as
   infringement of its trademarks by local schools that operate their own
   monetary-themed reading programs. Our court has affirmed dismissals of

                                         2
Case: 21-40333            Document: 00516670330              Page: 3       Date Filed: 03/08/2023

                                      Nos. 21-40333 and 21-40334

   Springboards’ trademark claims against two Texas school districts. 1 This
   appeal concerns similar claims against MISD and IDEA 2 under the Lanham
   Act, 15 U.S.C. §§ 1051 et. seq., alleging trademark infringement, trademark
   counterfeiting, and false designation of origins. 3 MISD is a public school
   district in Hidalgo County, Texas, and IDEA is a nonprofit corporation that
   runs public charter schools throughout Texas.
            Springboards alleges that MISD infringed Springboards’ trademarks
   through its reading program. Many MISD schools track the number of words
   students read each year and present students who read a million words with
   faux million-dollar bills bearing the phrase “Million Dollar Reader.” Various
   MISD schools have posts on their websites or social media celebrating their
   “Millionaire Reader[s], “Millionaires,” and referring to a “millionaire
   club.”
            Springboards alleges similar infringement by IDEA through its
   reading program. IDEA schools present awards to students who achieve
   “IDEA Millionaire Reader status” and host “IDEA Millionaire Reader’s
   Celebration[s]” in recognition of their accomplishment. IDEA schools
   sometimes share information about these events and the millionaire reading
   program online.
            In the district court, both MISD and IDEA moved to dismiss for lack
   of subject matter jurisdiction, arguing they were arms of the state and thus

            1
             Springboards to Educ., Inc. v. Houston Indep. Sch. Dist., 912 F.3d 805 (5th Cir.
   2019), as revised (Feb. 14, 2019) (affirming dismissal of Lanham Act claims against a public
   school district); Springboards to Educ., Inc. v. Pharr-San Juan-Alamo Indep. Sch. Dist., 33
   F.4th 747 (5th Cir. 2022) (same).
            2
                We address the two suits together, as did the district court.
            3
            Springboards also brought claims against MISD and IDEA for trademark dilution
   under the Lanham Act, the dismissals of which it does not appeal.

                                                    3
Case: 21-40333      Document: 00516670330          Page: 4     Date Filed: 03/08/2023

                              Nos. 21-40333 and 21-40334

   entitled to sovereign immunity. Both also moved for summary judgment. The
   district court disposed of these motions at the same time. It ruled that only
   IDEA enjoyed sovereign immunity and, accordingly, granted IDEA’s motion
   to dismiss and denied MISD’s. However, the court granted MISD summary
   judgment, concluding Springboards could not establish MISD’s program was
   likely to cause confusion with respect to Springboards’ trademarks.
          Springboards now appeals the summary judgment in favor of MISD,
   while MISD cross-appeals its denial of sovereign immunity. Springboards
   also appeals the dismissal of its claims against IDEA on the basis of sovereign
   immunity.
                                         II.
          We review both the district court’s determination of sovereign
   immunity and its summary judgment de novo. Richardson v. Flores, 28 F.4th
   649, 653 (5th Cir. 2022); All. for Good Gov’t v. Coal. for Better Gov’t, 901 F.3d
   498, 504 (5th Cir. 2018). We may affirm a judgment on grounds other than
   those relied upon by the district court if the record contains an adequate and
   independent basis for that result. Lauren C. by & through Tracey K. v.
   Lewisville Indep. Sch. Dist., 904 F.3d 363, 374 (5th Cir. 2018); Chauvin v.
   Tandy Corp., 984 F.2d 695, 697 (5th Cir. 1993).
                                         III.
          We begin with the threshold jurisdictional issue of whether IDEA and
   MISD enjoy sovereign immunity. Vogt v. Bd. of Comm’rs of Orleans Levee
   Dist., 294 F.3d 684, 688 (5th Cir. 2002) (“Federal court jurisdiction is
   limited by the Eleventh Amendment and the principle of sovereign immunity
   that it embodies.”). The Eleventh Amendment recognizes the background
   constitutional principle that states, as separate sovereigns, are inherently
   immune from suit without their consent. Hess v. Port Auth. Trans-Hudson
   Corp., 513 U.S. 30, 39–40 (1994); Seminole Tribe of Fla. v. Fla., 517 U.S. 44,

                                          4
Case: 21-40333      Document: 00516670330           Page: 5     Date Filed: 03/08/2023

                               Nos. 21-40333 and 21-40334

   54 (1996); see also The Federalist No. 81, at 487 (Alexander Hamilton)
   (Clinton Rossiter ed., 1961) (“It is inherent in the nature of [a State’s]
   sovereignty not to be amenable to the suit of an individual without its
   consent.”). That immunity extends to so-called arms of the state, entities
   which are effectively the state itself because “the state is the real, substantial
   party in interest” to the lawsuit. Hudson v. City of New Orleans, 174 F.3d 677,
   681 (5th Cir. 1999) (quoting Pendergrass v. Greater New Orleans Expressway
   Comm’n, 144 F.3d 342, 344 (5th Cir. 1998)); see also Mt. Healthy City Sch.
   Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280 (1977).
          In determining whether an entity is an arm of the state, we balance the
   so-called “Clark factors,” which our court first articulated decades ago in
   Clark v. Tarrant County, 798 F.2d 736 (5th Cir. 1986). Those factors are:
   (1) whether state statutes and case law view the entity as an arm of the state;
   (2) the source of the entity’s funding; (3) the entity’s degree of local
   autonomy; (4) whether the entity is concerned primarily with local, as
   opposed to statewide, problems; (5) whether the entity has the authority to
   sue and be sued in its own name; and (6) whether it has the right to hold and
   use property. Clark, 798 F.2d at 744–45. The second factor carries the most
   weight, while factors five and six are of lesser importance. Hudson, 174 F.3d
   at 682; Black v. N. Panola Sch. Dist., 461 F.3d 584, 596 (5th Cir. 2006). But
   “no single factor” is dispositive; courts consider the factors “as a whole.”
   Clark, 798 F.2d at 745. The burden of proof rests with the entity asserting
   immunity. Skelton v. Camp, 234 F.3d 292, 297 (5th Cir. 2000).
          The Clark factors have not escaped criticism. Recently, they were
   fairly described as “hav[ing] all the precision of a blunderbuss.” Cutrer v.
   Tarrant Cnty. Loc. Workforce Dev. Bd., 943 F.3d 265, 270 (5th Cir. 2019), as
   revised (Nov. 25, 2019). “No factor or combination of [the factors] is
   necessary. None is sufficient. And Clark says nothing about how to ‘balance’
   them.” Ibid. That imprecision is on display here. Making a good faith attempt

                                           5
Case: 21-40333      Document: 00516670330          Page: 6     Date Filed: 03/08/2023

                              Nos. 21-40333 and 21-40334

   to apply the factors, the district court concluded a public school district was
   not an arm of the state, but a public charter school was. That is puzzling, to
   put it mildly. See, e.g., Black, 461 F.3d at 596 (“Generally, school boards and
   districts are not arms of the state shielded by Eleventh Amendment
   immunity.”). As discussed below, our application of the factors differs
   meaningfully from the district court’s, particularly as to IDEA.
                                          A.
          We begin with IDEA. Examining each Clark factor, we conclude that,
   contrary to the district court’s ruling, IDEA is not an arm of the state.
                                          1.
          For the first Clark factor, we examine how the state perceives the
   entity through its constitution, laws, and other official pronouncements.
   Hudson, 174 F.3d at 683. IDEA points out that Texas considers public charter
   schools as arms of the state and directs us to the Texas Supreme Court’s
   decision in El Paso Educ. Initiative, Inc. v. Amex Props., LLC, 602 S.W.3d 521
   (Tex. 2020). That case held that because “open-enrollment charter schools
   act as an arm of the State government,” they receive state sovereign
   immunity. Id. at 529–30. See also HWY 3 MHP, LLC v. Elec. Reliability
   Council of Texas, 462 S.W.3d 204, 210 (Tex. App. 2015) (noting that “open-
   enrollment charter schools should be treated as governmental units”). While
   the Texas courts’ decisions on state sovereign immunity are not dispositive
   as to federal sovereign immunity, we agree with IDEA that this factor weighs
   in favor of immunity. Texas law “reflects the state’s view that suing [IDEA]
   is equivalent to suing the state of Texas itself.” Perez v. Region 20 Educ. Serv.
   Ctr., 307 F.3d 318, 328 (5th Cir. 2002).

                                          6
Case: 21-40333      Document: 00516670330          Page: 7    Date Filed: 03/08/2023

                              Nos. 21-40333 and 21-40334

                                          2.
          Factor two, the funding inquiry, is more complex and ends up cutting
   against immunity. The inquiry has two parts. “[F]irst and most
   importantly,” we examine “the state’s liability in the event there is a
   judgment against the defendant, and second, [we consider] the state[’s]
   liability for the defendant’s general debts and obligations.” Vogt, 294 F.3d at
   693 (quoting Hudson, 174 F.3d at 687). Whether the state would be liable for
   a judgment depends primarily on whether it indemnifies the defendant, the
   degree that it funds the defendant, and the extent that it restricts the
   defendant’s use of state-provided funds. See Perez, 307 F.3d at 328; Hudson,
   174 F.3d at 686–88. Factor two carries the most weight because one of the
   Eleventh Amendment’s central purposes is to protect state treasuries from
   involuntary liability. Jacintoport Corp. v. Greater Baton Rouge Port Comm'n,
   762 F.2d 435, 440–41 (5th Cir. 1985); see also Hess, 513 U.S. at 48 (noting with
   approval that most circuits privilege this factor).
          The district court found, and IDEA continues to argue, that the first
   part of the funding inquiry favors immunity because “94 percent of [IDEA’s]
   funding comes from State and federal sources.” We disagree. For several
   reasons, a hypothetical judgment against IDEA would likely not be paid with
   state funds. To begin with, IDEA’s argument improperly aggregates state
   and federal funds. See Cutrer, 943 F.3d at 271 (denying immunity where an
   entity claimed to depend on public funds but failed to demonstrate its
   reliance on “state funds”) (emphasis in original). The Eleventh Amendment
   is concerned only about the potential impact on the state treasury. See
   Pendergrass, 144 F.3d at 345 (explaining that the relevant rationale is “the
   protection of state treasuries”). Whether federal money is at stake is
   irrelevant.

