Daniel v. American Board of Emergency Medicine

ORDER

ARCARA, District Judge.

This case was referred to Magistrate Judge Leslie G. Foschio, pursuant to 28 U.S.C. § 636 (b)(1), on April 24,1991. Defendants filed various motions to dismiss the Second Amended Complaint on grounds of immunity, lack of personal jurisdiction, improper venue and improper service of process. On January 16, 1996, Magistrate Judge Foschio filed a Report and Recommendation regarding the various motions.

1

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Plaintiffs and several of the defendants have filed objections to the Report and Recommendation.

2

Oral argument on the objections was held on October 17,1996.

Pursuant to 28 U.S.C. § 636 (b)(1), this Court must make a

de novo

determination of those portions of the Report and Recommendation to which objections have been made. Upon a

de novo

review of the Report and Recommendation, and after reviewing the submissions of the parties and hearing argument from counsel, the Court adopts the proposed findings of the Report and Recommendation.

The Court finds the analysis of Magistrate Judge Foschio to be extremely thorough and well-reasoned. The Court will take this opportunity, however, to expand on Magistrate Judge Fosehio’s analysis regarding venue in light of two recent cases,

Paper Sys., Inc. v. Mitsubishi Corp.,

967 F.Supp. 364 (E.D.Wis.1997) and

Icon Indus. Controls Corp. v. Cimetrix, Inc.,

921 F.Supp. 375 (W.D.La.1996).

Under 15 U.S.C. § 22 :

Any suit, action or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such eases may be served in the district of which it is an inhabitant, or wherever it may be found.

The Court finds that the worldwide service of process clause in § 22 is totally independent from the venue clause.

See Paper Systems Inc. v. Mitsubishi Corp.,

967 F.Supp. 364, 366-67 (1997). There is nothing in the legislative history of § 22 nor Supreme Court precedent suggesting that the venue clause is supposed to serve as a limitation on the worldwide service of process clause.

Id.

at 367 (citing

Go-Video, Inc. v. Akai Elec. Co.,

885 F.2d 1406, 1410-11 (9th Cir.1989)). As the court stated in

Paper Sys.:

Personal jurisdiction defines a court’s power; if § 22 provides for worldwide service. without exception, Congress has extended the federal court’s powers to their constitutional limit to enforce the antitrust laws. Perhaps more than any other law, the antitrust laws are national in scope and impact. The antitrust laws define the rules of the free market economy; like the weather, the economy respects no state or natural boundaries.

******

If the antitrust laws are to be effective, district courts’ jurisdiction must reach the limits of the power of the United States of America. In the case of antitrust laws, it makes no sense to tie a district court’s jurisdiction to the state in which it sits; it neither promotes the enforcement of antitrust law nor the management of litigation.

Id.

at 368.

28 U.S.C. § 1391 (b) provides, in pertinent part, that venue is proper in a federal question case in “a judicial district where any defendant resides, if all defendants reside in the same State.” 28 U.S.C.. § 1391(c) provides that “a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at .the time the action is commenced.” Because all the

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corporate defendants in this case are subject to personal jurisdiction in New York, by virtue of their amenability to worldwide service of process under § 22, they all “reside” in New York for venue purposes under § 1391(b).

The Second Circuit’s decision in

Goldlawr, Inc. v. Heiman,

288 F.2d 579 (2d Cir.1961), rev’d on other grounds, 369 U.S. 463 , 82 S.Ct. 913 , 8 L.Ed.2d 39 (1962), does not bar this result. In

Goldlawr,

the Second Circuit stated, incidental to concluding that a transferor court lacked personal jurisdiction over the defendants, that “the extraterritorial service privilege [of § 22] is given only when the other [venue] requirements' are satisfied.”

Id.

at 581. This statement, however, was merely dictum.

See Go-Video,

885 F.2d at 1411 . Further,

Goldlawr

was decided in 1961, when the general venue provisions for domestic corporations contained in 28 U.S.C. § 1391 (e) were more restrictive than § 22. Thus, the

Goldlawr

court had no occasion to consider whether the worldwide service of process clause in § 22 could apply if grounds for venue were provided by another statute.

See General Elec. Co. v. Bucyrus-Erie Co.,

550 F.Supp. 1037, 1041-42 (S.D.N.Y.1982).

The Court rejects defendants’ argument that application of the general venue provisions contained in 28 U.S.C. § 1391 in conjunction with the worldwide service of process clause in § 22 renders superfluous the special venue provisions contained in § 22. Defendants argue against such an application on the premise that Congress presumably intended the venue provisions contained in § 22 to have some meaning. This argument overlooks,' however, the fact that § 22 was enacted in 1914, decades before Congress expanded the general venue provisions in 1988. Thus, at the time § 22 was enacted, the special venue provisions contained therein served a definite purpose. It may well be that the 1988 amendments to § 1391 made those provisions superfluous, but'if so, such was the prerogative of Congress.

The Court also rejects defendants’ argument that it would be unfair to allow antitrust plaintiffs to obtain personal jurisdiction and venue over corporate defendants in any district in the United States. That is a policy issue best left to Congress. Had it desired to do so, Congress could have prevented this result- in 1988 by providing that § 1391(c), as amended, did not apply to antitrust actions, but it failed to do so. Even if Congress did not consider the impact that the amendment would have on antitrust cases brought against corporate defendants, it is certainly free to restrict antitrust venue through new legislation if desired. In the meantime, there are other safeguards against the filing and prosecution of an antitrust action in a district which has no meaningful connection to the location of the parties or the underlying controversy, including the doctrine of

forum non conveniens

and the right to seek a change of venue for the convenience of the parties and witnesses under 28 U.S.C. § 1404 (a).

See Icon Indus. Controls Corp.,

921 F.Supp. at 383 .

The policies underlying the Clayton Act are “designed to expand the reach of the antitrust laws and make it easier for plaintiffs to sue for antitrust violations.”

Go-Video, Inc.,

885 F.2d at 1413 . What defendants are attempting to do here, however, is to narrow the scope of § 22, thereby making it more difficult for antitrust plaintiffs to sue multiple defendants in a single action in the same district. This position is not supported by the language of § 22, its legislative history, or the policies underlying it. Rather, the more well-reasoned interpretation of § 22 and its relation to the general venue provisions in § 1391 is that of Magistrate Judge Foschio.

Accordingly, for the reasons set forth in Magistrate Judge Foschio’s Report and Recommendation and this Order, defendants’ motions to dismiss are granted in part and denied in part as set forth at pages 278-79 of the Report and Recommendation.

In its objections, defendant Forsythe requests that, if the Court decides to adopt the Report and Recommendation, that the Court certify the following issues to the Second Circuit Court of Appeals for immediate review and determination: (1) does § 12 of the Clayton Act, 15 U.S.C. § 22 , provide for “automatic”

in personam

jurisdiction and venue over any domestic corporation without

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regard to whether the domestic corporation maintains “minimum contacts” with the forum; and, if so, (2) is § 12 of the Clayton Act constitutional in doing so.

Although no authority is cited by Forsythe for such relief, the Court construes its request as a motion for certification for purposes of immediate interlocutory appeal pursuant to 28 U.S.C. § 1292 (b). Section 1292(b) provides, in pertinent part:

When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he [or she] shall so state in writing in such order.

The Second Circuit has repeatedly cautioned that “use of this certification procedure should be strictly limited because only exceptional circumstances will justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment.”

In re Flor,

79 F.3d 281, 284 (2d Cir.1996) (citations and internal quotations omitted).

Forsythe has failed to persuade the Court that there exist exceptional circumstances warranting an interlocutory appeal in this case. Although Forsythe asks for the Court’s certification for an interlocutory appeal, it provides no legal argument in support of its request. It states simply that “important legal issues” are involved and that the Court should therefore certify the case to the Second Circuit. Simply put, the issue of venue has been thoroughly considered by both Magistrate Judge Foschio and this Court and certification to the Second Circuit at this point would not best serve the interests of justice. There are approximately 176 plaintiffs and 30 defendants in this case. Magistrate Judge Fosehio’s Report and Recommendation was 347 pages long. The case is already over seven years old. An immediate appeal from this Order will not materially advance the ultimate termination of this litigation and will result instead in piecemeal litigation and further delay.

With regard to Forsythe in particular, the questions that it asks to be certified will not necessarily be dispositive. In an Order being filed concurrently with this Order, the Court affirms Magistrate Judge Foschio’s Decision and Order filed January 16, 1996, holding that Forsythe and several of the other defendants waived the defense of improper venue by failing to initially include it in their motion to dismiss. Thus, even if Forsythe were to prevail on the question of whether venue was proper, it would still face • the hurdle of having to show that it did not waive the defense of improper venue.

Accordingly, defendant Forsythe’s motion for certification for interlocutory appeal is denied. Moreover, the Court will not consider or grant any motion for reconsideration of this order or any other motion for certification for interlocutory appeal. The matter is hereby referred back to Magistrate Judge Foschio for further proceedings.

IT IS SO ORDERED.

REPORT and RECOMMENDATION

FOSCHIO, United States Magistrate Judge.

TABLE OF CONTENTS

JURISDICTION................................................................ 147

BACKGROUND................................................................ 148

DISCUSSION.................................................................. 150

I.Subject Matter Jurisdiction................................................. 150

a. Eleventh Amendment Immunity......................................... 151

1. Ohio State University Hospital.:.................................... 155

2. Oregon Health Sciences University Hospital.......................... 162

3. University of California Medical Centers............................. 165

4. University Hospital at State University of New York at Stony Brook... 171

5. University Hospital at the University of New Mexico School of Medicine ........................................................... 175

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6.University of Massachusetts Medical Center..........................178 Summary of Findings on Eleventh Amendment Defenses.......................181 b. State Action Doctrine ..................................................181

1.Lincoln Medical and Mental Health Center...........................184

2. Ohio State University Hospital......................................185

3. Oregon Health Sciences University Hospital..........................186

4. Tri-City Medical Center ...........................................187

5. University of California Medical Centers.............................188

6. University Hospital at State University of New York at Stony Brook... 189

7. University Hospital at the University of New Mexico School of Medicine .........'..................................................190

8. University of Massachusetts Medical Center..........................190

c. Local Government Antitrust Act Immunity................................191

1. Lincoln Medical and Mental Health Center...........................192

2. Oregon Health Sciences University Hospital, University of California

Medical Centers, University Hospital at the University of New

México School of Medicine, and University of Massachusetts Medical Center 194

3. Tri-City Medical Center ...........................................196

II. Personal-Jurisdiction.......................................................197

a. Jurisdiction Under Clayton Act Section 12................................197

b. Jurisdiction under New York State Law..................................201

1. New York Civil Practice Law and Rules Section 301 ...................202

a. Johns Hopkins Hospital, Part of the Johns Hopkins Health System ........................................................205

b. Children’s Hospital (San Diego)..................................206

c. Children’s Hospital of Michigan..................................206

d. Detroit Receiving Hospital and University Health Center...........207

e. Forsyth Memorial Hospital .....................................207

f. Kettering Medical Center.......................................208

g. Loma Linda University Medical Center...........................208

h. Lutheran General Hospital......................................209

i. Medical College of Pennsylvania and Hospital.....................209

j. Mercy Catholic Medical Center — Misc.icordia Division.............210

k. Mercy Hospital and Medical Center..............................211

l. Methodist Hospital of Indiana...................................211

m. Ohio State University Hospital..................................212

n. Oregon Health Sciences University Hospital.......................213

o. Riverside Methodist Hospitals...................................213

p. Saint Francis Medical Center ...................................214

q. St. Anthony Hospital...........................................215

r. Tri-City Medical Center (San Diego).............................215

s. University of California (Los Angeles) Medical Center..............215

t. University of California (Irvine) Medical Center-...................216

u. University of California (San Diego) Medical Center................216

v. University Hospital at the University of New Mexico ...............216

w. University of Massachusetts Medical Center......................216

x. University Medical Center, Tucson, Arizona.......................217

Council of Emergency Medicine Residency Directors...................227

2. Jurisdiction for Transacting Business under Section 302(a)(1)...........228

3. Conspiracy Jurisdiction under Section 302(a)(2) .......................230

a. Tortious Act Within New York ..................................231

b. Factual Showing of a Conspiracy in Restraint of Trade.............233

i. Corrupt Agreement........................................234

ii. Overt Act in Furtherance of Agreement......................246

iii. Parties’ Intentional Participation in Furtherance of Plan or Purpose.................................................246

iv. Resulting Damage or Injury '................................249

c. Specific Facts Alleged Warranting Inference that Each Defendant is a Member of the Conspiracy................................250

d. Imputing Conduct to Out-of-State Co-conspirators.................250

i. Defendants’ Awareness that its Activity had Effects in New York...................................................250

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ii. Benefit of the Activity in New York..........................251

iii. . Exercise of Discretion or Control............................251

4.Jurisdiction Based on Tortious Acts under Sections 302(a)(3)(i) and 302(a)(3)(ii).....................................................252

Summary of Findings Regarding Personal Jurisdiction.........................255

III. Venue.....................................................................255

a. Venue in Antitrust Actions..............................................256

1. American Board of Emergency Medicine.............................259

2. Council of Emergency Medicine Residency Directors...................263

3. Children’s Hospital (San Diego).....................................264

4. Children’s Hospital of Michigan.....................................264

5. Detroit Receiving Hospital and University Health Center...............265

6. The Johns Hopkins Hospital, Part of the Johns Hopkins Health System ........................................................265

7. Loma Linda University Medical Center..............................266

8. Lutheran General Hospital.........................................266

9. Medical College of Pennsylvania and Hospital.........................267

10. Mercy Catholic Medical Center-Misc.icordia Division..................268

11. Mercy Hospital and Medical Center .................................268

12. Methodist Hospital of Indiana.......................................269

13. Oregon Health Sciences University Hospital..........................269

14. St. Anthony Hospital ..............................................270

15. University Medical Center (Tucson) .................................270

b. Venue under the General Venue Provisions................................271

1. Section 1391 ......................................................271

2. Section 1406 ......................................................276

IV. Service of Process .........................................................277

CONCLUSION.................................................................278

JURISDICTION

This matter was referred to the undersigned on April 24, 1991 by the Honorable Richard J. Arcara for report and recommendation. The matter is presently before the court on the “hospital Defendants’ ”

1

motions to dismiss the Second Amended Complaint on grounds .of immunity, lack of personal jurisdiction, improper venue, and improper service of process;

2

Defendant American Board of Emergency- Medicine’s motion to dismiss the . Second Amended Complaint on the ground of improper venue; and, Defendant Council of Emergency Medicine Residency Directors’ motion to dismiss the Sec

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ond Amended Complaint on grounds of lack of personal jurisdiction, improper venue, and improper service of process.

BACKGROUND

Plaintiff, an emergency medicine physician, filed this action on September 25, 1990, following the American Board of Emergency Medicine’s (“ABEM”) refusal to permit Plaintiff to take its examination as a prerequisite to certification as an ABEM Diplomate. Plaintiff filed an amended complaint (“the First Amended Complaint”) on February 7, 1991, asserting causes of action under Sections 1 and 2 of the Sherman Act, 15 U.S.C. § 1

et seq.,

and seeking relief pursuant to Sections 4 and 16 of the Clayton Act, 15 U.S.C. § 12

et seq.

On January 13, 1994, the Second Amended Complaint was filed, adding one hundred and seventy-five additional Plaintiffs, all individual physicians who allege to have similar claims, and thirty Defendants, including the Council of Emergency Medicine Residency Directors (“CORD”) and twenty-eight teaching hospitals whom Plaintiffs allege are co-conspirators with Defendant ABEM. Specifically, in the Second Amended Complaint, Plaintiffs allege that ABEM" conspired with CORD and the hospital Defendants to unreasonably restrict competition between ABEM certified and nori-eertified emergency physicians, including Plaintiffs, by eliminating ABEM’s prior alternative qualification for eligibility to sit for ABEM’s certification examination on the basis of years of practice in the field of emergency medicine (referred to as the “practice-track”), under which Plaintiffs may have been eligible to sit for and successfully pass the examination thereby requiring ABEM’s certification. Plaintiffs allege that ABEM and the hospital Defendants perpetuated this restraint through a conspiracy involving various professional organizations in the field of emergency medicine, including CORD, as a result of the activities of various physicians whom had achieved ABEM certification under the “practice-track” and were either employed or affiliated with the hospital Defendants’ residency programs in emergency medicine. Familiarity with the further proceedings and orders of this court, addressing the sufficiency of the First Amended Complaint,

Daniel v. American Board of Emergency Medicine,

802 F.Supp. 912 (W.D.N.Y.1992), and various issues related to Plaintiffs’ discovery requests, is presumed.

Defendants subsequently, in March, April, and May of 1994, moved to dismiss or for summary judgment

3

for lack of personal jurisdiction, improper venue, on grounds of immunity, and for insufficient service of process.

4

Following five months of jurisdictional

*?

discovery,

5

Plaintiffs file, on December 12, 1994, a memorandum in opposition to Defendants’ motions to dismiss or for summary judgment. Defendants subsequently filed both joint and individual memoranda in support of the motions. Oral argument was held on March 13,1995.

Based upon the discussion which follows, Defendants Ohio State University Hospital, Oregon Health Sciences University Hospital, University of California (Los Angeles) Medical Center, University of California (Irvine) Medical Center, University of California (San Diego) Medical Center, University Hospital of the State University of New York at Stony Brook, University Hospital at the University of New Mexico School of Medicine, and University of Massachusetts Medical Center should be dismissed from this action on grounds of Eleventh Amendment immunity. Alternatively, Defendants Lincoln Medical and Mental Health Center, Ohio State University Hospital, Oregon Health Sciences University Hospital, University of California (Los Angeles) Medical Center, University of California (Irvine) Medical Center, University of California (San Diego) Medical Center, University Hospital of the State University of New York at Stony Brook, University Hospital at the University of New Mexico School of Medicine and University of Massachusetts Medical Center, should be dismissed from the suit as they are exempt from federal antitrust laws under the state action doctrine. The action against Lincoln Medical and Mental Health Center and Tri-City Medical Center should be dismissed insofar as money damages are requested under the Local Government Antitrust Act.

This court also finds that under Section 12 of the Clayton Act, 15 U.S.C. § 22 , each of the Defendants which are domestic corporations should be subject to personal jurisdiction in this district, including CORD, Children’s Hospital (San Diego), Children’s Hospital of Michigan,' Detroit Receiving Hospital and University Health Center, For-syth Memorial Hospital, Johns Hopkins Hospital, Part of the Johns Hopkins Health System, Kettering Medical Center, Loma Linda University Medical Center, Lutheran General Hospital, Medical College of Pennsylvania and Hospital, Mercy Catholic Medical Center-Misc.ieordia Division, Mercy Hospital and Medical Center, Methodist Hospital of Indiana, Oregon Health Sciences University Hospital,

6

Riverside Methodist Hospitals, Saint Francis Medical Center, St. Anthony Hospital, and University Medical Center (Tucson, Arizona). Thus, as to these Defendants, the motions to dismiss for lack of personal jurisdiction should be denied.

Alternatively, Johns Hopkins Hospital, Part of the Johns Hopkins Health System, should be subject to personal jurisdiction, pursuant to Section 301 of the New York Civil Practice Law and Rules (“N.Y.CPLR”), as the court finds it is doing or soliciting business in New York. However, the court finds that Plaintiffs have failed to demonstrate that CORD and the other hospital Defendants which have moved to dismiss for lack of personal jurisdiction are soliciting business pursuant to Section 301, or that they should be subject to personal jurisdiction, pursuant to New York’s long-arm statute, N.Y. CPLR Section 302(a)(1), (2) or (3), for transacting business, or committing a tor-tious act within the state, or committing a tortious act outside the-state causing injury within the state.

Therefore, even if, based on the District Judge’s determination of the asserted immunity claims, if remaining as parties to this action, the motions to dismiss for lack of personal jurisdiction, made by Ohio State

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University Hospital, Tri-City Medical Center, University of California (Los -Angeles) Medical Center, University of California (Irvine) Medical Center, University of California (San Diego) Medical Center, University Hospital at the University of New. Mexico School of Medicine, and University of Massachusetts Medical Center, should be granted as the court finds personal jurisdiction under Section 12 of the Clayton Act and N.Y. CPLR Sections 301, 302, or 303, does not exist over these Defendants.

The court also finds that proper venue as to ABEM and Johns Hopkins Hospital, Part of the Johns Hopkins Health System exists pursuant to Section 12 of the Clayton Act, however, those Defendants which are not domestic corporations, if remaining as parties, are not subject to venue under this section. However, should the District Judge accept the Report and Recommendation regarding Eleventh Amendment immunity, the state action doctrine, the Local Government Antitrust Act, or lack of personal jurisdiction, Defendants Tri-City Medical Center, University of California (Los Angeles) Medical Center, University of California (Irvine) Medical Center, University of California (San Diego) Medical Center, University Hospital at the University of New Mexico School of Medicine, and the University of Massachusetts Medical Center will have been dismissed from the action as parties, leaving the remaining Defendants — Children’s Hospital (San Diego), Children’s Hospital of Michigan, CORD, Detroit Receiving Hospital and University Health Center, Forsyth Memorial Hospital, Johns Hopkins Hospital, Part of the Johns Hopkins Health System, Kettering Medical Center, Loma Linda University Medical Center, Lutheran General Hospital, Medical College of Pennsylvania and Hospital, Mercy Catholic Medical Center — Misc.i-cordia Division, Mercy Hospital and Medical Center, Methodist Hospital of Indiana, Riverside Methodist Hospitals, Saint Francis Medical Center, St. Anthony Hospital, and University Medical Center (Tucson) — as subject to venue in this district pursuant to 28 U.S.C. § 1391 (b)(1). The motions to dismiss pursuant to 28 U.S.C. § 1406 (a) should, nevertheless, be granted with respect to University of California (Los Angeles) Medical Center, University of California (Irvine) Medical Center and University of California (San Diego) Medical Center, but denied as to ABEM. CORD and Mercy Catholic Medical Center-Misc.icordia Division’s motions to dismiss for improper service of process should be denied.

DISCUSSION

On a motion to dismiss, the court looks to the four corners of the complaint and is required to accept a plaintiffs allegations as true and to construe those allegations in the light most favorable to plaintiff.

Scheuer v. Rhodes,

416 U.S. 232, 236 , 94 S.Ct. 1683, 1686 , 40 L.Ed.2d 90 (1974);

Dacey v. New York County Lawyers’ Association,

423 F.2d 188, 191 (2d Cir.1969),

cert. denied,

398 U.S. 929 , 90 S.Ct. 1819 , 26 L.Ed.2d 92 (1970). The complaint will be dismissed only if “it appears beyond doubt” that the plaintiffs can prove no set of facts which would entitle them to relief.

Conley v. Gibson,

355 U.S. 41, 45-46 , 78 S.Ct. 99, 101-02 , 2 L.Ed.2d 80 (1957);

Goldman v. Belden,

754 F.2d 1059, 1065 (2d Cir.1985). The court is required to read the complaint with great generosity on a motion to dismiss.

See Yoder v. Orthomolecular Nutrition Institute,

751 F.2d 555 , 558 (2d Cir.1985).

Defendants argue that Plaintiffs’ Second Amended Complaint should be dismissed for lack of subject matter jurisdiction, lack of personal jurisdiction, improper venue, and improper service of process pursuant to Federal Rules of Civil Procedure 12(b)(1), (2), (3) and (5). These contentions will be discussed in this Report and Recommendation.

I.

Subject Matter Jurisdiction

This court has authority to examine and resolve the issues surrounding any motions challenging the jurisdiction of the court.

Thornhill Publishing v. General Telephone & Electronics,

594 F.2d 730 , 733 (9th Cir.1979). The party asserting jurisdiction bears the burden of proving that the case is in the proper forum.

United Food & Commercial Workers Union, Local 919, AFL

—CIO

v. CenterMark Properties Meriden Square, Inc.,

30 F.3d 298, 301 (2d Cir.1994).

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In evaluating a Rule 12(b)(1) motion to dismiss challenging the court’s subject matter jurisdiction, the court may resolve disputed jurisdictional fact issues by reference to evidence outside the pleadings, such as affidavits.

Antares Aircraft, L.P. v. Federal Republic of Nigeria,

948 F.2d 90, 96 (2d Cir.1991),

cert. granted and judgment vacated on other grounds,

505 U.S. 1215 , 112 S.Ct. 3020 , 120 L.Ed.2d 892 (1992);

Sheahan v. Brady,

866 F.Supp. 770, 771 (S.D.N.Y.1994). The court has broad authority and discretion in resolving jurisdictional issues, and can receive affidavits, interrogatories, depositions, oral testimony, or any combination in making such a determination.

Washington v. Norton Manufacturing, Inc.,

588 F.2d 441, 443 (5th Cir.),

cert. denied,

442 U.S. 942 , 99 S.Ct. 2886 , 61 L.Ed.2d 313 (1979). Based on the extensive discovery conducted relating to the jurisdictional issues presented on the motions and the voluminous and detailed affidavits and exhibits submitted in this case, no hearing was deemed necessary.

Defendants Ohio State University Hospital, Oregon Health Sciences University Hospital, University of California (Los Angeles) Medical Center, University of California (Irvine) Medical Center, University of California (San Diego) Medical Center, University Hospital of the State University of New York at Stony Brook, University Hospital at the University of New Mexico School of Medicine, and the University of Massachusetts Medical Center, assert that, as hospitals connected with their respective state university medical schools, they qualify for Eleventh Amendment immunity, and that this court therefore lacks subject matter jurisdiction over them. Defendants Oregon Health Sciences University Hospital, Tri-City Medical Center, University of California (Los Angles) Medical Center, University of California (Irvine) Medical Center, University of California (San Diego) Medical Center, University Hospital of the State University of New York at Stony Brook, University Hospital at the University of New Mexico School of Medicine, and University of Massachusetts Medical Center also assert that the state action doctrine prohibits this court from enforcing federal antitrust laws against these Defendants. Further, Defendants Lincoln Medical & Mental Health Center, Oregon Health Sciences University Hospital, Tri-City Medical Center, University of California (Los Angles) Medical Center, University of California (Irvine) Medical Center, University of California (San Diego) Medical Center, University Hospital at the University of New Mexico School of Medicine, and University of Massachusetts Medical Center argue that they are immune from suit pursuant to the Local Government Antitrust Act of 1984, 15 U.S.C. §§ 34-36 . Lincoln Medical & Mental Health Center and Tri-City Medical Center are units of municipal health care facilities located, respectively, in New York City and San Diego.

a.

Eleventh Amendment Immunity

The Eleventh Amendment commands that “[t]he 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 Citizens or Subjects of any Foreign State.” U.S. Const. amend. XI. Its immunity extends to entities created by state governments that operate as instrumentalities of the state.

7

Hess v. Port Authority Trans-Hudson Corporation,

513 U.S. 30, 30-31 , 115 S.Ct. 394, 396 , 130 L.Ed.2d 245 (1994);

Lake Country Estates, Inc. v. Tahoe Regional Planning Agency,

440 U.S. 391, 401 , 99 S.Ct. 1171, 1177 , 59 L.Ed.2d 401 (1979). In determining whether a governmental body may invoke the Amendment’s immunity from suit in federal court, the court will assess whether the entity constitutes an arm of a state by evaluating the degree of control and supervision over the entity, including the state’s power of appointment and removal of officers or directors, any authority to approve or disapprove the actions of the entity, including its capacity to raise revenue for its own purposes, whether the entity is financially independent from the state, whether the state is responsible for the

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entity’s obligations and liabilities, and the character of its functions,

ie.,

state-wide or local,

8

are performed or served by the entity.

9

Lake Country Estates, Inc. v. Tahoe Regional Planning,

440 U.S. 391, 400-402 , 99 S.Ct. 1171, 1176-1178 , 59 L.Ed.2d 401 (1979);

Baxter v. Vigo Cty. School Corp.,

26 F.3d 728 , 732-33 (7th Cir.1994);

Feeney v. Port Authority Trans-Hudson Corporation,

873 F.2d 628, 629-30 (2d Cir.1989),

aff'd,

495 U.S. 299 , 110 S.Ct. 1868 , 109 L.Ed.2d 264 (1990). Each factor must be evaluated to determine whether a state is actually or effectively being sued in the proceeding.

Ford Motor Company v. Department of Treasury,

323 U.S. 459, 464 , 65 S.Ct. 347, 350-351 , 89 L.Ed. 389 (1945). If, based on this analysis, the state is found not to be the real party in interest, the protections afforded pursuant to the Eleventh Amendment are unavailable to the defendant.

Ford Motor Company, supra,

at 464, 65 S.Ct. at 350-51 .

Courts have also examined the legal powers of the entity, including its capacity to sue or be sued independently from the state, enter into contracts in its own name, acquire property, enjoy immunity from state taxation, or having a distinct corporate status.

See, e.g., Fitzpatrick v. Bitzer,

519 F.2d 559, 564-65 (2d Cir.1975),

rev’d on other grounds,

427 U.S. 445 , 96 S.Ct. 2666 , 49 L.Ed.2d 614 (1976). However, neither the Supreme Court nor the Second Circuit have discussed these latter factors in any recent case employing an arm-of-the-state inquiry.

See Hess, supra; Lake Country Estates, supra; Mount Healthy City School District, supra; Feeney v. Port Authority Trans-Hudson Corporation,

873 F.2d 628 (2d Cir.1989),

aff'd,

495 U.S. 299 , 110 S.Ct. 1868 , 109 L.Ed.2d 264 (1990). “When [these] indicators of immunity point in different directions, the Eleventh Amendment’s twin reasons for being remain the prime guide,”

Hess, supra,

at 47 , 115 S.Ct. at 404 , namely preventing threats to the state’s dignity by requiring the entity to defend suit in federal court and avoidance of federal court judgments which must be paid out of a state’s treasury.

10

Hess, supra,

at 47-48 , 115 S.Ct. at 404 .

Here, eight of the moving hospital Defendants are sponsored by state-created public universities.

11

The overwhelming majority of courts which considered the question of Eleventh Amendment immunity as to such institutions, found state universities share in their

*153

respective state’s Eleventh Amendment immunity.

See Sherman v. Curators of University of Missouri,

16 F.3d 860 , 863 n. 3 (8th Cir.1994) (citing cases). However, as no one factor is dispositive in determining' whether an entity is entitled to Eleventh Amendment immunity, and as each state university “exists in a unique governmental context ... each must be considered on the basis of its own peculiar circumstances.”

Hall v. Medical College of Ohio at Toledo,

742 F.2d 299, 302 (6th Cir.1984),

cert. denied,

469 U.S. 1113 , 105 S.Ct. 796 , 83 L.Ed.2d 789 (1985) (quoting

Soni v. Board of Trustees,

513 F.2d 347, 352 (6th Cir.1975),

cert. denied,

426 U.S. 919 , 96 S.Ct. 2623 , 49 L.Ed.2d 372 (1976)).

See also Kashani v. Purdue University,

813 F.2d 843, 845 (7th Cir.),

cert. denied,

484 U.S. 846 , 108 S.Ct. 141 , 98 L.Ed.2d 97 (1987) (“Although state universities have consistently been found to be entitled to immunity, courts reexamine the issue with regard to the facts of each case ‘because the states have adopted different schemes ... in constituting their institutions of higher learning.’ ”) (quoting

United Carolina Bank v. Board of Regents,

665 F.2d 553, 557 (5th Cir.1982)).

In this case, Plaintiffs contend that Defendants asserting Eleventh Amendment immunity are not entitled to it as they are “independently operated and financially self-sufficient businesses engaged in

commercial activities,

not governmental organizations involved in legislative or regulatory functions.” Plaintiffs’ Memorandum of Law in Opposition to Jurisdictional and Immunity Motions, filed December 12, 1994, at p. VI-2 (“Plaintiffs’ Memorandum of Law”) (emphasis in original). Therefore, Plaintiffs contend, that the court should not allow these Defendants to evade responsibility in federal court for their conduct under the guise of Eleventh Amendment immunity. ' Further, Plaintiffs argue that if Defendants are granted immunity, they will be deprived of any remedy for the alleged antitrust violations.

12

See

Plaintiffs’ Memorandum of Law at p. VI-2.

As an initial matter, Plaintiffs’ argument, Plaintiffs’ Memorandum of Law at VI-2, VI-17 - VI-38, that the Eleventh Amendment should not be applicable to the hospital Defendants as they operate as independent businesses is beside the point.

13

Many state agencies provide services that may also be readily available from, and perhaps, even more efficiently provided by, commercial private enterprises whether or not operated for profit. However, the Eleventh Amendment’s protection does not turn on whether the activity in question is one -that predominantly is associated with goods or services traditionally produced or purveyed in the private sector such as health care, but rather whether the entity providing such service is the state. Thus, the issue must, as stated in

Hess, supra,

at 47-48 , 115 S.Ct. at 404 , and

Feeney,

873 F.2d at 629-30 , ultimately depend on whether the sovereign power of the state is so involved in the organization and operation of the entity as to directly implicate the fundamental policy of federalism secured by the Eleventh Amendment. The fact that the state chooses to involve itself in a service readily available from private enterprises which do not, normally, enjoy immunity from prosecution, of

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antitrust claims in federal court does not displace this basic constitutional principle.

Any remedy to perceived unfairness to injured litigants is not to be found in bending the Eleventh Amendment beyond its contours to accommodate such arguably valid concerns, but with the legislatures which make important choices on behalf of the states they govern, including an election to waive the Amendment’s protection.

See Hess, supra,

at 48-51 , 115 S.Ct. at 405 (a state does not waive its Eleventh Amendment immunity by consenting to suit only in its own state courts, the state must specify its intention to subject itself to suit in federal court). Adopting Plaintiffs’ argument would, except in cases involving the state itself, effectively repeal the Eleventh Amendment’s broad protection afforded the states as many activities and services organized or provided under state law are analytically well within Plaintiffs’ concept of “financially self-sustaining” business entities.

Another premise underlying the Plaintiffs’ position that the public hospital Defendants are outside the Eleventh Amendment’s protection is that, as the majority of their respective revenues derive from patient fees and are held in accounts separate from the general treasury accounts of the sponsoring state itself, a money judgment in this action would not be one against the state and thus would not contravene the second of the “twin reasons,”

Hess, supra,

at 47-48 , 115 S.Ct. at 404 , for the Amendment, “the prevention of federal court judgments that must be paid out of a state’s treasury.”

Id.

This premise is dependent on characterizing the operating accounts of these hospital Defendants not being a part of their respective state treasuries, and is invalid for several reasons.

Initially,

see

Discussion Section 1(a),

infra,

each such hospital Defendant is a public entity created either by state statute or constitution as an agency, arm or instrumentality of the state. Although only Ohio has specifically so stated by legislation, Ohio Rev.Code Ann. §§ 117.01 and 3345.05 (Baldwin 1995), the record supports a finding that these funds as generated by the hospitals are public monies. The court’s attention has been directed to no case supporting a finding that the term “state treasury” for Eleventh Amendment purposes is limited only to funds held in accounts controlled by a state officer, such as a comptroller or treasurer, and this court has found none. Indeed, as discussed,

see

Discussion Section 1(a),

infra,

the hospital Defendants claiming Eleventh Amendment immunity are subject to financial audits by other state officials. Such general auditing power strongly suggests a degree of interest in these funds equivalent to that as may be expected with respect to the state’s accounts for more common types of revenue sources such as income and sales taxes.

See, e.g., Rothstein v. Wyman,

467 F.2d 226, 236-37 (2d Cir.1972),

cert. denied,

411 U.S. 921 , 93 S.Ct. 1552 , 36 L.Ed.2d 315 (1973) (“reparations” for delayed payment of federal public assistance benefits involved “substantial expenditures from

public funds

of the state” thereby requiring Eleventh Amendment protections) (McGowan, J.) (emphasis added). Nor does the fact that the source of monies held by the public hospital Defendants are patient fees rather than general tax revenues alter this result. “[W]hen the action is

in essence

one for recovery of money

from the state,”

the Eleventh Amendment applies.

See Ford Motor Car Co. v. Department of Treasury of Indiana,

323 U.S. 459, 464 , 65 S.Ct. 347 , 89 L.Ed. 389 (1944) (action in federal court for refund, by state officers constituting board of Indiana Department of Treasury, of illegally collected sales taxes precluded by Eleventh Amendment) (emphasis added);

Jain v. University of Tennessee,

670 F.Supp. 1388 (W.D.Tenn.1987),

aff'd,

843 F.2d 1391 (6th Cir.),

cert. denied,

488 U.S. 827 , 109 S.Ct. 78 , 102 L.Ed.2d 54 (1988) (fact that two-thirds of state university funding derived from non-legislated sources did not preclude Eleventh Amendment immunity).

Further, the question of whether state public funds would respond to a federal judgment depends on a careful examination of the entity’s relationship to the state and, in particular, whether the entity has the power to raise its own funds. See

Hess, supra; Baxter, supra,

at 732-33 (county department of welfare, as part of county having taxing power independent of state, not protected by Eleventh Amendment). Here, although each

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public hospital Defendant has authority to set patient fees, such power clearly is not exercised independently of state approval and oversight.

See

N.Y. Educ. L. § 355 (8). (McKinney 1997) (State University of New York funds subject to regulation by the state comptroller); Plaintiffs’ Memorandum of Law at VI-26, VI-28 - VI-29, VI-30 - VI-31, VI-33 - VI-34; Appendix Volume 5, Exhibit 6, Doc. Nos. LL11 1063, LL11 1092; Appendix Volume 6, Exhibit 1, Doc. Nos. LL12 1415- 111451; Exhibit 2, Doc. Nos. LL13 432-LL13 433, LL13 453-LL13 459; Appendix Volume 14, Exhibits 1-3, 5-9, Interrogatory Response Nos. 2, 5, 14; Ohio State University Hospital’s Memorandum of Law in Support of Motion to Dismiss, filed May 2, 1994, Exhibit B, § 3335-93-02. Moreover, in no case has the state which created the respective hospital Defendants, divorced itself from all financial responsibility for any liabilities incurred.

Compare Lake Country Estates v. Tahoe Planning Agency,

440 U.S. 391, 401 , 99 S.Ct. 1171, 1177 , 59 L.Ed.2d 401 (1979) (noting that bi-state agency’s enabling legislation expressly provided that neither creating state would be liable for agency’s obligations — agency held not within Eleventh Amendment). As discussed,

infra,

neither is any public hospital Defendant authorized to pay any judgment from funds it may lawfully retain in accounts held separate from the state treasury. Therefore, because it cannot be found as to any public hospital Defendant that a judgment for money damages in this case will not be paid “both legally and practically,” by the state,

Hess, supra,

at 51-53 , 115 S.Ct. at 406 , the Eleventh Amendment’s “core concern is implicated.”

Id.

However, as required by

Hess ,

the specific factors relating to each public hospital Defendant’s organization and relationship to the respective states must nevertheless be analyzed.

1.

Ohio State University Hospital

To determine whether Eleventh Amendment immunity applies to Ohio State University Hospital, Ohio statutory láw, the bylaws of Ohio State University, and the bylaws of the Medical Staff of the Ohio State University Hospitals which includes Defendant University Hospital must be reviewed. University Hospital has requested that the court take judicial notice of its bylaws. Exhibit B of Ohio State University Hospital’s Memorandum of Law in Support of Motion to Dismiss, filed May 2,1994. As the bylaws describe the powers and duties granted to University Hospital’s board of trustees and medical staff, their consideration is necessary to determine whether the hospital is an independent entity with respect to its degree of legal autonomy from the Ohio State University of which it is a unit and any other state governing bodies. Plaintiffs do not oppose this request. The court therefore takes judicial notice of the bylaws, as presented in Exhibit B.

See

Fed.R.Evid. 201(d) (court may take judicial notice- as requested by a party).

- When an action is brought against an entity or institution claiming immunity under the Eleventh Amendment, application of the amendment turns on whether the entity can be characterized as an arm of the state, or whether it should be treated as a non-immunized political subdivision of the state.

Mount Healthy City School District, supra,

at 280, 97 S.Ct. at 572-73 (“The bar of the Eleventh Amendment to suit in federal courts extends to States and state officials in appropriate circumstances, but does not extend .to counties and similar municipal corporations”) (citations-omitted). In determining whether the University Hospital is entitled to immunity, this court will examine the relationship among Ohio State University, its board of trustees, and the state of Ohio, as well as several factors relating to the autonomy, financial independence, and function of the University Hospital.

The Ohio State University was created as a state educational institution for higher education by the Ohio General Assembly; a board of trustees was simultaneously created to govern the university. Ohio Rev.Code Ann. §§ 3335.01, 3335.02, 3345.011 (Baldwin 1995).

14

The Ohio State University Board of Trustees (“the OSU Trustees”) consists of

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eleven members. Ohio Rev.Code Ann. § 3335.02(A). The OSU Trustees are appointed by the governor of Ohio and confirmed by the state senate

15

for nine year terms.

16

Ohio Rev.Code Ann. § 3335.02(A).

Cf. United Carolina Bank, supra,

at 558 (where an institution’s governing body is elected by local voters rather than being appointed by the governor with the advice and consent of the state senate, it is more likely a political subdivision than an arm of the state). Through its plenary appointment authority, the state of Ohio exercises significant influence over the operations of the OSU Trustees and, through the Trustees,. Ohio State University.

The Ohio legislature has granted the OSU Trustees the ability to sue and be sued,

17

the authority to contract, and the power to make and use a common university seal, to enable the board of trustees to effectively operate the university. Ohio Rev.Code Ann. § 3335.03. These powers are, however, specifically defined and limited by the state legislature. For example, Ohio statutes prescribe the number of trustees necessary for a quorum, Ohio Rev.Code Ann. § 3335.06, the duration of fire protection contracts, Ohio Rev.Code Ann. § 3345.09, and even the penalty for the unauthorized duplication of keys, Ohio Rev.Code Ann. §§ 3345.13, 3345.99.

“The trustees are also given the power to adopt rules and regulations, Ohio Rev.Code Ann. § 3335.08, but it is not suggested that the state could not statutorily modify or invalidate such rules.”

Bailey v. Ohio State University,

487 F.Supp. 601, 604 (S.D.Oh.1980). “This structure demonstrates that, as to general powers, Ohio State [University] is much less autonomous in its relation to the state than other universities which have been held not to be instrumentalities of the state.”

Bailey, supra,

at 604 .

University Hospital was created by the OSU Trustees on September 13,1963 as part of a program to establish a college of medicine. Ohio Rev.Code Ann. § 3335.15; Ohio State University Hospital’s Memorandum in Support of Motion to Dismiss, filed May 2, 1994, Exhibit B, Bylaws of Medical Staff of Ohio State University Hospitals, § 3335-43-01 (1993) (“Hospital Bylaws”). The hospital is governed by a board (“Hospital Board”), selected by the OSU Trustees. Hospital Bylaws § 3335-93-0HAX1). The Hospital Board consists of fourteen members, including two members of the OSU Trustees and twelve citizen members who are appointed by the OSU Trustees in consultation with the president of Ohio State University. Hospital Bylaws § 3335-93-01. The citizen members of the Hospital Board can be removed or suspended by the OSU Trustees, thus circumscribing- the independence of the Hospital Board. Hospital Bylaws § 3335-93-07(A).

*157

The Hospital Board is responsible for oversight of patient care services and the University Hospital’s support of the Ohio State University health sciences academic programs. Hospital Bylaws §§ 3335-93-01(A), 3335-99-01. The powers of the Hospital Board are specifically enumerated in the Hospital Bylaws, Sections 3335-93-01 through 3335-93-10. The OSU Trustees did not grant the Hospital Board the power to sue or be sued or to acquire or own property in the hospital’s name. Ohio Rev.Code § 3335.15(B). However, the hospital is empowered to enter into contracts without prior approval of the state, although these contracts are of a limited nature and all must ultimately be approved by other university officials.

18

Plaintiffs’ Memorandum of Law at VI-34; Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 19, pp. 79-82.

It appears that the delegation of some of the OSU Trustees’ powers to the Hospital Board was necessary for-the College of Medicine and University Hospital to properly function. However, despite the myriad responsibilities of the Hospital Board, it remains ultimately subject to the authority of the OSU Trustees. Hospital Bylaws §§ 3335-93-02, 3335-93-03. Significantly, the powers expressly enumerated in the Hospital Bylaws can be amended or withdrawn at any time by the OSU Trustees. Hospital Bylaws § 3335-103-01.

Ohio State University has not granted the University Hospital separate corporate existence; further, the Ohio State University was not created as a corporation with perpetual existence.

See Bailey, supra,

at 604 . Moreover, the hospital itself has no employees, as all members of its medical staff are. faculty members of the Ohio State University College of Medicine, an academic unit of the Ohio State University. Hospital Bylaws § 3335-43-04(A)(2).

Title to all land used by the Ohio State University and the University Hospital is held in the name of the state of Ohio. Ohio Rev.Code Ann. § 3335.13; 1995 Oh. Laws § 3345.12(P). Only property held for investment purposes or in the university’s endowment portfolio is held in trust by the OSU Trastees for Ohio State University. Ohio Rev.Code Ann. § 3335.13. Further, the OSU Trustees must “[njegotiate for and receive conveyances and transfers of property, both real and personal, to be used by [the college of medicine].” Ohio Rev.Code Ann. § 3335.15(B).

Additionally, Ohio Rev.Code Ann. § 2743.01(A) provides that an Ohio state university, such as the Ohio State University, Ohio Rev.Code Ann. § 3345.011, is an instrumentality of the state, and is amenable to suit in the state’s, court of claims.

19

Ohio Rev.Code Ann. § 3335.03(B).

The various powers delegated to the OSU Trustees and the Hospital Board indicate a

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degree of independence from the state of Ohio itself, however, that appearance is diluted by the fact that the entire OSU Board of Trustees, which, as noted, chooses the members of the Hospital Board, is selected by the governor of Ohio with the advice and consent of the Ohio senate. Moreover, the OSU Trustees expressly retained the power to amend or repeal the duties and powers- of the Hospital Board, and the Trustees must make annual reports regarding the Ohio State University and the University Hospital to the Ohio General Assembly. Ohio Rev.Code Ann. § 3335.07. From that perspective, the functions granted to both the Hospital Board and the OSU Trustees appear less like the independent powers of a municipality, such as a city or county, and more like the scope of authority legislatively delegated to an agency or other instrumentality of the state thereby sparing the state’s legislature of the obligation to ratify its every action.

The court must next determine whether relevant case law treats the entity at issue as independent or as a surrogate of the state.

Feeney, supra,

at 629-30. Several Ohio cases have addressed the question of whether Eleventh Amendment immunity applies to the state colleges and universities of Ohio and have clearly held Ohio’s state colleges and universities, including the Ohio State University, to be arms of the state entitled to the amendment’s protection.

See Weaver v. University of Cincinnati,

758 F.Supp. 446 (S.D.Oh.1991) (Eleventh Amendment barred suit against the University of Cincinnati as it is an arm of the state);

Dillion v. University Hospital,

715 F.Supp. 1384, 1386-87 (S.D.Oh.1989) (university hospital is an agent of the University of Cincinnati and therefore an arm of the state of Ohio entitled to Eleventh Amendment immunity);

Bailey, supra,

at 604 (Ohio State University is an instrumentality of the state entitled to Eleventh Amendment immunity);

Thacker v. Board of Trustees,

31 Ohio App.2d 17 , 285 N.E.2d 380 (1971),

aff'd,

35 Ohio St.2d 49 , 298 N.E.2d 542 (1973) (Ohio State University and Ohio State University Hospitals are instrumentalities of the state),

overruled in part on other grounds, Schenkolewski v. Cleveland Metroparks System,

67 Ohio St.2d 31 , 426 N.E.2d 784 , 787 n. 3 & 4 (1981);

Wolf v. Ohio State University Hospital,

170 Ohio St. 49 , 162 N.E.2d 475 (1959) (Ohio State University Hospital and the Board of Trustees of Ohio State University are instrumentalities of the state),

overruled in part on other grounds, Schenkolewski, supra,

at 787 n. 3 & 4.

See also Hall, supra,

at 303 (Ohio considers its colleges and universities to be part of the state for purposes of sovereign immunity).

As the degree of control over the University Hospital by the OSU Trustees and, through the OSU Trustees, the governor of Ohio is fairly substantial, and the Ohio courts, both federal and state, have determined Ohio State University and the Defendant University Hospital to be instrumentalities of the state, the court finds that the autonomy factor weighs in favor of according Eleventh Amendment immunity to the University Hospital.

Plaintiffs vigorously argue, as discussed,

supra,

that any judgment which might be obtained in this action would not necessarily be paid from the state treasury, but could be satisfied from the University Hospital’s self-generated revenue, its trust fund, or commercial insurance carried by it. Plaintiffs’ Memorandum of Law at VI-31 - VI-32. The University Hospital maintains an insurance trust fund to meet its liabilities for malpractice claims, which was established and funded pursuant to the authority of Ohio Revised Code Section 3345.201. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 19, pp. 93, 97,101. The hospital also maintains private insurance coverage in case the insurance trust fund is expended. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 19, pp. 101-102. The Executive Director of. the University Hospital stated that this insurance policy was intended for general liability claims.

Id.

Plaintiffs contend, in an attempt to demonstrate that Eleventh Amendment immunity does not apply, that a judgment against the University Hospital could be paid from its insurance policies. However, Plaintiff cites no authority to support its argument that the presence of insurance displaces immunity afforded by the Eleventh Amendment. To the contrary, several courts which have consid

*159

ered the effect of insurance on the question of waiver of immunity hold that the presence of insurance does not defeat a claim of Eleventh Amendment immunity.

See, e.g., Bockes v. Fields,

999 F.2d 788, 790-791 (4th Cir.1993) (where Commonwealth of Virginia’s Public Officials Liability Self-Insurance Plan would be required to pay a judgment against the defendants, and the Commonwealth funds eighty percent of the self-insurance plan, the Eleventh Amendment nevertheless bars recovery);

Wallace v. State of Oklahoma,

721 F.2d 301, 305 (10th Cir.1983) (Oklahoma statute which waived sovereign immunity for a claim covered by liability insurance did not waive Eleventh Amendment immunity in federal court);

Gressley v. Deutsch,

890 F.Supp. 1474, 1488 (D.Wy.1994) (even if the University of Wyoming had insurance policy to cover the civil rights claims asserted by the plaintiff, such policies would not result in waiver of Eleventh Amendment immunity);

Mohammed v. Farney,

832 F.Supp. 103, 106 (S.D.N.Y.1993) (the state did not waive its Eleventh Amendment immunity by purchasing liability insurance);

Hobbs v. Georgia Department of Transportation,

785 F.Supp. 980, 984 (N.D.Ga.1991) (mere creation of an insurance fund to protect state treasury does not act as an implicit waiver of a state’s Eleventh Amendment immunity);

Ragosta v. State of Vermont,

556 F.Supp. 220, 224 (D.Vt.1981) (insurance policy purchased by state did not amount to a waiver of immunity under the. Eleventh Amendment). Básed upon this authority, even assuming that the University Hospital has insurance coverage for the antitrust claims asserted by Plaintiffs, this fact does not bar application of Eleventh Amendment immunity.

University Hospital maintains that its trust fund money consists of public funds as defined by Ohio law, Ohio Rev.Code Ann. § 117.01, and, therefore, any judgment against the hospital constitutes a judgment against the state. Ohio law also provides that any money received, collected by, or owed to a representative, officer, or employee of a state agency,

20

public institution, political subdivision, or other office pursuant to any order, resolution, or authority constitutes public money. Ohio Rev.Code Ann. § 117.01. The hospital continues the analysis to conclude that any damage award imposed by a federal court and paid from the hospital’s operating funds or funds allocated by the state, constitute Ohio public funds and would violate the' Eleventh Amendment. Ohio State University Hospital’s Memorandum of Law at pp. 14-15. Thus, it concludes, a federal money judgment in this action against the University Hospital could result in the depletion of Ohio’s public funds.

In determining whether a state university is entitled to Eleventh Amendment immunity, courts also consider the extent of state funding, the state’s oversight and control of the university’s fiscal affairs, the university’s ability to independently raise funds, whether the state taxes the university, and whether a judgment against the university would result in the state increasing its appropriations to the university.

Kashani, supra,

at 845 .

Ohio State University’s College of Medicine only qualifies for state funding if it meets the legal requirements for state funding, including operating an accredited program of medical education in the state, and maintaining a department of family practice, including courses of study, clinical experience, preceptorships, and residencies in family practice. Ohio Rev.Code Ann. §§ 3333.10, 3333.11, 3335.15(A). The OSU Trustees are required to prepare and file a detailed statement regarding the condition of the university, all expenditures and disbursements made, the number of professors, staff, and students in each department, an estimate of expenses for the following year, a statement demonstrating progress of the university, and other such information. Ohio Rev.Code Ann. § 3335.07. A necessary component of this budget is the operating budget for the University Hospital. Defendant’s Reply Memorandum of Law, filed May 2, 1994, at p. 40. These statements are then submitted to the Ohio legislature for approval.

See Harden, supra,

at 1163 (‘Where the budget of an

*160

entity is submitted to the state for approval, this suggests that the entity is an agency of the state [for the purpose of determining the degree of state control over the entity and the fiscal autonomy of the entity]”). Further, all aspects of the economic life of Ohio State University and, therefore, the operation of University Hospital, are subject to state audit and other forms of scrutiny. Ohio Rev.Code Ann. § 3345(B) (trustees’ annual report shall include “amounts of receipts and disbursements”); Ohio Rev.Code Ann. § 3345.03 (university must pay cost of inspection of accounts by state bureau of inspection and supervision of public offices); Ohio Rev.Code Ann. § 3345.05 (“all receipts and expenditures are subject to the inspection of the auditor of the state”).

By contrast with the state’s community colleges, school districts, and other political subdivisions of Ohio such as its counties, towns and villages, the Ohio State University and the University Hospital do not have the power to levy taxes to service a bond issue.

Cf. Mount Healthy, supra,

at 280, 97 S.Ct. at 572-573. The absence of the authority to tax is a strong indication that an entity is more like a direct arm of the state government than a county or a city, as such enablement gives the entity an important degree of fiscal and operational autonomy.

Kashani, supra,

at 846 .

Compare Mackey v. Stanton,

586 F.2d 1126, 1131 (7th Cir.1978),

cert. denied,

444 U.S. 882 , 100 S.Ct. 172 , 62 L.Ed.2d 112 (1979) (the county department and the school board have the power to raise their own funds by tax levy and by bond issuance, providing a manner for payment of judgments without resort to the state treasury);

United Carolina Bank, supra,

at 558 (“Most telling is the power of junior colleges to levy ad valorem taxes [as] ... [u]nder Texas law, political subdivisions are sometimes defined as entities authorized to levy taxes.”);

Hall, supra,

at 304 (“[N]one of the [Ohio] state universities or colleges ... have power to levy taxes to service such bond issues or otherwise provide revenue independent of state appropriations.”). Thus, although the University Hospital has, as described below, sources of revenue, which under Ohio law are classified as public funds, other than appropriations from the legislature, it lacks the capacity typically granted local governments to require payments in the form of taxation or fees to fund the services they provide to the public.

The University Hospital receives the majority of its revenue from payment for services provided to patients, however, funds for the hospital may also be raised through the issuance of bonds by the OSU Trustees, but the limited ability to issue bonds and other obligations is regulated in detail by state law. 1995 Oh. Laws § 3345.12 (provides in-depth explanations of how obligations are authorized, prepared and secured). The debt obligations authorized by the OSU Trustees are secured by a pledge of and lien upon the available receipts of Ohio State University, as provided for in the bond proceedings, excluding money raised by taxation and state appropriations. 1995 Oh. Laws §§ 3345.12(B), (C). Significantly, payment of a judgment is not one of the purposes for which the Ohio State University is authorized to issue bonds. 1995 Oh. Laws §§ 3345 .12(B), (C). Further, the OSU Trustees and the Hospital Board are prohibited from contracting “a debt not previously authorized by the general assembly [the Ohio legislature].” Ohio Rev.Code Ann. § 3335.10.

Plaintiffs emphasize the fact that the University Hospital can avail itself of self-generated income from its own hospital charges for services it may provide and donations, and that any judgment rendered against the hospital could be paid by funds not appropriated from the Ohio General Assembly. However, “[b]y statute, the Ohio legislature permits the state colleges and universities to retain [self-generated] funds, rather than require them to be paid into the treasury and then appropriated back to the schools as needed, but it could just as easily amend that statute to require the converse.”

Hall, supra,

at 304 .

Plaintiffs argue that the most relevant financial factor weighing against finding Eleventh Amendment immunity for the University Hospital is that the hospital’s operating funds do not come predominantly from the state. For example, for the hospital’s 1992 - 1993 fiscal year, only 2.8% of the

*161

hospital’s total revenues were attributable to direct state appropriations.

21

Plaintiffs’ Memorandum of Law at VI-31 - VI-32. However, no statutory limitation exists restricting the amount of money that the University Hospital may receive from the state.

See

Ohio Rev.Code § 3335.01

et seq.

Moreover, in assessing the Eleventh Amendment claim, “ ‘the nature of the state’s [legal]

obligation

to contribute may be more important than the size of the contribution.’ ”

Fitchik v. New Jersey Transit Rail Operations, Inc.,

873 F.2d 655, 660 (3d Cir.1989) (quoting

Blake v. Kline,

612 F.2d 718, 723 (3d Cir.1979), ce

rt. denied,

447 U.S. 921 , 100 S.Ct. 3011 , 65 L.Ed.2d 1112 (1980)) (emphasis added). Thus, although the University Hospital has received, currently, a relatively small percentage of its total operating budget from state appropriations, in the future the hospital may require or receive larger appropriations to address its needs. Therefore, the extent of direct state financial support at a given point in time is not determinative of the hospital’s financial independence for purposes of Eleventh Amendment immunity analysis.

Here, the key question for Eleventh Amendment purposes is whether the funds which would used to satisfy the potential federal court judgment will come directly from the state treasury, or whether, if the hospital’s financial resources are insufficient or non-existent, the state must, under state law, reimburse the hospital, thereby effectively paying the obligation.

Fitchik, supra,

at 660 . Although it appears that a judgment in this case would in all likelihood be paid from the hospital’s trust fund, which constitutes public money, or the university’s excess liability insurance policy, the judgment would be paid using public money, as Ohio has not specifically stated that it will not be liable for the debts and obligations incurred by the university. Ohio Rev.Code § 3335.01

et seq.

Thus, the funding consideration favors University Hospital’s claim that it is entitled to immunity from suit in federal court.

The primary purpose of the university hospital is the advancement of higher education by providing research and training support as part of the Ohio State University College of Medicine. Ohio Rev.Code Ann. § 3335.15. Federal courts have long provided that university and professional education is recognized as a function of state government.

See Skehan v. State System of Higher Education,

815 F.2d 244, 248 (3d Cir.1987).

See also Stewart v. Baldwin County Board of Education,

908 F.2d 1499, 1511 (11th Cir.1990) (public primary and secondary schools, unlike state colleges and universities, limit enrollment to city or county residents, thereby suggesting a “local” or municipal function);

Miller v. Rutgers,

619 F.Supp. 1386, 1391 (D.N.J.1985);

Handsome v. Rutgers,

445 F.Supp. 1362 , 1367 n. 7 (D.N.J.1978).

In

Mount Healthy School District v. Doyle,

the Supreme Court looked not only to whether the entity at issue was formed with independent powers from the state but also to whether it served the state as a whole, or a particular region.

Mount Healthy School District,

429 U.S. at 280, 97 S.Ct. at 572-573 (“Petitioner is but one of many local school boards within the State of Ohio”). In this case, University Hospital provides educational and health care services for individuals state-wide, although patients located in the vicinity of the hospital’s facilities at Columbus, Ohio are more likely to use the hospital on a regular basis than those persons who live at a greater distance. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 19, pp. 85-86.

Moreover, the powers and duties granted to the Hospital Board to enable the Ohio State University Hospital to carry out its primary purpose of providing medical education together with the Ohio State University Medical School, contrasts to those of a city or county whose exercise of their far more extensive police powers, are their very reason for existence. Therefore, the University Hospital is distinguishable from public entities which perform only local government functions, and this factor weighs in favor of granting the hospital sovereign immunity.

Compare Hess, supra,

at 42-44, 115 S.Ct. at

*162

402 (Port Authority Trans-Hudson Corporation denied Eleventh Amendment immunity);

Baxter, supra,

at 732-33 (Eleventh Amendment did not bar claim against county department of public works) (citing

Mackey v. Stanton,

586 F.2d 1126, 1131 (7th Cir.1978),

cert. denied,

444 U.S. 882 , 100 S.Ct. 172 , 62 L.Ed.2d 112 (1979)).

As the autonomy, financial independence, and function indicators point toward a finding of immunity, this court need not assess whether a judgment in this case against the hospital would potentially deplete the Ohio state treasury, and whether the sovereign dignity of the state is preserved, as discussed in

Hess, supra,

513 U.S. at 51-53 , 115 S.Ct. at 406 (1994).

Accordingly, applying the factors bearing on the availability of Eleventh Amendment immunity, the court finds that the Defendant University Hospital is an arm of the state of Ohio and entitled to Eleventh Amendment immunity from suit in this court.

2.

Oregon Health Sciences University Hospital

Oregon Health Sciences University and its University Hospital

22

were created as educational institutions for higher learning by the Oregon legislature. The Oregon Health Sciences University consists of a medical school, a dental school, a school of nursing, a hospital, and research centers. Or.Rev.Stat. § 352.055(1) (1993); Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhibit 47, p. 8. The university was originally part of the Oregon State System of Higher Education, Or.Rev.Stat. § 352.002 (1993), however, in 1995, the Oregon legislature transformed Oregon Health Sciences University into a “public corporation.” 1995 Or.Laws ch. 162 §§ 1(2), 1(3). Under Oregon law, a public corporation is an entity “created by the state to carry out public missions and services ... [by] participating] in activities or providing] services that are also provided by private enterprise.”

23

■ 1995 Or.Laws ch. 162 § 1(2).

The Board of Directors (“the Board”) which governs the university consists of seven members

24

appointed by the governor of Oregon and confirmed by the state senate.

25

1995 Or.Laws ch. 162 §§ 1(2), 4(1). The terms of office are four years for nonstudent members, and two years for student members. 1995 Or.Laws ch. 162 § 4(2). The governor may remove any member of the Board at any time for cause, after notice and public hearing. 1995 Or.Laws eh. 162 § 4(7). Thus, the state of Oregon exercises superincumbent authority over the Board, Oregon Health Sciences University, and the University Hospital.

The Oregon legislature granted the Board the power to appoint and employ personnel, make and enter contracts, purchase, control, or dispose of title to real and personal property,

26

sue or be sued in its own name in any

*163

forum,

27

hold and control all funds, and borrow funds as needed by the university.

28

1995 Or.Laws ch. 162 § 8. Further, Oregon statutes pertaining to eminent domain procedures, intergovernmental cooperation, public records policy, and governmental standards and practices for officers and employees; Or. Rev.Stat. chs. 35, 190, 192, 244, apply to Oregon Health Sciences University upon the same terms which apply to public bodies other than the state. 1995 Or.Laws ch. 162 § 9. However, the provisions of several other Oregon statutes, including those dealing with state administrative agencies, procedures and rules of state agencies, personnel relations law, and state real property, Or.Rev.Stat. chs. 182, 183, 240, 270, do not apply to the university. 1995 Or.Laws ch. 162 § 9(2).

Oregon Health Sciences University may also issue and sell revenue bonds, however, the statute providing the procedure for a municipality to issue such bonds does not apply to revenue bonds issued by the University. 1995 Or.Laws ch. 162 § 59; Or.Rev. Stat. § 288.815 (1993). Also, the university’s enabling act provides that. “[n]o obligation of any kind incurred under [Oregon Revised Statute Sections] 288.805 to 288.945 shall be [considered] ... an indebtedness of the State of Oregon.” 1995 Or.Laws ch. 162 § 59.

Moreover, if there is a shortfall of university funds, secured by university generated revenues or property, available to satisfy state general bond obligations issued for university purposes, the state legislature may provide funds to satisfy the shortfall. Except for the requirement of Or.Rev.Stat. 291.445, that general obligation bonds to be paid from general fund appropriations, the legislature has no legal obligation to provide funds for bond obligations issued by the university. 1995 Or.Laws ch. 162 § 61a.

Although the Oregon legislature provided that the university “shall not be considered a unit of local ■ or municipal government or a state agency for purposes of state statutes or constitutional provisions,” 1995 Or.Laws ch. 162 § 2, which results in the fact that the Board maintains considerable authority over university affairs, Oregon law states that the university is a “government entity performing governmental functions and exercising governmental powers.” ' 1995 Or.Laws ch. 162 §§ 2, 8. Further, the university receives funding from the state, it is controlled by the state, and it performs state-wide educational and health care functions. 1995 Or.Laws ch. 162 §§ 1(2), 1(3), 3(l)(a), 3(3)(a)-(f). Thus, the .University Hospital as a component of Oregon Health Sciences University retains more of the characteristics of an arm or instrumentality of the state than a political subdivision.

Prior federal and state cases involving Oregon Health Sciences University in Oregon have accorded both Oregon’s state universities and the Oregon State Board of Higher Education immunity as instrumentalities of the state of Oregon.

29

Brinkley v. Oregon Health Sciences University,

94 Or.App. 531 , 766 P.2d 1045, 1047 (1988),

review denied,

307 Or. 571 , 771 P.2d 1021 (1989) (Oregon Health Sciences University treated as a public body);

Davis v. Harris,

570 F.Supp. 1136, 1137 (D.Or.1983) (“Eleventh Amendment immunizes the State Board of Higher Education from action in federal court”);

Penk v. Oregon State Board of Higher Education,

93 F.R.D. 45, 53 (D.Or.1981) (“Oregon State Board of Higher Education is the state”);

James & Yost, Inc. v. State Board of Higher Education,

216 Or. 598 , 340 P.2d 577, 578 (1959) (Oregon State Board of Higher Education is an instrument or arm of the state).

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However, since the current statutes governing Oregon Health Sciences University and the University Hospital became effective on July 1, 1995, 1995 Or.Laws ch. 162 § 95, no case interpreting the status of the university or its affiliated hospital as an Oregon public corporation, in relation to Eleventh Amendment immunity, has been decided.

Plaintiffs have argued that any judgment against the Oregon Health Sciences University Hospital would not be paid from the state treasury. Plaintiffs’ Memorandum of Law at VI-27 — VI-29. Specifically, Plaintiffs assert that the University Hospital is not dependent on the state for funding, in that the University Hospital is financially self-sufficient as it “generated an operating profit of over $10 million for [the period ending May 31, 1993],” Plaintiffs’ Memorandum of Law at VI-28, and only 5.6% of its revenues wei'e attributable to state funding for the period ending May 31, 1994. Plaintiffs’ Memorandum of Law at VI-27; Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 23, p. 27. However, no statutory limitations exist that restrict the amount of funding that the university and University Hospital can receive from the state. It is generally recognized that the state’s obligation to contribute to the revenues of the university is more important than the amount of the contribution.

Fitchik,

873 F.2d at 660 .

In determining whether the University Hospital should receive Eleventh Amendment immunity, the court must consider not only the extent of state funding, but also the state’s oversight and control of the Health Sciences University’s fiscal affairs, the university’s independent ability to raise funds, whether Oregon taxes the university, and whether a judgment against the university would result in the state increasing its appropriations to the university.

Kashani

813 F.2d at 845 .

In this case, Oregon Health Sciences University, with the approval of its Board, may enter into financing agreements which would be advantageous to the university. 1995 Or. Laws Ch. 162 §§ 17-21. However, there is no indication that money can be borrowed in order to pay a judgment against the university. Further, the university may issue revenue bonds, which are to be considered “obligations of a political subdivision of the state,” rather than obligations of the state itself. 1995 Or.Laws ch. 162 § 60. There is no evidence in the record that money raised through the issuance of these bonds could not be used to pay a judgment against the University Hospital.

Although these considerations point away from granting Eleventh Amendment immunity, the factors presented here relating to autonomy and control by the state persuasively point toward granting immunity. Oregon Health Sciences University must, pursuant to the statutes in effect on July 1, 1995, submit a funding request to the Oregon Department of Administrative Services and the Legislative Assembly, the Oregon State Legislature, as part of the governor’s budget every other year. 1995 Or.Laws ch. 162 § 13(1). Included within this budget is an allocation for the University Hospital, which is submitted by the various departments to the hospital administration, and then to the university. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 23, pp. 6-10. Any request approved by Oregon’s Legislative Assembly is appropriated to the Department of Administrative Services for direct allocation to the university. 1995 Or.Laws eh. 162 § 13(1). Thus, the fact that the Oregon Health Sciences University Hospital must submit a budget to the state for approval suggests that it is an agency of the state for Eleventh Amendment purposes.

See Harden,

760 F.2d at 1163.

The mission of Oregon Health Sciences University and the University Hospital is to serve the people of Oregon as the primary provider of education in the health professions for students of the state of Oregon and the northwest region of the country. 1995 Or.Laws ch. 162 § 3(l)(a). The courts have considered education, particularly professional education, to be a recognized function of state government, so long as the educational entity does not limit enrollment to city or county residents.

See Skehan, supra,

at 248 . As Oregon Health Sciences University and the University Hospital are intended to serve all residents of the state of Oregon, they

*165

function more like an arm of the state in this-respect.

On the other hand, despite the fact that the university must submit a budget to the Oregon Department of-Administrative Services and the Oregon legislature and, as

&

result, receives some state appropriations, the remaining aspects of Oregon Health Sciences University and the University Hospital’s economic life are largely independent of the state. The property owned or leased by the University is not subject to property taxes. 1995 Or.Laws eh. 162 § 21; Or .Rev. Stat. § 307.090(1) (1993) (“all property of the state and all public or corporate property used or intended for corporate purposes of the several counties, cities, towns, ... and all other public or municipal corporations in this state, is exempt from taxation”). However, as under Oregon law both state and local entities are exempt from taxation, this factor does not facilitate a decision as to whether Oregon Health Sciences University Hospital is an arm of the state or a political subdivision.

As the relevant indicators of Eleventh Amendment immunity as to the University Hospital appear to point in different directions, the court must determine whether a judgment against the Oregon Health Sciences University Hospital would burden the state treasury, and ensure that the dignity of the state is preserved.

Hess, supra,

at 51-53 , 115 S.Ct. at 406 .

Oregon Health Sciences University maintains the authority to issue bonds to raise revenue and without pledging the full faith and credit of the state, but the hospital itself does not share the university’s authority to use these procedures to raise capital, as only the Board possesses this power. The University Hospital does generate an operating profit, however this fact does not demonstrate that a judgment against the University Hospital would not require the expenditure of state resources as the purpose of immunity is that its protection does depend upon the actual outcome of the litigation, rather, it operates to bar litigation and exposure to any liability at the outset. Given the direct state control over the university’s budget and overall operation in providing the people of Oregon with educational opportunities and health care, such a judgment would nevertheless offend the dignity of the state of Oregon. 1995 Or.Laws ch. 162 §§ 1(2), 1(3), 3(l)(a), 3(3)(a)-(f). The court therefore finds Oregon Health Sciences University Hospital is an arm or-instrumentality of the state of Oregon, entitled to Eleventh Amendment protection.

3.

University of California Medical Centers

Plaintiffs argue that the University of California Medical Centers at Los Angeles, Irvine, and San Diego, are “financially self-sustaining” business entities which should not be granted Eleventh Amendment immunity. Plaintiffs’ Memorandum of Law at VI-17 — VI-18, VI-21, VI-24. The medical centers contend that the Regents of the University of California (“the Regents”) own and operate each of the California state universities and their respective medical centers, which are part of the University of California, and therefore arms of the state of California for purposes of the Eleventh Amendment. Defendants’ Reply Memorandum of Law at p. 15; - Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 39, p. 8.

In determining whether the University of California Medical Centers sued are agencies of the state of California such that the state is the real party in interest, the court must review the powers, characteristics and relationships among the Regents, the University of California, and the medical centers.

Each of the California state universities and their respective Defendant medical centers are owned and operated by the Regents of the state of California, a public corporation established by the California constitution, which administers the University of California, a public trust under the California State Constitution. Cal. Const. of 1879, art. IX, § 9; Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 39, p. 9. Accordingly, California courts have considered the Regents as an arm of the state or “fourth branch of [state] government.”

See Regents of University of California v. City of Santa

*166

Monica,

77 Cal.App.3d 130, 134 , 143 Cal.Rptr. 276 (2d Dist.1978) (Regents constitute a “branch of the state itself ... a constitutionally created arm of the state”).

The Regents consist of a twenty-five member board, with seven

ex-officio

members, including the state’s governor, lieutenant governor, the speaker of the California assembly, superintendent of public instruction, president and vice-president of the alumni association of the university, and the acting president of the university, who is appointed by the trustees of the university, and eighteen members appointed by the governor and approved by the senate. Cal. Const. of 1879, art. IX, § 9(a). Each' appointed member of the Regents serves a twelve year term. Cal. Const. of 1879, art. IX, § 9(b). Thus, the state of California is empowered to exercise significant direction over the operations of the Regents through its constitutional officers and the University of California system including the university medical centers.

See Rutledge v. Arizona Board of Regents,

660 F.2d 1345, 1349-50 (9th Cir.1981) (Board of Regents of University of Arizona was protected by the Eleventh Amendment where the board of regents was composed of government officials or people appointed by the governor and where the regents had to submit annual reports to the governor).

See also

Footnote 14,

supra.

The California constitution gives the California Regents “full powers of organization and government, subject only to such legislative control as may be necessary to insure the security of its funds and compliance with the terms of the endowments of the university and such competitive bidding procedures as may be applicable.... ” Cal. Const, art. IX, § 9(a); Cal. Public Contract Code § 10500

et seq.

(requiring competitive bidding for projects in excess of fifty thousand dollars). These powers include holding legal title to all real and personal property of the university,

30

the power to sue or be sued,

31

to use a seal, and to delegate authority to committees or faculty as the Regents may deem appropriate. Cal. Const, art. IX, § 9(f).

See

Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 31, pp. 6,19; Volume 10, Exhibit 39, pp. 46, 65, 66-67, 71, 75, 83; Volume 11, Exhibit 63, pp. 22, 65, 70-71, 78, 79, 94; Volume 11, Exhibit 67, pp. 23, 26. Similarly, the Regents have by statute the power to make contracts,

32

leases, and agreements including with any “state or federal agency.” Cal.Educ.Code §§ 92436, 92437 (West 1989).

33

Moreover, the California Regents have complete power over construction projects. The Regents can issue revenue bonds to finance construction projects, and structure the terms of the bonds, including using its property to secure the bonds and redeem them. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 39, pp. 39, 67. Further, the Regents can invest any bond proceeds in a construction fund as it desires, subject to limitations included in indentures relating to the issuance of revenue bonds.

See

Cal.Educ.Code §§ 92441, 92482, 92525, 92532. Additionally, surplus money from revenue bonds can be used by the Regents for any purpose.

34

Cal.Educ.Code § 92533.

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However, neither the principal nor the interest on any bonds issued can create liability against the state, or the Regents, or the property or funds of either, except to the extent of the pledge of revenues in relation to which the bonds were issued. Cal.Educ. Code § 92470.

The Regents must submit reports to each house of the California legislature on “matters pertaining to and affecting salaries, wages, hours of work, conditions of work, and other matters relating to personnel under the jurisdiction of the Regents and the employees of the University of California.”

Ciba-Geigy Corporation, supra,

at 623.

In view of the plenary authority of the Regents over the University of California, the California courts have concluded “that the University has quasi-judicial powers over its own personnel disputes, and that the state courts must show deference when reviewing the factual findings of a University adjudicatory officer.”

Unix System Laboratories, Inc. v. Berkeley Software Design, Inc.,

832 F.Supp. 790, 795 (D.N.J.1993) (citing

Apte v. Regents of the University of California,

198 Cal.App.3d 1084 , 244 Cal.Rptr. 312, 315-316 (Cal.App.1st Dist.1988);

Ishimatsu v. Regents of the University of California,

266 Cal.App.2d 854 , 72 Cal.Rptr. 756, 763 (Cal.App.1st Dist .1968)). The “University [Regents] also has legislative powers in the sense that its policies and procedures attain ‘the status of statutes in its internal governance.’”

Unix System Laboratories, Inc., supra,

at 795 (quoting

Apte, supra,

244 Cal.Rptr. at 315 ). Thus, the Regents “constitutes a branch of the state government equal and coordinate with the legislature, judiciary, and the executive branch.”

Ciba-Geigy Corporation, supra,

at 622 (quoting 30 Ops.Cal. Atty.Gen. 162, 166 (1957)). Moreover, the University of California is defined as a “state agency” in the California Government Code Section 3202(b) (West 1995), whereas the counties, cities, political subdivisions, and municipal corporations are all defined as local agencies. Cal.Gov.Code § 3202(a) (West 1995).

In administering the trust of the University of California, the Regents were granted “all the powers necessary or convenient for the effective administration of its trust, including the power ... to delegate to its committees or to the faculty of the university, or to others, such authority or functions as it may deem wise....” Cal. Const. art. IX, §§ 9(a), (f). Thus, the Regents have granted the medical centers the power to administer their day to day operations.

See

Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 28, p. 6, Exhibit 31, pp. 6, 10-11, Exhibit 39, pp. 40, 46, 58-59, 66-67, 70, 86; Volume 11, Exhibit 63, pp. 19, 21, 66-67, 69-70, 79, Exhibit 67, pp. 8-9, 22, 26.

In contrast to the Regents, the medical centers of the various universities of California are not independent legal entities, rather, they are physical extensions of the Regents existing under their sole aegis.

Lujan v. Regents of the University of California,

69 F.3d 1511 (10th Cir.1995) (suit against the regents is barred by Eleventh Amendment immunity);

Selman v. Harvard Medical School,

494 F.Supp. 603, 614, 616 (S.D.N.Y.),

aff'd,

636 F.2d 1204 (2d Cir.1980) (the University of California Medical Schools at Los Angeles, San Diego, and San Francisco are all part of the Regents of the University of California and are entitled to Eleventh Amendment immunity absent waiver). Moreover, neither the state universities of California, nor their medical centers are separately incorporated from the Regents of the University of California. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 39, pp. 8, 15, 26, 75; Volume 11, Exhibit 63, p. 19.

The University of California medical centers generate substantial income through patient revenues, however, state appropriations to the Regents and the university’s medical centers are used to pay for teaching faculty, leasing equipment, and tort and contract judgments against the Regents.

35

Plaintiffs’

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Memorandum of. Law, Appendix Volume 10, Exhibit 31, pp. 16, 18, Exhibit 39, pp. 13, 28-29. Although the medical centers did not receive the greatest percentage of their total funding from direct state appropriations, the amount of funding by the state is not disposi-tive on the issue of Eleventh Amendment immunity.

See Jain,

670 F.Supp. at 1390-91 .

See also Fitchik,

873 F.2d at 660 (quoting

Blake,

612 F.2d at 723 ) (in assessing an Eleventh Amendment claim, “ ‘the nature of the state’s [legal] obligation to contribute may be more important than the size of the contribution.’ ”). Additionally, the medical centers have no assets or property of their own as all property and bank accounts are in the name of the Regents. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 31, pp. 21, 25-26; Exhibit 39, p. 71; Volume 11, Exhibit 63, pp. 75, 78; Exhibit 67, p. 8.

Although the medical centers govern their own day to day operations, they remain accountable to the Regents, and do not possess the authority to enter any necessary contracts, to sue, issue bonds, or own or hold property. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 31, pp. 12, 18-19, Exhibit 39, pp. 11, 15, 17-22, 26, 40, 61, 66-67; Volume 11, Exhibit 63, pp. 8, 21, 22, 78, Exhibit 67, pp. 7-8, 19. Further, the medical centers cannot be sued in their own name, rather, they must be sued in the name of the Regents. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 39, p. 83; Volume 11, Exhibit 63, p. 94. Thus, as the medical centers lack the degree of autonomy from the state necessary to function independently of the Regents and the state as to legal matters affecting them, in an action against the medical centers the true party in interest is the Regents, indisputedly an arm of the state of California.

Plaintiffs argue nevertheless that the medical centers, in their day to day activities, operate as independent business entities. Plaintiffs’ Memorandum of Law at VI-17 - VI-25. However, the medical centers do not have employees, and do not hire or fire any persons who work in the centers, rather “[a]ll persons who provide services to [the medical centers] are either employees of or contractors with The Regents of the University of California.” Defendants’ Immunity Reply Memorandum at p. 17; Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 36, p. 23, Exhibit 39,- p. 61; Volume 11, Exhibit 53, p. 7. Moreover, university or state approval is required in order to hire or fire employees of the medical centers, as these employees are employed by the university.

Id.

Although each medical center maintains its own financial records and statements, Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 31, pp. 10-11, 13; Exhibit 39, p. 40; Volume 11, Exhibit 63, pp. 19, 66-67; Exhibit 67, pp. 8-9, these statements are compiled with those of the particular university of which it is a part, which forwards a complete proposed budget to the Regents and, ultimately, the California state legislature for appropriations. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 39, pp. 17-22. Moreover, the medical centers do not function as entities separate from their respective universities and the Regents. Even though each medical center is responsible for proposing, reviewing, evaluating, and approving their own policies regarding patient admissions, fee scheduling, and physician credentialing, these policies are reviewed at the university level. Plaintiffs’ Memorandum at VI-21, VI-23; Appendix Volume 10, Exhibit 28, p. 6; Exhibit 32, p. 8; Exhibit 39, pp. 58-59, 61; Volume 11,

*169

Exhibit 58, p. 35.

See also

Plaintiffs’ Memorandum of Law, Appendix Volume 5, Exhibit 6, Doc. No. LL11 1078; Volume 6, Exhibit 2, Doc. No. LL13 00497.

Plaintiffs assert that University of California (Los Angeles) Medical Center and University of California (Irvine) Medical Center have accumulated several million dollars in excess revenues, which, Plaintiffs maintain, supports their view that these hospitals are financially independent. Plaintiffs’ Memorandum of Law at VI-19, VI-24. The state, however, retains authority to appropriate any excess revenues generated by the medical centers. Plaintiffs’ Memorandum of Law at VI-19 n. 10. Such “excess” is often administratively “loaned” to the medical center’s affiliated university, without obligation to repay. Plaintiffs’ Memorandum of Law, Volume 11, Exhibit 67, pp. 15, 22. Further, upon deposit, excess revenues become assets of the Regents. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 31, p. 21; Exhibit 39, . p. 75; Volume 11, Exhibit 63, p. 66. The medical centers may, however, retain such excess revenues to pay their expenses. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 31, pp. 22-25; Volume 11, Exhibit 63, pp. 69-70; Exhibit 67, p. 22.

The Regents delegated some duties to the chancellors of the medical centers including management of patient care facilities, implementation of operating policies, reviewing hospital operations policies, as well as serving as chief administrator of their respective medical centers. Plaintiffs’ Memorandum of Law at VI-21, VI-24 — VI-25. However, the medical centers have only a limited right to contract without the approval of the Regents or the president of the University of California; they may enter contracts up to $250,000 to purchase equipment, and are authorized to pay personnel, or pay for services or other capital expenditures. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 31, p. 19; Exhibit 39, pp. 66-67; Volume 11, Exhibit 63, pp. 22, 79; Exhibit 67, p. 26.

The Regents delegated the authority to approve and execute contracts on behalf of the university to the president of the University of California. Defendants’ Immunity Reply Memorandum at p. 16. However, the president must obtain specific authorization from the Regents prior to entering into certain contracts involving exceptions to approved university programs and policies, and construction contracts in excess of approved funds. Defendants’ Immunity Reply Memorandum at p. 16. Thus, the medical centers have limited fiscal autonomy in fact and law, and must report to the University of California or the Regents for approval of expenditures.

The University of California system and its medical centers were created under the California constitution, and were intended to be governed by the authority of the Regents.

See

Cal. Const. art. IX, § 9. Several federal court decisions have, consistent with this statement of fundamental California law, dismissed cases involving the Regents finding the Regents to be an arm or instrumentality of the state of California, entitling the Regents to Eleventh Amendment immunity from suit in federal court.

See, e.g., Mascheroni v. Board of Regents of the University of California,

28 F.3d 1554, 1559 (10th Cir.1994);

Thompson v. City of Los Angeles,

885 F.2d 1439, 1443 (9th Cir.1989);

Mitchell v. Los Angeles Community College District,

861 F.2d 198, 201 (9th Cir.1988),

cert. denied,

490 U.S. 1081 , 109 S.Ct. 2102 , 104 L.Ed.2d 663 (1989) (California cases demonstrate that California state universities are “dependent instrumentalities of the -state”) (citing

Slivkoff v. California State University and Colleges,

69 Cal.App.3d 394, 400 , 137 Cal.Rptr. 920 , (1977));

BV Engineering v. University of California, Los Angeles,

858 F.2d 1394, 1395 (9th Cir.1988);

Unix System Laboratories, supra,

at 796;

Ciba-Geigy,

804 F.Supp. at 622;

Moxley v. Vernot,

555 F.Supp. 554, 561 (S.D.Oh.1982);

Vaughn, supra,

at 1354.

See also Hamilton v. Regents,

293 U.S. 245, 257 , 55 S.Ct. 197, 201-202 , 79 L.Ed. 343 (1934) (University of California held to be a department of the state of California).

Compare Doe v. Lawrence Livermore National Laboratory,

65 F.3d 771 (9th Cir.1995) (court held that in the unique situation where a particular state department, and not the state of California, pays for any judgment rendered against the uni

*170

versity in its management of the laboratory, there is no immunity under the Eleventh Amendment).

California has exempted the state universities of California from taxation by state or local authorities, Cal.Educ.Code § 92443, a special status which some courts find indicative that an entity is an arm of the state rather than a subdivision.

Kashani, supra,

at 846 . The Regents and its universities are also exempt from local building codes, municipal and zoning regulations, permit fees, and inspection fees for construction improvements solely for educational purposes. Cal. Gov.Code §§ 6103, 6103.6, 6103.7;

City of Santa Monica, supra,

at 136, 143 Cal.Rptr. 276 ; Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 39, p. 9. Additionally, revenue bonds issued by the Regents are exempt from state taxation.

Ciba-Geigy Corporation, supra,

at 622. Further, the Regents are protected under California’s tort claims act.

36

See

Cal.Gov.Code § 811.2. As these protections apply to the medical centers as well as the Regents

Keller v. State Bar of California,

47 Cal.3d 1152 , 1164 n. 10, 255 Cal.Rptr. 542 , 767 P.2d 1020 (1989),

rev’d on other grounds,

496 U.S. 1 , 110 S.Ct. 2228 , 110 L.Ed.2d 1 (1990), they strongly indicate that the Medical Centers are arms or instru-mentalities of the state entitled to Eleventh Amendment immunity.

The autonomy of the Regents from other branches of state government, and its incorporation as a public entity, stems from the mandate in the California constitution - to ensure that the Regents performs its governmental mission, to engage in higher education, without political or sectarian influence. Cal. Const. art. IX, § 9(f).

See also Jain,

670 F.Supp. at 1392 (separate incorporation of state university did not detract from its status as an alter-ego of the state under Eleventh Amendment where the university was incorporated in order to pursue “the ends of higher education.”). As the medical centers serve the governmental objective of providing medical training and education to undergraduate and graduate students on a state-wide basis, Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhibit, 53, pp. 36-37, this state purpose also weighs in favor of granting Eleventh Amendment immunity.

Finally, the court must consider whether a judgment against the medical centers would be paid from state funds. The medical centers maintain a self-insurance fund, professional liability insurance, general liability insurance, and a trust fund through the university. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 31, pp. 33-34; Volume 11, Exhibit 67, pp. 24-26. The medical centers contribute to payment of the premiums on these policies. Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhibit 67, pp. 25-26. The self-insurance program is intended to pay for liability" to the extent that sovereign immunity as to státe law claims is waived pursuant to the California tort claims act. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 39, pp. 75-76. Both the general liability policy and trust fund were intended to pay for campus related claims, such as torts or accidents. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 39, pp. 77-78. The trust fund, however, which is held by the Regents, is generated from several sources, including the medical centers, student health services fees, and state appropriations.

Id.

at pp. 75-79. As the resources in the trust fund include funds from state appropriations, any judgment against the fund could ultimately consume financial resources from the state treasury.

See Vaughn, supra,

at 1353 (the Regents could not satisfy a judgment from' its funds, as the property of the Regents is the property of the state, and the Regents was not authorized to' issue bonds to pay for claims

*171

against it). Additionally, as discussed in Section 1(a)(1), the presence of insurance policies does not remove the immunity otherwise granted by the Eleventh Amendment.

See, e.g., Bockes,

999 F.2d at 790-91 ;

Wallace,

721 F.2d at 305 ;

Gressley,

890 F.Supp. at 1488 ;

Mohammed,

832 F.Supp. at 106 . Moreover, the medical centers could not use their earned surplus or excess net revenues to pay a judgment against them, as the Regents require that these funds be used for hospital purposes only. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 39, pp. 86-87.

Further, California has not disclaimed liability for the debts of the University of California or its medical centers. Instead, the California constitution mandates the state to ensure the “security of the University of California’s funds.” Cal. Const. art. IX, § 9(a);

Ciba-Geigy Corporation, supra,

at 624. Also, demonstrating the close financial link between the state and the Regents is the extent of direct control which the state exercises over the finances of the Regents and the University of California. For example, the legislature oversees the University of California’s budgets and may limit the uses for state moneys appropriated to the University of California.

Cib'ar-Geigy Corporation, supra,

at 624. The California “legislature has ‘prohibited the [Regents] from expending funds for new large-scale computers ... and has required the [Regents] to use certain funds ... to support additional primary care medical residences.’”

Ciba-Geigy Corporation, supra,

at 624 (quoting

Autonomy and Accountability: The University of California and the State Constitution,

38 Hastings L.J. 933 -34 (1987) (citations omitted)). Likewise, the Regents must submit reports to the State Public Works Board of any state money that it allocates for a construction project. Cal. Educ.Code § 92101. If the Regents fail to use the money allocated for construction projects, the unused funds revert to the state’s General Fund. Cal.Educ.Code § 92101. Additionally, the Regents “can only issue revenue bonds for its construction projects and not to pay its judgments.”

Ciba-Geigy Corporation, supra,

at 624.

Finally, the Regents are subject to state audits, and its financial statements, including funds that it receives from non-state sources, are part of the annual financial report of the Auditor General of California.

See Harden,

760 F.2d at 1163-64 (state university protected by Eleventh Amendment where university must submit its budget to the state and received appropriations from the state);

Jagnandan v. Giles,

538 F.2d 1166, 1175 (5th Cir.1976),

cert. denied,

432 U.S. 910 , 97 S.Ct. 2959 , 53 L.Ed.2d 1083 (1977) (University of Mississippi protected by Eleventh Amendment in part where University had to prepare an annual report of its “gross receipts and disbursements” including funding from sources other than the state).

“‘The power of the Regents to operate, control, and administer the University is virtually exclusive.’ ”

City of Santa Monica, supra,

at 135, 143 Cal.Rptr. 276 (citing 30 Ops.Cal.Atty.Gen. 162 , 166 (1957)). The Regents possess a great degree of operational autonomy over the affairs of the University of California and its constituent member institutions including the Defendant medical centers and hospitals. The medical centers are dependent on the Regents and the University of California in several key aspects of their existence and the Regents of California are clearly an arm of the state. Thus, the court finds that the Defendant medical centers are likewise arms of the state of California and that the University of California Medical Centers at Los Angeles, Irvine, and San Diego are protected by the Eleventh Amendment. As all of the indicators of immunity point towards granting immunity to the medical centers, no additional analysis under

Hess, supra,

is required.

4.

University Hospital at State University of New York at Stony Brook

The State University of New York (“SUNY”) was established in 1948 by Chapter 695 of the Laws of 1948, as amended (New York Education Law § 352) (McKinney 1988).

37

SUNY currently consists of, among other general and specialized - edu

*172

cational institutions of higher learning, four university centers, including one located in Stony Brook, New York. The ■ New York legislature provided for the addition of other universities, colleges, institutions, facilities, and research centers which could be acquired, established, operated, or contracted to be operated by the state through the State University Trustees. N.Y.Educ.L. § 352(3). Section 351 of the New York Education Law provides that the “mission of the State University system [is] to provide the People of New York [with] educational services of the highest quality ... in a complete range of academic, professional and vocational post-secondary programs.... ” In fulfilling this purpose, SUNY was to provide a “full range of graduate and professional education ... [by strengthening] its educational and research programs in the health sciences through the provision of high quality care at its hospitals, clinics and related programs.....” N.Y.Educ.L. §§ 351(a), (d). The State University at Stony Brook, its medical school and its related hospital were established and are maintained and operated in furtherance of the purposes as set forth in New York Education Law Section 351(d). Defendant State University of New York at Stony Brook Hospital’s Memorandum of Law in Support of Motion to Dismiss, filed May 12,1994, at p. 8.

SUNY is governed by a Board of Trustees consisting of sixteen members. N.Y.Educ.L. § 353. Fifteen of the members are appointed by the governor with the advice and consent of the state senate.

38

N.Y.Educ.L. § 353. The trustees are responsible for administration, supervision, and coordination of state operated institutions, programs of higher education, the provision of standards and regulations covering the organization and operation of their programs, setting tuition charges and fees, establishing health and medical centers, professional and graduate schools, research centers and other facilities. N.Y.Educ.L. § 355(1). The trustees are required to submit their proposed long-range plan for SUNY to the state Board of Regents

39

and the governor every four years, as well as reporting to the Board of Regents, the governor, and the legislature on the progress of SUNY. N.Y.Educ.L. § 354(1), (2), (3). •

The SUNY trustees may “take, hold and administer ... real and personal property ... either absolutely or in trust for any educational or other purpose within the jurisdiction and corporate purposes of the state university.” N.Y.Educ.L. § 355(2)(a). Real property may be acquired or purchased, including through eminent domain, by the trustees. N.Y.Educ.L. §§ 307(1), 355(2)(a). Additionally, the trustees are authorized to expend appropriations made for SUNY by the Comptroller of the state, an elected state officer, from the funds specifically appropriated for that purpose by the state legislature. N.Y.Educ.L. §§ 355(4)(b), (4)(c), (8).

The trustees are also empowered to establish health and medical centers, as well as graduate and professional schools. N.Y.Educ.L. § 355(l)(d). The trustees may appoint a head for each state operated institution, and prescribe the functions, powers and duties of the head of the institution, as well as providing for the appointment of the instructional and administrative staff. N.Y.Educ.L. § 355(2)(g).

The trustees may also enter contracts and perform other acts which are necessary or appropriate to effectively carry out the objects and purposes of SUNY. N.Y.Educ.L. §§ 355(2)(n), (2)(p), (6). Moreover, the trustees are required to make an annual report of its activities and recommendations to the

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Board of Regents, governor, state comptroller, and legislature, including operations and accomplishments, revenues and expenditures. N.Y.Educ.L. § 359.

Further, the trustees are required to review and coordinate the budget and appropriation requests of all state operated institutions within SUNY, and combine these requests with the fiscal requirements for institutions of higher education into a university budget for submission to the governor. N.Y.Educ.L. § 355(4)(a); Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhibit 51, pp. 63-64, 66-67.

The State University at Stony Brook Hospital and School of Medicine were created pursuant to New York Education Law Section 355(l)(d), with the university hospital’s activities in support of the educational and research mission of the university. N.Y.Educ.L. § 351(d). Stony Brook University Hospital is therefore an integral part of the University at Stony Brook, and, as such, of the SUNY system. The hospital is also subject to general oversight and control by the governor and the legislature, as all appropriations to Stony Brook and its hospital are approved by both the governor and legislature. Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhibit 51, pp. 63-64, 66-67.

Additionally, hospital activities, such as purchasing and contracting, are subject to audit by the state comptroller.

Id.

at 55, 70-71, 77-79. All contracts entered by Stony Brook are contracts of the state, and contracts which exceed $50,000 for goods or $35,000 for services must be approved by the state comptroller and the attorney general, also an elected state officer. N.Y.Educ.L. § 355(5)(a); Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhibit 51, p. 55. Further, all contracts of the University Hospital must be approved by the Director of the Stony Brook Medical Center and are subject to the approval of the state. Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhibit 51, pp. 55, 71.

The University Hospital itself has no independent right to hold title to property and no bank accounts or insurance, and the hospital’s funds are controlled by the state, pursuant to New York Education Law and the New York State Finance Law. Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhibit 51, pp. 15, 32-35, 68. The payments for services are received by the hospital and then deposited in New York state accounts.

Id.

at 15, 32-35.

The Stony Brook University Hospital is not separately incorporated from SUNY, rather, SUNY manages, administers, and oversees the University Hospital as a unit of the University at Stony Brook. Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhibit 51, pp. 37-40. Persons who perform services for Stony Brook University Hospital are all state employees, rather than employees of the hospital. N.Y.Educ.L. § 355a; Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhibit 51, pp. 12-13, 40, 49-50. