State of Oregon v. City of Rajneeshpuram/1985 03 13

Case summary
STATE OF OREGON Plaintiff, v. CITY OF RAJNEESHPURAM, a putative Oregon municipal corporation; WASCO COUNTY, a political subdivision of the State of Oregon; ROBERT M. BROWN, Sheriff of Wasco County; RAJNEESH FOUNDATION INTERNATIONAL, a New Jersey corporation; RAJNEESH INVESTMENT CORPORATION, an Oregon corporation; RAJNEESH NEO-SANNYAS INTERNATIONAL COMMUNE, an Oregon corporation; MA ANAND SHEELA, individually; SWAMI PREM JAYANANDA, MA YOGA VIDYA, SWAMI KRISHNA DEVA, MA PREM ARCHAN, SWAMI DEVA SANDESH, MA PREM PATIPADA, MA DEVA JAYAMALA, MA SAT PRABODHI, MA PREM RIKTA, individually and as representatives of the class of all current residents of the City of Rajneeshpuram; Defendants

Civil No. 84-359 FR

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON

1985 U.S. Dist.

March 13, 1985, Decided and Filed

CASE SUMMARY

PROCEDURAL POSTURE: Plaintiff state filed suit against defendant city seeking a declaration that the incorporation of the city violated the United States Constitution. The city filed a motion to join certain state officials in their individual and official capacity as plaintiffs in the action. The state moved for an order staying the city's motion to join and for a summary order determining that the court had no jurisdiction.

OVERVIEW: The state also moved for an order allowing it additional time to respond to the merits of the city's motion to join additional parties. The city sought to join certain state officials on the grounds that (1) in the absence of these parties the court's exclusive jurisdiction was threatened; (2) complete relief could not be accorded those already before the court; and (3) the current parties would be subjected to multiple litigation and potentially inconsistent decisions. The court pointed out that the general rule of the eleventh amendment was that relief sought against an officer was, in fact, against a sovereign if the decree would operate against the latter. However, the court found that an exception to this rule was that a suit challenging the constitutionality of a state official's action was not one against the state. The court found that the interests promoted by this exception were applicable to the resolution of this case and found that jurisdiction to enjoin state officials from violating federal law may be exercised by the court.

OUTCOME: The court denied the state's motion for summary judgment and denied the state's motion to stay the city's motion to join additional parties. However, the court granted the state's motion for enlargement of time to respond to the merits of the city's motion to join additional parties.

COUNSEL: [*1]  Dave Frohnmayer, Attorney General, William F. Gary, Deputy Attorney General, Robert W. Muir, Asst. Attorney General, Margaret Rabin, Asst. Attorney General, Attorneys for Plaintiff.

Swami Prem Niren, Swami Prartho Subhan, Swami Satyam Vishuddha, Rajneesh Legal Services Corporation; Ma Prem Sangeet; Bernard L. Smith, District Attorney, Attorneys for Defendants.

OPINION BY: FRYE

Opinion
OPINION

OPINION AND ORDER

FRYE, Judge:

In the matter before the court, defendants move pursuant to Fed. R. Civ. P. 19(a) and 21 for an order joining certain state officials in their individual and official capacity as plaintiffs in this action. Plaintiff, State of Oregon, responds to defendants' motion to join parties by moving the court for an order staying defendants' motion to join parties and for a summary order determining that the court has no jurisdiction to grant defendants' motion to compel joinder of state officials as plaintiffs for the purpose which defendants assert.

Plaintiff has moved the court for an order allowing it additional time to respond to the merits of defendants' motion to join additional parties, in the event the court determines that jurisdiction is proper. Because the court will [*2] allow plaintiff additional time to respond to the merits of defendants' motion to join parties if this court has jurisdiction, in this order the court will address itself exclusively to the issue of its jurisdiction to grant such a motion.

Background
BACKGROUND

On October 1, 1984, defendants moved this court for a preliminary injunction enjoining the plaintiff, State of Oregon, from treating the City of Rajneeshpuram and its employees and officials differently from other legally incorporated cities. Prior to the hearing on the preliminary injunction, plaintiff challenged the court's jurisdiction to grant such relief. On November 16, 1984, this court entered an order finding that the eleventh amendment to the United States Constitution precluded granting injunctive relief against the State of Oregon in this case. Opinion and Order of November 16, 1984, at 13.