                                          7
Case: 21-40333        Document: 00516670330              Page: 8       Date Filed: 03/08/2023

                                  Nos. 21-40333 and 21-40334

           Disaggregating the sources of IDEA’s funding shows that any risk of
   a judgment’s being paid from state funds is remote. IDEA draws its 94%
   figure from IDEA’s 2016–2018 financial reports. Those show that roughly a
   quarter of IDEA’s annual funding comes from local and federal sources.
   Those amounts run into the tens of millions. In 2018 alone, IDEA took in
   about $27 million from local sources and $71 million from the federal
   government, including almost $17 million given directly to IDEA without any
   state processing. This cuts sharply against IDEA’s immunity, because the
   funding inquiry “concerns whether the state is ‘directly responsible for a
   judgment’ or ‘indemnifies the defendant.’” Stratta v. Roe, 961 F.3d 340, 354
   (5th Cir. 2020) (quoting U.S. ex rel. Barron v. Deloitte & Touche, L.L.P., 381
   F.3d 438, 440 (5th Cir. 2004) (cleaned up)). IDEA’s ample funding from
   local and federal sources belies the assertion that Texas would be “directly
   responsible for a judgment.” 4 And IDEA points to no evidence that Texas is
   obligated to indemnify it. See Vogt, 294 F.3d at 693 (weighing against
   immunity the fact that “the state has no duty to pay a judgment” against the
   entity).
           Moreover, IDEA concedes that the “overwhelming majority” of its
   state funding is “earmarked”—meaning it comes with state-imposed
   restrictions on how the funds may be spent. Those restrictions also cut
   against immunity. Whether “funding is earmarked for any particular
   purpose” is relevant “to determine whether a judgment likely would be paid
   with state funds.” Perez, 307 F.3d at 328. When state funds are set aside for
   specific uses, that weighs against immunity because those funds are
   necessarily unavailable to satisfy legal liabilities. Hudson, 174 F.3d at 688

           4
             To be clear, as in past cases, “we do not draw a bright-line rule as to the amount
   of [non-state] funding necessary to hold an entity financially independent from the state.”
   Daniel v. Univ. of Texas Sw. Med. Ctr., 960 F.3d 253, 258 (5th Cir. 2020).

                                                8
Case: 21-40333         Document: 00516670330               Page: 9      Date Filed: 03/08/2023

                                   Nos. 21-40333 and 21-40334

   (“Importantly, either all or substantially all of the funds from the State are
   earmarked for specific purposes . . . . These funds cannot be used to pay a . . .
   judgment.”); Vogt, 294 F.3d at 694 (“Because the state funds are already
   earmarked for other purposes, the state monies cannot be used to pay a
   judgment against [the entity].”); Pendergrass, 144 F.3d at 345–46. IDEA
   cannot concede that the bulk of its state funds is restricted while at the same
   time arguing it would have to use those same funds to pay a judgment. 5
           We turn to the second (and less important) part of factor two: whether
   Texas may be indirectly liable because it is “responsible for the defendant’s
   general debts and obligations.” Hudson, 174 F.3d at 688. Unlike its traditional
   public school counterparts, IDEA cannot generate its own revenue by levying
   taxes. Tex. Educ. Code § 12.102(4). It must instead issue bonds, which
   Texas guarantees. Id. § 45.05219; 19 Tex. Admin. Code §33.67. IDEA’s
   inability to independently raise revenue counsels in favor of immunity. Perez,
   307 F.3d at 329. And the fact that Texas guarantees its bonds is also relevant.
   Williams v. Dallas Area Rapid Transit, 242 F.3d 315, 320 (5th Cir. 2001).
   However, these indirect indicators do not ultimately move the needle. We
   have suggested that “where the state’s only liability was in guaranteeing a
   state authority’s notes and bonds,” this “‘ancillary effect’ on the state
   treasury does not confer immunity under the Eleventh Amendment.”
   Jacintoport, 762 F.2d at 441 (citing Blake v. Kline, 612 F.2d 718, 726 (3d Cir.
   1979)). Here, in light of the reasons discussed above, “[a]ny influence upon
   the state treasury by . . . a judgment would be too indirect and remote to

           5
             Nor can IDEA argue that a judgment against it might lead Texas to provide
   additional unrestricted funds to satisfy the liability. We have rejected the argument that the
   “remote possibility that the state will elect to pay a judgment” constitutes a threat to the
   state treasury. Hudson, 174 F.3d at 689. Nor does IDEA provide any evidence that Texas
   regularly provides money to satisfy liabilities, despite having no obligation to do so. Cf.
   Vogt, 294 F.3d at 693.

                                                 9
Case: 21-40333      Document: 00516670330          Page: 10      Date Filed: 03/08/2023

                               Nos. 21-40333 and 21-40334

   characterize it as a potential liability of the state treasury or to make the state
   the real, substantial party in interest.” Pendergrass, 144 F.3d at 346. So, to
   sum up, factor two weighs against immunity because Texas is unlikely to have
   to pay for an adverse judgment and its indirect responsibility is limited to its
   “ancillary” backing of IDEA’s bonds.
                                           3.
          Factor three considers whether the entity is autonomous or controlled
   by the state. We look to the degree of independence enjoyed by the entity and
   its managers, as well as how its managers are appointed. Vogt, 294 F.3d at
   694; Stratta, 961 F.3d at 354. “Frequent and broad oversight by the state
   suggests that the entity is an arm of the state.” Perez, 307 F.3d at 330. Texas
   pervasively regulates charter entities like IDEA. Texas courts have
   recognized that a charter school’s charter is “entirely contingent on State
   discretion.” Texas Educ. Agency v. Am. YouthWorks, Inc., 496 S.W.3d 244,
   262 (Tex. App. 2016). Texas may unilaterally withhold funding or suspend
   the charter school’s authority to operate if the school violates its charter or
   state law. Tex. Educ. Code § 12.1162(b). Texas may even “reconstitute”
   the governing body of a charter school and appoint new members to the
   governing body. Id. § 12.115(a), (d). And charter schools must satisfy Texas’s
   annual performance evaluations by meeting state-mandated benchmarks. Id.
   § 12.1181. Provisions like these show that Texas has broad oversight and
   control over IDEA, which counsels in favor of immunity.
                                           4.
          The fourth factor turns on “whether the entity acts for the benefit and
   welfare of the state as a whole or for the special advantage of local
   inhabitants.” Pendergrass, 144 F.3d at 347. The district court found that
   IDEA “operates campuses statewide and with a statewide purpose of
   providing public education,” and IDEA continues to press that argument

                                           10
Case: 21-40333     Document: 00516670330          Page: 11    Date Filed: 03/08/2023

                              Nos. 21-40333 and 21-40334

   here, contending “education is a statewide concern.” But IDEA sets the
   inquiry at too high a level of generality. We have already rejected this
   argument in the context of a levee board’s arguing that it combatted the
   “statewide problem” of flooding. Vogt, 294 F.3d at 695. The relevant inquiry,
   we explained, “focuses on the tasks undertaken by the particular defendant.”
   Ibid. By contrast, we noted that “primary education and law enforcement are
   also statewide concerns, yet school boards and sheriffs are not arms of the
   state.” Ibid. So too here. Education may be a statewide concern in the
   abstract, but IDEA’s day-to-day “tasks” consist in operating local schools.
   Just as the levee board in Vogt contributed to a statewide undertaking but was
   local in nature because its primary concern was the local levees, IDEA too is
   a local entity acting “for the special advantage of local inhabitants.”
   Pendergrass, 144 F.3d at 347.
          Nor can IDEA turn this factor to its advantage by pointing to the sheer
   number of schools it operates throughout Texas. To the contrary, our
   precedent teaches that an entity’s limited scope of jurisdiction counsels
   against immunity. See Vogt, 294 F.3d at 695 (“[M]ost entities that are entitled
   to Eleventh Amendment immunity have statewide jurisdiction.”). While
   IDEA may operate schools throughout Texas, that does not somehow give
   IDEA statewide jurisdiction. Rather, IDEA’s schools each serve
   geographically limited communities. Properly understood, IDEA’s
   “jurisdiction” is limited to particular areas where it has a school.
   Accordingly, factor four weighs against immunity.
                                         5.
          Factor five, which carries little weight, considers whether the entity
   can sue and be sued in its own name. That ability points against immunity.
   Perez, 307 F.3d. at 331. IDEA concedes it has previously sued and been sued
   under its own name. But it argues that this factor still favors immunity

                                          11
Case: 21-40333      Document: 00516670330          Page: 12     Date Filed: 03/08/2023

                               Nos. 21-40333 and 21-40334

   because Texas specifically allows independent school districts to sue and be
   sued, while remaining silent as to charter schools. See Tex. Educ. Code
   §11.151(a) (allowing independent school districts to “sue and be sued” in the
   name of the district). IDEA points to our decision in Perez, which concluded
   that where state law is silent as to the entity’s power to sue but expressly
   allows analogous entities to do so, this factor “slightly favors” immunity.
   Perez, 307 F.3d. at 331. Perez is distinguishable, however. Perez made no
   finding about whether the entity in question had a history of suing in its own
   name—it based its conclusion merely on the silence in state law. Not so here.
   IDEA concedes it has a history of suing in its own name. This factor thus
   weighs against immunity.
                                          6.
          Finally, factor six asks whether the entity can hold and use property.
   If it can, that points away from immunity. Texas law is clear on this point:
   “[W]hile an open-enrollment charter school is in operation, the charter
   holder holds title to any property . . . and may exercise complete control over
   the property as permitted under the law.” Tex. Educ. Code § 12.128(b).
   As IDEA observes, though, Texas law also states that property purchased by
   a charter holder with state funding “is considered to be public property for
   all purposes under state law” and is “property of this state held in trust by
   the charter holder for the benefit of the students.” Id. § 12.128(a). If a charter
   school ceases operations, Texas takes possession and control of the property.
   Id. § 12.128(c). IDEA argues that these restrictions show that it does not truly
   hold property.
          We disagree. Our precedent rejects the argument that this factor
   points toward immunity where the entity held title but “all of [the entity’s]
   property ultimately belong[ed] to the state.” Vogt, 294 F.3d at 696. Because
   Texas law provides that the charter holder holds title to its property, this

