Court Opinion

ID: 2971344
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:33:28.282693+00
Date Added: 2024-06-11T15:02:20.511433
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
            Pursuant to Sixth Circuit Rule 206            2        Ernst, et al. v. Roberts, et al.               No. 02-2287
    ELECTRONIC CITATION: 2004 FED App. 0266P (6th Cir.)
                File Name: 04a0266p.06
                                                           Member, Michigan Judges            -
                                                           Retirement Board,                  -
UNITED STATES COURT OF APPEALS                                    Defendants-Appellees.       -
                                                                                              -
              FOR THE SIXTH CIRCUIT                                                          N
                _________________                                Appeal from the United States District Court
                                                                for the Eastern District of Michigan at Detroit.
J. RICHARD ERNST , WILLIAM       X                        No. 01-73738—Bernard A. Friedman, Chief District Judge.
T. ERVIN , JAMES E. WILSON,       -
                                  -                                            Argued: January 30, 2004
and JOHN PATRICK O’BRIEN,
                                  -    No. 02-2287
on behalf of themselves and       -                                     Decided and Filed: August 12, 2004
all others similarly situated,     >
                                  ,
          Plaintiffs-Appellants, -                            Before: SUHRHEINRICH and CLAY, Circuit Judges;
                                  -                                        GWIN, District Judge.*
             v.                   -                                               _________________
                                  -
DOUGLA S B. ROBERTS,              -                                                    COUNSEL
                                  -
Treasurer of the State of
                                  -                       ARGUED: Kenneth A. Flaska, KASIBORSKI, RONAYNE
Michigan; CHRISTOPHER M.          -                       & FLASKA, Detroit, Michigan, for Appellants. Wendell A.
DE ROSE , Director,               -                       Wilk, DYKEMA GOSSETT, Lansing, Michigan, for
Department of Management          -                       Appellees. ON BRIEF: Kenneth A. Flaska, Chester E.
and Budget Office of              -                       Kasiborski, Jr., KASIBORSKI, RONAYNE & FLASKA,
Retirement Systems; GEORGE -                              Detroit, Michigan, for Appellants. Wendell A. Wilk, Lori M.
                                  -                       Silsbury, DYKEMA GOSSETT, Lansing, Michigan, Larry F.
M. ELWORTH, Member,               -                       Brya, OFFICE OF THE ATTORNEY GENERAL, Lansing,
Michigan Judges Retirement        -                       Michigan, for Appellees.
Board; ROY PENTILLA ,             -
Member, Michigan Judges           -                         CLAY, J., delivered the opinion of the court, in which
Retirement Board; ERIC E.         -                       GWIN, D. J., joined. SUHRHEINRICH, J. (pp. 37-57),
DOSTER, Member, Michigan          -                       delivered a separate dissenting opinion.
                                  -
Judges Retirement Board;          -
LYLE VAN HOUTEN , Member, -
Michigan Judges Retirement        -
                                                               *
Board; and ROBERT RANSOM, -                                    The Ho norable James S. Gwin, United States District Judge for the
                                                          Northern District of Ohio, sitting by designation.

                            1
No. 02-2287               Ernst, et al. v. Roberts, et al.   3    4       Ernst, et al. v. Roberts, et al.                   No. 02-2287

                    _________________                             violations of state law not related to equal protection, namely,
                                                                  wasting trust and breach of fiduciary duty.1
                        OPINION
                    _________________                               Plaintiffs sought various forms of relief. Plaintiffs sought
                                                                  certification of the action as a class action pursuant to FED . R.
  CLAY, Circuit Judge. Plaintiffs, J. Richard Ernst, William      CIV . P. 23. Plaintiffs also sought restitution in the form of
T. Ervin, James E. Wilson, and John Patrick O’Brien, appeal       monetary awards. Additionally, Plaintiffs sought declaratory
from the order issued by the United States District Court for     and injunctive relief, to alter the retirement system’s
the Eastern District of Michigan, entered on September 30,        functioning, for the purpose of bringing it into compliance
2002, granting the motion to dismiss of Defendants                with the laws whose violation Plaintiffs alleged.
(Treasurer of the State of Michigan Douglas B. Roberts and
affiliated parties), declining to exercise supplemental              The federal law counts relied upon 42 U.S.C. § 1983 as the
jurisdiction over Plaintiffs’ state law claims, and denying as    basis for pleading the liability of Defendants (the Treasurer of
moot Defendants’ motion for abstention or, alternatively, for     the State of Michigan and affiliated parties), all of whom are
a stay of proceedings, and Plaintiffs’ motion to strike an        government officials. On December 7, 2001, Defendants
affidavit, in this action under 42 U.S.C. § 1983, challenging     filed a Motion for Abstention or, Alternatively, for a Stay in
the Michigan Judges Retirement Act of 1992, MICH. COMP.           the Proceedings. On December 18, 2001, Defendants filed a
LAWS § 38.2101 et seq., as violating the United States and        Motion to Dismiss or, in the Alternative, for Summary
Michigan Constitutions and also asserting state law claims for    Judgment. On February 8, 2002, Plaintiffs filed a Motion to
wasting trust and breach of fiduciary duty. For the reasons set   Strike the Affidavit of Daniel A. Norberg. On March 20,
forth below, we REVERSE the district court’s dismissal of         2002, the district court held a hearing on Plaintiffs’ motion to
Plaintiffs’ federal claims.                                       strike, Defendants’ motions to dismiss or for summary
                                                                  judgment, and Defendants’ motion for abstention or for a stay
                     BACKGROUND                                   of proceedings.
                     Procedural History                             On September 30, 2002, the district court entered an
                                                                  opinion and order, granting Defendants’ motion to dismiss
  On September 5, 2001, Plaintiffs filed a complaint, in          Plaintiffs’ federal claims (Counts I, III, V, and VII) due to
which they alleged that the Michigan Judges Retirement Act        Defendants’ Eleventh Amendment immunity; declining to
of 1992, MICH. COMP. LAWS § 38.2101 et seq., violates the         exercise supplemental jurisdiction over Plaintiffs’ state claims
Equal Protection Clauses of the United States and Michigan        (Counts II, IV, VI, VIII, IX, and X); denying as moot
Constitutions and various provisions of state law. The            Defendants’ motion for abstention or for a stay of
complaint set forth ten counts. The initial eight counts of       proceedings; and denying as moot Plaintiffs’ motion to strike
Plaintiffs’ complaint alleged four separate theories of           the Norberg affidavit. Ernst v. Roberts, 225 F. Supp. 2d 781,
violation of equal protection. For each theory of the
complaint, one count is devoted to federal law and another to
state law. The final two counts of the complaint alleged
                                                                      1
                                                                       The district court o pinio n set forth the counts in de tail. Ernst v.
                                                                  Roberts, 225 F. Supp. 2d 7 81, 784-85 (E .D. Mich. 2002 ).
No. 02-2287                      Ernst, et al. v. Roberts, et al.           5    6         Ernst, et al. v. Roberts, et al.                   No. 02-2287

789 (E.D. Mich. 2002). Plaintiffs filed a timely notice of                           -- George Elworth, Roy Pentilla, Eric Doster, Lyle Van
appeal.                                                                              Houten, and Robert Ransom, all of whom are members
                                                                                     of the Michigan Judges Retirement Board (“MJRB”).
                           Substantive Facts
                                                                                     Under the JRA, as amended in 1996, all Michigan judges
  The district court stated the background facts that gave rise                      are covered by one of two pension plans. “Tier 1” is a
to this case as follows:                                                             defined benefit plan; “Tier 2” is a defined contribution
                                                                                     plan.[3] Judges who first entered office before March 31,
  The plaintiffs in this case are a Michigan circuit judge, a                        1997, were in Tier 1. Judges who first entered office
  Michigan probate judge, a Michigan district judge, and                             thereafter were in Tier 2. The 1996 amendment to the act
  a retired Michigan circuit judge. The case has not been                            permitted Tier 1 participants to move to Tier 2, but they
  certified as a class action, nor have plaintiffs moved yet                         had to make this election by a certain date in 1998.
  for class certification. Nonetheless, plaintiffs purport to
  represent all active and retired Michigan judges who are                       Ernst v. Roberts, 225 F. Supp. 2d at 783-84. More of a
  “similarly situated.” The basic allegation in the                              factual background is not needed, for purposes of this
  complaint is that the Judges Retirement Act of 1992                            opinion, because the district court never reached the merits.
  (“JRA”), which created the Judges Retirement System                            As explained below, the district court’s dismissal of the
  (“JRS”), treats judges of the 36th District Court more                         federal claims under the Eleventh Amendment constituted a
  favorably than the “non-36th District Court judges.”                           dismissal for lack of jurisdiction.
  Plaintiffs claim that this disparity violates equal
  protection because there is no rational basis for providing                                                   DISCUSSION
  judges of the 36th District Court more favorable
  pensions.                                                                        Plaintiffs make four arguments. First, Plaintiffs claim that
                                                                                 the district court erred in dismissing the federal claims on the
  The defendants are:                                                            basis of Eleventh Amendment immunity. Secondly, Plaintiffs
                                                                                 argue that even if, arguendo, the federal claims were properly
  -- Mark Murray[2], the Treasurer of the State of                               dismissed due to Eleventh Amendment immunity, the district
  Michigan;
  -- Christopher DeRose, the Director of the Office of                                3
  Retirement Systems, which is part of the Michigan                                       These two types of plans d iffer as follows:
  Department of Management and Budget. DeRose is also                                 In a defined contribution plan “employees are not promised any
  the executive secretary of the Judges Retirement System;                            particular level of benefits; instead they are pro mised only that
  and                                                                                 they will receive the ba lance in their individual accounts.”
                                                                                      Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 637
                                                                                      n.1, 110 L. Ed . 2d 5 79, 110 S. Ct. 2668 (199 0). T his is in
                                                                                      contrast to a defined bene fit plan which pro vides a fixed b enefit
    2
                                                                                      to the employee. 29 U.S.C. § 1002 (35).
      The tre asu re r at th e time o f th e complain t, Mark A . M urray, was
replaced by Douglas B. Roberts, who was substituted as a Defendant, by           Ben nett v. CONRAIL Matched Sav. Plan Admin. Comm., 168 F.3d 671,
a district court order, on November 8, 2001.                                     675 n.2 (3d C ir. 1999).
No. 02-2287                       Ernst, et al. v. Roberts, et al.             7    8       Ernst, et al. v. Roberts, et al.                    No. 02-2287

court erred in dismissing the claims with prejudice. Thirdly,                       asserting immunity establishes that immunity applies.6 In
Plaintiffs aver that the district court erred by granting                           burden allocation, as well as in other respects, Eleventh
Defendants’ motion to dismiss without identifying the precise                       Amendment immunity may be considered to be an affirmative
rule upon which it relied and by ruling without affording                           defense to jurisdiction.7
Plaintiffs discovery regarding the Eleventh Amendment
immunity defense. Finally, Plaintiffs argue that if Defendants                         Plaintiffs argue that Eleventh Amendment immunity does
are not entitled to Eleventh Amendment immunity, then the                           not bar the federal claims in this case.       The Eleventh
district court should be required to revisit the issue of                           Amendment bars suits against a state by citizens of another
assuming supplemental jurisdiction over Plaintiffs’ state law                       state, and, under Hans v. Louisiana, 134 U.S. 1, 10 S. Ct. 504,
claims.                                                                             33 L. Ed. 842 (1890), the Eleventh Amendment prohibits
                                                                                    citizens from suing their own state. Barton v. Summers, 293
  Because we rule that Defendants are not entitled to                               F.3d 944, 948 (6th Cir. 2002) (citing Hans).
Eleventh Amendment immunity on any of the claims, we
decline to address Plaintiffs’ second argument. We take the                           When a state or an arm of the state is sued, there are various
remaining three issues in order.                                                    exceptions to immunity; 8 but none of these exceptions fully

  The first two issues that we address are reviewed de novo,
because these issues address the ruling on Eleventh                                     6
Amendment immunity. Barton v. Summers, 293 F.3d 944,                                     The party asserting Eleventh Amendment immunity bears the
                                                                                    burden of establishing it. Gragg v. Ky. Cabinet for Workforce Dev., 289
948 (6th Cir. 2002).                                                                F.3d 958 , 963 (6th Cir. 2002).
                                       I.                                               7
                                                                                          Higgins v. Mississippi, 217 F.3d 951 , 953 (7th Cir. 2000)
                                                                                    (characterizing Eleventh Amendment immunity as “an affirmative
  Eleventh Amendment immunity bars federal courts from                              defense rather than a limitation on jurisdiction.”).
exercising jurisdiction4 over a claim,5 where the party                                  Generally, the party asserting jurisdiction has the burden of
                                                                                    establishing it. E.g., Hudson v. Coleman, 347 F.3d 13 8, 141 (6th Cir.
                                                                                    2003). The difference b etween Eleventh A mendme nt immunity and other
                                                                                    jurisdictional issues, in this respect, supports the view of the immunity as
     4
                                                                                    an affirmative defense to jurisdiction.
      Eleventh Amendm ent immunity is an issue of jurisdiction, but the                  There is further support for the characterization as an affirmative
issue is no longer classified as sim ply a question of subject matter               defense in the fact that Eleve nth Amendment immunity can be waived by
jurisdiction. Ku v. Tennessee, 322 F.3d 431, 434 (6th Cir. 2003) (“by               the state or agency (see infra note 8), while original jurisdiction cannot be
creating a clear rule of waiver by removal, the Supreme Court [in Lapides           waived. E.g., United States v. County of Muskegon, 298 F.3d 569 , 579
v. Bd. of Regen ts of the Univ. Sys. of Ga., 535 U.S. 613, 122 S. Ct. 1640,         (6th Cir. 2002).
152 L. Ed. 2d 806 (2002)] has unequivocally rejected the view that, in                   The notion of this imm unity as an affirmative defense to jurisdiction
cases over which the federal court otherwise has original jurisdiction, the         helps to exp lain its differences from other issues of jurisdiction. Henry v.
additional ‘jurisdictional bar’ erected by the Eleventh Amendme nt should           Metro. Sew er Dist., 922 F.2d 332, 338 (6th Cir. 1990) (“the atypical
be treated as a matter o f ‘subjec t matter’ jurisdiction rather than ‘person al’   jurisdictional bar of the eleventh amendment”).
jurisdiction.”).
                                                                                        8
     5
                                                                                         Even if the party being sued is a state or an arm of the state,
      Eleventh Amendment analysis must be d one on a claim-by-claim                 Eleventh Amendment immunity will not apply to a claim, under various
basis. Henry v. Metro. Sewer D ist., 922 F.2d 33 2, 338 (6th Cir. 1990).            circumstances.
No. 02-2287                     Ernst, et al. v. Roberts, et al.         9    10    Ernst, et al. v. Roberts, et al.                    No. 02-2287

governs the present case. Contrary to the dissent’s                           great pains to emphasize that monetary relief is sought. But,
characterization of our holding,9 we do not rule that the state               as explained below, the question of Eleventh Amendment
has waived its immunity to suit. The dissent emphasizes that                  immunity hinges on whether or not the state would potentially
a waiver of state court immunity does not constitute a waiver                 be liable for a judgment in the case; hence, the fact that
of immunity to suit in federal court. This proposition is                     monetary relief is sought is not determinative–rather, the key
perfectly true and equally irrelevant. Our holding is not that                question is where the monetary relief would come from, if a
the state has waived immunity to suit against the JRS; rather,                judgment were entered. (The dissent rightfully acknowledges
for the reasons stated below, we hold that the JRS is akin to                 this point, stating, “To rephrase the issue a bit: by providing
a political subdivision (and not an arm of the state), which                  the requested relief, would we be ordering prospective
means that immunity never applied. Because immunity never                     injunctive relief, or monetary damages? And if the latter,
applied, it was not waived.                                                   where would the money come from?”)
  Under Ex Parte Young, there is no immunity for a claim for                     The dispute as to jurisdiction in the present case arises due
only prospective, non-monetary relief. See supra note 8.                      to the fact that the Eleventh Amendment does not bar all suits
Various federal claims in this case clearly seek monetary                     against non-federal public agencies.            The Eleventh
relief, including the refund and payment of portions of                       Amendment does not apply to political subdivisions, such as
Plaintiffs’ contributions to the JRS. Because we hold that                    municipalities. Monell v. Dep’t of Soc. Servs., 436 U.S. 658,
none of the claims for monetary relief are covered by                         691 (1978). As stated in Hall v. Medical College of Ohio,
Eleventh Amendment immunity, we need not reach the issue
of whether there are any federal claims seeking only                            When an action is brought against a public agency or
prospective, non-monetary relief. The dissent has gone to                       institution, and/or the officials thereof, the application of
                                                                                the Eleventh Amendment turns on whether said agency
                                                                                or institution can be characterized as an arm or alter ego
                                                                                of the state, or whether it should be treated instead as a
     Immunity may be waived by the state or agen cy. Lapides v. Bd. of          political subdivision of the state.
Reg ents, 535 U.S. 613 , 619 (2002); Law son v. Shelby C oun ty, 211 F.3d
331, 334 (6th Cir. 2000); Nelson v. Miller, 170 F.3d 64 1, 646 (6th Cir.      742 F.2d 299, 301 (6th Cir. 1984) (citing Mt. Healthy City
1999).
     Immunity may be waive d by C ongress. Nelson v. Miller, 170 F.3d
                                                                              Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280, 97 S. Ct.
at 646; Will v. Mich. Dep’t of State Police, 491 U.S. 58, 66 (1 989).         568, 50 L. Ed. 2d 471 (1977)). The question before us is
     There will be no immunity if the claim challenges the                    whether the JRS is identifiable as an arm or alter ego of the
constitutionality of actions against state officials and seeks o nly          state, as is necessary for the JRS and its agents10 to be
prospective, non-monetary dam ages, such as an injunc tion. Rossborough
Mfg. Co. v. Trim ble, 301 F.3d 482, 489 (6th Cir. 2002) (citing Edelman
v. Jordan, 415 U.S. 651, 664, 94 S. Ct. 1347, 39 L. Ed. 2d 662 (1974) and
Ex Parte Young, 209 U.S. 123 , 150 -60, 2 8 S. C t. 441 , 52 L. Ed. 714            10
                                                                                     “In addition to the states themselves, the Eleventh Amendment
(1908)); Nelson v. Miller, 170 F.3d at 646.                                   immunizes departments and agencies of the states. Pennhurst State Sch.
    9
                                                                              & Hosp. v. Halderman, 465 U.S. 89, 1 00, 1 04 S . Ct. 900, 79 L. Ed. 2d 67
      The dissent states, “In fact, on the flip side, the Supreme Court has   (1984).” Dubuc v. Mich. Bd. of Law Exam ’rs, 342 F.3d 61 0, 615 (6th Cir.
consistently held that a state does not waive its Eleventh Amendment          2003).
immunity by consenting to suit only in its own co urts.” (E mph asis in           W hen sued in their official capacities, individual defendants enjoy
origina l.)                                                                   immunity if they are officials of a state agency that would enjoy
No. 02-2287                     Ernst, et al. v. Roberts, et al.         11     12   Ernst, et al. v. Roberts, et al.             No. 02-2287

covered by Eleventh Amendment immunity, or whether, to                            Citing Blake, this Court determined that Eleventh
the contrary, the JRS is better deemed a political subdivision,                 Amendment immunity barred suit against the Medical
akin to a municipality.                                                         College of Ohio at Toledo (“MCO”), in part due to the
                                                                                definition of this entity under state law; in explaining the
   State law is crucial to the analysis, because state law                      decision, this Court explicitly emphasized the importance of
defines the nature of agencies. In Mount Healthy City School                    state law, which can be controlling, in Eleventh Amendment
District Board of Education v. Doyle, the Supreme Court                         analysis:
made clear that state law plays a role in determining whether
an agency is more akin to a municipality or to an arm of the                      Although we can find no reported decision, federal or
state:                                                                            state, dealing specifically with the status of MCO, it is
                                                                                  highly significant that the statute which created and
  The issue here thus turns on whether the Mt. Healthy                            governs the University of Cincinnati as a state university
  Board of Education is to be treated as an arm of the State                      is virtually identical in its terms to the statute which
  partaking of the State’s Eleventh Amendment immunity,                           created and governs the Medical College of Ohio. See
  or is instead to be treated as a municipal corporation or                       Ohio Rev. Code Ann. §§ 3361.01-.05 (Page 1980). It
  other political subdivision to which the Eleventh                               would therefore appear that Ohio considers MCO an
  Amendment does not extend. The answer depends, at                               “arm of the state,” and not merely a political subdivision
  least in part, upon the nature of the entity created by state                   thereof. The question of its status for purposes of the
  law.                                                                            Eleventh Amendment is, of course, a matter of federal,
                                                                                  not state, law, but Ohio decisions and laws shedding light
429 U.S. 274, 280 (1977), superseded on other grounds by                          on the relationship of the school to the state government
statute, by 5 U.S.C. § 1221(e)(2). In accordance with this                        are important, and potentially controlling. See Blake v.
principle, in Blake v. Kline, 612 F.2d 718 (3d Cir. 1979), state                  Kline, 612 F.2d at 722, see also Hughes-Bechtol, Inc. v.
law was vital to the analysis of a state treasury’s potential                     West Virginia Board of Regents, 737 F.2d 540, slip at 5
legal liability.     The Third Circuit stated that once                           (6th Cir. 1984); Long v. Richardson, 525 F.2d at 75, 79.
Pennsylvania made a contribution to a retirement plan, the
funds contributed might no longer be general state funds,                       Hall, 742 F.2d at 303-04. The law of this Circuit is so clear
under Pennsylvania law. Id. at 724, 728 (remanding for                          in emphasizing the importance of state law in questions of
further inquiry into state law).                                                Eleventh Amendment immunity that another circuit has cited
                                                                                our Circuit on this issue. Jacintoport Corp. v. Greater Baton
                                                                                Rouge Port Comm’n, 762 F.2d 435, 439 (5th Cir. 1985) (“the
                                                                                . . . Sixth Circuit[] ha[s] held that although the question of
                                                                                Eleventh Amendment immunity is a matter of federal law,
immunity. Will v. Mich. Dep’t of State Police, 491 U.S. 58, 71 (1989)
                                                                                state decisions concerning the relationship of the entity to the
(stating, regarding a claim against an individual state official, pursuant to   state may be an important, and under certain circumstances a
42 U.S .C. § 19 83, “a suit against a state official in his or her official     controlling factor in determining immunity under the
capacity is not a suit against the official but rather is a suit against the    Eleventh Amendment.”) (citing Hall, 742 F.2d at 302;
official’s office. As such, it is no different from a suit against the State    internal quotation marks omitted).
itself.”) (citations omitted). See also Hall v. Med. Coll. of Oh io, 742 F.2d
299, 301 (6th Cir. 1984).
No. 02-2287                 Ernst, et al. v. Roberts, et al.    13    14    Ernst, et al. v. Roberts, et al.              No. 02-2287

   The dissent misconstrues the law, here, by failing to              ultimately be liable for any money judgment against the
recognize the significant role that state law plays in the            entity. Brotherton v. Cleveland, 173 F.3d 552, 560-61 (6th
analysis. The dissent states, “If the state treasury is immune        Cir. 1999).”); Brotherton v. Cleveland, 173 F.3d 552, 561
from liability . . . , it is because of the Eleventh Amendment        (6th Cir. 1999) (“The Hess [v. Port Auth. Trans-Hudson
and not Article IX, § 24 of the Michigan Constitution or the          Corp., 513 U.S. 30 (1994)] opinion focused on the impact on
Musselman decision.” Apparently, in the dissent’s view, the           a State treasury, and [Regents of the University of California
Eleventh Amendment provides this Court the basis for                  v.] Doe slightly altered that emphasis by establishing that
determining whether a non-federal public agency is akin to an         potential liability, not actual ability to pay or indemnification,
arm of a state or is akin to a municipality. The dissent would        determines the Eleventh Amendment status of an entity. See
have us consult the Eleventh Amendment to determine                   Doe, 117 S. Ct. at 904-05.”). See also Alkire v. Irving, 330
whether or not the Michigan state treasury could potentially          F.3d 802, 812 (6th Cir. 2003) (“Hess’s emphasis on the State
be held liable for a judgment against the JRS. This reasoning         treasury”).
overlooks this Court’s pronouncement that in employing
Eleventh Amendment analysis to determine whether an entity              Prior to Hess v. Port Authority Trans-Hudson Corp., 513
is akin to an arm of the state or is akin to a municipality, state    U.S. 30, 51 (1994), potential state treasury liability was only
statutes and state court decisions “are important, and                one of a number of factors in the Eleventh Amendment
potentially controlling.” Hall, 742 F.2d at 303-04.                   analysis. The other factors included the entity’s status under
                                                                      state law; whether the entity performs a governmental or
   The general question of how to characterize a non-federal          proprietary function; whether the entity has been separately
public entity has not been left to federal courts’ whim or            incorporated; the degree of autonomy that the entity exercises
intuition. Rather, under established case law, in Eleventh            over its own operations; whether the entity can sue or be sued
Amendment analysis, the question of whether a public entity           and enter into contracts; immunity from state taxation; and
is best characterized as an arm or alter ego of the state, instead    whether the sovereign has immunized itself from
of being deemed a political subdivision of the state, hinges on       responsibility for the entity’s operations. Hall, 742 F.2d at
whether there is potential legal liability of the state treasury      302 (quoting Blake v. Kline).
to satisfy a judgment. If a claim against a public agency
exposes the state treasury to potential legal liability, then            But Hess enhanced the importance of state treasury
Eleventh Amendment immunity bars the claim from being                 liability, to the extent that, after Hess, the possibility arose
heard in federal court; if there is no such potential liability,      that other factors (aside from state treasury liability) can no
then there is no immunity. Regents of the Univ. of Cal. v.            longer be considered at all. In Brotherton v. Cleveland, we
Doe, 519 U.S. 425, 431 (1997) (“[I]t is the [state] entity’s          were able to reach a ruling without determining whether Hess
potential legal liability for judgments, rather than its ability or   had eliminated any consideration of the other factors, and we
inability to require a third party to reimburse it, or to             explicitly left this question unresolved. 173 F.3d at 561
discharge the liability in the first instance, that is relevant in    (“Whether we view as dispositive Hess's emphasis on the
determining the underlying Eleventh Amendment question.”);            State treasury, or interpret it as placing significant weight on
Dubuc v. Mich. Bd. of Law Exam’rs, 342 F.3d 610, 615 (6th             one factor of a multi-factor test, we conclude that EBAA may
Cir. 2003) (“To determine whether an entity is a state                not properly invoke the Eleventh Amendment.”) (citation
department or agency for purposes of the Eleventh                     omitted).
Amendment, the primary issue is whether the state would
No. 02-2287                 Ernst, et al. v. Roberts, et al.    15    16     Ernst, et al. v. Roberts, et al.                     No. 02-2287

   In Dubuc, we dealt with the question of whether the other          to clearly point towards the opposite conclusion of that
factors (aside from state treasury liability) survived Hess in        reached as to state treasury liability. For example, in cases in
any form. We ruled that when no evidence is presented                 which it appeared that there were no potential state treasury
regarding the issue of whether the funds to satisfy a judgment        liability, but all or almost all of the other factors clearly
would come from the state treasury, the other factors may be          indicated that the agency was akin to an arm of the state,
considered. 342 F.3d at 615 (“The parties have not submitted          perhaps immunity would apply.
any evidence regarding whether the State of Michigan would
be ultimately responsible for any money judgment against the             But we need not determine which interpretation of the role
Board or the Bar. The other factors, however, weigh in favor          of the other factors is correct, because in the present case it is
of finding the Board and the Bar immune from this lawsuit.”).         undisputed that there is sufficient evidence and legal authority
However, in Dubuc and in Alkire v. Irving, 330 F.3d 802 (6th          to support a conclusion as to state treasury liability, 11 and the
Cir. 2003), we reiterated our statement from Brotherton that,         other factors do not align together to counter the state treasury
after Hess, it is unclear whether other factors may even be           liability analysis. Quite a few of the other factors (apart from
considered when evidence is presented regarding the whether           potential liability of the state treasury) support the view that
the state treasury would be liable for a judgment. Dubuc, 342         the JRS is akin to a municipality. The JRS’s function is more
F.3d at 615 (citing Brotherton); Alkire, 330 F.3d at 811-12           aptly characterized as proprietary than as governmental,
(citing Brotherton).                                                  because the JRS’s function is for the profit or material benefit
                                                                      of itself (and its beneficiaries), and not the general public.12
  Our cases uniformly make clear that, even if the other              The JRS enjoys a fair degree of autonomy. E.g., MICH.
factors can be considered, still, the most significant factor is      COMP. LAWS § 38.2204(1) (“The retirement board has the
potential liability of the state treasury. Alkire, 330 F.3d at 811    rights, authority, and discretion in the proper discharge of
(“we now recognize that the question of who pays a damage             retirement board duties pursuant to the executive organization
judgment against an entity as the most important factor in            act of 1965, Act No. 380 of the Public Acts of 1965, being
arm-of-the-state analysis, though it is unclear whether it is the     sections 16.101 to 16.608 of the Michigan Compiled Laws.”).
only factor or merely the principal one.”) (citing Brotherton).       It is undisputed that the JRS can sue and be sued in state
   In light of the statements in Brotherton, Alkire, and Dubuc,
indicating that Hess may have completely eliminated any
consideration of the other factors, we reiterate the position
taken in those cases: potential liability of the state treasury is         11
the most important factor, and the other factors may have                     The dissent reaches a different conclusion from ours, as to potential
                                                                      state treasury liability, but there is no dispute that we have sufficient
been rendered completely obsolete by Hess. This could mean            evide nce and legal autho rity to decide the issue. Cf. Dubuc, 342 F.3d at
that the other factors are of no significance, unless (as in          615.
Dubuc) there is not sufficient evidence or legal authority to
support a conclusion as to state treasury liability. Arguably,             12
                                                                              According to B LACK’S L A W D ICTIONARY (7th ed. 1 999 ), a
there is also the possibility that other factors could also prove     “governmental function” is the legally authorized cond uct of a
significant in cases in which there is sufficient evidence and        government agenc y “that is carried out for the b enefit of the general
legal authority to support a conclusion as to potential state         public.” Id. at 704. A “proprietary function” is “[a] m unicipality’s
                                                                      conduct that is performed for the profit or benefit of the municipality
treasury liability, but all or almost all of the other factors were   rather than for the benefit of the general public.” Id. at 1235.
No. 02-2287                       Ernst, et al. v. Roberts, et al.       17     18   Ernst, et al. v. Roberts, et al.             No. 02-2287

court.13 The JRS can enter into contracts: the JRS has the                      conclusion, the other remaining factors could not possibly
statutory authority to enter into contracts with private                        sway our conclusion that there is no Eleventh Amendment
individuals or corporations; this authority has been exercised,                 immunity.
e.g., to retain actuarial services;14 also, the JRS enters into
contracts with the state, from whom the JRS leases office                          Thus, we proceed to the analysis of the key factor, potential
space and purchases legal, administrative, and investment                       legal liability of the state treasury for a judgement.
services.15                                                                     Theoretically, there are two ways in which potential legal
                                                                                liability for a judgment against the JRS might reach state
  To be sure, certain of the remaining factors favor the view                   treasury funds. First, JRS funds might be commingled with
of the JRS as an arm of the state; for example, it is undisputed                general state funds–which is to say that JRS funds might be
that the JRS is not separately incorporated. But we express                     available for general use by the state for other purposes,
no definitive view as to the remaining other factors, because,                  unrelated to the retirement system. If funds are commingled,
even if they all weighed in favor of Defendants’ position, they                 then any JRS liability would be tantamount to state treasury
would not be sufficient to change the analysis. In light of the                 liability. Secondly, even if JRS funds are segregated from
numerous factors enumerated above, which indicate that the                      state treasury funds, the JRS might not have sufficient funds
JRS is akin to a municipality, and in light of our analysis of                  to satisfy a judgment; applicable state law could make state
potential state treasury liability below, reaching the same                     treasury funds available to satisfy the part of the judgment
                                                                                that exceeded the amount of funds available to the JRS. We
                                                                                examine both possibilities.
    13
        In a state court action alleging discrimination on much the same
basis that discrimination is alleged in the present action, the JRS was           A. Whether JRS Funds Are Segregated from State
named as the defendant. The matter was contested on the merits. It was               Treasury Funds
undisp uted that the JR S could be sued in state co urt. (J.A. at 312 .)
     The dissent somehow misses this point, stating, in its footnote 16,          The first question is whether JRS funds are commingled
“This leads to a curious result: although the state canno t be sued in state    with general state funds. If the JRS’s funds are not separate
court because it has exercised its sovereign immunity, it can be sued in
federal court because it cannot be sued in state court.” The dissent
                                                                                from the state treasury, then any judgment against the JRS
conflates the JR S with the state. It is undisputed that the JRS can be sued    would necessarily impose liability on the state treasury.
in state co urt.
                                                                                  Defendants argue that Michigan law makes retirement
    14
       M ICH . C O M P . L A W S § 38.2205 (“The department shall be            funds general state funds. Defendants cite the Michigan
respo nsible for the budgeting, procurement, and related management             Constitution, Art. IX, § 19, which specifies, “The state shall
functions of the retirement system. The director of the bureau of               not subscribe to, nor be interested in the stock of any
retirement systems in the dep artment is the executive secretary of the         company, association or corporation, except as follows:
retirement system. The executive secretary, with dep artment app roval,
shall employ the services of an actuary and, subject to rules of the civil      (A) Funds accumulated to provide retirement or pension
service commissio n, shall em ploy m edica l advisers, clerical, technica l,    benefits for public officials and employees may be invested
and administrative employees the executive secretary considers necessary        as provided by law.” Defendants argue, “If the retirement
for the proper operation of the retirement system.”); (J.A. 316) (JRS           funds were not considered State funds, there would be no
bud get).                                                                       need for the framers to carve out this exception.”
    15                                                                          (Defendants’ Br. at 20 n.9.) However, this argument is one of
         The paym ents for these services are substantial. See infra note 17.
No. 02-2287                 Ernst, et al. v. Roberts, et al.   19    20     Ernst, et al. v. Roberts, et al.                    No. 02-2287

semantics. The use of the term “state” in Art. IX, § 19 of the         However, the dissent mischaracterizes the significance of
Michigan Constitution does not establish that JRS funds are          the state contributions to the JRS, under MICH. COMP. LAWS
state funds, under Eleventh Amendment analysis. Eleventh             § 38.2302. The presence of funds contributed by the state is
Amendment analysis hinges upon potential state treasury              simply the scenario described in Blake–after the state funds
liability–Defendants’ argument here does not bear on this            are contributed to the retirement plan, “that money loses its
issue.                                                               identity as [general state] funds and becomes trusteed funds
                                                                     earmarked for a particular purpose.” 612 F.2d at 724. State
  Other sources of law make clear that JRS funds are                 law specifies with clarity16 that JRS funds are kept in a
segregated from the state treasury. This means that relief for       separate trust from general state funds; thus, funds taken from
Plaintiffs’ claims would not come from general state funds           the JRS to satisfy a judgment would not be funds from the
but, rather, from the trust devoted solely to the JRS. As stated     state treasury. In other words, once general state funds (from
in MICH. COMP. LAWS § 38.2604(6):                                    the state treasury) are contributed to the JRS, the funds
                                                                     become specifically earmarked for JRS use and cannot be
  The assets of the retirement system shall be held in trust         used for any other purpose; JRS funds cease to constitute
  and invested for the sole purpose of meeting the                   general state funds. MICH. COMP. LAWS § 38.2604(6).
  legitimate obligations of the retirement system and shall          Hence, a judgment against the JRS does not impose liability
  not be used for any other purpose. The assets shall not            on the state treasury.
  be used for or diverted to a purpose other than for the
  exclusive benefit of the members, vested former                      Indeed, not only is state law clear on this matter; also, the
  members, retirants, and retirement allowance                       record before us helps to confirm our conclusion. The JRS
  beneficiaries before satisfaction of all retirement system         makes arms length payments to the state, for office rental
  liabilities.                                                       space and services rendered.17 The existence of these
                                                                     payments from the JRS to the state again suggests that the
See also MICH. COMP. LAWS § 38.2208 (stating that                    funds of these two entities were not commingled; the detailed
retirement payments are “payable out of funds of the                 accounting of the payments further supports the notion that
retirement system”).                                                 funds were not commingled.
   It is true that some of the funds in the JRS are contributed
by the state. Part of the JRS comes from contributions from
                                                                          16
the public employees themselves (such as Plaintiffs). As                    In Blake, the Pennsylvania Attorney General advanced the notion
Plaintiffs state, “Any judgment for Plaintiffs . . . might require   that under Pennsylvania law the retirement funds become segregated. 612
a refund to Plaintiffs of contributions illegally extracted from     F.2d at 724. The Pennsylvania Attorney G enera l did no t cite any state
them . . . .” (Plaintiffs’ Br. at 23.) The remainder of the JRS      law supporting this view, and thus further inquiry was needed.
                                                                     Consequently, the case was rem anded to the district court, with the Third
comes from annual state contributions, under MICH. COMP.             Circuit vacating district co urt’s order dismissing the complaint as barred
LAWS § 38.2302. See Ernst v. Roberts, 225 F. Supp. 2d at             by the E leventh Amendment. Id. at 728.
789 (“Part of the relief plaintiffs are seeking in this case is a
                                                                          17
refund of the allegedly overfunded Tier 1 plan which, they                  In 2000, the JRS paid to the state $1211 in building rentals; $8096
concede, includes ‘the State’s mandatory contribution to the         in technological support; $38,224 in fees to the Attorney General; and
Tier 1 Plan.’”) (emphasis added).                                    $65,000 for investment services. In 1999, the corresponding figures were
                                                                     $11 83, $ 16,3 79, $ 377 6, and $63 ,600 , respectively. (J.A . at 307 .)
No. 02-2287                Ernst, et al. v. Roberts, et al.   21    22     Ernst, et al. v. Roberts, et al.                       No. 02-2287

  B. Whether State Treasury Funds Might Be Called                   treasury being forced to actually pay part of a judgment may
     Upon, if the JRS Lacked Sufficient Funds to Satisfy            be quite low.18
     a Judgment
                                                                       Defendants allege that a legal obligation, creating state
   Even where, as here, the agency’s funds are segregated           treasury liability, arises from Art. IX, § 24 of the Michigan
from the state treasury, there remains the possibility that a       Constitution, which states:
monetary judgment would exceed the current amount of funds
held by the agency and that such a judgment could reach the           The accrued financial benefits of each pension plan and
state treasury. We must determine whether, under state law,           retirement system of the state and its political
if there were a judgment against the JRS that exceeded the            subdivisions shall be a contractual obligation thereof
JRS’s current level of funds, the State of Michigan could             which shall not be diminished or impaired thereby.
possibly be compelled to use state treasury funds to satisfy the      Financial benefits arising on account of service rendered
remainder of the judgment.                                            in each fiscal year shall be funded during that year and
                                                                      such funding shall not be used for financing unfunded
   In determining “potential legal liability,” we do not              accrued liabilities.
consider the actual level of funding of the JRS. It is irrelevant
whether the JRS actually has enough funds to satisfy the               Yet there is no potential legal liability of the state treasury
amount sought in any judgment. Brotherton, 173 F.3d at 561          if there cannot be a legal action to compel the state to divert
(“The Hess opinion focused on the impact on a State treasury,       funds from the state treasury to satisfy a judgment that
and [Regents of the University of California v.] Doe slightly       exceeds the JRS’s funds. Legal liability exists only when
altered that emphasis by establishing that potential liability,     some legal action can be brought to enforce a legal duty. 19
not actual ability to pay or indemnification, determines the        The case of Musselman v. Governor of Michigan, 533
Eleventh Amendment status of an entity. See Doe, 117 S. Ct.         N.W.2d 237, 448 Mich. 503 (1995) establishes that Art. IX,
at 904-05.”) (emphasis added). Rather, the relevant question        § 24 does not create any right of action that could force state
is whether the state could be legally obligated to pay part of
a judgment, under the hypothetical scenario in which the
funds of the separate agency (in this case, the JRS) were not            18
                                                                            It is not clear whether a court may ever separate a claim into the
sufficient to satisfy the judgment. For the purposes of this        portion that could be satisfied by segregated a gency funds and the excess
hypothetical inquiry, we must assume that the amount of             portion that might reach the state treasury–essentially, Plaintiffs have
liability imposed by a judgment would exceed the agency’s           suggested such a scenario, through an offered stipulation. Whether a
current level of funds; we then ask whether the state treasury      plaintiff can separate a claim in this manner is a question that we need not
                                                                    decide in this case.
could be held liable for the remainder of the judgment. If,
under our hypothetical inquiry, the state treasury could be              19
                                                                           “Liability” is universally defined to inc lude a mechanism to
liable for a judgment on a claim, then that claim is barred by      com pel enforcement. See, e.g., B LACK’S L A W D ICTIONARY 925 (7th ed.
Eleventh Amendment immunity–there is potential legal                1999) (“liability” is “[t]he quality or state of being legally obligated or
liability, notwithstanding that the probability of the state        accountable; legal responsibility to another or to society, enforceable by
                                                                    civil remedy or crimina l punishment.”); W EBSTER ’S T H IR D N EW
                                                                    I NTERNATIONAL D IC T IO N A R Y 1302 (1993) (defining “liability,” inter alia,
                                                                    as “accountability and responsibility to another enforc eable by legal civil
                                                                    or criminal sanctions”).
No. 02-2287                 Ernst, et al. v. Roberts, et al.   23    24    Ernst, et al. v. Roberts, et al.             No. 02-2287

treasury funds to be used to pay any part of a judgment                   Constitutional Convention of 1961, p. 773 (delegate
against the JRS. In Musselman, the Michigan legislature did               Brake).]
not appropriate money for health benefits earned by current
employees. 533 N.W.2d at 239-40, 448 Mich. at 507-08.                  In other words, insofar as the plaintiffs are asking us to
The plaintiffs alleged that the legislature’s action violated Art.     require the Legislature to appropriate funds for
IX, § 24. 533 N.W.2d at 240, 448 Mich. at 509-10. Yet, in              retirement health care benefits, we understand that the
denying mandamus, the Supreme Court of Michigan                        intention of the drafters was that the second sentence of
explained that there could be no legal action to enforce the           Const. 1963, art. 9, § 24 is not self-executing. Because
“shall be funded” provision of Art. IX, § 24:                          the provision does not alter the rule that legislative action
                                                                       is necessary to appropriate funds, it fails to lay down
  Given that the plaintiffs have failed to show that there is          rules by means of which its principles may be given the
  a pool of funds available to be transferred to the reserve           force of law.
  for health benefits, the requested relief necessarily
  involves funds from the state treasury. The only 533 N.W.2d at 245-46, 448 Mich. at 522-23 (footnotes and
  defendant with authority to appropriate funds from the             internal quotation marks and brackets omitted).
  treasury is the Legislature. See Board of Education of
  the City of Detroit v. Elliott, 319 Mich. 436, 453; 29                The Supreme Court of Michigan explained that the purpose
  N.W.2d 902 (1947). “No money shall be paid out of the              of Art. IX, § 24 was to prevent the legislature from borrowing
  state treasury except in pursuance of appropriations made          from the accrued assets of plan participants. 533 N.W.2d at
  by law.” Const. 1963, art. 9, § 17.                                241-42, 448 Mich. at 511-12. Such borrowing, or “back
                                                                     door” spending, as it was called, could create situations in
  In this context, this Court lacks the power to require the         which the liabilities of a public retirement system far
  Legislature to appropriate funds.           This was the           surpassed the system’s assets. Id. Yet even where this
  understanding of the drafters of art. 9, § 24, who likewise        purpose was being circumvented–as in Musselman, where
  did not contemplate that the prefunding requirement                current health care benefits were not being funded–the
  could be enforced by a court. They expected that the               legislature could not be legally compelled to devote state
  decision to comply rested ultimately with the Legislature,         treasury funds to fund the benefits. 533 N.W.2d at 242, 448
  whom the people would have to trust:                               Mich. at 522 (“the drafters of art 9, § 24 . . . did not
                                                                     contemplate that the prefunding requirement could be
    It is the intention that we will put in each year                enforced by a court.”). The state treasury cannot be held
    enough in every fund to take care of the liability               legally liable, even where the very purpose of Art. IX, § 24 is
    occurring during that year, so it will not go farther            at stake.
    and farther behind.
                                                                        Under Musselman, a legal action cannot be maintained in
    . . . [But] there is no way to compel the legislature to         state court, in Michigan, to compel the state to devote state
    appropriate money. There is no way that I know of                treasury funds to fulfill the mandate of Art. IX, § 24. Nor
    to compel a city council to raise more money. We                 could Art. IX, § 24 provide the basis for any subsequent legal
    have to put some faith in somebody, and this is                  action in federal court to compel state treasury funds to be
    being put in the legislature. [1 Official Record,                devoted to fulfilling a judgment in a lawsuit. As stated in
No. 02-2287                       Ernst, et al. v. Roberts, et al.           25     26     Ernst, et al. v. Roberts, et al.                     No. 02-2287

Musselman, “[t]he only defendant with authority to                                     In a legal action, rights and remedies are separate
appropriate funds from the treasury is the Legislature.” 533                        elements.21 “[W]here there is a legal right, there is also a
N.W.2d at 245-46, 448 Mich. at 522. Needless to say, where                          legal remedy by suit or action at law, whenever that right is
there cannot be a legal action to enforce the Michigan                              invaded.” Marbury v. Madison, 5 U.S. 137, 163 (1803)
Constitution against the state treasury, there could be no                          (quoting BLACKSTONE ’S COMMENTARIES). However, the
action to enforce a state statute, such as MICH. COMP. LAWS                         scope of remedies for a legal right is not unlimited.
§ 38.2302, against the treasury. The Eleventh Amendment                             Musselman did not rule out the possibility of injunctive relief
bars any action against the state legislature, which, unlike the                    to enforce Art. IX, § 24. For instance, if the state attempted
JRS, could never be considered a political subdivision akin to                      to divert JRS funds to finance state liabilities unrelated to the
a municipality but, rather, would always be identified as a                         JRS, then presumably Art. IX, § 24 would provide grounds
branch of the state itself.20 There can be no action in any                         for injunctive relief, independent of any rights established in
court to force the state treasury to pay any part of a judgment                     MICH. COMP. LAWS § 38.2604(6).22 Musselman simply made
relating to a federal claim in a lawsuit concerning the                             clear that there can be no monetary relief from the state
JRS–thus, the state treasury is not subject to potential legal
liability. Even if the JRS lacked sufficient funds to satisfy a
judgment in this case, the state treasury could not be held
liable for any unpaid portion of the judgment.                                           21
                                                                                              As stated in a scholarly commentary:

                                                                                         The scope of a cause of action . . . flows from the primary right
                                                                                         theory that every judicial action consists of the following
                                                                                         elements: (1) a p rimary right which is possessed by the p laintiff
                                                                                         and a correspo nding prima ry duty owed by the defendant; (2) a
                                                                                         wrong done by the defendant which consists of a breach of the
                                                                                         primary right and duty; (3) remedial right of the plaintiff and a
                                                                                         reme dial duty of the d efendant; (4) a remedy or relief.
     20
        The liability analysis regarding the JR S would no t apply to the state
legislature.                                                                        Elizabeth L. Hisserich, C omm ent, The C ollision of De claratory
      The JRS is a state-created p ublic agency that performs a function            Jud gm ents and Res Judicata, 48 UCLA L. R EV . 159, 165-66 (2000)
within the narrow area of retirement benefits. Thus, potential legal                (footnotes omitted ). See also Do rothy M . Rob ins, Comment, When the
liability analysis applies to determine whether the JRS is more akin to a           Gleam in Your Eye Becomes A G lare: C app ed D am age s in Fertility
municipality than an arm or alter ego of the state. But this analysis only          Malpractice Actions, 26 U.S.F. L. R EV . 717, 751 n.66 (19 92) (“Every
applies to specialized state entities, such as agencies that perform                judicial action must . . . involve the following elements: a primary right
administrative functions within narrow areas.                                       possessed by the pla intiff, and a corresponding primary duty devolving
      The state legislature is not specialized in one particular area but a         upon the defendant; a delict or wro ng do ne by the defendant which
constitutionally authorized branch of state government. M IC H . C ONST .           consisted in a breach of such prima ry right and duty; a remed ial right in
art. IV, § 1. The state legislature is by definition an arm of the state, not       favor of the plaintiff, and a remedial duty resting on the defendant
an agency. Of course, this distinction is ultimately moot. E ven if,                springing from this delict, and finally the remedy or relief itself.”)
arguendo, the state legislature were subject to po tential liability analysis,      (citations omitted).
immunity would apply. A federal monetary judgment for a claim against                    22
the state legislature would be interpreted as attempting to compel the                      An injunction wo uld enforce Art. IX, § 24’s provision that
legislature to use its authority to appropriate state tre asury funds to sa tisfy   “[f]inancial benefits arising on account of service rendered in each fiscal
the judgment. The claim would thus be barred by the Eleventh                        year shall be funded during that year and such funding shall not be used
Amendment, under po tential legal liability analysis.                               for financing unfunded acc rued liabilities.”
No. 02-2287                      Ernst, et al. v. Roberts, et al.          27     28    Ernst, et al. v. Roberts, et al.              No. 02-2287

treasury; the case did not rule out the possibility of a non-                     of the Supreme Court’s holding in Doe, this Court has
monetary remedy.                                                                  repeatedly referred to the term “liability” in characterizing the
                                                                                  legal standard that governs immunity analysis. Dubuc, 342
   Absent the Musselman case, it might have been argued that                      F.3d at 615 (“To determine whether an entity is a state
the state treasury could have been held liable pursuant to Art.                   department or agency for purposes of the Eleventh
IX, § 24. Governmental actors have been held liable for                           Amendment, the primary issue is whether the state would
damages based on rights granted in a constitution, even where                     ultimately be liable for any money judgment against the
no statute explicitly authorizes such damages. See Bivens v.                      entity.”) (citing Brotherton); Brotherton, 173 F.3d at 561
Six Unknown Named Agents of Fed. Bureau of Narcotics, 403                         (“The Hess opinion focused on the impact on a State
U.S. 388 (1971) (establishing monetary liability of federal                       treasury, and Doe slightly altered that emphasis by
officials for violations of the Fourth Amendment23). Thus,                        establishing that potential liability, not actual ability to pay or
absent a clear statement of law to the contrary, we would have                    indemnification, determines the Eleventh Amendment status
to hold that Art. IX, § 24 creates potential state treasury                       of an entity.”) (citing Doe).
liability. But Musselman clearly holds that there is no
potential state treasury liability. Consequently, none of the                        The dissent states that the majority’s “reasoning is faulty
claims are barred by Eleventh Amendment immunity.                                 because a state’s exercise of state sovereign immunity does
                                                                                  not control the question of federal constitutional immunity.”
   The dissent’s counter-arguments prove unpersuasive. The                        Indeed, the dissent repeatedly characterizes Michigan as
dissent states that “any funding requirement, even if it must                     exercising “state sovereign immunity.” However, the dissent
be honored by the legislature and not ordered by a court, will                    is mistaken, here. The state has not immunized the JRS from
necessarily impact on the state treasury.” However, an                            suit in state court; to the contrary, the JRS has been named as
“impact” on the state treasury–resulting from the legislature’s                   the defendant in an action in state court that was adjudicated
voluntary decision to appropriate funds to make up for a                          on the merits. See supra note 13. Nor does it appear that
possible depletion in an agency’s funds–is not akin to                            there would be state court immunity for any of the state
“liability.” The cases cited by the dissent in support of its                     officials who are named as Defendants in this case. See
proposition24 pre-date the Supreme Court’s adoption of the                        Marrical v. Detroit News, Inc., 805 F.2d 169, 173 (6th Cir.
term “potential legal liability” in Doe, which was decided in                     1986) (“We initially note that the Michigan legislature, when
1997. 519 U.S. at 431. The term “liability” has a precise                         it enacted its governmental immunity statute, declined to
meaning (discussed above). We have no reason to believe                           extend immunity to governmental officials and contemplated
that the Supreme Court used this term heedlessly. As a result                     that they would be subject to suit for torts committed in the
                                                                                  course of their duties.”).
    23
       At the time that Bivens was decided, 42 U.S.C. § 1983 had already             The Musselman case had nothing to do with state court
established that state officials may be held liable for damages for               immunity. Immunity is a defense, where a suit could
violations of the federal constitution. But this statute did not provide a        otherwise be brought (absent the immunity). E.g., Cartwright
basis for establishing the liability of federal officials for violations of the   v. City of Marine City, 336 F.3d 487, 490 (6th Cir. 2003)
federal constitution. Bivens, 403 U.S. at 399 n.1 (Harlan, J., concurring).       (“Qualified immunity is an affirmative defense shielding
    24                                                                            governmental officials from liability as long as their conduct
      Edelman v. Jordan, 415 U.S. 651 (1974); Fitzpatrick v. Bitzer, 519
F.2d 559 (2d Cir. 19 75), rev’d on other grounds, 427 U.S. 445 (1976).
                                                                                  does not violate clearly established statutory or constitutional
No. 02-2287                Ernst, et al. v. Roberts, et al.   29    30    Ernst, et al. v. Roberts, et al.             No. 02-2287

rights of which a reasonable person would have known.”)                  If the act which the state attorney general seeks to
(citation and internal quotation marks omitted); see also supra          enforce be a violation of the Federal Constitution,
note 7. Musselman held that there never had been any                     the officer, in proceeding under such enactment,
mechanism for bringing a suit in state court to enforce Art.             comes into conflict with the superior authority of
IX, § 24 against the state treasury. Thus, under Musselman’s             that Constitution, and he is in that case stripped of
holding, it would be superfluous, even meaningless, to speak             his official or representative character and is
of immunizing the state treasury from suit in state court to             subjected in his person to the consequences of his
enforce Art. IX, § 24. Immunity applies as a defense only                individual conduct. The state has no power to
where, contrary to the situation here, there is an existing              impart to him any immunity from responsibility to
means for bringing a suit.                                               the supreme authority of the United States.
   Nothing in our ruling would prevent a state from exercising        209 U.S. 123, 159-60, 52 L. Ed. 714, 28 S. Ct. 441
state sovereign immunity for its agencies. The state could            (1908).
prohibit suit in state court against any of its agencies. Where
a judgment against an agency would potentially impose               Dubuc, 342 F.3d at 617. This reasoning is inapposite here,
liability on the state treasury, the agency would be immune         because the state treasury would not be stripped of its public
from suit in federal court; the agency could also be immune         character, if a judgment rendered the JRS liable for violations
from suit in state court. Where a judgment against an agency        of the federal constitution.        The phrase “individual
could not potentially impose liability on the state treasury, the   defendants” is not used carelessly in the passage quoted by
agency could be immune from suit in state court but not in          the dissent. The state treasurer would liable for a judgment in
federal court. Our ruling in no way impedes states from             this case, but (per Musselman) only insofar as he could satisfy
implementing state court immunity for agencies.                     that judgment with funds from the JRS. The Eleventh
                                                                    Amendment is necessary to protect the state treasury precisely
   The dissent quotes from Dubuc, 342 F.3d at 617, which            because, unlike an individual defendant, the state treasury
states, “[w]hile [a provision of the Michigan Supreme Court         cannot possibly be stripped of its identity as part of the state.
Rules Concerning the State Bar of Michigan providing the
staff of the State Bar and the Board of Law Examiners] may             Under the dissent’s misreading of Dubuc, municipalities
immunize the individual defendants from state law claims, no        would enjoy sovereign immunity: state laws and rules create
state law or rule can immunize anyone from liability for            and define municipalities, but “no state law or rule can
violating the United States Constitution.” The dissent              immunize anyone from liability for violating the United
selectively ignores the phrase “individual defendants.” In          States Constitution.” In essence, the dissent would attempt to
Dubuc, this Court simply made clear that a state cannot             contradict the Supreme Court’s clear ruling that
invoke federal immunity for individual state officials who          municipalities are not entitled to sovereign immunity, Monell
violate the federal constitution, because the act of violating      v. Department of Social Services, 436 U.S. 658, 691 (1978),
the constitution strips the individuals of their status as state    and the Supreme Court’s clear ruling that non-federal public
officials:                                                          agencies are not entitled to immunity if they are akin to
                                                                    municipalities. Mt. Healthy City Sch. Dist. Bd. of Educ., 429
  In Ex parte Young, the Supreme Court explained the                U.S. at 280 (“The issue here thus turns on whether the Mt.
  supremacy of federal law over state law:                          Healthy Board of Education is to be treated as an arm of the
No. 02-2287                Ernst, et al. v. Roberts, et al.   31    32    Ernst, et al. v. Roberts, et al.              No. 02-2287

State partaking of the State’s Eleventh Amendment immunity,         raised the issue of the merits of the claims; rather, the parties’
or is instead to be treated as a municipal corporation or other     appellate briefs discuss only the issue of jurisdiction.
political subdivision to which the Eleventh Amendment does          Because the merits of the claims are not argued on appeal,
not extend.”).                                                      Defendants’ motion for summary judgment cannot be
                                                                    addressed by this Court, in the present appeal proceeding.
   The dissent misconstrues our ruling as determining that          E.g., Kocsis v. Multi-Care Mgmt., 97 F.3d 876, 881 (6th Cir.
there has been a waiver of Eleventh Amendment immunity:             1996) (“Although plaintiff's notice of appeal indicates that she
“The majority’s unique use of state sovereign immunity              is appealing the entire district court judgment, she raises only
doctrine as some kind of implied waiver of constitutional           the dismissal of her ADA claims in her brief on appeal.
immunity constitutes an impermissible end run around the            Accordingly, plaintiff has waived all other arguments.”)
well-established principles of the Eleventh Amendment.” Yet         (citation omitted). This Court will not rule on the merits at
there is no “implied waiver” here. For something to be              this stage.
waived, it must initially have been applicable (prior to the
waiver). The majority holds that the JRS never enjoyed                                             II.
immunity, because the JRS is akin to a municipality. The
state cannot waive immunity that the JRS never had.                   Plaintiffs claim that the district court erred by not
                                                                    identifying the rule it relied upon in dismissing the case and
   The state does not “waive” immunity by establishing a            in not affording Plaintiffs discovery regarding the Eleventh
municipality or a municipality-like agency, in this or any          Amendment immunity issue. However, here, Plaintiffs fail to
other instance. Municipalities and municipality-like entities       assert an additional meritorious basis for relief.
never enjoy immunity; these entities are created by state law,
but there is no immunity to “waive” for these entities. Under          Neither Defendants’ motion to dismiss nor the district
the dissent’s bizarre, erroneous use of the term “waive,” a         court’s opinion cited a subsection of FED . R. CIV . P. 12(b).
state would “waive” its immunity for a city, through the            Plaintiffs claim that Defendants’ motion failed to meet the
state’s act of first establishing the city. The dissent’s           pleading standard, under FED . R. CIV . P. 7(b)(1) (requiring
misunderstanding of the law stems from its unwillingness to         that a motion “shall state with particularity the grounds
accept that state law is a crucial part of defining the nature of   therefor”). However, we do not require a citation to a specific
a non-federal public entity in Eleventh Amendment analysis.         subsection of Rule 12, in asserting Eleventh Amendment
Mt. Healthy City Sch. Dist. Bd. of Educ., 429 U.S. at 280;          immunity. In fact, although Eleventh Amendment immunity
Hall, 742 F.2d at 303-04; Jacintoport Corp., 762 F.2d at 439;       is a defense to jurisdiction, Defendants and the district court
Blake, 612 F.2d at 724.                                             had good reason to avoid citing FED . R. CIV . P. 12(b)(1)
                                                                    (subject matter jurisdiction) or 12(b)(2) (personal
  Finally, the dissent argues that an alternative basis for         jurisdiction): namely, the Supreme Court has dispelled the
dismissal exists, because the dissent concludes that Plaintiffs’    notion of this immunity as simply an issue of subject matter
claims fail on the merits. The district court never ruled on the    jurisdiction, without classifying this immunity as entirely an
merits, instead dismissing the case for lack of jurisdiction;       issue of personal jurisdiction. See supra note 4. Defendants
thus, ordinarily it would be improper for this Court to issue       and the district court acted properly when they cited the
the initial ruling on Defendants’ motion for summary                Eleventh Amendment itself as the controlling legal
judgment. Moreover, on appeal, neither of the parties has
No. 02-2287                      Ernst, et al. v. Roberts, et al.         33     34    Ernst, et al. v. Roberts, et al.              No. 02-2287

authority–no specific citation to a subsection of Rule 12(b)                       A district court’s decision to decline supplemental
was necessary.                                                                   jurisdiction over state law claims is reviewed for abuse of
                                                                                 discretion. As stated in Musson Theatrical v. Fed. Express
  Additionally, we note that if, arguendo, it were clear which                   Corp., 89 F.3d 1244, 1254 (6th Cir. 1996),
subsection of Rule 12(b) were applicable, then this Court
could substitute the proper subsection of Rule 12(b) for an                        A district court has broad discretion in deciding whether
erroneous or incomplete citation by the district court; this is                    to exercise supplemental jurisdiction over state law
assuming that, contrary to our ruling on issue I, above,                           claims. Transcontinental Leasing, Inc. v. Michigan Nat'l
Defendants had established Eleventh Amendment                                      Bank of Detroit, 738 F.2d 163, 166 (6th Cir. 1984). That
immunity. 25                                                                       discretion, however, is bounded by constitutional and
                                                                                   prudential limits on the use of federal judicial power.
  Since there was sufficient evidence on the record for us to                      Gibbs itself expressed one of the most important of these
reverse the grant of Eleventh Amendment immunity, we                               limits: “Certainly, if the federal claims are dismissed
decline to entertain Plaintiffs’ argument that the district court                  before trial, even though [the federal claims are] not
erred in failing to grant discovery.                                               insubstantial in a jurisdictional sense, the state claims
                                                                                   should be dismissed as well.” [United Mine Workers v.]
                                    III.                                           Gibbs, 383 U.S. [715,] 726 [, 86 S. Ct. 1130, 16 L. Ed.
2d 218 (1966).]
  Plaintiffs argue that the district court should be required to
revisit the issue of assuming supplemental jurisdiction over                     See also Smith v. Dearborn Fin. Servs., Inc., 982 F.2d 976,
Plaintiffs’ state law claims if, as we concluded in issue I,                     983 (6th Cir. 1993) (“because the district court properly
above, Defendants are not entitled to Eleventh Amendment                         dismissed plaintiff's federal claims for lack of subject matter
immunity on all of the claims.                                                   jurisdiction, the district court also was within its discretion to
                                                                                 dismiss plaintiff's pendent state law claims without
                                                                                 prejudice.”) (citations omitted).

    25
                                                                                   Under 28 U.S.C. § 1367(c):
        In civil cases, a district court’s error in form–such as citing the
wrong subsection of a rule of civil procedure, or providing analysis that          The district courts may decline to exercise supplemental
fails to discuss certain relevant issues–does not provide grounds for
autom atic reversal or remand. Rathe r, this Court can affirm a ruling of a
                                                                                   jurisdiction over a claim under subsection (a) if--
district court for any va lid grounds stated o n the rec ord. City Mgmt. Corp.     (1) the claim raises a novel or complex issue of State
v. U.S. Chem. Co., 43 F.3d 244, 251 (6th Cir. 1994) (“we may affirm on             law,
any grounds supported by the record, even though they may be different             (2) the claim substantially predominates over the claim
from the grounds relied on by the district co urt”) (citations omitted). Cf.       or claims over which the district court has original
F ED . R. C RIM . P. 32(i)(3)(B ) (formerly F ED . R. C RIM . P. 32(c)(1)) (in     jurisdiction,
federal criminal cases, at the sentencing phase, district courts are required
to set out sp ecific findings on contro verted matters); United States v.          (3) the district court has dismissed all claims over which
Osborne, 291 F.3d 9 08, 911-12 (6 th Cir. 2002) (under F ED . R. C RIM . P.        it has original jurisdiction, or
32, a district cou rt’s failure to set forth the appropriate findings on           (4) in exceptional circumstances, there are other
controverted matters provides grounds for this Court to vacate a sentence          compelling reasons for declining jurisdiction.
and remand for re-sentencing).
No. 02-2287                Ernst, et al. v. Roberts, et al.   35    36   Ernst, et al. v. Roberts, et al.          No. 02-2287

   The district court concluded that each of these four                                   CONCLUSION
provisions would provide independent grounds for declining
supplemental jurisdiction. Ernst v. Roberts, 225 F. Supp. 2d          For the aforementioned reasons, we REVERSE the district
at 790. Because Eleventh Amendment immunity does not                court’s dismissal of each of Plaintiffs’ federal claims, and
apply, the district court erred in stating that § 1367(c)(3)        REMAND for proceedings not inconsistent with this opinion.
would provide cause for declining supplemental jurisdiction.
However, Plaintiffs wrongly identify the district court as
relying solely on § 1367(c)(3). Plaintiffs do not challenge the
other three independent reasons for declining supplemental
jurisdiction. A district court has “broad discretion” in
deciding whether to exercise supplemental review. Musson
Theatrical, 89 F.3d at 1254. Plaintiffs fail to establish error
in any of the district court’s three other independent,
unchallenged reasons for declining supplemental jurisdiction.
Therefore there was no abuse of discretion.
   Of course, nothing would prevent the district court from
reconsidering its exercise of discretion, on its own volition, in
light of our remand of the federal claims. Under 28 U.S.C.
§ 1367(c), the district court has the option of declining
supplemental jurisdiction if any one of the provisions apply,
but the district court is not bound to decline supplemental
jurisdiction merely because one or more provisions apply. By
declining to instruct the district court to reconsider the issue
of supplemental jurisdiction, in light of our reversal of the
dismissal of all federal claims, we in no way impair the
district court’s discretion to exercise supplemental
jurisdiction, notwithstanding the applicability of other
provisions of 28 U.S.C. § 1367(c). Indep. Enters. v.
Pittsburgh Water & Sewer Auth., 103 F.3d 1165, 1170 n.3 (3d
Cir. 1997) (“The district court, having dismissed the federal
claims, declined to exercise supplemental jurisdiction over
Independent’s state claims and dismissed them without
prejudice. It may reconsider that decision on remand in light
of our disposition of the federal claims.”). We simply refuse
to interfere with the district court’s discretion on this matter,
at a stage in the proceedings when the district court has
already set forth three independent, unchallenged reasons for
declining supplemental jurisdiction.
No. 02-2287                Ernst, et al. v. Roberts, et al.   37   38        Ernst, et al. v. Roberts, et al.                      No. 02-2287

                      ______________                               compensate for past violations.” Erwin Chemerinsky, Federal
                                                                   Jurisdiction 425 (4th ed. 2003).
                         DISSENT
                      ______________                                 So the central question in this case is whether the state is
                                                                   the real, substantial party in interest even though the named
  SUHRHEINRICH, Circuit Judge, dissenting. I dissent               defendants are Douglas B. Roberts, Treasurer of the State of
because I believe that the Eleventh Amendment bars all of the      Michigan; Christopher DeRose, Director, Department of
claims in this case. Further, the state law claims should have     Management and Budget Office of Retirement Systems;
been dismissed under the doctrine of Pennhurst State Sch. &        George M. Elworth, Member of the Michigan Judges
Hosp. v. Halderman, 465 U.S. 89 (1984). Finally, to the            Retirement Board (“MJRB”); Roy Pentilla, Member of the
extent that Plaintiffs have stated a valid federal equal           MJRB; Eric E. Doster, Member of the MJRB; Lyle Van
protection claim for prospective injunctive relief, I would        Houten, Member of the MJRB; and Robert Ransom, Member
dismiss that claim because the state law at issue has a rational   of the MJRB.1 To rephrase the issue a bit: by providing the
basis and is therefore not unconstitutional.                       requested relief, would we be ordering prospective injunctive
                                                                   relief, or monetary damages? And if the latter, where would
                               I.                                  the money come from?
   The case before us involves a straightforward application                                               II.
of Eleventh Amendment principles. In Hans v. Louisiana,
134 U.S. 1 (1890), the Supreme Court held that the Eleventh          To answer these questions, we must examine the nature of
Amendment bars suits against a state by its own citizens.          the relief sought, which means examining the complaint.
Barton v. Summers, 293 F.3d 944, 948 (6th Cir. 2002). Here,        Precedent directs that “‘[a] federal court must examine each
the state is not a named party; various state officials are the    claim in a case to see if the court’s jurisdiction over that
named defendants. The Eleventh Amendment does not                  claim is barred by the Eleventh Amendment.’” Henry v.
preclude official capacity suits against state officials for       Metro. Sewer Dist., 922 F.2d 332, 337 (6th Cir. 1990)
injunctive relief. Ex parte Young, 209 U.S. 123 (1908).            (quoting Pennhurst State School & Hosp. v. Halderman, 465
However, it prohibits a federal court from awarding                U.S. 89, 121 (1984)). Counts I, III, V, and VII of the
retroactive monetary relief against state officials when those     Complaint are based on the Equal Protection Clause of the
damages will be paid by the state treasury. See, e.g., Edelman     Fourteenth Amendment and are brought pursuant to 42
v. Jordan, 415 U.S. 651 (1974); Ford Motor Co. v. Dep’t of         U.S.C. § 1983. Count I alleges that the Act violates
Treasury, 323 U.S. 459 (1945). In Ford Motor Co., the              Plaintiffs’ rights because judges of the 36th District Court are
Supreme Court said: “[W]hen the action is in essence one for       entitled to retirement allowance under the Tier I Plan which
the recovery of money from the state, the state is the real,       exceed that to which Plaintiffs and are entitled even though
substantial party in interest and is entitled to invoke its        judges of the 36th District Court contribute a smaller
sovereign immunity from suit even though individual officials      percentage of their compensation into the Tier 1 Plan for that
are nominal defendants.” Ford Motor Co., at 464. In short,         greater retirement allowance.
“[a] federal court may order future compliance by state
officials, but it may not compel payment of damages to
                                                                        1
                                                                            All of the defendants were su ed in the ir official capacities.
No. 02-2287                     Ernst, et al. v. Roberts, et al.        39     40       Ernst, et al. v. Roberts, et al.                    No. 02-2287

   Count III alleges that the Act does not provide for annual                  contributions required of judges of the 36th District Court.”3
percentage increases in the retirement allowance paid under                     In Paragraph 5, Plaintiffs ask the court to afford to Plaintiffs
the Tier 1 Plan although certain of the statutes creating the                  who have remained members of the Tier 1 Plan but have not
retirement plans of other state and governmental employees                     yet retired “a retirement allowance upon their retirements
provide for an annual percentage increase in the retirement                    equal to that to which [comparable] judges of the 36th District
allowance paid. Count V challenges the constitutionality of                    Court” are or will be entitled.4 Paragraph 6 seeks restitution
the Act because it prescribes the calculation of the retirement                in the form of “the difference between the dollar amount of
account value of the judges who transferred from the Tier 1                    retirement allowance” that Plaintiffs have received “and the
Plan to the Tier 2 Plan in a disparate manner. Count VII                       greater amount of retirement allowance they would have
alleges that the Act violates the constitutional rights of                     received” if they were 36th District Court judges.5 Paragraph
Plaintiffs because per the terms of the Act judges of the 36th                 7 seeks an annual percentage increase in retirement allowance
District Court who elected to transfer from the Tier 1 Plan to                 equivalent to the annual percentage increases afforded to
the Tier 2 Plan were able to transfer substantially greater                    other state funded retirement systems.6 Paragraph 8 seeks
amounts of money than non-36th District Court judges of the
same age and same length of service because the Act, as
complained of in Count I, afforded 36th District Court judges                       3
                                                                                        4.    Order that Defendants forthwith refun d to those
a higher allowance under the Tier 1 Plan.                                                     Plaintiffs and me mbers o f The C lass who are m embe rs,
                                                                                              former vested mem bers, re tirants, or retirement
   Counts II, IV, VI, and VIII mirror Counts I, III, V, and VII,                              allowance beneficiaries of the Tier 1 Plan, with interest,
but instead of being founded upon the Equal Protection                                        that portion of their past contributions into the Tier 1
Clause of the Fourteenth Amendment, are founded upon                                          Plan in excess of the past contributions required of
Article I, Section 2 of the Michigan Constitution. Counts IX                                  judges of the 36th District C ourt[.]
and X assert state law claims for wasting trust and breach of                       4
fiduciary duty, respectively.                                                           5.    Order Defendants to afford to Plaintiffs and T he Class
                                                                                              members who have remained mem bers of the Tier 1
                                                                                              Plan but have not yet retired a retirement allowance
  Also critical to the analysis is the relief requested.                                      upon their retirements equal to that to which judges of
Plaintiffs’ prayer for relief reveals that the primary thrust of                              the 36th District Court with the same age and length of
the suit is to obtain monetary relief.2 In Paragraph 4,                                       service are or will be entitled[.]
Plaintiffs ask that Defendants refund to members and                                5
beneficiaries of the Tier 1 Plan “that portion of their past                            6.    Order Defendants to forthwith make restitution to
contributions into the Tier 1 Plan in excess of the past                                      Plaintiffs and m emb ers of T he Class who are retira nts
                                                                                              or retirement allowanc e beneficiaries by paying to
                                                                                              them, with interest, the difference between the dollar
                                                                                              amount of retirement allowance that they have received
                                                                                              and the grea ter amount o f retirement allowance that
                                                                                              they would have received if they had been judges of the
                                                                                              36th District Court[.]
    2
       Paragraphs 1 and 2 request the court to certify the action as a class        6
action and declare that the Act violates the Fourteenth Amendment and                   7.    Order that Defendants forthwith afford to Plaintiffs and
the State C onstitution. Neither are claims for prospective, injunctive                       members of The Class who are retirants or retirement
relief.                                                                                       allowance beneficiaries of the Tier 1 Plan an annual
No. 02-2287                   Ernst, et al. v. Roberts, et al.          41   42       Ernst, et al. v. Roberts, et al.                                No. 02-2287

restitution in the form of “the difference between the dollar                them to revoke their original elections to participate in the
amount of retirement allowance equivalent to those afforded                  Tier 2 Plan so that they can make their elections effective as
by other state funded retirement systems.”7 Although                         of some different date in time. Paragraph 12 asks the court
couched in equitable terms, Paragraphs 4 through 8 in reality                to order the defendants to pay excess contributions.9 In short,
seek compensation for the State’s past action which Plaintiffs               the foregoing assertions all seek the equivalent of money
perceive as inequitable.                                                     damages that are more than incidental, and seek retroactive
                                                                             monetary relief. Paragraphs 13 through 16 are not related to
  Paragraphs 9 through 11 similarly seek to correct past                     the federal constitutional claims, but are based on Plaintiffs’
errors by requiring Defendants to recalculate how benefits                   “wasting trust” claim under state law.10 Paragraphs 17
should be calculated. 8 Plaintiffs also seek an order allowing

                                                                                             Class who have elected to transfer to the Tier 2
            percentage increase in retirement allowance equivalent                           Plan, Defendants recalculate their APV as of the
            to the annual percentage increase afforded by other                              app licable APV d ate as though the T ier 1 P lan’s
            state funded retirement systems which provide for                                accumulated bene fit obligation to them was
            annual percentage increases in benefits[.]                                       equivalent to that of a judge of the 36th District
                                                                                             Court of the same age and length of service and
   7                                                                                         transfer the difference between the recalculated
       8.   Order that Defendants forthwith mak e restitutio n to
            those Plaintiffs and memb ers of The Class who are                               APV and the APV previously calculated, with
            retirants or retirement allowance beneficiaries of the                           interest, from the reserves of the Tier 1 Plan to that
            Tier 1 Plan by paying to them, with interest, the                                perso n’s Tier 2 P lan acc ount[.]
            difference between the dollar amount of retirement                    9
            allowance equivalent to those afforded by other state                     12.    Order Defendants to pay The Excess
            funded retirement systems.                                                       Contributions to members, retirants and
                                                                                             retirement allowance beneficiaries of the Tier
   8                                                                                         1 Plan[.]
       9.   Order Defendants to perm it Plaintiffs and members of
            The Class the opp ortunity to terminate me mbe rship in               10
            the Tier 1 Plan and irrevocably ele ct to pa rticipate in                  13.   Pr e l i m i nar i l y a n d p e r m a n e n tl y e n j o in
            the Tier 2 Plan as of a designated date certain each                             Defendants from transferring or paying
            year, which date will be used for calculating APV[.]                             monies from the Tier 1 Plan’s reserve for
                                                                                             employer contributions to the court fee fund,
   10.      Order Defendants to permit Plaintiffs and                                        from transferring or paying monies from the
            members of The Class who have elected to transfer                                court fee fund to the court equity fund, and
            from the Tier 1 Plan to the Tier 2 Plan the                                      from transmitting court fees to the treasurer
            opp ortunity to have the Actuarial Present Value                                 for deposit into the court fee fund instead of
            (“APV”) of their ac counts recalculated as of a d ate                            into the reserve for employer contrib utions[.]
            subsequent to June 30, 1998 and order Defendants
            to transfer the difference between the recalculated                       14.    Ord er Defendants to cause the preparation of
            APV and the APV previously calculated, with                                      an annual report for the current fiscal year and
            interest, from the reserves of the Tier 1 Plan to that                           future fiscal years that fully and accura tely
            perso n’s Tier 2 ac count.                                                       repo rts all of the reserve acco unts of the Tier
                                                                                             1 Plan and o f the cou rt fee fund and all
   11.      Order that, as to Plaintiffs and members of T he                                 activities of the Tier 1 Plan, including but not
No. 02-2287                         Ernst, et al. v. Roberts, et al.       43   44     Ernst, et al. v. Roberts, et al.                     No. 02-2287

through 19 seek attorney fees, interest, and any other                          claims for prospective injunctive relief. Only paragraph 3,
appropriate relief.11 Although not claims for prospective                       which I will discuss momentarily, appears to seek prospective
injunctive relief, they would likely be allowed as ancillary                    injunctive relief.12
relief, see Hutto v. Finney, 437 U.S. 678 (1978), but only if
the action were otherwise proper under § 1983. These are not                                                        III.
                                                                                   So the question becomes, if the requested relief is ordered,
                                                                                where would the money come from? Because all of the
              limited to the transfer or payment of monies                      defendants are sued in their official capacities, it is anticipated
              out of the court fee fund into the court equity                   that the monies would come from the related agencies, the
              fund[.]                                                           JRS, and the state treasury (the state treasurer Douglas
    15.       Order Defendants to provide an accounting
                                                                                Roberts, is also a named defendant). This brings us to the
              for past fiscal years of the various reserve                      next issue, is the JRS an arm of the state for purposes of the
              acco unts of the Tier 1 Plan, of the court fee                    Eleventh Amendment? As the majority correctly states, “[i]n
              fund, and of all of the activities of the Tier 1                  Eleventh Amendment analysis, the question of whether a
              Plan, including but not limited to the transfer                   public entity is best characterized as an arm or alter ego of the
              or deposit of monies into and between the
              various reserve accounts of the Tier 1 Plan,
                                                                                state, instead of being deemed a political subdivision of the
              the deposit of monies into the court fee fund,                    state, hinges on whether there is potential legal liability of the
              and the transfer of payment of monies out of                      state treasury to satisfy a judgment.” Maj. Op. at 8 (footnote
              the court fee fund into the court equity fund[.]                  omitted). As this Court recently observed in Dubuc v.
                                                                                Michigan Bd. of Law Exam’rs, 342 F.3d 610 (6th Cir. 2003):
    16.       P r e l imin a rily a n d p e r m a n e n t l y e n j oi n
              Defend ants, their successors, and their agents
                                                                                “To determine whether an entity is a state department or
              from transferring to the treasury at the time of                  agency for purposes of the Eleventh Amendment, the primary
              termination of the Tier 1 Plan those funds                        issue is whether the state would ultimately be liable for any
              remaining in the various accounts in the Tier                     money judgment against the entity.” Id. (quoting Brotherton
              1 Plan in excess of those needed to pay                           v. Cleveland, 173 F.3d 552, 560-61 (6th Cir. 2003)).13
              retirement allowances to members, vested
              former members, retirants and retirement
              allowance beneficiaries of the Tier 1 Plan and
              order Defendants and their successors to pay
              such funds to those persons who at time of                             12
              termination are members, vested former                                      3.   Preliminar ily and        pe rman ently enj oin
              memb ers, retirants, or retirement allowance                                     Defendants from requiring those Plaintiffs and
              beneficiaries[.]                                                                 memb ers of The Class who have remained as
                                                                                               participants in the Tier 1 Plan to contribute a
   11                                                                                          higher percentage of their compensation for a
        17.   Award Plaintiffs and memb ers o f T he Class
              attorneys fees pursuant to 42 USC § 1988[.]                                      retirement allowance than jud ges of the 36th
        18.   Award Plaintiffs and members of The Class                                        District Court.
              interest to which they are entitled; and                               13
        19.   Award Plaintiffs and members of The Class                                Unlike the majority, I do not read Dubuc, Brotherton, and Irvine
              such additional or different relief to which                      as basica lly rendering other factors irrelevant when evidence is presented
              they are entitled.                                                regarding whether the state treasury wo uld be liable for a jud gment.
No. 02-2287                      Ernst, et al. v. Roberts, et al.          45     46     Ernst, et al. v. Roberts, et al.                       No. 02-2287

   As the majority notes, there are two ways in which                             In other words, there is no commingling of funds. Regarding
potential legal liability for a judgment against the JRS might                    the second method, the majority recognizes that, other things
reach state treasury funds. “First, JRS funds might be co-                        being equal, the state treasury might be liable for any shortfall
mingled with general funds–which is to say that JRS funds
might be available for general use by the state for other
purposes, unrelated to the retirement system. If funds are co-
mingled, then any JRS liability would be tantamount to state                      (E.D. Va. 1997 ) (holding that Virginia’s Retirement System is an arm of
treasury liability.” The second method asks whether “even if                      the state entitled to Eleventh Amendm ent imm unity); Mello v.
JRS funds are segregated from state treasury funds, the JRS                       Woo dhouse, 755 F. Sup p. 923 (D. N ev. 199 1) (holding that suit against
might not have sufficient funds to satisfy a judgment;                            the Nevada P ublic Employees’ Retirement Board was barred by the
applicable state law could make state treasury funds available                    Eleventh Amendme nt).
to satisfy the part of the judgment that exceeded the amount                            Blake v. Kline, 612 F.2d 71 8 (3d Cir. 197 9), cited by the m ajority, is
                                                                                  not particularly persuasive. Although the Third Circuit directed the
of funds available to satisfy the part of the judgment that                       district court to consider on remand an opinion by the Pennsylvania
exceeded the amount of funds available to the JRS.” Maj.                          Attorney General stating that the money deposited in the retirement fund
Op. at 12.                                                                        had lost its identity as Commonwealth fund s, the Co urt ultimately stated
                                                                                  that the district court needed to determine whether the state, in making a
  The majority concludes that under the first method, “JRS                        contribution, was acting in the role of sovereign or some o ther capacity.
                                                                                  Id. at 724.
funds are kept in a separate trust from general state                                   Other factors, see H all v. M ed. C ollege of O hio, 742 F.2d 299 , 302
funds–thus, funds taken from the JRS to satisfy a judgment                        (6th Cir. 1984), reflect that the JRS is an arm of the state. The M ichigan
would not be funds from the state treasury.” Maj. Op. at 13.14                    Judges Retirement System and the Michigan Judges Retirement Board
                                                                                  were created by the Michigan Judg es Retirement Act. o f 1992, M ich.
                                                                                  Comp. Laws §§ 38.21 01-2670 . The Act mand ate that the Boa rd consist
    14
                                                                                  of the State Treasurer and the Attorney General of Michigan, as well as
        I disagree with this conc lusion as well, because it is contrary to the   one sitting judge and two additional members appointed by Governor of
statutes establishing the JRS, which require the State Tre asurer to invest       Michigan with the advice and consent of the Michigan Senate. Mich.
JRS assets like all other assets of the State. Mich. Comp. Laws                   Comp. Laws § 38.2202(1). The Act is integrated with other Michigan
§ 38.2 206 (1), 38.11 32-3 8.11 40i. T he Act requires the State T reasurer to    departments. Indeed, the Michigan Judg es Retirement Bo ard “is created
dep osit JRS funds in the same manner as and subject to the laws                  in the departm ent [of m anagement and budget].” §§ 38 .2202(1 );
gove rning the deposit of other State funds. Id. § 38 .220 6(1).                  38.2104(5). The M ichigan Departm ent of M anagement is respo nsible
     Other courts have held that funds deposited in a retirement system do        “for the budgeting, procurement, and related management functions of the
not lose their fundamental character as public funds. See Fitzpatrick v.          retirement system.” Id. § 38 .220 6(1). The State Tre asurer “is the
Bitzer, 519 F.2d 559 , 565 n.4 (2d Cir. 197 5), aff’d in part, rev’d in part      treasurer of the retirement system.” Id. § 38 .220 6(l). T he M ichigan
on other grounds, 427 U.S. 445 (1976). Relatedly, courts have held that           Attorney General is the Board’s legal advisor and repre sents the B oard in
retirement systems are arms of the state and therefore entitled to Eleventh       all litigation. Id. § 38.2207. The retirement system is required to prepare
Amendm ent immunity. See, e.g., M cGinty v. New Y ork, 251 F.3d 84 (2d            an annual report each fiscal year “regarding the financial, actuarial, and
Cir. 2001) (holding that the New York Retirement System is an arm of the          other activities of the retirement system,” and present it to the Governor
state; dismissing the plaintiffs’ claims as barred by the Eleventh                and Legislature. Id. § 38.2209. Furthermore, “[t]he retirement system
Amendm ent); JMB G roup Trust IV v. Pennsylvania M un. Ret. Sys., 986             shall draw its warrants upon the state treasury, payable out of funds of the
F. Supp. 534, 53 8 (N.D. Ill. 1997) (holding that the Pennsylvania                retirement system, for the payment of retirement allowances, accumulated
Retirement System was an arm of the state where the duties and                    contributions, and the paym ent of salaries and other expenses necessary
responsibilities of the Retirement System were “totally defined and               in the administration of the retirement system.” Id. § 38.2208. The
limited by the Commonwealth of Pennsylvania under the provisions of the           retirement system, is funded, in part, by annual legislative appropriations
Pen nsylvania Code”); Schu lthorpe v. V irginia Ret. Sys., 952 F. Supp. 307       and other p ublic m onies. Id. 38.2 303 , 38.2 304 .
No. 02-2287                Ernst, et al. v. Roberts, et al.   47   48   Ernst, et al. v. Roberts, et al.             No. 02-2287

pursuant to Art. IX, § 24 of the Michigan Constitution. See        have been held liable pursuant to Art. IX, § 24.” Maj. Op. at
Maj. Op. at 19. That provision states:                             19; see also id. at 7 n.8 (“Various federal claims in this case
                                                                   clearly seek monetary relief, including the refund and
  The accrued financial benefits of each pension plan and          payment of portions of Plaintiffs’ contributions to the JRS.”).
  retirement system of the state and its political                 The majority nonetheless concludes that because Musselman
  subdivisions shall be a contractual obligation thereof           “establishes that Art. IX, § 24 does not create any right of
  which shall not be diminished or impaired thereby.               action that could force state treasury funds to be used to pay
  Financial benefits arising on account of service rendered        any judgment against the JRS,” Maj. Op. at 15, there is no
  in each fiscal year shall be funded during that year and         Eleventh Amendment immunity bar to suit. See Maj. Op. at
  such funding shall not be used for financing unfunded            7 n.8 (“Because we hold that none of the claims for monetary
  accrued liabilities.                                             relief are covered by Eleventh Amendment immunity, we
                                                                   need not reach the issue of whether there are any federal
Musselman v. Governor, 533 N.W.2d 237, 240 n.7 (Mich.              claims seeking only prospective, non-monetary relief.”). The
1995), on reh’g on other grounds, 450 N.W.2d 346 (Mich.            majority’s conclusion that the Eleventh Amendment is not
1996). The provision itself is clear, and Musselman further        implicated, despite the provisions of Art. IX, § 24, is based on
indicates that the state is obligated to prefund said benefits:    the following reasoning:
“We hold that the state is obligated to prefund health care
benefits under art. 9, § 24.” Id. at 246.                            [t]here can be no action in any court to force the state
                                                                     treasury to pay any part of a judgment relating to a
  However, Musselman also held that Article IX, § 24 is not          federal claim in a lawsuit concerning the JRS–thus, the
self-executing:                                                      state treasury is not subject to potential legal liability.
                                                                     Even if the JRS lacked sufficient funds to satisfy a
     In other words, insofar as the plaintiffs are asking us to      judgment in this case, the state treasury could not be held
  require the Legislature to appropriate funds for                   liable for any unpaid portion of the judgment.
  retirement health care benefits, we understand that the
  intention of the drafters was that the second sentence of        Maj. Op. at 17-18.
  Const. 1963, art. 9, § 24 is not self-executing. Because
  the provision does not alter the rule that legislative action      In other words, the majority reasons that, because state law
  is necessary to appropriate funds, it fails to “‘lay[]down       says that the money cannot come from the state treasury, a
  rules by means of which [its] principles may be given the        federal court could not order such relief either, so there is no
  force of law.’”                                                  need to worry about the Eleventh Amendment. This
                                                                   reasoning is faulty because a state’s exercise of state
Id. (alteration in original; footnote omitted); see also id.       sovereign immunity does not control the question of federal
(“However, because we have no authority to order the               constitutional immunity. Cf. Dubuc, 342 F.3d at 617 (stating
Governor or the Legislature to appropriate funds, mandamus         that “[w]hile [a provision of the Michigan Supreme Court
is denied.”)                                                       Rules Concerning the State Bar of Michigan providing the
                                                                   staff of the State Bar and the Board of Law Examiners] may
  The majority acknowledges that “[a]bsent the Musselman           immunize the individual defendants from state law claims, no
case, it might have been argued that the state treasury could      state law or rule can immunize anyone from liability for
No. 02-2287                      Ernst, et al. v. Roberts, et al.        49     50   Ernst, et al. v. Roberts, et al.             No. 02-2287

violating the United States Constitution”).15 In fact, on the                     The raison d’etre for the Eleventh Amendment is to
flip side, the Supreme Court has consistently held that a state                 protect, in a federal forum, a state’s exercise of sovereignty
does not waive its Eleventh Amendment immunity by                               immunity. As recently observed by a majority of Justices in
consenting to suit only in its own courts. Port Auth. Trans-                    Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (1996):
Hudson Corp. v. Feeney, 495 U.S. 299, 305 (1990) (citations
omitted); Atascadero State Hosp. v. Scanlon, 473 U.S. 234,                        Although the text of the Amendment would appear to
241 (1985) (“Thus, in order for a state statute or constitutional                 restrict only the Article III diversity jurisdiction of the
provision to constitute a waiver of Eleventh Amendment                            federal courts, “we have understood the Eleventh
immunity, it must specify the State’s intention to subject itself                 Amendment to stand not so much for what it says, but for
to suit in federal court.”); Pennhurst, 465 U.S. at 99-100 n.9                    the presupposition . . . which it confirms.” Blatchford v.
(citations omitted); Florida Dept. of Health & Rehabilitative                     Native Village of Noatak, 501 U.S. 775, 779 . . . (1991).
Servs. v. Florida Nursing Home Assn., 450 U.S. 147, 150,                          That presupposition, first observed over a century ago in
1981 (per curiam); Great Northern Life Ins. Co. v. Read, 322                      Hans v. Louisiana, 134 U.S. 1, . . . (1890), has two parts:
U.S. 47, 54 (1944) ( “[I]t is not consonant with our dual                         first, that each State is a sovereign entity in our federal
system for the Federal courts to be astute to read the consent                    system; and second, that “‘[i]t is inherent in the nature of
to embrace Federal as well as state court. . . . [A] clear                        sovereignty not to be amenable to the suit of an
declaration of the state’s intention to submit its fiscal                         individual without its consent,’” id., at 13 . . . (emphasis
problems to other courts than those of its own creation must                      deleted), quoting The Federalist No. 81, p. 487 (C.
be found”). By the same token, the state should not lose its                      Rossiter ed. 1961) (A. Hamilton). See also Puerto Rico
constitutional immunity simply because it exercised its state                     Aqueduct and Sewer Authority, supra, [506 U.S. 139
sovereign immunity. 16         As the foregoing precedent                         1993] at 146 (“The Amendment is rooted in a recognition
establishes, the state must make its consent to suit in federal                   that the States, although a union, maintain certain
court clear.                                                                      attributes of sovereignty, including sovereign
                                                                                  immunity”). For over a century we have reaffirmed that
                                                                                  federal jurisdiction over suits against unconsenting States
                                                                                  “was not contemplated by the Constitution when
                                                                                  establishing the judicial power of the United States.”
                                                                                  Hans, supra, at 15. [Fn7]
    15
        In Dubuc, the individual d efendants, all of whom were sued in their
official capacities, argued that they were immune from the federal claims         _____________
under 42 U.S.C. § 1983 because state law ma de them “ab solutely immune           FN7. E.g., North Carolina v. Temple, 134 U.S. 22, 30,
from suit for conduct arising o ut of the p erform ance of their duties.”
Dubuc, 342 F.3d at 617. This Court rejected this argum ent because state
                                                                                  10 S. Ct. 509, 511, 33 L. Ed. 849 (1890); Fitts v.
law canno t insulate the defendants from violations of federal law. It is for     McGhee, 172 U.S. 516, 524, 19 S. Ct. 269, 272, 43 L.
this proposition that I cited Dubuc, and no other. T hus, the d octrine of Ex     Ed. 535 (1899); Bell v. Mississippi, 177 U.S. 693, 20 S.
Parte Young was therefore applicable to the individual defendants sued            Ct. 1031, 44 L. Ed. 945 (1900); Smith v. Reeves, 178
in their official capacities.                                                     U.S. 436, 446, 20 S. Ct. 919, 923, 44 L. Ed.1140 (1900);
    16                                                                            Palmer v. Ohio, 248 U.S. 32, 34, 39 S. Ct. 16, 16-17, 63
        This leads to a curious result: although the state cannot be sue d in     L. Ed. 108 (1918); Duhne v. New Jersey, 251 U.S. 311,
state court because it has exercised its sovereign immunity, it can be sued
in federal court bec ause it cannot b e sued in state co urt.
                                                                                  313, 40 S. Ct. 154, 64 L. Ed.280 (1920); Ex parte New
No. 02-2287               Ernst, et al. v. Roberts, et al.   51   52    Ernst, et al. v. Roberts, et al.               No. 02-2287

  York, 256 U.S. 490, 497, 41 S. Ct. 588, 589, 65 L. Ed.          impermissible end run around the well-established principles
  1057 (1921); Missouri v. Fiske, 290 U.S. 18, 26, 54 S.          of the Eleventh Amendment. If the state treasury is immune
  Ct. 18, 20-21, 78 L. Ed. 145 (1933); Great Northern Life        from liability for such purposes, it is because of the Eleventh
  Ins. Co. v. Read, 322 U.S. 47, 51, 64 S. Ct. 873, 875, 88       Amendment and not Article IX, § 24 of the Michigan
  L. Ed. 1121 (1944); Ford Motor Co. v. Department of             Constitution or the Musselman decision. And the Eleventh
  Treasury of Ind., 323 U.S. 459, 464, 65 S. Ct. 347, 350-        Amendment directs that if, as here, the state is the real party
  51, 89 L. Ed. 389 (1945); Georgia Railroad & Banking            in interest, has not consented to suit in a federal forum, and
  Co. v. Redwine, 342 U.S. 299, 304, n. 13, 72 S. Ct. 321,        monetary relief is sought, the suit must be dismissed.
  324, n. 13, 96 L. Ed. 335 (1952); Parden v. Terminal
  Railway of Ala. Docks Dept., 377 U.S. 184, 186, 84 S.             Contrary to its assertion, the majority and I actually agree
  Ct. 1207, 1209-1210, 12 L. Ed. 2d 233 (1964); United            that state law plays a significant role in the Eleventh
  States v. Mississippi, 380 U.S. 128, 140, 85 S. Ct. 808,        Amendment immunity analysis. However, I do not perceive
  814-15, 13 L. Ed. 2d 717 (1965); Employees of Dept. of          Art. IX § 24 and the Musselman decision as leading to the
  Public Health and Welfare of Mo., 411 U.S. 279, 280, 93         conclusion that the JRS is not an arm of the state. Rather, I
  S. Ct. 1614, 1615-1616, 36 L. Ed. 2d 251 (1973);                see them as confirming the contrary conclusion. Further, any
  Edelman v. Jordan, 415 U.S. 651, 662-663, 94 S. Ct.             funding requirement, even if it must be honored by the
  1347, 1355-1356, 39 L. Ed. 2d 662 (1974); Fitzpatrick v.        legislature and not ordered by a court, will necessarily impact
  Bitzer, 427 U.S. 445, 96 S. Ct. 2666, 49 L. ed. 2d 614          on the state treasury. Cf. Fitzpatrick v. Bitzer, 519 F.2d 559
  (1976); Cory v. White, 457 U.S. 85, 102 S. Ct. 2325, 72         (2d Cir. 1975), rev’d on other grounds, 427 U.S. 445 (1976).
  L. Ed. 2d 694 (1982); Pennhurst State School and                (holding that “[a] judgment against the Connecticut State
  Hospital v. Halderman, 465 U.S. 89, 97-100, 104 S. Ct.          employees fund would automatically increase the obligations
  900, 906-908, 79 L. Ed. 2d 67 (1984); Atascadero State          of the general state treasury and amount to a judgment against
  Hospital v. Scanlon, 473 U.S. 234, 237-238, 105 S. Ct.          the state” because the state was required to appropriate funds
  3142, 3144, 3145, 87 L. E.2d 171 (1985); Welch v. Texas         annually on an actuarial basis such that at least 75% of the
  Dept. of Highways and Public Transp., 483 U.S. 468,             total retirement income payment for each year had to made by
  472-474, 107 S. Ct. 2941, 2945-2946, 97 L. Ed. 2d 389           the state). See generally Edelman, 415 U.S. at 664 (stating
  (1987) (plurality opinion); Dellmuth v. Muth, 491 U.S.          that “the general rule is that relief sought nominally against an
  223, 227-229, and n. 2, 105 L. Ed. 2d 181 (1989); Port          officer is in fact against the sovereign if the decree would
  Authority Trans-Hudson Corp. v. Feeney, 495 U.S. 299,           operate against the latter” (internal quotations omitted)); see
  304, 110 S. Ct. 1868, 1872, 109 L. Ed. 2d 264 (1990);           id. n.11 (stating that “[t]he general rule is that a suit is against
  Blatchford v. Native Village of Noatak, 501 U.S. 775,           the sovereign if the judgment sought would expend itself on
  779, 111 S. Ct. 2578, 2581, 115 L. Ed. 2d 686 (1991);           the public treasury or domain” (internal quotations omitted)).
  Puerto Rico Aqueduct and Sewer Authority v. Metcalf &
  Eddy, Inc., 506 U.S. 139, 144, 113 S. Ct. 684, 687-688,           Finally, the majority fails to address the impact of Mich.
  121 L. Ed. 2d 605 (1993).                                       Comp. Laws. § 38.2302, which imposes mandatory state
                                                                  contribution requirements:
Seminole Tribe, 517 U.S. at 54. The majority’s unique use of
state sovereign immunity doctrine as some kind of implied           Sec. 302. (1) Except as provided in subsection (2), the
waiver of constitutional immunity constitutes an                    legislature shall annually appropriate to the retirement
No. 02-2287              Ernst, et al. v. Roberts, et al.   53   54   Ernst, et al. v. Roberts, et al.              No. 02-2287

 system the amount determined under subsection (2) in              determined under this subsection in the executive budget
 order to fund the retirement system the amount                    to the legislature for appropriation in the next fiscal year.
 determined under the fiscal year for which the
 appropriation is made. The legislature shall annually                (4) If applicable, the bureau of retirement systems in
 appropriate to the retirement system the amount                   the department shall certify to the director of the
 determined under subsection (3) in order to reconcile the         department an amount equal to the difference between
 estimated appropriation made in the previous fiscal year          the estimate actuarial funding requirement for the next
 with the actual appropriation needed to adequately fund           fiscal year and the sum of the estimated revenue to be
 the retirement system for the previous fiscal year.               received by the retirement system during the next fiscal
                                                                   year from employer contributions pursuant to section
   (2) The legislature shall annually appropriate to the           303, court fees pursuant to section 304, and mandatory
 retirement system an amount equal to 3.5% of the                  member contributions pursuant to section 305. The
 aggregate annual compensation of the difference between           department shall submit the amount determined under
 the sum of the contribution rates determined under                this subsection in the executive budget to the legislature
 section 301(2) and (3) multiplied by the aggregate annual         for appropriation in the next fiscal year.
 compensation and the estimated revenue from court fees
 under section 304, whichever is greater. The department         Mich. Comp. Laws Ann. § 38.2302 (West 1997). See also
 shall submit the amount determined under this subsection        § 38.2208 (stating that “[t]he retirement system shall draw its
 in the executive budget to the legislature for                  warrants upon the state treasury, payable out of funds of the
 appropriation in the next fiscal year. If the department        retirement system, for the payment of retirement allowances,
 receives notification from the United States internal           accumulated contributions, and the payment of salaries and
 revenue service that this subsection will cause the             other expenses necessary in the administration of the
 retirement system to be disqualified for tax purposes           retirement system”). In my view, the foregoing provisions
 under the internal revenue code, this subsection does not       clearly reflect that the state considers the JRS a state agency,
 apply and subsection (4) applies.                               in the department of budget and management, §§ 38.2201(1),
                                                                 38.2104(5), funded by the treasury, and not merely a political
   (3) Not later than 60 days after the termination of each      subdivision.
 state fiscal year, the bureau or retirement systems shall
 certify to the director of the department the actual              In sum, I would affirm the district court’s dismissal on the
 aggregate annual compensation paid to all active                basis of Eleventh Amendment immunity.
 members during the preceding state fiscal year and the
 difference, if any, between the actual actuarial funding                                      IV.
 requirement and the sum of the actual revenue received
 by the retirement system during the preceding fiscal year          Plaintiffs’ state law claims were also properly dismissed,
 from the appropriation pursuant to subsection (2) or (4),       although for reasons different than those stated by the district
 whichever is applicable, employer contributions pursuant        court. In Pennhurst v. State Sch. & Hosp. v. Halderman,
 to section 303, court filing fees pursuant to section 304,      supra, the Supreme Court held that the Eleventh Amendment
 and mandatory member contributions pursuant to section          prohibits federal courts from ordering state officials to
 305.     The department shall submit the amount                 conform their conduct to state law, and also bars state law
No. 02-2287                        Ernst, et al. v. Roberts, et al.   55   56   Ernst, et al. v. Roberts, et al.              No. 02-2287

claims brought under pendent jurisdiction. 465 U.S. at 103-                “primary thrust of the suit” remains the money. See Barton,
06. This is true whether the relief sought is prospective or 293 F.3d at 949. As we observed in Barton, “the interest of
retroactive. Id. In distinguishing federal claims against state            a sovereign in allocating state funds is a ‘very serious’ one,”
officials from state law claims against state officials, the               and “an attempt to force the allocation of state funds
Court reasoned that:                                                       implicates core sovereign interests.” Id. at 951 (quoting
                                                                           Kelley v. Metro. County Bd. of Educ., 836 F.2d 986, 995 (6th
    This need to reconcile competing interests [the need to                Cir. 1987)). The Eleventh Amendment bars this type of
  promote the supremacy of federal law vs. the                             claim as well. See Barton, 293 F.3d at 949-51 (discussing
  constitutional immunity of the States] is wholly absent,                 exception to doctrine of Ex Parte Young; stating that the
  however, when a plaintiff alleges that a state official has              injunctive relief must be truly prospective, non-monetary
  violated state law. In such a case the entire basis for the              relief with only incidental impact on the state treasury, and
  doctrine of Young and Edelman disappears. A federal                      that “[t]he dividing line, therefore, is whether the money or
  court’s grant of relief against state officials on the basis             non-monetary injunction is the primary thrust of the suit”).
  of state law, whether prospective or retroactive, does not
  vindicate the supreme authority of federal law. On the                     Furthermore, even if this claim–and any of the others for
  contrary, it is difficult to think of a greater intrusion on             that matter–truly seeks prospective, nonmonetary injunctive
  state sovereignty than when a federal court instructs state              relief and is therefore not barred by the Eleventh Amendment,
  officials on how to conform their conduct to state law.                  relief is still not appropriate if there is no constitutional
  Such a result conflicts directly with the principles of                  violation. In my view, dismissal was proper because the JRS
  federalism that underlie the Eleventh Amendment. We                      has a rational basis and therefore its application does not
  conclude that Young and Edelman are inapplicable in a                    violate the federal equal protection clause. See generally
  suit against state officials on the basis of state law.                  Terre v. Boraas, 416 U.S. 1 (1974) (holding that in equal
                                                                           protection cases not involving a suspect classification or
Id. at 106. Thus, even if only injunctive relief were sought,              fundamental right, courts apply a rational basis test). As the
dismissal of Counts II, IV, VI, VIII, IX, and X was proper.                Michigan Supreme Court ruled in Harvey v. Michigan, 664
N.W.2d 767 (Mich. 2003):
                                       V.
                                                                             The state, by assuming the entire funding of the pensions
  Paragraph 3 asks the court to enjoin Defendants from                       of 36th District judges in the financially distressed city of
requiring Plaintiffs who have remained as participants in the                Detroit, made those pensions more secure. Certainly the
Tier 1 Plan to pay a larger contribution to the JRS than the                 Legislature would or could understand that this would
36th District Court judges. Although couched as prospective                  induce competent and qualified attorneys to become
language, in essence Plaintiffs seek to require the allocation               judges or to remain judges, just as the legislation did in
of state funds that are subject to the requirements of the Act.17            Hughes [v. Judges Retirement Bd., 282 N.W.2d 160
Thus, the injunctive relief requested is not “truly prospective              (Mich. 1979)]. Accordingly, we agree that the trial
non-monetary relief,” and it is not incidental; therefore, the               court’s holding that plaintiffs have not satisfied their
                                                                             burden to show that there was no rational basis for this
                                                                             legislation. Thus, the statute withstands constitutional
    17
         This is equally true as to a ll of Plaintiffs’ claims.
                                                                             scrutiny.
No. 02-2287                     Ernst, et al. v. Roberts, et al.       57

Id. at 774.18 I agree with the Michigan Supreme Court that
the proper test is rational basis and that the Judges
Retirement Act easily passes constitutional scrutiny. I would
hold that Defendant state officials did not violate Plaintiffs’
equal protection rights by enforcing the provisions of the
Judges Retirement Act.
                                   VI.
  For the foregoing reasons, I believe that we should affirm
the judgment of the district court dismissing in its entirety
Plaintiffs’ complaint.

    18
        In Hughes v. Judges’ Ret. Bd., 282 N.W .2d 1 60 (Mich. 19 79), a
group of already-retired judges challenged legislation amending the
Judges Retirement Act to increase the pension benefits to judges who
retired after its effected date. The amendment caused the pension of new
and still-active judges to be higher than retirees’ benefits. The M ichigan
Supreme Court analyzed the statute under the rational-basis test and
concluded that statute was constitutional. Ir reasoned that the legislation
was rational because the Legislature was inducing “competent and
qualified attorneys to become judges, or to remain judg es if alread y in
office.” Id. at 168.