The court noted in that opinion that the State of Oregon was the sole party aligned against the defendants and that the court's decision did not reach the issue of jurisdiction to award injunctive relief against state officials alleged to be violating federal law. This issue is now before the court.

Defendants seek to join certain [*3] state officials in this action on the grounds that (1) in the absence of these parties this court's exclusive jurisdiction is threatened; (2) complete relief cannot be accorded those already before the court; and (3) the current parties will be subjected to multiple litigation and potentially inconsistent decisions. The defendants allege that the state officials they seek to join as parties to this action have stated their intention to conduct state administrative hearings regarding the entitlement of the City of Rajneeshpuram to state funds for "911" emergency telephone services, to access to the Law Enforcement Data System, and to administer state fire codes. Defendants allege that the issue at each of these hearings is the same as the issue before the court in this action: the constitutionality of the City of Rajneeshpuram.

Analysis
ANALYSIS

Defendants have clearly stated their intention to join these state officials as plaintiffs in order these state officials from violating federal law. Plaintiff contends that by virtue of the eleventh amendment of the United States Constitution, this court has no jurisdiction to compel the joinder of state officials as parties plaintiff in this [*4] action. Plaintiff claims that the defendants' motion to join additional parties for the purpose of seeking injunctive relief threatens the sovereignty of the State of Oregon no less directly than a motion for injunctive relief directed at the State itself.

HN1The eleventh amendment acts as a bar to federal suits against the state or state officials "when the state is the real, substantial party in interest." Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 464 (1945). Thus, "the general rule is that relief sought against an officer is, in fact, against the sovereign if the decree would operate against the latter." Hawaii v. Gordon, 373 U.S. 57, 58 (1963) (per curiam). The Supreme Court in Pennhurst State School & Hosp. v. Halderman,    U.S.   , 104 S.Ct. 900 (1984) recently explained that a state's grant of sovereign immunity is not without important exception. The Court stated: [10] The Court has recognized an important exception to this general rule: a suit challenging the constitutionality of a state official's action is not one against the State. This was the holding in Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed.2d 714 (1908), [*5] in which a federal court enjoined the Attorney General of the State of Minnesota from bringing suit to enforce a ate statute that allegedly violated the Fourteenth Amendment. This Court held that the Eleventh Amendment did not prohibit issuance of this injunction. The theory of the case was that an unconstitutional enactment is "void" and therefore does not "impart to [the officer] any immunity from responsibility to the supreme authority of the United States." Id, at 160, 28 S.Ct., at 454. Since the State could not authorize the action, the officer was "stripped of his official or representative character and [was] subjected to the consequences of his official conduct." Ibid. 104 S.Ct. at 909.

The plaintiff relies upon the Pennhurst case in support of its position that the defendants' action amounts to no more than an attempt to obtain injunctive relief against the state itself. Pennhurst itself is not dispositive of the issues before the court, however. In Pennhurst, plaintiffs were seeking injunctive relief against state officials for both state and federal law violations. The Court of Appeals affirmed the district court's injunction based solely upon [*6] the state law claim. The Supreme Court reversed and remanded, holding that the Ex Parte Young exception did not apply to a state officer's violation of state law. The Court remanded for a determination of whether there was grounds under federal law to uphold the injunction.

In this case defendants seek relief against state officials on the grounds that their threatened actions will violate federal law. Defendants claim that state administrative proceedings to determine the federal constitutionality of the City of Rajneeshpuram would undermine exclusive federal jurisdiction and violate the right of these defendants to a federal forum by virtue of removal pursuant to 28 U.S.C. 1441, et seq. and the supremacy clause of the United States Constitution. Regardless of whether defendants can prevail on their claim for injunctive relief, these defendants, unlike the plaintiffs in Pennhurst, base their claim for relief upon violation of federal law.