                                          12
Case: 21-40333     Document: 00516670330         Page: 13    Date Filed: 03/08/2023

                             Nos. 21-40333 and 21-40334

   factor also weighs against immunity. See also Pendergrass, 144 F.3d at 347
   (weighing this factor against immunity despite the fact that “at some time in
   the distant future” the entity’s property “may revert to the state”).
                                       ***
          In sum, factors one and three favor sovereign immunity while factors
   two, four, five, and six do not. Balancing all the factors, and giving greater
   weight to factor two, we conclude that IDEA is not an arm of the state and
   does not share in Texas’s sovereign immunity.
                                        B.
          Because MISD cross-appeals the district court’s ruling that it is not
   entitled to sovereign immunity, we must also apply the Clark factors to it.
   Guided by our foregoing analysis, we easily conclude the district court was
   correct. See Lopez v. Houston Indep. Sch. Dist., 817 F.2d 351, 353 (5th Cir.
   1987) (finding a Texas independent school district was “sufficiently distinct
   from the state to be outside the [E]leventh [A]mendment”), overruled on
   other grounds, Walton v. Alexander, 44 F.3d 1297, 1303 n.4 (5th Cir. 1995) (en
   banc); San Antonio Indep. Sch. Dist. v. McKinney, 936 S.W.2d 279, 284 (Tex.
   1996) (holding that “an independent school district is more like a city or
   county than it is like an arm of the State of Texas and is amenable to suit in
   federal court under the Eleventh Amendment”); Black, 461 F.3d at 596
   (“Generally, school boards and districts are not arms of the state shielded by
   Eleventh Amendment immunity.”).
          As with IDEA, factor one weighs in favor of immunity. Texas courts
   have long recognized that independent school districts are part of the state
   itself and therefore enjoy state sovereign immunity. As far back as 1931, the
   Texas Supreme Court referred to them as “state agencies, erected and
   employed for the purpose of administering the state’s system of public
   schools.” Love v. City of Dallas, 40 S.W.2d 20, 26 (Tex. 1931). More recently,

                                         13
Case: 21-40333       Document: 00516670330             Page: 14      Date Filed: 03/08/2023

                                 Nos. 21-40333 and 21-40334

   the supreme court stated it is “well settled in this state that an independent
   school district is an agency of the state” and thus enjoy immunity unless
   Texas waives it. Barr v. Bernhard, 562 S.W.2d 844, 846 (Tex. 1978).
           The second and weightier factor cuts against immunity because a
   judgment against MISD would not fall upon Texas. In response, MISD
   contends that recent changes to state law make school districts somewhat
   more reliant on state funding. This argument fails for at least two reasons.
   First, MISD still receives significant funding from non-state sources. The
   record shows that roughly half of MISD’s annual revenue comes from
   sources other than the state. In 2019, for instance, MISD collected about $90
   million from local and intermediate sources, $20 million from federal
   sources, and $6 million from “Other Resources.” There is little reason to
   think the state treasury would be implicated by a judgment against MISD.
   Second, while Texas law does impose some limits on school districts’ taxing
   power, 6 they still maintain the power to levy certain taxes and to issue bonds.
   See Tex. Educ. Code §§ 45.001, 45.002. The ability to self-finance
   weighs heavily against immunity. See Pendergrass, 144 F.3d at 346.
           Factor three, the degree of local autonomy, weighs in favor of
   immunity because Texas exerts considerable oversight and control over its
   school districts. School districts are subject to state accreditation, as well as
   academic performance and financial accountability standards, and Texas can
   take corrective action for any failure to comply. See Tex. Educ. Code
   § 39A.001. Indeed, Texas can close a noncompliant district and annex it to
   an adjoining district. Id. § 39A.005. Texas also has significant influence over

           6
              See, e.g., Tex. Educ. Code § 45.0021 (preventing districts from levying
   maintenance taxes to create a surplus to pay the district’s debt); id. § 45.0032 (placing
   limits on maintenance, operations, and enrichment taxes); id § 45.003 (requiring some
   taxes to be authorized by a majority of the district’s voters).

                                              14
Case: 21-40333     Document: 00516670330          Page: 15     Date Filed: 03/08/2023

                              Nos. 21-40333 and 21-40334

   the day-to-day operations of school districts, as it controls to varying degrees
   matters like school curriculum and student transportation. See, e.g., id.
   § 28.002 (required curriculum); Id. § 34.002, 34.003 (statewide bus safety
   standards).
          As with IDEA, factor four points away from immunity because school
   districts meet local rather than statewide needs. MISD serves students in
   Hidalgo County, not Texans generally. It thus operates “for the special
   advantage of local inhabitants.” Pendergrass, 144 F.3d at 347. This limited
   jurisdiction counsels against immunity. Vogt, 294 F.3d at 695.
          Factors five and six likewise weigh against immunity. Texas law
   provides that the trustees of an independent school district “in the name of
   the district may acquire and hold real and personal property [and] sue and be
   sued.” Tex. Educ. Code § 11.151(a). While of lesser importance, this
   authority shows the district is separate from the state.
          Altogether, only factors one and three weigh in favor of immunity and
   the marquee second factor points the other way. We therefore agree with the
   district court that MISD is not an arm of the state and is not entitled to
   sovereign immunity
                                         IV.
          We turn to Springboards’ trademark claims and conclude that the
   district court properly granted summary judgment in MISD’s favor. We also
   conclude that judgment for IDEA is proper, “exercis[ing] our discretion to
   affirm on unadvocated grounds supported by the record.” United States v.
   Sanchez, 900 F.3d 678, 687 n.8 (5th Cir. 2018).
          The Lanham Act imposes liability on anyone who, without consent,
   uses “in commerce any reproduction, counterfeit, copy, or colorable
   imitation of a registered mark in connection with the sale, offering for sale,

                                          15
Case: 21-40333     Document: 00516670330           Page: 16     Date Filed: 03/08/2023

                               Nos. 21-40333 and 21-40334

   distribution, or advertising of any goods or services on or in connection with
   which such use is likely to cause confusion . . . .” 15 U.S.C. § 1114(1)(a). The
   likelihood of confusion is our focus here, as it is a prerequisite to recovery for
   all of Springboards’ claims. See Springboards to Educ., Inc. v. Pharr-San Juan-
   Alamo Indep. Sch. Dist., 33 F.4th 747, 750–51. (5th Cir. 2022). For
   Springboards to prevail, it must show that MISD’s use of Springboards’
   marks “create[d] a likelihood of confusion in the minds of potential
   consumers as to the source, affiliation, or sponsorship” of MISD’s products
   or services. Elvis Presley Enters., Inc. v. Capece, 141 F.3d 188, 193 (5th Cir.
   1998). “Likelihood of confusion means more than a mere possibility; the
   plaintiff must demonstrate a probability of confusion.” Xtreme Lashes, LLC
   v. Xtended Beauty, Inc., 576 F.3d 221, 226 (5th Cir. 2009) (internal citation
   omitted).
          To assess whether confusion is likely, we consider a flexible list of
   factors called the digits of confusion. These include:
          (1) the type of mark allegedly infringed, (2) the similarity
          between the two marks, (3) the similarity of the products or
          services, (4) the identity of the retail outlets and purchasers,
          (5) the identity of the advertising media used, (6) the
          defendant's intent, (7) any evidence of actual
          confusion . . . [and] (8) the degree of care exercised by
          potential purchasers.
   Bd. of Supervisors for LSU v. Smack Apparel Co., 550 F.3d 465, 478 (5th Cir.
   2008) (cleaned up) (citation omitted). No one factor is dispositive, and we
   may consider any other relevant factor. Capece, 141 F.3d at 194.
          However, there is a threshold issue before we can reach the likelihood
   of confusion. First, “we must identify the class of consumers at risk of
   confusion.” Springboards To Educ., Inc. v. Houston Indep. Sch. Dist., 912 F.3d
   805, 812 (5th Cir. 2019), as revised (Feb. 14, 2019). That is a problem here

                                          16
Case: 21-40333       Document: 00516670330              Page: 17       Date Filed: 03/08/2023

                                  Nos. 21-40333 and 21-40334

   because Springboards is neither clear nor consistent about whom it considers
   to be at risk of confusion.
           Springboards represents that its business model involves selling its
   Campaign to schools as units, tailoring the contents and theme to each
   school. Houston Indep. Sch. Dist., 912 F.3d at 813 (“Springboards’ business
   model is premised on marketing the Read a Million Words campaign to
   school districts and selling those districts the products and services needed
   to implement the campaign.”). Springboards does not allege that MISD
   marketed its own millionaire club to outside school districts, thus causing
   confusion among other districts. Rather, Springboards repeatedly refers to
   the confusion of parents, students, and teachers. For instance, Springboards
   argues that its Campaign and MISD’s were “directed to identical groups –
   students, parents, and educators in the school district[s].” As we explained
   in a materially identical case rejecting Springboards’ claims, the confusion of
   those persons is “not the appropriate focus of the likelihood-of-confusion
   analysis” because they are not “purchasers in any ordinary sense.” Ibid.
   They merely use a product that the school district buys. 7
           At times, Springboards suggests that third parties in other districts
   were misled into thinking that MISD’s “inferior” program was affiliated
   with Springboards’ Campaign. This is the relevant class of consumers. It is
   actionable if potential consumers confuse an infringing and inferior product
   with the authentic mark, as that mistaken association might result in a loss of
   sales or goodwill. Id. at 814. Accordingly, our likelihood of confusion analysis
   is limited to the question of whether other school districts would likely

           7
              As in Houston Independent School District, Springboards has put forward no
   evidence that these groups “exercise any influence over [MISD’s] purchasing decisions,”
   so there is no potential cause of action for user confusion. Houston Indep. Sch. Dist., 912
   F.3d at 813.

