ESTES v. WYOMING DEPARTMENT OF TRANSPORTATION
FILED
United States Court of Appeals
Tenth Circuit
SEP 5 2002
PATRICK FISHER
Clerk PUBLISH
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
CONNIE M. ESTES, No. 00-8069
Plaintiff - Appellee,
v.
WYOMING DEPARTMENT OF TRANSPORTATION,
Defendant - Appellant.
Appeal from the United States District Court
for the District of Wyoming
(D.C. No. 00-CV-39-B)
Jay A. Jerde, Senior Assistant Wyoming Attorney General, (Hon. Gay
Woodhouse, Wyoming Attorney General, and John W. Renneisen, Deputy
Attorney General, with him on the brief), Office of the Wyoming Attorney
General, Cheyenne, Wyoming, for Defendant-Appellant.
Colette B.Davies, (L.B. Cozzens, with her on the brief), Cozzens, Warren &
Harris, P.L.L.P., Billings, Montana, for Plaintiff-Appellee.
Before SEYMOUR, Circuit Judge, BRORBY, Senior Circuit Judge, and
LUCERO, Circuit Judge.
LUCERO, Circuit Judge.
Connie Estes began her employment with the Wyoming Department of
Transportation ("WDOT") as a driver's license examiner in January 1997. In
April 1997, she injured her back at work, and in March 1998, she underwent
lumbar decompressive surgery. On November 10, 1998, Estes's surgeon released
her for work with three restrictions: lifting limited to twenty-five pounds; no
repetitive bending at the waist, stooping, or crawling; and no sitting or standing
without being able to move for more than one hour. At the request of WDOT, a
physician reviewed Estes's medical records and concluded on November 16,
1998, that she was unable to perform her functions as a driver's license examiner
because she could not lift fifty pounds. In December 1998, Estes was dismissed
by WDOT.
Estes filed suit in state court alleging that WDOT violated Title I of the
American with Disabilities Act ("ADA"), committed breach of contract, and
violated Wyoming's workers' compensation law when it dismissed her. She
sought lost pay and fringe benefits, compensatory damages, reinstatement, court
costs, and attorney's fees. WDOT removed the case to federal court and stated in
the Notice of Removal that it was not waiving any constitutional challenges to the
district court's jurisdiction. Later WDOT filed a motion for judgment on the
pleadings, arguing the district court lacked jurisdiction because WDOT is entitled
to sovereign immunity and, alternatively, that Estes failed to exhaust state
administrative remedies for her breach-of-contract claim. Denying the motion in
part and granting it in part, the district court held that Congress validly abrogated
the States' sovereign immunity for violations of Title I of the ADA; that WDOT
waived its sovereign immunity from the breach-of-contract claim when it removed
the case to federal court; and that the state-law workers' compensation claim was
barred by the Wyoming Governmental Claims Act, Wyo. Stat. Ann. 1-39-101
to -121. WDOT timely appealed, raising two main questions for our resolution:
(1) whether Congress validly abrogated the States' sovereign immunity for
violations of Title I of the ADA, and (2) whether WDOT waived its sovereign
immunity when it removed the case to federal court.
We abated this case to await the Supreme Court's then-pending decision in
Lapides v. Board of Regents, 122 S. Ct. 1640 (2002). That case has now been
decided in a manner that definitively resolves one of the jurisdictional issues
before us and provides substantial guidance on another. Exercising jurisdiction
pursuant to 28 U.S.C. 1291, we affirm in part and reverse and remand in part.
I
The Eleventh Amendment provides that "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. As
interpreted, "an unconsenting State is immune from suits brought in federal courts
by her own citizens as well as by citizens of another State." Edelman v. Jordan,
415 U.S. 651, 66263 (1974). Sovereign immunity is not absolute. Congress can,
for example, abrogate a State's sovereign immunity "in the exercise of its power
to enforce the Fourteenth Amendment," and a State may waive its immunity by
consenting to suit. Coll. Savings Bank v. Fla. Prepaid Postsecondary Ed. Expense
Bd., 527 U.S. 666, 670 (1999). However, the requirements for abrogation and
waiver are strict. Before Congress can abrogate a State's sovereign immunity
pursuant to Article I, 5 of the Fourteenth Amendment, Congress "must identify
conduct transgressing the Fourteenth Amendment's substantive provisions, and
must tailor its legislative scheme to remedying or preventing such conduct." Fla.