Plaintiff relies further upon the cases of Larson v. Domestic and Foreign Commerce Corp., 337 U.S. 682 (1949) and Dugan v. Rank, 372 U.S. 609 (1968) in support of their position that injunctive relief cannot be granted against [*7] these state officials. However, these cases are distinguishable on the same grounds as Pennhurst. In both Larson and Dugan, the Court recognized the general rule that a suit is against the sovereign if the effect of the judgment would be "to restrain the government from acting, or to compel it to act." Larson v. Domestic & Foreign Corp., 337 U.S. at 704. However, both courts recognized the exception to that rule when acts are allegedly beyond a state official's statutory authority or allegedly constitutionally void. Dugan v. Rank, 372 U.S. at 621. In Larson, the plaintiff filed an action against federal administrators for an injunction in a contract dispute. The Court noted that "[t]here was no claim made that the Administrator and his agents, etc. were acting unconstitutionally or pursuant to an unconstitutional grant of power," 337 U.S. at 691, and that no exception to the sovereign immunity rule applied. Dugan is similarly distinguishable as an action for trespass alleging no federal violation falling within an exception to the sovereign immunity rule. Both Larson and Dugan are discussed at length in the Pennhurst case, and federal courts [*8] after Pennhurst continue to apply the Ex Parte Young exception to assume jurisdiction to remedy violations of federal law by state officials. See, e.g. Hoohuli v. Arioshi, 741 F.2d 1169 (9th Cir. 1984), citing Pennhurst.

While the plaintiff correctly states the general rule against relief sought nominally against state officials when the decree will operate against the sovereign, the State's position fails to address itself to the Ex Parte Young exception. "[T]he Young doctrine has been accepted as necessary to vindicate federal rights and hold state officials responsible to the 'supreme authority of the United States.'" Pennhurst State School & Hospital v. Halderman, 104 S.Ct. at 910, quoting Young 209 U.S. at 160.

Plaintiff brought this declaratory judgment action against the defendants seeking a declaration that the incorporation, existence and operation of the City of Rajneeshpuram is unconstitutional under the Establishment Clause of the first amendment of the United States Constitution. The alleged actions of the state officials implicates federal law interests and the proper resolution of federal issues. The Young doctrine has long been used [*9] to promote the vindication of federal rights.

Order
While this case continues to present issues of first impression in its substantive and procedural posture, the court finds that the interests promoted by the Ex Parte Young exception 1 are applicable to the resolution of this case and jurisdiction to enjoin state officials from violating federal law may be exercised by this court

IT IS HEREBY ORDERED that plaintiff's motion for a summary order is DENIED; plaintiff's motion for a stay of defendants' motion to join additional parties is DENIED; and plaintiff's motion for enlargement of time to respond to the merits of defendants' motion to join additional parties is GRANTED. Plaintiff shall submit any further response to defendants' motion to join additional parties within 10 days from the date of this order. Defendants will have seven days to respond, and the court will then take the issue under advisement.

DATED this 13th day of March, 1985.

Helen J. Frye, United States District Judge

Appendix
APPENDIX

November 16, 1984, Decided and Filed

OPINION AND ORDER

FRYE, [*10]  Judge:

The matter before the court is plaintiff State of Oregon's motion for summary order challenging the jurisdiction of this court to grant injunctive relief against the State of Oregon. The State of Oregon's motion involves (1) the nature and extent of a state's immunity from suit in federal court under the eleventh amendment to the United States Constitution, and (2) what constitutes a waiver of that immunity.

Plaintiff State of Oregon brought this declaratory judgment action against defendants in state court, seeking a declaration that the incorporation, existence, and operation of the City of Rajneeshpuram is unconstitutional under the Establishment of Religion Clause of the first amendment to the United States Constitution. Defendants 1 removed the action to this court, and the State of Oregon then filed a motion to remand the action back to state court. After extensive briefing, this court concluded that the State of Oregon's complaint stated a claim arising under federal law for jurisdictional purposes, that the two defendants that did not consent to removal should be realigned as plaintiffs for jurisdictional purposes, and hence that the action was properly removeable. [*11] The court rejected the State of Oregon's argument that the eleventh amendment precluded removal; however, the court noted that the eleventh amendment might affect the nature and type of relief the court could grant against the State of Oregon.

This court is aware of the limitations the eleventh amendment places on the types of relief a federal court may award against a state, and it may be that certain forms of ancillary relief the defendants might request if they prevail would not be within this court's power to award.

State of Oregon v. City of Rajneeshpuram, Civ. No. 83-1892FR (D. Ore. March 23, 1984), Opinion and Order at 11.

Defendants have now filed a motion for a preliminary injunction, asking the court to enjoin the State of Oregon from treating the City of Rajneeshpuram and its employees and officials differently from other legally incorporated cities. Prior to the hearing on the preliminary injunction motion, the State of Oregon argued that the eleventh amendment precludes this court from granting the requested injunctive relief against the State of Oregon itself, and requested [*12] that the court decide the eleventh amendment issue prior to holding the preliminary injunction hearing. In light of the serious nature of the eleventh amendment question, the court granted the State of Oregon's request.

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. Courts have extended the immunity to cover suits by citizens of a state against their own state. Hans v. Louisiana, 134 U.S. 1 (1890). Clearly the eleventh amendment bars defendants from proceeding against the State of Oregon unless an exception to the eleventh amendment exists or unless the State of Oregon has waived its eleventh amendment immunity. A state may waive its eleventh amendment immunity, for example, by participating in a federal program, Parden v. Terminal Railway, 377 U.S. 184 (1964), or by filing or intervening in an action in federal court. See, e.g., Clark v. Barnard, 108 U.S. 436 (1883), State of Iowa v. Union Asphalt and Roadoils, Inc., 409 F.2d 1239 (8th Cir. [*13]  1969), City of Fresno v. Edmonston, 131 F. Supp. 421 (N.D. Cal. 1955). Defendants argue that an exception to or waiver of the eleventh amendment applies in the present case.

Defendants rely on three rules of law. First, when a state brings an action in federal court it waives its eleventh amendment immunity with respect to all counterclaims arising out of the same transaction or occurrence dealt with by the complaint, at least to the extent that the counterclaims do not exceed the amounts sought by the state's claim. See, e.g., Georgia Department of Human Resources v. Bell, 528 F. Supp. 17 (N.D. Ga. 1981). Second, federal courts have the power to take all appropriate measures to protect their removal jurisdiction, including enjoining parties before them from proceeding in state and administrative tribunals involving the subject matter before the federal court. See, e.g., Myers v. Hertz Penske Truck Leasing, Inc., 572 F. Supp. 500 (N.D. Ga. 1983), City of Fresno, supra. Third, where a state voluntarily brings an action in federal court, rule two applies to the state just as it does to any other party, because the state has waived its eleventh amendment immunity [*14] by bringing suit in federal court. City of Fresno, supra.

Defendants argue that, applying these rules, the State of Oregon has waived its immunity from suit in this case, notwithstanding the fact that it did not voluntarily bring this action in federal court and strongly objected to this court's jurisdiction when defendants removed the case to the federal court. Essentially, defendants argue that when a state brings in a state court an action arising under federal law, the state has waived its eleventh amendment immunity as to all counterclaims arising out of the same transaction or occurrence as the state's claim in the event the case is removed to federal court. The waiver of eleventh amendment immunity in such a case is not explicit, but rather implied. When the State of Oregon chose to base its action on federal law, it must have known that the action would be removable, and hence must also have waived its eleventh amendment immunity as if it originally had brought the action in federal court.

Defendants cite two cases in support of this argument. In Port Royal & Augusta Railway Co. v. South Carolina, 60 F. 552 (C.C.D.S.C. 1894), the railroad removed an action brought [*15] against it by the State of South Carolina to federal court. A single circuit judge (as opposed to a panel or the court sitting en banc) held that the State of South Carolina had waived its eleventh amendment immunity with respect to a "cross-bill" filed by the railroad against the State of South Carolina after removal. In Commonwealth of Puerto Rico v. Sea-Land Service, Inc., 349 F. Supp. 964 (D.P.R. 1970), the Commonwealth of Puerto Rico brought an action arising under federal law against the defendant in a state court, seeking the payment of certain warehousing fees by the defendant. After removal, the defendant answered and contended that the Commonwealth of Puerto Rico was liable to pay the fees. The court held that the Commonwealth of Puerto Rico had waived its eleventh amendment immunity by bringing the action in state court: Once the Commonwealth decides to voluntarily become a party to a suit involving its interests by way of the attorney general, as in the case at bar, it waives its sovereign immunity, which consent and waiver cannot afterwards be withdrawn. Puerto Rico v. Ramos, 232 U.S. 627 (1914). Once the veil of sovereign immunity is voluntarily lifted by [*16] the Commonwealth itself, it stands in the shoes of an ordinary citizen and the cause of action can be removed to the federal court if there are grounds for removal.

Id. at 977.

Although the cases above are factually on point, they do not constitute substantial authority because both ignored a fundamental rule that has developed in eleventh amendment cases: A state does not waive its eleventh amendment immunity from suit in federal courts by consenting to be sued in its own courts. See Great Northern Life Insurance Co. v. Read, 322 U.S. 47 (1944). Read involves a statute which allowed the citizens of the State of Oklahoma to sue the state's insurance commissioner for money wrongly collected as taxes. The court held that the State of Oklahoma's consent to be sued in its own courts did not create a waiver of its eleventh amendment immunity from suit in federal court:

The immunity may, of course, be waived. [Citation omitted]. When a state authorizes a suit against itself to do justice to taxpayers who deem themselves injured by any exaction, it is not consonant with our dual system for the Federal courts to be astute to read the consent to embrace Federal as well [*17] as state courts. Id. at 54. 2

The present case is factually different from cases such as Read in that the present case involves a consent implied from the filing of an action rather than from a general statutory consent to suit. However, in light of the Supreme Court's recent decision in Pennhurst State School & Hospital v. Halderman,    U.S.   , 104 S. Ct. 900 (1984), this factual distinction is not crucial. In Pennhurst, the Court engaged in a comprehensive discussion of the origin, nature, and development of eleventh amendment immunity, and stated: A sovereign's immunity may be waived, and the Court consistently has held that a State may consent to suit against it in federal court. We have insisted, however, that the State's consent must [*18] be unequivocally expressed. . . . . . Our reluctance to infer that a State's immunity from suit in the federal courts has been negated stems from recognition of the vital role of the doctrine of sovereign immunity in the federal system. A State's constitutional interest in immunity encompasses not merely whether it may be sued, but where it may be sued. Id. at 907 (citations, footnote omitted; emphasis in original).

For this court to adopt defendants' argument would require the court to ignore the Pennhurst language as well as the established principle that the eleventh amendment involves not only whether a state may be sued, but also where it may be sued. Although the language quoted above is dicta, it reflects a concern on the part of the Supreme Court that the eleventh amendment be more strictly applied by lower federal courts. Here, defendants ask this court to hold that the State of Oregon consented to be sued and enjoined in federal court by bringing an action based on a federal cause of action in state court. Such a waiver would have to be implied, and implied very tenuously at that. This court would have to find consent because (1) the state brought [*19] an action arising under federal law, (2) which the state knew would be removable to federal court. However, the history of this litigation reveals that (1) the state did not believe that its complaint arose under federal law for jurisdictional purposes, and at all times has contested this court's assertion of subject matter jurisdiction, and (2) the state has done everything in its power to preclude removal of this action to federal court. In such circumstances, the kind of unequivocal expression of waiver of immunity required by the cases is absent; a finding by this court that the state consented to be sued in federal court by these defendants would be a fiction. Defendants also argue that the removal statutes themselves constitute an abrogation by Congress of the State of Oregon's eleventh amendment immunity, without regard to whether the state waived its immunity or consented to suit. An analogous case is County of Monroe v. State of Florida, 678 F.2d 1124 (2d Cir. 1982), cert. denied 459 U.S. 1104, which involves the Federal Extradition Act, 18 U.S.C. §§ 3181 et seq. This Act authorizes the executive authority of a state to make a demand upon another state for the [*20] return of a fugitive, and places upon the second state a duty to apprehend and deliver the fugitive to the demanding state. Section 3195 provides that all costs or expenses incurred by the second state in apprehending the fugitive shall be paid by the demanding authority. The court in Monroe held that when a demanding state makes use of the Act, it is subject to suit in federal court in the event it refuses to pay the costs incurred by the apprehending authorities. The court, citing Parden, supra, first noted that Congress may abrogate eleventh amendment immunity in its exercise of powers delegated to it under the United States Constitution. Article IV, section 2 of the United States Constitution specifically refers to extradition matters, and has been interpreted as giving Congress full power to deal with such matters. The Federal Extradition Act was enacted pursuant to this constitutional grant of power to Congress. Although the Act contains no express abrogation of eleventh amendment immunity (because the Act was originally enacted before the eleventh amendment was adopted), the court found that such abrogation should be implied from the Act. It arrived at this conclusion [*21] for a number of reasons. First, the Act specifically makes a demanding state liable for costs incurred in apprehending a fugitive, and were eleventh amendment immunity not abrogated, the apprehending state would be left without a remedy. Second, the demanding state knew that it would be liable for costs when it invoked that Act -- a liability imposed expressly by a federal law -- and hence the demanding state impliedly consented to suit in federal court by invoking the Act: The instant case involves a federal statute that does not come into play until affirmatively invoked by the demanding state and that may be invoked on a limited, ad hoc basis as the need arises. In § 3195 Congress explicitly conditioned the right of a state to demand extradition upon the demanding state's willingness to pay the costs of that extradition. By demanding extradition, [the demanding state] indicated its willingness to accept Congress' condition: pay the costs of extradition or consent to suits brought to enforce that obligation. 678 F.2d at 1134. The court also noted that the impact of the abrogation of the eleventh amendment on the demanding state's treasury was small, and that [*22] the strong federal interest in seeing that demanding states live up to their obligations under the Act strongly outweighed the minimal invasion of their sovereignty.

To make an analogous argument, defendants here must argue that Congress intended to abrogate the State of Oregon's eleventh amendment immunity when it enacted the removal statutes. However, undertaking the same sort of analysis as in Monroe, this argument must fail. First, unlike Monroe, the present case does not involve a federal statute that does not come into play until affirmatively invoked by the state. Rather, the removal statutes must be invoked by the defendants. Second, unlike the federal statute in Monroe, there is no express liability imposed upon the State of Oregon by the removal statutes themselves, as the removal statutes do not grant substantive legal rights. Third, Monroe involves a situation where the result of abrogating eleventh amendment immunity was slight (in that case the imposition of a $15,588.99 judgment upon the demanding state) and avoidable on a case-by-case basis. Here, however, the consequences of finding an abrogation of eleventh amendment immunity are severe: a federal [*23] court might impose upon the State of Oregon its direction as to how the state must treat one of the state's own municipalities under state law. And this consequence could only be avoided under the defendants' theory if the State of Oregon chose to give up its right to rely on the United States Constitution in bringing this suit. This is not the "minimal invasion of sovereignty" involved in Monroe. Finally, the federal interest involved in the present case that the determination of questions of federal law should be done by federal courts is insufficient to override the State of Oregon's eleventh amendment immunity. Were this not so, the eleventh amendment would be rendered meaningless, for in every case involving a federal question, the eleventh amendment would be abrogated.

To conclude, there is no basis for finding that Congress intended to abrogate eleventh amendment immunity when it enacted the removal statutes.

Defendants protest that this decision will preclude this court from granting full relief among all parties. This is true, but irrelevant. As the Court in Pennhurst stated:

It may be that applying the Eleventh Amendment. . . results in federal claims being brought [*24] in state court, or in bifurcation of claims. That is not uncommon in this area. . ..

In any case, the answer to [plaintiffs'] assertions is that such considerations of policy cannot override the constitutional limitation on the authority of the federal judiciary to adjudicate suits against a State. . . . That a litigant's choice of forum is reduced "has long been understood to be part of the tension inherent in our system of federalism." Id. at 919-20 (citations, footnotes omitted).

IT IS ORDERED that plaintiff's motion for summary order is therefore GRANTED, and this court finds that the eleventh amendment precludes any granting of injunctive relief against the State of Oregon in this case. 3

[*25] DATED this 16th day of November, 1984.

Helen J. Frye, United States District Judge