                                               17
Case: 21-40333       Document: 00516670330              Page: 18       Date Filed: 03/08/2023

                                  Nos. 21-40333 and 21-40334

   confuse MISD’s use of “Million Dollar Reader” and similar phrases with
   Springboards’ marks related to its Campaign. 8
           We see no risk of confusion. We follow our two prior cases affirming
   dismissal of Springboards’ infringement claims against other Texas school
   districts. In Springboards v. Houston Independent School District, 912 F.3d 805
   (5th Cir. 2019), and Springboards v. Pharr-San Juan-Alamo Independent School
   District, 33 F.4th 747 (5th Cir. 2022), we found no likelihood of confusion
   when Springboards brought identical Lanham Act claims against school
   districts for factually indistinguishable monetary-themed reading incentive
   programs. The more recent of those cases called Springboards’ claims “déjà
   vu all over again” and recognized that the first case was “functionally
   identical.” Pharr-San Juan-Alamo Ind. Sch. Dist., 33 F.4th at 748, 749. The
   déjà vu continues here. Springboards points to no material distinction
   between the instant case and our ruling in Houston Independent School District.
   And the district court saw so little difference between MISD and the school
   district in Pharr-San Juan-Alamo Independent School District (also located in
   Hidalgo County) that it granted both summary judgment at the same time
   without making any distinction between the two. Nothing material separates
   this case from its predecessors.
           Nevertheless, we briefly recite some of the reasons that Springboards
   fails to demonstrate any likelihood of confusion. “We need not parse the
   individual digits [of confusion]” because any possibility of confusion is
   “exceedingly remote.” Pharr-San Juan-Alamo Ind. Sch. Dist., 33 F.4th at
   750. To begin with, monetary-themed literacy programs using nearly
   identical language to Springboards’ marks abound and predate Springboards’

           8
              Because we find there is no likelihood of confusion, we need not decide the open
   question of whether Springboards must first produce evidence that MISD’s program is, in
   fact, inferior. See Houston Indep. Sch. Dist., 912 F.3d at 814 n.5.

                                               18
Case: 21-40333      Document: 00516670330          Page: 19     Date Filed: 03/08/2023

                               Nos. 21-40333 and 21-40334

   Campaign by years. Houston Indep. Sch. Dist., 912 F.3d at 815. Indeed, MISD
   purchased many of its “Million Dollar Reader” products from a company
   that began selling similar products in 2010, while Springboards’ earliest mark
   dates only to 2011. Plus, Springboards’ sales appear to be overwhelmingly
   concentrated in one school district, so it is unlikely that other school districts
   would confuse MISD’s program as an inferior knockoff of Springboards’.
   Ibid.
           Additionally, there is no evidence that MISD intended to confuse
   other districts by attempting to “derive benefits from [Springboards’]
   reputation by using [its] mark.” Viacom Int’l v. IJR Capital Invs., L.L.C., 891
   F.3d 178, 195 (5th Cir. 2018). Springboards argues that MISD had knowledge
   of Springboards’ Campaign, but “mere awareness . . .does not establish bad
   intent.” Streamline Prod. Sys., Inc. v. Streamline Mfg., Inc., 851 F.3d 440, 456
   (5th Cir. 2017) (cleaned up). Springboards does not offer any evidence that
   MISD ever ventured beyond mere awareness. In fact, MISD did not sell or
   market its program to other school districts at all.
           Finally, we note that school districts typically exercise great care as
   consumers, which makes them unlikely candidates for confusion.
   “[P]rofessional and institutional” purchasers “are virtually certain to be
   informed, deliberative buyers.” Oreck Corp. v. U.S. Floor Sys., Inc., 803 F.2d
   166, 173 (5th Cir. 1986). Public school districts searching for comprehensive
   literacy programs are a far cry from an individual consumer’s grabbing an
   item off the shelf. They are sophisticated institutions unlikely to be led astray
   by passing similarities between services. Houston Indep. Sch. Dist., 912 F.3d
   at 817. In short, there is no risk that other school districts would confuse
   MISD’s program with Springboards’ Campaign–related marks.
           For substantially the same reasons, Springboards’ identical Lanham
   Act claims against IDEA also fail. While the district court’s ruling for IDEA

                                          19
Case: 21-40333        Document: 00516670330             Page: 20         Date Filed: 03/08/2023

                                  Nos. 21-40333 and 21-40334

   was erroneously predicated on sovereign immunity, we may affirm on other
   ground “when the record contains an adequate and independent basis for
   that result.” Lauren C., 904 F.3d at 374 (quoting Britt v. Grocers Supply Co.,
   978 F.2d 1441, 1449 (5th Cir. 1992)). 9 The record shows no risk of confusion.
          As noted, Springboards’ sales are concentrated in one school district,
   indicating a relatively weak standing in the market. And school districts
   commonly use other millionaire-themed reading programs, many of which
   predate Springboards’ marks. See Sun Banks of Fla., Inc. v. Sun Fed. Sav. &
   Loan Ass’n, 651 F.2d 311, 317 (5th Cir. 1981) (widespread third-party use
   weighs heavily against a likelihood of confusion). Nor is there any evidence
   that IDEA deliberately used Springboards’ marks. While Springboards
   alleges deliberate misappropriation, its “evidence” is that it and IDEA both
   use the same balloon vendor for some of their millionaire reader celebrations
   and that IDEA schools are required to solicit multiple bids for projects rather
   than engage in “sole source” procurement with a single supplier.
          Additionally, IDEA consistently takes steps to signal that its reading
   program bears no relation to Springboards’ Campaign. For instance, IDEA’s
   program refers to “IDEA Millionaire Reader[s],” “IDEA Millionaires,” and
   “IDEA Millionaire Reader’s Celebration[s].” Where a user of a mark clearly
   identifies itself, there is little risk that third parties will be confused about the
   origin of the mark. See Oreck, 803 F.2d at 171 (finding little chance of
   confusion where a company’s advertisements “clearly indicate[d]” that it
   was “the maker of the product”); Houston Indep. Sch. Dist., 912 F.3d at 816
   (concluding a school district’s use of its name in connection with the mark
   “especially mitigates the likelihood of confusion”). Here, since IDEA clearly

          9
              Both parties fully briefed motions for summary judgment.

                                               20
Case: 21-40333     Document: 00516670330         Page: 21    Date Filed: 03/08/2023

                             Nos. 21-40333 and 21-40334

   and consistently connects its reading program to its own name, there is no
   genuine possibility that other school districts would be confused.
          Without a likelihood of confusion, Springboards’ Lanham Act claims
   fail. Judgment is proper for both MISD and IDEA.
                                        V.
          The district court’s judgments in favor of MISD and IDEA are
   AFFIRMED.

                                        21
Case: 21-40333       Document: 00516670330              Page: 22      Date Filed: 03/08/2023

                                 Nos. 21-40333 and 21-40334

   Andrew S. Oldham, Circuit Judge, concurring:
           In this case, we were asked to hold that a private charter school enjoys
   state sovereign immunity while a public school district does not. The fact that
   our precedents allow this question to be asked is reason enough to grant en
   banc rehearing.
           The line of cases that make possible such an absurd QP is called the
   “arm of the State” doctrine. It’s cumbersome. It provides nonsensical
   results. And worst of all, it doesn’t even ask the right question. It turns on a
   multi-part balancing test, comprised of a non-exhaustive list of “Clark
   factors”—none of which is necessary or sufficient to show an entity is an
   “arm of the State” and thus entitled to state sovereign immunity. 1
           I propose a new single-factor test: Was the entity asserting state
   sovereign immunity considered “the State” in 1789? If yes, then sovereign
   immunity. If no, then none.
           Part I describes the original public meaning of sovereign immunity in
   1789. Part II then discusses what constituted “the State” at the Founding.
   Part III connects those two concepts and proposes a rule for “arms of the
   State” to replace our current doctrine. Part IV concludes by applying that
   rule to this case.

           1
             Under Clark v. Tarrant County, 798 F.2d 736 (5th Cir. 1986), the potentially
   relevant factors—none of which is necessary and none of which is sufficient—include: (1)
   “whether the state statutes and case law view the entity as an arm of the state”; (2) “the
   source of the entity’s funding”; (3) “the entity’s degree of local autonomy”; (4) “whether
   the entity is concerned primarily with local, as opposed to statewide, problems”; (5)
   “whether the entity has the authority to sue and be sued in its own name”; and (6)
   “whether it has the right to hold and use property.” Id. at 744–45. “Such ‘tests’ have all
   the precision of a blunderbuss.” Cutrer v. Tarrant Cnty. Loc. Workforce Dev. Bd., 943 F.3d
   265, 270 (5th Cir. 2019).

                                              22
Case: 21-40333      Document: 00516670330            Page: 23      Date Filed: 03/08/2023

                                Nos. 21-40333 and 21-40334

                                             I.
          The doctrine of sovereign immunity was firmly established in the
   English common law by the thirteenth century. Clyde E. Jacobs, The
   Eleventh Amendment and Sovereign Immunity 5 (1925) (“At
   least as early as the thirteenth century . . . it was recognized that the king
   could not be sued in his own courts . . . .”); Louis L. Jaffe, Suits Against
   Governments and Officers: Sovereign Immunity, 77 Harv. L. Rev. 1, 2 (1963)
   (“By the time of Bracton (1268) it was settled doctrine that the King could
   not be sued eo nominee in his own courts.”). All sovereign power was “vested
   by [law] in a single person, the king or queen.” 1 William Blackstone,
   Commentaries *183; see also Chisholm v. Georgia, 2 U.S. (2 Dall.) 419,
   446 (1793) (Iredell, J., dissenting) (determining that the Crown alone was
   “the sovereign of the Kingdom”). This meant that the Crown was
   “immediately invested [with] all the ensigns, rights, and prerogatives of
   sovereign power.” 1 Blackstone, supra, at *183. One such royal
   prerogative the Crown enjoyed was immunity from suit. Id. at *235 (“[N]o
   suit or action can be brought against the king, even in civil matters, because
   no court can have jurisdiction over him.”); 3 Blackstone, supra, at *255
   (“[N]o action will lie against the sovereign, (for who shall command the
   king?) . . . .”); see also Chisholm, 2 U.S. (2 Dall.) at 437 (Iredell, J., dissenting)
   (compiling sources).
          The historical record contains competing justifications for the
   doctrine of sovereign immunity. Part of the justification was that the Crown
   was above everyone, so it could be amenable to suit by no one. See, e.g., 1
   Blackstone, supra, at *242. Part of the justification was that the King was
   the font of all law, so he could not by definition violate it. Kawananakoa v.
   Polyblank, 205 U.S. 349, 353 (1907) (“A sovereign is exempt from suit, not
   because of any formal conception or obsolete theory, but on the logical and
   practical ground that there can be no legal right as against the authority that