Prepaid Postsecondary Ed. Expense Bd. v. Coll. Savings Bank, 527 U.S. 627, 639
(1999). Before we will conclude that a State has waived its sovereign immunity,
there must be "an unequivocal waiver specifically applicable to federal-court
jurisdiction." Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 241 (1985).
Denying WDOT's motion for partial judgment on the pleadings, the district
court decided that Congress validly abrogated the States' sovereign immunity
when it enacted the ADA and that WDOT waived its immunity on the state-law
claims when it removed the case from state court to federal court. We review de
novo the denial of a motion for judgment on the pleadings pursuant to Federal
Rule of Civil Procedure 12(c), applying the same standard as the district
court-accepting all well-pleaded allegations in the complaint as true, and
construing them in the light most favorable to the plaintiff. Ramirez v. Dep't of
Corr., 222 F.3d 1238, 1240 (10th Cir. 2000).
A
Applying Board of Trustees of the University of Alabama v. Garrett, 531
U.S. 356 (2001), decided after the district court entered its decision in this case,
we reverse the district court's conclusion that Congress validly abrogated the
States' sovereign immunity in Title I of the ADA. In Garrett, the Supreme Court
held that Congress did not validly abrogate the States' sovereign immunity from
suit by private individuals for money damages under Title I of the ADA. Id. at
374 n.9. We proceed to consider whether WDOT's removal of the case to federal
court constitutes a waiver of its sovereign immunity in this case.
B
We initially consider WDOT's waiver argument regarding the state-law
breach-of-contract claim. WDOT argues that a State's mere removal of a case
from state court to federal court does not constitute a waiver of its sovereign
immunity. WDOT contends that the State must additionally litigate the merits of
the case in that forum.
Lapides forecloses this argument. Lapides clearly holds that a State waives
its sovereign immunity to suit in a federal court when it removes a case from state
court. Id. at 1646. The Court stressed that its holding is limited "to the context
of state-law claims, in respect to which the State has explicitly waived immunity
from state-court proceedings." Id. at 1643. Because WDOT is a division of the
State of Wyoming, and Wyoming Statutes Annotated 1-39-104 waives
Wyoming's sovereign immunity for contract-claim suits in its own courts, Lapides
is dispositive.
Lapides holds that "removal is a form of voluntary invocation of a federal
court's jurisdiction sufficient to waive the State's otherwise valid objection to
litigation of a matter (here of state law) in a federal forum." Id. at 1646.
Therefore it is irrelevant that appellant removed the case to federal court simply
to challenge the district court's jurisdiction to hear the case. See id. at 1645 ("A
benign motive . . . cannot make the critical difference for which [the State] hopes.
Motives are difficult to evaluate, while jurisdictional rules should be clear.").
C
In limiting its holding to state-law claims, Lapides does not squarely
answer whether the mere act of removing federal-law claims waives a State's
sovereign immunity in federal court. However, based on the Supreme Court's
analysis in Lapides and our own circuit's precedent in this area, we conclude that
WDOT has waived its sovereign immunity for the ADA claim.
Three of our cases address whether a State's removal of federal-law claims
to federal court effects a waiver of sovereign immunity. See McLaughlin v. Bd.
of Trustees, 215 F.3d 1168 (10th Cir. 2000); Sutton v. Utah State Sch. for the
Deaf & Blind, 173 F.3d 1226 (10th Cir. 1999); Gallagher v. Continental Ins. Co.,
502 F.2d 827 (10th Cir. 1974). We first addressed the general issue in Gallagher,
which involved a suit challenging the pay of additional compensation for the
Eisenhower Memorial Tunnel on Interstate 70, near Loveland Pass in Colorado.
Citizens and taxpayers of the State of Colorado and the United States sued the
State, project contractors, contractors' sureties, and various Colorado officials in
state court. All defendants removed the case to federal court, based on federal
question and diversity jurisdiction, and the district court dismissed. Ultimately
dismissing this case for lack of standing, we initially addressed whether Colorado
was entitled to sovereign immunity. We noted that "the state made a general
appearance, joined in the removal petition and the resistance to plaintiffs' remand
motion, [and] moved to dismiss for failure to state a claim . . . ." Gallagher, 502
F.2d at 830.
