Daniel v. Univ. of Tex. Sw. Med. Ctr.

960 F.3d 253

Gwendolyn M. DANIEL, Plaintiff - Appellant

v.UNIVERSITY OF TEXAS SOUTHWESTERN MEDICAL CENTER, Defendant - Appellee

No. 19-10834

United States Court of Appeals, Fifth Circuit.

FILED June 2, 2020

Laura E. Calhoun, Attorney, Albin Roach, P.L.L.C., Frisco, TX, for Plaintiff-Appellant.

Jason R. LaFond, Office of the Attorney General, Office of the Solicitor General, Austin, TX, Jason Thaddeus Contreras, Esq., Assistant Attorney General, Office of the Attorney General, Financial Litigation & Charitable Trusts Division, Austin, TX, for Defendant-Appellee.

Before WIENER, STEWART, and WILLETT, Circuit Judges.

CARL E. STEWART, Circuit Judge:

Plaintiff-Appellant Gwendolyn M. Daniel filed an Americans with Disabilities Act (ADA) action against Appellee-Defendant University of Texas Southwestern Medical Center (UTSMC). She is seeking recovery for UTSMC’s alleged discrimination and retaliation against her in connection with her employment as a UTSMC nurse.

The district court granted UTSMC’s Federal Rule of Civil Procedure (Rule) 12(b)(1) motion to dismiss because UTSMC is an arm of the State of Texas and therefore entitled to Eleventh Amendment immunity. We AFFIRM.

I.

UTSMC is a public medical institution within the University of Texas System (UT System)¹ and the largest medical center in the Dallas metropolitan area. UTSMC is comprised of UT Southwestern Medical School, UT Southwestern Graduate School of Biomedical Sciences, and UT Southwestern School of Health Professions. UTSMC is also affiliated with several healthcare facilities, including but not limited to Parkland Memorial Hospital, William P. Clements Jr. University Hospital, and, as relevant in this case, Saint Paul University Hospital.²

Plaintiff was employed at Saint Paul as a contract registered nurse and subsequently elevated to a full-time nurse. Plaintiff alleges that due to her ADA-qualified disability, UTSMC subjected her to continual harassment, discipline, discrimination, retaliation, and constructive discharge.

In July 2018, Plaintiff initiated this action against UTSMC seeking economic and equitable relief for ADA retaliation and discrimination.³ UTSMC moved for Rule 12(b)(1) dismissal, claiming Eleventh Amendment sovereign immunity. The district court granted the motion for lack of subject matter jurisdiction because "it is well settled that UTSMC is an arm of the state of Texas." The court entered judgment in UTSMC’s favor thereafter. Plaintiff subsequently moved for reconsideration which the district court denied.

Plaintiff now appeals the dismissal order granting UTSMC’s 12(b)(1) motion and the entry of final judgment. Plaintiff’s appeal centers entirely around whether her lawsuit is considered a suit against an arm of the State of Texas for the purpose of Eleventh Amendment protection.

II.

We review questions of subject matter jurisdiction, including sovereign immunity determinations, de novo. See Machete Prods., L.L.C. v. Page , 809 F.3d 281, 287 (5th Cir. 2015).

"[P]laintiff bears the burden of proof that jurisdiction does in fact exist." Ramming v. United States , 281 F.3d 158, 161 (5th Cir. 2001). In evaluating a Rule 12(b)(1) motion, "we must take all of the factual allegations in the complaint as true, but we are not bound to accept as true a legal conclusion couched as a factual allegation .... [A] district court is empowered to find facts as necessary to determine whether it has jurisdiction." Machete , 809 F.3d at 287 (internal quotation marks and citation omitted).

III.

Pursuant to the Eleventh Amendment, a state’s sovereign immunity in federal court extends to private suits against state agencies, state departments, and other arms of the state. See P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc. , 506 U.S. 139, 146, 113 S.Ct. 684, 121 L.Ed.2d 605 (1993) ; Richardson v. S. Univ. , 118 F.3d 450, 452–54 (5th Cir. 1997) (stating that sovereign immunity protects "arms of the state"). "While instrumentalities of the state enjoy sovereign immunity, ‘the Eleventh Amendment does not extend its immunity to units of local government.’ " Providence Behavioral Health v. Grant Rd. Pub. Util. Dist. , 902 F.3d 448, 456 (5th Cir. 2018) (quoting Bd. of Trustees of Univ. of Ala. v. Garrett , 531 U.S. 356, 369, 121 S.Ct. 955, 148 L.Ed.2d 866 (2001) ). Said differently, not all units of a state government are immunized from federal action.

To determine whether a unit qualifies as an arm of the state as a matter of law,⁴ "we employ the six-factor test developed in Clark v. Tarrant County, Tex. , 798 F.2d 736 (5th Cir. 1986)." Providence , 902 F.3d at 456. The six Clark factors are:

(1) Whether the state statutes and case law view the agency as an arm of the state;

(2) The source of the entity’s funding;

(3) The entity’s degree of local autonomy;

(4) Whether the entity is concerned primarily with local as opposed to statewide, problems;

(5) Whether the entity has the authority to sue and be sued in its own name; and (6) Whether the entity has the right to hold and use property.

See Hudson v. City of New Orleans , 174 F.3d 677, 681 (5th Cir. 1999) (citing Clark , 798 F.2d at 744-45 ). An underlying goal of this six-factor test is to protect state funding; in turn, the second factor is the most important. Id. at 682. Each factor need not be present for state immunity to be extended. See id .

In employing the Clark factors,⁵ we conclude that UTSMC is entitled to arm-of-the-state status; therefore, it has sovereign immunity from Plaintiff’s ADA discrimination and retaliation claims.

Factor 1 (Statutory and Legal Authorities) . UTSMC is part of the UT System. See TEX. EDUC. CODE § 65.02 (a)(7).

A public university system is considered a state agency. See TEX. GOV’T. CODE § 572.002(10)(B). Texas Government Code § 572.002(10)(B) defines "state agency" as, among other things, "a university system or an institution of higher education as defined by Section 61.003, Education Code." Texas Education Code Section 61.003(8) ’s definition of "institution of higher education" includes "any ... medical or dental unit ... as defined in this section." The definition of "medical or dental unit" includes UTSMC. See TEX. EDUC. CODE § 63.003(5).

We have held that public universities are entitled to sovereign immunity as arms of the state. See U.S. Oil Recovery Site PRP Grp. v. R.R. Comm’n of Tex. , 898 F.3d 497, 501–02 (5th Cir. 2018) (collecting cases). In several unpublished opinions, we have likewise consistently treated health institutions of the UT System, including UTSMC, as instrumentalities of the State of Texas. See, e.g. , Elhaj-Chehade v. Office of Chief Admin. Hearing Officer , 235 F.3d 1339 (Table), 2000 WL 1672679, at *1 (5th Cir. 2000) (holding that UTSMC "is an arm of the State"); U.S. ex rel. King v. Univ. of Tex. Health Sci. Ctr. at Hous. , 544 F. App'x 490, 495–98 (5th Cir. 2013) (per curiam) (holding that the medical institution is an arm of state); Sullivan v. Univ. of Tex. Health Sci. Ctr. at Hous. Dental Branch , 217 F. App'x 391, 392 (5th Cir. 2007) (per curiam) ("It is undisputed that UTHSC, as an arm of the state, is entitled to Eleventh Amendment immunity."); Scott v. Pfizer Inc. , 182 F. App'x 312, 315-16 (5th Cir. 2006) (per curiam) (same with regard to University of Texas Medical Branch).

These statutes and legal authorities favor treating UTSMC as an arm of Texas.

Factor 2 (Source of State Funding) . In evaluating the second and most significant factor, we analyze "whether a judgment against [UTSMC] will be paid with state funds." Richardson , 118 F.3d at 455.

Texas law authorizes state treasury funds to be allocated to UTSMC from the permanent health fund for higher education. See TEX. EDUC. CODE § 63.002(c)(3). Here, Plaintiff recognizes that UTSMC receives state funding but maintains that UTSMC is not dependent on state funding. She points to an "August 2018 Legislative Appropriations Request Fiscal Years 2020 and 2021" report that states: UTSMC "receives no State dollars to construct or operate clinical facilities."⁶ Because she was employed at Saint Paul, a UTSMC medical facility that predominately relied on private funding, Plaintiff urges us to infer that public funds would not be used to pay any resulting judgment from this action. We disagree.

A similar contention was posed to us in United Carolina Bank v. Board of Regents of Stephen F. Austin State University , 665 F.2d 553, 560 (5th Cir. Unit A 1982). There, the district court held that the university was not entitled to Eleventh Amendment protection because a judgment award did not implicate general revenues of the state, as there were identifiable revenue bonds available for a judgment payout. Id. (The entity "could itself pay such an award because it had substantial unappropriated, separately held, locally generated funds."). But "[t]he key is not the ability to identify segregated funds"; rather, it "is whether use of these unappropriated funds to pay a damage award against [the university] would interfere with the fiscal autonomy and political sovereignty of Texas." Id. at 560-61. Because the university also held funds in the state treasury and the funds were otherwise restricted from use, we reversed the district court’s holding, refrained from segregating identifiable funds, and extended sovereign immunity to the university. Id . at 561 (stating that "any award from those funds would directly interfere with the state’s fiscal autonomy").

We see no reason to veer from United Carolina Bank ’s reasoning, and in turn, we reject Plaintiff’s segregation argument. Furthermore, Plaintiff’s record support—which essentially relies on an isolated sentence that UTSMC clinical facilities are privately funded—does not verify whether a judgment against UTSMC would be satisfied with private or state-allocated funds. To be clear, we do not draw a bright-line rule as to the amount of private funding necessary to hold an entity financially independent from the state. Plaintiff’s burden is to...