                                            23
Case: 21-40333     Document: 00516670330           Page: 24     Date Filed: 03/08/2023

                               Nos. 21-40333 and 21-40334

   makes the law on which the right depends.”). And part of the justification
   was the courts belonged to the King, so he had the right to refuse consent to
   suit in his own courts. Interestingly, this last rationale was not limited to the
   Crown; it extended to feudal lords who also were not amenable to suit in their
   own courts. 1 F. Pollock & F. Maitland, History of English
   Law 518 (2d ed. 1899) (“He can not be compelled to answer in his own
   court, but this is true of every petty lord of every petty manor; that there
   happens to be in this world no court above his court is, we may say, an
   accident”); 3 W. Holdsworth, A History of English Law 465
   (3d ed. 1927) (“[N]o feudal lord could be sued in his own court”).
          At the Founding, sovereign immunity became a part of the American
   common law. See Chisholm, 2 U.S. (2 Dall.) at 437 (Iredell, J., dissenting)
   (concluding that state sovereign immunity comes from “the common law,”
   which “is the ground-work of the laws in every State in the Union,” and
   which is, “where no special act of Legislation controls it, to be in force in each
   State, as it existed in England, (unaltered by any statute) at the time of the
   first settlement of the country”); Alden v. Maine, 527 U.S. 706, 715–16
   (1999); William Baude & Stephen E. Sachs, The Misunderstood Eleventh
   Amendment, 169 U. Pa. L. Rev. 609, 614 (2021). Of course, English
   conceptions of the doctrine did not map neatly onto the American Republic
   where sovereignty resides in the People and where we’ve never had a king or
   feudal lord.
          The most important American innovation to the doctrine was that our
   Founders left “to the several states, a residuary and inviolable sovereignty.”
   The Federalist No. 39, at 198 (James Madison) (George W. Carey &
   James McClellan eds., 2001); see also Gamble v. United States, 139 S. Ct. 1960,
   1968 (2019) (discussing the well-established principle of “dual sovereignty”
   at the founding (quotation omitted)). As part of their residual sovereignty, all
   States retained immunity from suits without their consent—in state courts

                                          24
Case: 21-40333     Document: 00516670330             Page: 25   Date Filed: 03/08/2023

                                 Nos. 21-40333 and 21-40334

   and in federal ones. See The Federalist No. 81, at 422 (Alexander
   Hamilton) (George W. Carey & James McClellan eds., 2001) (“It is inherent
   in the nature of sovereignty not to be amenable to the suit of an individual
   without its consent. . . . [T]he exemption, as one of the attributes of
   sovereignty, is now enjoyed by the government of every state in the union.”);
   Alden, 527 U.S. at 730–754 (holding state sovereign immunity applies in state
   courts as in federal ones).
          For example, the Articles of Confederation provided: “Each State
   retains its sovereignty, freedom, and independence, and every Power,
   Jurisdiction, and right, which is not by this confederation expressly delegated
   to the United States, in Congress assembled.” Articles                     of
   Confederation art. II (U.S. 1781) (emphasis added). Likewise, courts
   commonly held that States were immune from suit. For example, in Nathan
   v. Virginia, 1 U.S. (1 Dall.) 77 (C.C.P. Phila., Phila. Cnty., 1981), the court
   agreed with the attorney general that each State “was a sovereign” so that
   “every kind of process” issued against a State was “null and void.” Ibid.; see
   also Nelson, supra, at 1579. Likewise, in Moitez v. The South Carolina, 17 F.
   Cas. 574 (No. 9697) (1781), a Pennsylvania Admiralty Court dismissed a suit
   against a South Carolina warship on the grounds that it was owned by a
   “sovereign independent state.” Ibid. Other pre-constitutional sources
   confirmed. See, e.g., The Federalist No. 81, at 422 (Alexander
   Hamilton) (George W. Carey & James McClellan eds., 2001) (claiming that
   sovereign immunity “is now enjoyed” by each State, referring to a time
   before ratification (emphasis added)); The Federalist No. 39, at 198
   (James Madison) (George W. Carey & James McClellan eds., 2001)
   (discussing the “inviolable sovereignty” of States); McIlvaine v. Coxe’s
   Lessee, 8 U.S. (4 Cranch) 209, 212 (1808) (“This opinion is predicated upon
   a principle which is believed to be undeniable, that the several states which
   composed this union . . . became entitled, from the time when they declared

                                            25
Case: 21-40333     Document: 00516670330          Page: 26     Date Filed: 03/08/2023

                              Nos. 21-40333 and 21-40334

   themselves independent, to all the rights and powers of sovereign states
   . . . .”); see also Franchise Tax Bd. of Cal. v. Hyatt, 139 S. Ct. 1485, 1493–94
   (2019); Alden, 527 U.S. at 726–27; Gamble, 139 S. Ct. at 1968 (“When the
   original States declared their independence, they claimed the powers
   inherent in sovereignty. The Constitution limited but did not abolish the
   sovereign powers of the States . . . .” (quotation omitted)).
           As many have argued, the Constitution didn’t override common-law
   sovereign immunity. See, e.g., Gamble, 139 S. Ct. at 1968; Franchise Tax Bd.
   of Cal., 139 S. Ct. at 1495–96; William Baude, Sovereign Immunity and the
   Constitutional Text, 103 Va. L. Rev. 1, 8–9 (2017); Caleb Nelson, Sovereign
   Immunity as a Doctrine of Personal Jurisdiction, 115 Harv. L. Rev. 1559,
   1580–1601 (2002); Stephen E. Sachs, Constitutional Backdrops, 80 Geo.
   Wash. L. Rev. 1813, 1816–18, 1828–34 (2012); Bradford R. Clark, The
   Eleventh Amendment and the Nature of the Union, 123 Harv. L. Rev. 1817,
   1862–75 (2010); Kurt T. Lash, Leaving the Chisholm Trail: The Eleventh
   Amendment and the Background Principle of Strict Construction, 50 Wm. &
   Mary L. Rev. 1577, 1599–1603, 1618–27, 1649–50, 1653–76 (2009); Steven
   Menashi, Article III as a Constitutional Compromise: Modern Textualism and
   State Sovereign Immunity, 84 Notre Dame L. Rev. 1135, 1155–75 (2009).
   The ratification debates, negative public reactions to Chisholm v. Georgia
   (holding that there was no common-law sovereign immunity for States from
   out-of-state citizen suits under the Constitution), and Congress’s swift
   passage of the Eleventh Amendment in response to Chisholm all indicate as
   much.
           Common-law sovereign immunity is different from Eleventh
   Amendment sovereign immunity. The latter only prohibits suits brought by
   out-of-state plaintiffs in federal court: “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

                                         26
Case: 21-40333       Document: 00516670330             Page: 27      Date Filed: 03/08/2023

                                 Nos. 21-40333 and 21-40334

   Citizens of another State, or by Citizens of any Foreign State.” U.S.
   Const. amend. XI (emphasis added). The former is broader in a sense 2
   because it applies even a citizen sues his home State. Coolbaugh v.
   Commonwealth, 4 Yeates 493 (Pa. 1808) (finding it “a settled principle, that
   no sovereign power [is] amenable to suits either in its own courts, or those of
   a foreign country, unless by its own consent”); Beers v. Arkansas, 61 U.S. (20
   How.) 527, 529 (1857) (applying the “established principle of jurisprudence
   in all civilized nations that the sovereign cannot be sued in its own courts, or
   in any other, without its consent and permission” in a suit against a State in
   its own court); The Siren, 74 U.S. (7 Wall.) 152, 153–54 (1868) (“It is a
   familiar doctrine of the common law, that the sovereign cannot be sued in his
   own courts without his consent.”); Cunningham v. Macon & B.R. Co., 109
   U.S. 446, 451 (1883) (“It may be accepted as a point of departure
   unquestioned, that neither a state nor the United States can be sued as
   defendant in any court in this country without their consent . . . .”). This
   practice culminated most famously in Hans v. Louisiana, 134 U.S. 1 (1890),
   which held that a State cannot be sued by its own citizen. See id. at 14–15. And
   the Court continues to “uph[o]ld States’ assertions of sovereign immunity
   in various contexts outside the literal text of the Eleventh Amendment”
   today. Alden, 527 U.S. at 727; see also PennEast Pipeline Co., LLC v. New
   Jersey, 141 S. Ct. 2244, 2264 (2021) (Gorsuch, J., dissenting); Baude &
   Sachs, supra, at 612–14.
           This case implicates common-law sovereign immunity, not the
   Eleventh Amendment. Plaintiff Springboards to Education, Inc. is a citizen

           2
            In another sense common-law sovereign immunity is narrower than the immunity
   recognized by the Eleventh Amendment: Common-law sovereign immunity can be waived
   by the sovereign, whereas the Eleventh Amendment (at least by its plain text) speaks in
   subject-matter-jurisdiction terms that presumably cannot be waived. Baude & Sachs, supra,
   at 623–24.