Twenty-five years later, we built upon this statement in Sutton. A mother
of a student at the Utah State School for the Deaf and Blind sued both school and
principal under 42 U.S.C. 1983 and various state laws in state court on behalf of
her son, who had been sexually assaulted at the school by a fellow student. 173
F.3d at 122930. Defendants removed the case to federal court. The district
court dismissed the 1983 claim for failure to state a claim, declined to retain
supplemental jurisdiction over the remaining state-law claims, and dismissed the
state claims without prejudice. Id. at 1230. On appeal, defendants for the first
time raised sovereign immunity as a defense. Id. at 1231. Sutton summarized the
holding of Gallagher as follows: "[W]e held that the Eleventh Amendment
defense was waived when a defendant State removed a case from state court to
federal court." We concluded that the Supreme Court's post-Gallagher cases did
not mandate a contrary result. Id. at 1234.
A State must express an "unequivocal intent to waive" sovereign immunity,
id. (quoting Atascadero, 473 U.S. at 241), and such intent "seems clear when a
state, facing suit in its own courts, purposefully seeks a federal forum," id.
Sutton holds that whether the State Attorney General has specific authority to
waive the State's sovereign immunity is irrelevant because the Attorney General's
office "caused the removal of the case from state to federal court" and litigated
the merits of the case in federal court. Id. at 1235. We concluded the State
waived its sovereign immunity because it took actions that amounted to an
"extraordinarily effective waiver." Id. at 1236 (quotation omitted).
In McLaughlin, the Board of Trustees of State Colleges of Colorado was
sued by John P. McLaughlin in state court challenging his termination from a
faculty appointment and his failure to receive a tenured position at Metropolitan
State College of Denver, a constituent institution. 215 F.3d at 1169. McLaughlin
sought relief pursuant to 42 U.S.C. 1983 and state law governing breach of
contract and promissory estoppel. Id. The Board removed the case to federal
court and moved for dismissal on two bases: that the district court lacked subject
matter jurisdiction on the federal claim because the Board was entitled to
sovereign immunity and, in the alternative, that McLaughlin failed to state a
claim. The district court concluded the Board did not waive its sovereign
immunity by removing the case to federal court. We reversed. We held that
reversal was compelled by Sutton, explaining that "when the invocation of federal
court jurisdiction [is] brought about by defendants' own counsel, the case presents
circumstances showing an extraordinarily effective waiver." Id. at 1170
(quotations omitted and brackets in original).
Advancing the major premise that in each of these three cases the States
had proceeded to litigate the merits in federal court, WDOT specifically contends
that a State must both remove and litigate the merits of a case in federal court
before a waiver of sovereign immunity will be inferred. Because WDOT only
"challeng[ed] the subject matter jurisdiction of the District Court with regard to
the ADA claim" and "did not take any steps after removal that could be construed
as affirmatively invoking the jurisdiction of the District Court on the merits of the
ADA claim," WDOT contends that it has not waived its sovereign immunity.(1)
(Appellant's Br. at 6, 17.) We are not persuaded that the major premise of
WDOT's argument is correct. Assuredly, the state defendants in McLaughlin,
Sutton, and Gallagher did litigate the merits of the case after removing it to
federal court. See McLaughlin, 215 F.3d at 117172; Sutton, 173 F.3d at 1235;
Gallagher, 502 F.2d at 830. But nothing in these three cited cases limits their
holdings to cases litigated on the merits following removal. Even if we were
persuaded by WDOT's interpretation of the three cases that it utilizes to establish
its major premise, Lapides now undermines the argument because it contains no
such requirement.
The Supreme Court has consistently held that a State waives its sovereign
immunity when it voluntarily appears in federal court. See Gunter v. Atlantic
Coast Line R.R., 200 U.S. 273, 284 (1906); Clark v. Barnard, 108 U.S. 436, 447
(1883). Never has the Court enunciated a requirement of litigation on the merits as a
condition of waiver. Lapides recently built on the Court's prior precedent in declaring:
It would seem anomalous or inconsistent for a State both (1) to
invoke federal jurisdiction, thereby contending that the "Judicial
power of the United States" extends to the case at hand, and (2) to
claim Eleventh Amendment immunity, thereby denying that the
"Judicial power of the United States" extends to the case at hand.
And a Constitution that permitted States to follow their litigation
interests by freely asserting both claims in the same case could
generate seriously unfair results.
122 S. Ct. at 1643. The jurisprudence in this area "stands for the unremarkable
proposition that a State waives its sovereign immunity by voluntarily invoking the
jurisdiction of the federal courts." Coll. Savings Bank, 527 U.S. at 681 n.3; see,
e.g., Gardner v. New Jersey, 329 U.S. 565, 574 (1947) (holding that "[w]hen the
State becomes the actor and files a claim against the fund it waives any immunity
which it otherwise might have had respecting the adjudication of the claim").
We conclude that WDOT has waived its sovereign immunity relative to the
ADA claim even if it attempted to remove the present case simply to federal court
to challenge the jurisdiction of the federal forum. Our holding today does not
affect the ability of a State to raise sovereign immunity when it is involuntarily
brought into federal court. It is only when a State removes federal-law claims
from state court to federal court that it "submits its rights for judicial
(1) When WDOT removed the case from state court to federal court, it
unambiguously invoked the jurisdiction of the federal court. In the February 28,
2000, Notice of Removal, WDOT argued that the federal court had jurisdiction
over the ADA claim because it arose under federal law, thus "satisfy[ing] the
original jurisdiction requirement for removal under Section 1441(a)."
(Appellant's App. at 13.)
determination," Gunter, 200 U.S. at 284, and unequivocally invokes the
jurisdiction of the federal courts.
D
Because we conclude that WDOT waived its sovereign immunity by
removing the case from state court to federal court, we need not address whether
injunctive relief is available for Estes under Ex parte Young, 209 U.S. 123
(1908).
II
Having concluded that WDOT waived its sovereign immunity for the state
breach-of-contract claim, we address WDOT's contention that the district court
lacked jurisdiction over this claim because Estes failed to exhaust administrative
remedies provided for in the State of Wyoming Personnel Rules ("Personnel
Rules"). Those rules allow permanent state employees claiming to have been
wrongly terminated to file an appeal with the Wyoming Department of
Administration and Information ("WDAI"). If the employee does not file a
petition for a "personnel appeal hearing" with the State Human Resources
Administrator within twenty days of receipt of a notice of dismissal, there is no
further right to appeal and the dismissal will stand. Personnel Rules of the
Executive Branch of Wyoming State Government, ch. 12, 7(a). Citing Glover v.
State, 860 P.2d 1169 (Wyo. 1993), WDOT contends the Personnel Rules vest
exclusive jurisdiction over personnel matters with WDAI until administrative
remedies have been exhausted.
In Glover, a State employee was terminated from his job as a bindery
technician for refusing to make outdoor deliveries during cold weather. Id. at
1170. Glover first filed suit in federal court; after that court granted a State's
motion for summary judgment, he proceeded to file similar claims in state court.
Id. at 1171. The state trial court granted the State's motion for summary
judgment based on Glover's failure to exhaust administrative remedies. On
appeal, the Wyoming Supreme Court affirmed, holding that the exhaustion
doctrine applies when "an agency alone has been granted or found to possess
exclusive jurisdiction over the case" and that the trial court did not abuse its
discretion when it declined to exercise jurisdiction due to Glover's failure to
exhaust his administrative remedies. Id. at 1173.
The district court in the present case rejected WDOT's exhaustion
argument. Estes's breach-of-contract claim is based on unlawful discrimination.
Under the Wyoming Fair Employment Practices Act, an individual alleging
discrimination or unfair employment practices may file a complaint with the
Wyoming Fair Employment Practices Commission ("Commission"). Therefore,
Estes could file her complaint with either WDAI or the Commission. The district
court concluded that WDAI "did not possess exclusive jurisdiction [over Estes's
claims], and dismissal for failure to exhaust administrate remedies would be
improper." (Appellant's App. at 82 (quotations omitted).)
On appeal, WDOT acknowledges that Estes could have filed her claim with
one of the two Wyoming agencies, but contends that because Estes did not pursue
her claim with the Commission, she must exhaust her administrative remedies
with WDAI. We note that the basis of Estes's breach-of-contract claim is
unlawful discrimination, that she filed a complaint with the Commission
(Appellant's App. at 66), and that she obtained a right to sue letter(2) from the
United States Equal Employment Opportunity Commission ("EEOC")
(Appellant's App. at 7) before she filed suit in state court.
The exhaustion requirement advanced by WDOT depends upon WDAI
having exclusive jurisdiction over a case. Both WDAI and the Commission,
however, have jurisdiction over Estes's unlawful discrimination claim, which
forms the basis of her breach-of-contract claim. We therefore conclude the
district court did not abuse its discretion in determining that Estes is not required
to exhaust her administrative remedies with WDAI under the Personnel Rules.
III
The judgement of the district court is REVERSED in part and AFFIRMED
in part. We REMAND for further proceedings consistent with this opinion.
(2) Estes's motion to supplement the record is DENIED. The deposition
testimony of Debra Ornelas is not relevant to the disposition of the issues raised
on appeal and an actual copy of the EEOC right to sue letter is not necessary
because the existence of the letter is mentioned in Estes's complaint.