By Tabitha Etlinger, Associate, Saxon, Gilmore, Carraway & Gibbons, P.A.
Earlier this month, the Eleventh Circuit, in United States of America ex rel. Michael Lesinski v. South Florida Water Management District, No. 12-16082, 2014 WL 23737 (11th Cir. Jan. 2, 2014), ruled that South Florida Water Management District (“SFWMD”) could not be liable in a case brought by a private citizen under the Federal Claims Act (the “Act”). Id, at *5. The ruling itself is not entirely unexpected since the United States Supreme Court has previously held that neither a state nor its agencies can be held liable in a case by a private citizen under the Act. Vt. Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765, 781 (2000). The reasoning of the Eleventh Circuit in coming to this decision, although not necessarily binding precedent, could have much broader implications.
The Act allows private citizens to bring suit against ‘persons’ for making false claims for federal funds. 31 U.S.C. § 3729(a). The Eleventh Amendment to the United States Constitution generally prohibits private citizens from bringing suit in federal court against states and their agencies without their consent. Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30, 39 (1994). The protection of the Eleventh Amendment, however, does not generally extend to local governments, such as counties and municipalities, so an analysis must be made as to whether an entity is an arm of the state or a local government entity. Lesinski, 2014 WL 23737 at *2 (citing Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280 (1977). In Stevens, the Supreme Court, based on a doctrine that the term ‘person’ generally does not include a sovereign state, suggested that the analysis of whether an entity is a ‘person’ under the Act is similar to the analysis of whether that same entity would enjoy immunity under the Eleventh Amendment. Stevens, 529 U.S. at 780. Based on the Stevens reasoning , the Eleventh Circuit held in Lesinski that the analysis of whether an entity is a ‘person’ under the Act should use the same established factors used to determine whether that entity would be immune from suit under the Eleventh Amendment. Lesinski, 2014 WL 23737, at *2.
The issue of whether a water management district is immune under the Eleventh Amendment has been addressed by several federal district courts and the decisions have not been consistent. See Grimshaw v. South Florida Water Management District, 195 F. Supp. 2d 1358, 1359-61 (S.D. Fla. 2002). In Lesinski, the Eleventh Circuit applied the four part test implemented under the Eleventh Amendment consisting of “(1) how state law defines the entity; (2) what degree of control the State maintains over the entity; (3) where the entity derives its funds; and (4) who is responsible for judgments against the entity.” Lesinski, 2014 WL 23737, at *3 (quoting Manders v. Lee, 338 F.3d 1304 (11th Cir. 2003). The Eleventh Circuit found that all four of these factors indicated that SFWMD was an arm of the state and, thus, that SFWMD could not be considered a ‘person’ under the Act. Lesinski, 2014 WL 23737, at *3-*5. Oddly, however, while specifically pointing out that the analysis is the same, the Eleventh Circuit was especially careful to limit its holding in Lesinski to the Act and refused to make a specific holding that SFWMD would be immune from suit in federal court under the Eleventh Amendment. Id. at FN 9. Accordingly, while the district courts of the Eleventh Circuit are left with a fairly strong indication of how the Eleventh Circuit is likely to rule regarding immunity of water management districts, it appears that they are left without clear precedent.
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