                                              27
Case: 21-40333     Document: 00516670330             Page: 28      Date Filed: 03/08/2023

                                 Nos. 21-40333 and 21-40334

   of Texas, and defendants McAllen Independent School District and IDEA
   Public Schools both claim to be the State of Texas. So we’re necessarily
   discussing the common law of sovereign immunity that predated the
   Eleventh Amendment and survived its ratification.
                                            II.
           The next question is what (or who) qualified as the “State” under the
   common law of sovereign immunity in 1789? As with so many historical
   inquiries, this one has points of clarity and points of ambiguity. I (A) begin
   with what we know for sure: Corporations were not considered the State
   under the common law. They had no sovereign immunity. Then I (B)
   cautiously wade into territory with limited historical evidence: whether
   unincorporated state agencies, boards, and departments were considered the
   State. It appears that the immunity of these entities in federal court was left
   in the hands of the States.
                                            A.
           First, corporations. It’s evident that at common law, both in England
   and the early American Republic, incorporated entities were not entitled to
   sovereign immunity. This rule applied regardless of whether the corporations
   were private or public and regardless of whether they exercised governmental
   functions.
           As Chief Justice Marshall said, “[a]s our ideas of a corporation, its
   privileges and its disabilities, are derived entirely from the English books, we
   resort to them for aid, in ascertaining its character.” Bank of U.S. v. Deveaux,
   9 U.S. (5 Cranch) 61, 88 (1809). In his Commentaries on the Laws of England,
   Blackstone identified many types of corporations at common law, including
   civil   corporations,   churches,      colleges    and     universities,   hospitals,
   manufacturing or commercial organizations, the royal society, and notably,
   corporations “erected for the good government of a town or particular

                                            28
Case: 21-40333     Document: 00516670330           Page: 29     Date Filed: 03/08/2023

                               Nos. 21-40333 and 21-40334

   district.” 1 Blackstone, supra, at *458–59. These corporations could only
   be created with the consent of the sovereign. Id. at *460. Once they were
   created, they could “sue or be sued, implead or be impleaded, grant or
   receive, . . . and do all other acts as natural persons may.” Id. at *463. And
   for that reason, a corporation could not assert the sovereign’s immunity from
   suit. See, e.g., Moodalay v. Morton, (1785) 28 Eng. Rep. 1245 (Ch.).
          At the Founding, America embraced the English conception of
   corporations. This theme was pervasive throughout the constitutional
   debates and early American court cases. See Lash, supra, at 1657.
          First, the constitutional debates. For all that the Federalists and Anti-
   Federalists disagreed about, they agreed that corporations were not
   sovereigns. Both drew sharp distinctions between corporations, which
   weren’t immune from suits, and sovereigns, which were, to advance their
   arguments.
          The Federalists began this debate by contending that States were akin
   to corporations. See 1 M. Farrand, Records of the Federal
   Convention of 1787, at 323, 328 (1907) (Alexander Hamilton:
   discussing how the States were “Corporations” with mere “corporate
   rights”); id. at 357–58 (James Madison); id. at 471 (James Madison: “There
   is a gradation of power in all societies, from the lowest corporation to the
   highest sovereign. The states never possessed the essential rights of
   sovereignty . . . . The states, at present, are only great corporations . . . .”);
   id. at 552 (Gouverneur Morris: “[The States] were originally nothing more
   than colonial corporations.”).
          The Anti-Federalists responded strongly and persuasively. They
   argued that the Federalists sought to reduce sovereign States to “mere
   corporation[s].” The Address of the Seceding Assemblymen (Oct. 2, 1787),
   reprinted in 13 The Documentary History of the Ratification

                                          29
Case: 21-40333      Document: 00516670330          Page: 30      Date Filed: 03/08/2023

                               Nos. 21-40333 and 21-40334

   of the Constitution 295, 296 (John P. Kaminski & Gaspare J.
   Saladino eds., 1981); see also 2 The Debates in the Several State
   Conventions           on     the      Adoption           of   the      Federal
   Constitution 403 (Jonathan Elliot ed., 1836) [hereinafter Elliot’s
   Debates] (Thomas Tredwell in the New York convention: “The sole
   difference between a state government under this Constitution, and a
   corporation under a state government, is, that a state being more extensive
   than a town, its powers are likewise proportionably extended, but neither of
   them enjoys the least share of sovereignty . . . .”); Democrat, Mass.
   Mercury (Bos.), July 23, 1793, reprinted in 5 The Documentary
   History of the Supreme Court, 1789–1800, at 393, 393 (Maeva
   Marcus ed., 1994) [hereinafter DHSC] (noting that some feared the
   Constitution as written “destroy[ed] the SOVEREIGNTY of the states, and
   render[ed] them no more than corporate towns”); Cato II (Oct. 11, 1787),
   reprinted in 13 The Documentary History of the Ratification
   of the Constitution, supra, at 369, 371 (arguing that “the different
   states do not retain separately their sovereignty and independency” under
   the Constitution); 3 Elliot’s Debates, supra, at 527 (George Mason: “Is
   this state to be brought to the bar of justice like a delinquent individual? Is the
   sovereignty of the state to be arraigned like a culprit, or private offender?”).
          And the Anti-Federalists proved triumphant. The Federalists
   eventually conceded that States were not corporations and hence would
   retain sovereign immunity. See 3 Elliot’s Debates, supra, at 533 (James
   Madison); The Federalist No. 81 (Alexander Hamilton); 3 Elliot’s
   Debates, supra, at 555 (John Marshall); Brutus, Indep. Chron. (Bos.),
   July 18, 1793, reprinted in 5 DHSC, supra, at 392, 392 (Rufus King); Democrat,
   supra, at 393–94, 394 nn.3–4 (Rufus King). The Federalists insisted,
   however, that no one would be so silly as to sue a sovereign State in federal
   court. See The Federalist No. 81, at 422 (Alexander Hamilton)

                                           30
Case: 21-40333      Document: 00516670330         Page: 31     Date Filed: 03/08/2023

                              Nos. 21-40333 and 21-40334

   (George W. Carey & James McClellan eds., 2001) (stressing that “the danger
   intimated must be merely ideal”).
            Second, this sharp line between corporations and sovereigns is also
   clear in early American court cases. The very first case entered on the
   Supreme Court docket, Van Staphorst v. Maryland, 2 U.S. (2 Dall.) 401
   (1791), involved a suit against a State. See 5 DHSC, supra, at 7, 16. While the
   Court didn’t reach the question of immunity, many members of the public
   raised red flags, and the sovereign/corporation distinction animated their
   objections. For example, one anonymously published letter heralded the
   danger that “[s]hould this action be maintained,” it would mean “the several
   States, have relinquished all their SOVEREIGNTIES, and have become
   mere corporations.” Letter from an Anonymous Correspondent, Indep.
   Chron. (Phila.), Feb. 13 & 19, 1791, reprinted in 5 DHSC, supra, at 20, 21.
   The letter went on: “For a Sovereign State, can never be sued, or coerced,
   by the authority of another government.” Ibid. To be sued, States would have
   to become “mere corporations.” Ibid. Massachusetts Attorney General James
   Sullivan also published his concern that this suit reduced the States from “an
   assemblage of republics” under the federal government to “divers
   corporations.” James Sullivan, Observations upon the Government of the United
   States of America (Bos.), July 7, 1791, reprinted in 5 DHSC, supra, at 21, 21. He
   concluded that without immunity, States were “mere corporation[s]”
   devoid of sovereignty. Id. at 29.
            The Court confronted this problem again in Oswald v. New York, 2
   U.S. (2 Dall.) 401 (1792). And again, the Court didn’t have a chance to decide
   the issue. Ibid. But Justice Iredell, who would pen the lone dissent in Chisholm
   v. Georgia one year later, began to explore the differences between a State and
   a “mere Corporation” in a draft opinion. See James Iredell’s Observations on
   State Suability (Phila.), Feb. 11–14, 1792, reprinted in 5 DHSC, supra, at 76,
   87–88.

                                          31
Case: 21-40333     Document: 00516670330          Page: 32     Date Filed: 03/08/2023

                              Nos. 21-40333 and 21-40334

          By the time the Court heard Chisholm v. Georgia, it knew the question
   of State suability boiled down to whether States were more akin to sovereigns
   or corporations. The majority and dissent agreed that sovereigns were
   entitled to immunity while corporations were not. They merely disagreed on
   whether States were sovereigns or corporations. Compare Chisholm, 2 U.S. (2
   Dall.) at 468 (Cushing, J.) (“As to corporations, all States whatever are
   corporations or bodies politic.”), and id. at 472 (Jay, C.J.) (arguing there’s no
   difference between suing a municipal corporation and suing a State), with id.
   at 448 (Iredell, J., dissenting) (discussing the “differences between such
   corporations, and the several States in the Union”).
          Justice Iredell’s lone Chisholm dissent is particularly instructive.
   That’s in part because his interpretation ultimately won the day—both in the
   short-term with the passage of the Eleventh Amendment, and in the long-
   term with the Court’s endorsement of his view of common-law sovereign
   immunity. See Hans, 134 U.S. at 16. But of greater relevance for present
   purposes, Justice Iredell discussed at length the “common law” of
   corporations and sovereigns. Chisholm, 2 U.S. (2 Dall.) at 447 (Iredell, J.,
   dissenting). He first argued that under the common law, a “corporation is a
   mere creature” of the sovereign and “owes its existence . . . to the authority
   which create[d] it.” Id. at 448. Conversely, a “State does not owe its origin
   to the Government of the United States” but rather “derives its authority
   from the same pure and sacred source as itself: The voluntary and deliberate
   choice of the people.” Ibid. Similarly, a corporation “is altogether
   depend[e]nt on that Government to which it owes its existence.” Ibid. Its
   “charter may be forfeited,” and its “authority may be annihilated.” Ibid. But
   a State is “totally independent” of the federal government. Ibid. Because of
   these differences, Justice Iredell concluded that while corporations are not
   immune from suits, States are “altogether exempt from the jurisdiction of

                                          32
Case: 21-40333     Document: 00516670330         Page: 33    Date Filed: 03/08/2023

                             Nos. 21-40333 and 21-40334

   the Courts of the United States” except for “the special instances where the
   general Government has power derived from the Constitution itself.” Ibid.
          The public response to Chisholm echoed this categorization. For
   example, one newspaper said that while the Constitution provided that
   “Congress should guarantee to every State in the Union a Republican form
   of government[,] ‘[a] form of government’ was never a mode of expression
   applied to the police of a town, parish, city or other corporation.” “The True
   Federalist” to Edmund Randolph, Number II, Indep. Chron. (Bos.), Jan.
   23 & 27, 1794, reprinted in 5 DHSC, supra, at 243, 245 [hereinafter The True
   Federalist].
          A few months later, Justice Iredell’s outcry reverberated through the
   halls of the Massachusetts General Assembly. In opposition to a suit against
   the Commonwealth, Vassall v. Massachusetts, Massachusetts Governor
   Hancock delivered a rousing speech. See John Hancock’s Address to the
   Massachusetts General Court, Indep. Chron. (Bos.), Sept. 18, 1793,
   reprinted in 5 DHSC, supra, at 416, 416. He argued that the rights of State as
   sovereigns could not be reduced to those of “mere Corporations.” Id. at 418.
   Others echoed his sentiments. See, e.g., William Widgery’s Speech in the
   Massachusetts House of Representatives, Indep. Chron. (Bos.), Sept. 23,
   1793, reprinted in 5 DHSC, supra, at 427, 428 (distinguishing between the
   State and “mere dependent corporations”); Brutus, supra, at 392 (urging the
   Massachusetts General Assembly to respond or risk becoming “an
   unimportant subordinate corporation”). The General Assembly rallied to its
   Governor’s side. It refused to answer Vassall’s suit, and the Court eventually
   dismissed it. See Reply of the Massachusetts General Court to John Hancock,
   Indep. Chron. (Bos.), Sept. 27, 1793, reprinted in 5 DHSC, supra, at 441,
   441.

                                         33
Case: 21-40333      Document: 00516670330          Page: 34     Date Filed: 03/08/2023

                               Nos. 21-40333 and 21-40334

           In the early nineteenth century, the Court relied even more on this
   formal division between corporations and sovereigns. In Trustees of
   Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518 (1819), the Court
   examined the nature of the Dartmouth College corporate charter with New
   Hampshire. Id. at 626–27. In doing so, the Court again considered the
   common law of corporations. It determined that a corporation was “a
   collection of individuals, united into one collective body, under a special
   name, and possessing certain immunities, privileges and capacities, in its
   collective character.” Id. at 667. Notably, as “artificial person[s],”
   corporations were not immune from lawsuits; they could “sue and be sued.”
   Ibid.
           This sovereign-corporate distinction is best illustrated by a series of
   suits against State-created banks. In those cases, the Court repeatedly held
   that even “a bank created by the government for its own uses, whose stock
   [was] exclusively owned by the government, [was a] public corporation,” and
   thereby unprotected by sovereign immunity. Id. at 669 (emphasis added); see
   also Bank of Commonwealth of Ky. v. Wister, 27 U.S. (2 Pet.) 318, 319 (1829)
   (holding that even though Kentucky “was the sole proprietor of the stock of
   the bank,” the bank was not the Commonwealth and therefore was not
   entitled to sovereign immunity); Bank of U.S. v. Planters’ Bank of Ga., 22
   U.S. (9 Wheat.) 904, 908 (1824) (holding that even where Georgia was a
   proprietor and corporator of the Bank, the “Planters’ Bank of Georgia [was]
   not exempted from being sued in the federal courts”); Briscoe v. Bank of
   Commonwealth of Ky., 36 U.S. (11 Pet.) 257, 327 (1837) (holding that even
   though Kentucky was the sole stockholder of the bank, the bank was not
   entitled to sovereign immunity); Darrington v. Bank of Ala., 54 U.S. (13
   How.) 12, 16–17 (1851) (same); Curran v. Arkansas, 56 U.S. (15 How.) 304,
   309 (1853) (“[A] State . . . by owning all the capital stock [in a bank], does not
   impart to that corporation any of its privileges or prerogatives . . . .”). The

                                          34
Case: 21-40333        Document: 00516670330              Page: 35       Date Filed: 03/08/2023

                                  Nos. 21-40333 and 21-40334

   mere fact that the State held all the financial interest in a bank did not make
   the bank an arm of the State. 3 Rather, the State’s incorporation of the bank
   severed any connection between the State and the bank for purposes of
   sovereign immunity. See Planters’ Bank of Ga., 22 U.S. (9 Wheat.) at 907
   (“The suit is against a corporation, and the judgment is to be satisfied by the
   property of the corporation, not by that of the individual corporators. The
   State does not, by becoming a corporator, identify itself with the corporation.
   The Planters’ Bank of Georgia is not the State of Georgia, although the State
   holds an interest in it.”).
           And while the Court highlighted the differences between corporations
   and the States, it minimized any differences between types of corporations.
   For example, the Court held that there was no distinction between public and
   private corporations—neither was entitled to sovereign immunity. See, e.g.,
   Trustees of Dartmouth College, 17 U.S. (4 Wheat.) at 668. The Court allowed
   suits to proceed against corporations with “public political purposes only,
   such as towns, cities, parishes and counties.” Ibid. The Court concluded that
   even corporations “founded by the government, for public purposes, where
   the whole interests belong also to the government,” were not “the State” for
   purposes of sovereign immunity. Id. at 669; see also Osborn v. Bank of U.S., 22
   U.S. (9 Wheat.) 738, 772 (1824) (The State’s “mere creation of a
   corporation, does not confer political power or political character” even
   where the corporation is given “public employments” normally reserved to
   the State.); cf. Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 442 (1821)
   (discussing how Congress’s incorporation of the City of Washington created

           3
             This fact alone suggests the Clark factors must be overturned. Clark’s emphasis
   on the financial ties between an entity and the State to determine if the entity is an arm of
   the State has no foundation in our legal history and tradition.

                                                35
Case: 21-40333      Document: 00516670330            Page: 36     Date Filed: 03/08/2023

                                Nos. 21-40333 and 21-40334

   a “separate body for the management of the internal affairs of the City, for its
   internal government, for its police” (emphasis added)).
          Other examples of corporations included “hospital[s] created and
   endowed by the government for general charity,” “insurance, canal, bridge,
   and turnpike companies,” “college[s],” and other “eleemonsynary
   corporations.” Trustees of Dartmouth College, 17 U.S. (4 Wheat.) at 668. Even
   when a college “acquire[d] the character of a public institution,” it retained
   its corporate status. Id. at 669. It didn’t miraculously become the State.
   Regardless of the types of corporations or the State’s involvement in them,
   the Court consistently found corporations weren’t entitled to sovereign
   immunity.
          The Court continued to abide by this formalistic rule throughout the
   nineteenth century—even as corporations grew in number and took on more
   public functions. For example, when confronted with a suit against a school
   board, the Court looked exclusively to the text of the State’s statute and
   concluded that “the language of the Nebraska statute makes school districts
   corporations in the fullest sense of the word.” School Dist. No. 56 v. St. Joseph
   Fire & Marine Ins. Co., 103 U.S. (13 Otto) 707, 708 (1880). The Court
   concluded its inquiry with the text, finding “no warrant for [a] distinction”
   between private and public corporations and concluding that both could be
   sued. Id. at 709. This principle was so well-established by the time the Court
   decided Lincoln County v. Luning, 133 U.S. 529 (1890), that the Court held it
   was “beyond question” that the county could be sued. Id. at 530; see also P.R.
   Ports Auth. v. Fed. Mar. Comm’n, 531 F.3d 868, 881–82 (D.C. Cir. 2008)
   (Williams, J., concurring). On the same day that the Court decided Hans v.
   Louisiana, it held in Lincoln County that an incorporated county was not the
   State for purposes of sovereign immunity. Lincoln County, 133 U.S. at 530
   (“[W]hile the county is territorially a part of the state, yet politically it is also
   a corporation created by, and with such powers as are given to it by, the state.

                                            36
Case: 21-40333        Document: 00516670330              Page: 37       Date Filed: 03/08/2023

                                  Nos. 21-40333 and 21-40334

   In this respect, it is a part of the state only in that remote sense in which any
   city, town, or other municipal corporation may be said to be a part of the
   state.”).
           In sum, it’s clear that incorporated entities or entities with sue-and-
   be-sued clauses did not qualify as “the State” for purposes of sovereign
   immunity at the Founding. Any “arm of the State” rule must account for this
   history to properly reflect the common-law immunity that predated and
   survived the Constitution.
                                               B.
           It’s less clear whether unincorporated, State-created entities were
   entitled to sovereign immunity. The English common law isn’t helpful since
   the American notion of “dual sovereignty” had no counterpart across the
   Atlantic. The constitutional ratification debates don’t have much to
   contribute because the Federalists and Anti-Federalists primarily debated
   whether the States would have immunity at all. See supra at 8–9. But as far as
   I can tell, neither side devoted much time to discussing which state entities
   might be immune from suit. And the law reports don’t provide much help
   either. While some state constitutions created agencies, boards, or
   departments in the late eighteenth or early nineteenth centuries, these
   entities were not nearly as powerful or as numerous as they are today. And
   when plaintiffs sought damages or injunctive relief against the State in federal
   court, they sued “the State” or a State officer by name. 4 It isn’t clear how

           4
              The early Supreme Court’s record on officer suits also isn’t especially
   enlightening. That’s because most of these cases post-dated Chisholm and were decided
   under the rubric of the Eleventh Amendment. See, e.g., Osborn, 22 U.S. at 857. And it’s
   also because Marshall’s Court wasn’t consistent. In one breath it said sovereign immunity
   only barred suits naming “the State” as the defendant. See ibid. (“[T]he jurisdiction of the
   Court depends . . . upon the actual party on the record. . . . [T]he 11th amendment, which
   restrains the jurisdiction granted by the constitution over suits against States, is, of

                                               37
Case: 21-40333        Document: 00516670330               Page: 38       Date Filed: 03/08/2023

                                   Nos. 21-40333 and 21-40334

   federal courts would’ve treated a defendant such as the Texas Department
   of Public Safety if it existed at the time.
           But we have some data points. We know that the Constitution
   explicitly provided that “[t]he powers not delegated to the United States by
   the Constitution, nor prohibited by it to the States, are reserved to the States
   respectively, or to the people.” U.S. Const. amend. X. Under this division
   of power, federal “jurisdiction extend[ed] to certain enumerated objects
   only,” leaving “to the several states, a residuary and inviolable sovereignty
   over all other objects.” The Federalist No. 39, at 198 (James Madison)
   (George W. Carey & James McClellan eds., 2001). Among the well-
   established powers reserved to the States was the power to structure their
   governments as they saw fit. See, e.g., Roger Sherman, A Citizen of New
   Haven, II, New Haven Gazette (Dec. 25, 1788), reprinted in Essays
   on the Constitution of the United States: Published
   During its Discussion by the People 1787–1788, at 237, 238 (Paul
   Leceister Ford ed., 1892) (“The powers vested in the federal government are
   clearly defined, so that each state still retain its sovereignty in what concerns
   its own internal government, and a right to exercise every power of a

   necessity, limited to those suits in which a State is a party on the record.”); see also Davis
   v. Gray, 83 U.S. (16 Wall.) 203, 220 (1872) (reading Osborn to hold that “[m]aking a State
   officer a party does not make the State a party, although her law may have prompted his
   action, and the State may stand behind him as the real party in interest” and a “State can
   be made a party only by shaping the bill expressly with that view”). And in the next breath
   it said that officers may be “the State” for purposes of sovereign immunity, especially
   where the suit sought to recover the State’s property. See Governor of Ga. v. Madrazo, 26
   U.S. (1 Pet.) 110, 123–24 (1828) (“[W]here the chief magistrate of a state is sued, not by
   his name, but by his style of office, and the claim made upon him is entirely in his official
   character, we think the state itself may be considered as a party on the record.”); United
   States v. Peters, 9 U.S. (5 Cranch) 115, 139 (1809) (allowing a suit against the Pennsylvania
   treasurer in his personal capacity but stipulating that “[i]f these proceeds had been the
   actual property of Pennsylvania” it “would have presented a case on which it was
   unnecessary to give an opinion”).

                                                38
Case: 21-40333     Document: 00516670330          Page: 39    Date Filed: 03/08/2023

                              Nos. 21-40333 and 21-40334

   sovereign state not particularly delegated to the government of the United
   States.”). That’s why, for example, Texas can have a bicameral legislature
   and Nebraska can have a unicameral one. There’s no mandated, one-size-
   fits-all structure for “the State.”
          We also know from various discussions of sovereign immunity at the
   Founding that it didn’t just rest with abstract “States.” It belonged to “state
   governments.” See, e.g., The Federalist No. 81, at 422 (Alexander
   Hamilton) (George W. Carey & James McClellan eds., 2001) (Sovereignty
   belongs to the “government of every State in the Union.” (emphasis added));
   The Federalist No. 32, at 155 (Alexander Hamilton) (George W. Carey
   & James McClellan eds., 2001) (“[S]tate governments would clearly retain all
   the rights of sovereignty . . . .” (emphasis added)); Brutus XIII (Feb. 21,
   1788), reprinted in 2 The Complete Anti-Federalist 428, 429
   (Herbert Storing ed., 1981) (subjecting a State to suit “is humiliating and
   degrading to a [state] government” (emphasis added)); Federal Farmer III
   (Oct. 10, 1787), reprinted in 2 The Complete Anti-Federalist,
   supra, at 234, 245 (“How far it may be proper to admit a foreigner or the
   citizen of another state to bring actions against state governments . . . is
   doubtful . . . .” (emphasis added)); Martin v. Hunter’s Lessee, 14 U.S. 304,
   325 (1816) (“[S]overeign powers vested in the state governments, by their
   respective constitutions, remained unaltered and unimpaired, except so far
   as they were granted to the government of the United States.” (emphasis
   added)); 2 Elliot’s Debates, supra, at 403 (Thomas Tredwell’s
   remarks in New York Ratifying Convention: referencing the sovereign power
   as belonging to “state governments” (emphasis added)); The True Federalist,
   supra, at 245 (“The word State in itself, signifies a sovereign government.”
   (emphasis added)); Sullivan, supra, at 29 (“sovereignty of the [state]
   governments” (emphasis added)); 1 Elliot’s Debates, supra, at 327
   (New York Ratification Statement: “every power, jurisdiction, and right”

                                         39
Case: 21-40333     Document: 00516670330         Page: 40    Date Filed: 03/08/2023

                             Nos. 21-40333 and 21-40334

   not delegated to Congress “remains to the people of the several states, or to
   their respective state governments” (emphasis added)); 1 Elliot’s
   Debates, supra, at 334 (Rhode Island Ratification Statement: same); Report
   of a Joint Committee of the Massachusetts General Court, Indep. Chron.
   (Bos.), June 20, 1793, reprinted in 5 DHSC, supra, at 230, 230 (arguing that
   subjecting States to suits is “in its principle subversive of the State
   Governments” (emphasis added)); 4 Elliot’s Debates, supra, at 259–60
   (Charles Pinckney speech before South Carolina House of Representatives:
   “The distinction which has been taken between the nature of a federal and
   state government appeared to be conclusive—that in the former, no powers
   could be executed, or assumed, but such as were expressly delegated; that in
   the latter, the indefinite power was given to the government, except on points
   that were by express compact reserved to the people.” (emphases added)).
          Thus, while the historical evidence doesn’t provide a clear answer to
   whether an unincorporated entity created by the State—like a state agency—
   enjoyed sovereign immunity at the Founding, any theory must account for
   these well-established principles: (1) sovereign immunity belonged to state
   governments, and (2) States retained the power to structure their
   governments as they saw fit after the Constitution. These two principles
   suggest that the State can imbue its constituent parts with sovereign
   immunity when creating them as unincorporated arms of the State. For
   example, Texas could choose not to have a Health and Human Services
   Commission or a Department of Public Safety or a Commission on
   Environmental Quality, and it could choose instead to perform its health,
   safety, and environmental functions under one undifferentiated state
   government that (obviously) enjoys common-law sovereign immunity. The
   fact that the State chose, in its sovereign prerogative, to create those
   unincorporated agencies of state government does not appear to change the

                                        40
Case: 21-40333        Document: 00516670330              Page: 41       Date Filed: 03/08/2023

                                  Nos. 21-40333 and 21-40334

   conclusion that these agencies still constitute “the State” and enjoy the same
   sovereign immunity.
                                               III.
           From this historical evidence about incorporated and unincorporated
   state government entities we can distill a rule to determine whether an entity
   is an immune “arm of the State.”
           If an entity has a separate legal status from the State (e.g., as a
   corporation, LLC, or § 501(c)(3) nonprofit organization) or the state statute
   designating the entity includes a “sue-and-be-sued” clause, the entity is not
   “the State” and hence is not entitled to sovereign immunity. That’s because
   the State has classified these entities as distinct legal persons, and a federal
   court cannot second-guess the State’s decision. 5 All other State-created
   entities are presumably arms of the State and entitled to sovereign immunity.
           This rule has several advantages over the Clark factors.
           First, it aligns with the Supreme Court’s guidance. In Regents of the
   University of California v. Doe, 519 U.S. 425 (1997), the Court stressed that
   any arm-of-the-State inquiry hinges on state law:
           Ultimately, of course, the question whether a particular state
           agency has the same kind of independent status as a county or
           is instead an arm of the State, and therefore “one of the United
           States” within the meaning of the Eleventh Amendment, is a
           question of federal law. But that federal question can be

           5
             In Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank,
   527 U.S. 627 (1999), the Court accepted the district court’s determination that an
   incorporated entity with such a sue-and-be-sued clause was an arm of the State. Id. at 633
   n.3 (1999). But the Court stipulated that this was “a conclusion the parties did not dispute
   before either the Federal Circuit or this Court.” Ibid.

                                               41
Case: 21-40333     Document: 00516670330          Page: 42     Date Filed: 03/08/2023

                              Nos. 21-40333 and 21-40334

          answered only after considering the provisions of state law that
          define the agency’s character.
   Id. at 429 n.5 (emphasis added). Clark by contrast is a pre-Regents relic. And
   it minimizes the importance of state law as only one of many factors and less
   important than others. See Clark, 798 F.2d at 736, 744; Hudson v. City of New
   Orleans, 174 F.3d 677, 682 (5th Cir. 1999). All else being equal, if state law
   says the unincorporated entity is not the State, but the entity is funded by the
   state treasury, a court will conclude it’s “the State.” See Hudson, 174 F.3d at
   682 (finding that the source of funding is the most important Clark factor).
   This result departs from Regents and accordingly must be overruled.
          Second, the proposed bright-line rule is grounded in what sovereign
   immunity meant at the Founding. As previously discussed, early American
   courts expressly disavowed any connection between an entity’s entitlement
   to sovereign immunity and its connection to the state treasury. See supra at
   13–14 & n.2. Clark, by contrast, pivots on the funding factor. Ibid. Thus, it
   abandons any tether to the common law (or the Eleventh Amendment for
   that matter).
          Third, the proposed rule is workable. As the majority rightly notes,
   the Clark factors are cumbersome and at times irreconcilable with one
   another. They don’t provide clear answers and lead to nonsensical results.
          Finally, the proposed rule respects the States’ powers under the
   Tenth Amendment to structure their governments however they see fit. The
   Clark factors, by contrast, give federal judges the power to decide what
   qualifies as “the State.” The result is a pandora’s box—there’s no telling
   what will come out. States have no notice, and they cannot structure their
   governments in predictable ways and in accordance with their sovereign
   prerogatives. The proposed test enables state governments to order their
   affairs so they can foreseeably raise sovereign immunity.

                                         42
Case: 21-40333       Document: 00516670330            Page: 43      Date Filed: 03/08/2023

                                Nos. 21-40333 and 21-40334

                                            IV.
             Finally, it’s time to apply this arm-of-the-State rule to the facts at
   hand.
             The McAllen Independent School District concedes that the Texas
   Education Code gives it the power to “sue and be sued.” The Code says:
   “The trustees of an independent school district constitute a body corporate
   and in the name of the district may . . . sue and be sued . . . .” Tex. Educ.
   Code § 11.151(a). The district is a corporation that can be sued by name, so
   it’s not entitled to sovereign immunity.
             IDEA Public Schools is a § 501(c)(3) nonprofit organization. ROA.21-
   40334.169, 2241. Thus, it’s not entitled to sovereign immunity.
                                     *       *       *
             The Clark factors do not reflect the common law of sovereign
   immunity. They are cumbersome and indeterminate. And they prompt
   needless litigation, as this case illustrates. Our en banc court should revisit
   them. 6

             6
             Lest there be any confusion, the question addressed in this opinion is what
   constitutes “the State”—and hence what enjoys the State’s sovereign immunity in federal
   court. The States are obviously free to cloak non-State entities with all manner of
   governmental immunities in state court, and as with almost everything in our federal
   system, the State need not follow federal standards in doing so. See, e.g., Tex. Educ.
   Code 12.1056(a).

                                             43