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United States ex rel. Fields v. Bi-State Development Agency of Missouri-Illinois Metropolitan District

United States Court of Appeals, Eighth Circuit

August 1, 2017

United States ex rel. Eric Fields Plaintiff- Appellee
v.
Bi-State Development Agency of the Missouri-Illinois Metropolitan District, doing business as Metro Defendant-Appellant Eager Road and Associates, LLC Defendant United States of America Movant

          Submitted: April 5, 2017

         Appeal from United States District Court for the Eastern District of Missouri - St. Louis

          Before GRUENDER, MURPHY, and KELLY, Circuit Judges.

          KELLY, Circuit Judge.

         Bi-State Development Agency (Bi-State) appeals the denial of its motion for summary judgment. It argues that the district court[1] erred in holding that Bi-State was not an arm of the state and therefore not entitled to Eleventh Amendment immunity in this False Claims Act (FCA) action brought by a private actor. Having jurisdiction pursuant to 28 U.S.C. § 1292(a), see P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144 (1993) (appeal from the denial of summary judgment based on sovereign immunity falls within a narrow subset of permissible interlocutory appeals), we affirm.

         I. Background

         Bi-State is an interstate compact entity that owns and operates public transportation services in the City of St. Louis, Missouri; St. Louis, Charles, and Jefferson Counties in Missouri; and Madison, St. Clair, and Monroe Counties in Illinois. Bi-State was created by a compact between Illinois and Missouri, which was then ratified by Congress. Mo. Rev. Stat. § 70.370; 45 Ill. Comp. Stat. 100/1; 64 Stat. 568.

         From 2003 to 2012, Eric Fields was employed by Bi-State and Eager Road and Associates, LLC (Eager Road), as an engineer. On July 28, 2014, Fields filed the instant lawsuit against Bi-State and Eager Road[2] pursuant to the qui tam provisions of the FCA. See 31 U.S.C. § 3730(b). The FCA mandates that "any person" who "knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval" to the government "is liable to the United States government for a civil penalty" and treble damages. 31 U.S.C. § 3729(a). Fields alleged that, when submitting claims to the federal government, Bi-State falsely certified that it was in compliance with the Hatch Act and Missouri law. Specifically, Fields claimed that Bi-State raised funds for a St. Louis county executive's re-election campaign and ordered its employees to volunteer for the campaign, despite federal and state prohibitions on employee participation in political activity. The government declined to intervene, and Fields proceeded with the case independently. See 31 U.S.C. § 3730(b)(4)(B) (private actor may proceed with FCA claim where government declines to intervene).

         On March 27, 2015, Bi-State moved for summary judgment, arguing that it did not qualify as a "person" under the FCA. The district court denied Bi-State's motion and Bi-State appealed. In that appeal, Bi-State argued that it did not meet the FCA's definition of "person, " and that it was entitled to Eleventh Amendment immunity. Because the decision below addressed only the FCA-not the Eleventh Amendment-we dismissed the interlocutory appeal for lack of jurisdiction. United States ex rel. Fields v. Bi-State Dev. Agency of the Mo.-Ill. Metro. Dist., 829 F.3d 598, 600 (8th Cir. 2016). On remand, Bi-State moved for summary judgment on Eleventh Amendment immunity grounds. The district court denied Bi-State's motion, finding that Bi-State is akin to a local governmental entity and therefore not entitled to Eleventh Amendment immunity. Bi-State now appeals that decision.

         II. Discussion

         Bi-State "bears the burden of showing that it is an arm of the state." Wojcik v. Mass. State Lottery Comm'n, 300 F.3d 92, 99 (1st Cir. 2002); see Fields, 829 F.3d at 600 ("[A]ll of our sister circuits to address the issue have recognized that an entity asserting Eleventh Amendment immunity bears the burden of showing its entitlement to such immunity."). "We cannot extend the Eleventh Amendment's protection to a bistate agency unless we have 'good reason to believe that the [compacting] [s]tates structured the new agency to enable it to enjoy the special constitutional protection of the [s]tates themselves.'" Barket, Levy & Fine, Inc. v. St. Louis Thermal Energy, 948 F.2d 1084, 1086 (8th Cir. 1991) (alteration in original) (quoting Lake Country Estates, Inc. v. Tahoe Reg'l Planning Agency, 440 U.S. 391, 401 (1979)). We review denials of summary judgment on sovereign immunity grounds de novo, "considering the evidence and all reasonable inferences from the evidence in the light most favorable to the nonmoving" party. Van Whye v. Reisch, 581 F.3d 639, 648 (8th Cir. 2009).

         The Eleventh Amendment reads: "The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." U.S. Const. amend. XI. "The Eleventh Amendment protects a bistate agency if the agency is an arm of the compacting states, but not if the agency is comparable to a local governmental entity like a county or municipality." Barket, 948 F.2d at 1086.

         In Barket, we addressed the very issue now before us: whether Bi-State is akin to an arm of the state or a local entity for purposes of Eleventh Amendment immunity. There, we explained that "[t]here is no litmus test to determine whether a bistate agency is more like an arm of the compacting states or more like a local governmental entity." Id. Instead, this determination requires us to examine the "nature of the entity created by state law, " id. (internal quotation omitted), by considering the following factors:

(1) whether the compacting states characterize the agency as an arm of the compacting states or as a local governmental entity; (2) whether the compacting states fund the agency; (3) whether the compacting states are financially responsible for the liabilities and obligations the agency incurs; (4) whether the agency's commissioners are appointed by the compacting states or by local governments; (5) whether the functions the agency performs are traditionally state or municipal; and (6) whether the compacting states can veto the agency's actions.

Id. We concluded that Bi-State was "more like a local governmental entity than an arm of Missouri and Illinois." Id. at 1088.

         Here, Bi-State does not dispute that Barket decided this issue. Instead, it argues that the law Barket relied on has changed, rendering Barket outdated and justifying our reconsideration of the Barket factors as applied to Bi-State. We address each of the six factors, first addressing those related to Bi-State's level of operational independence from the Missouri and Illinois and then addressing those related to Bi-State's ...


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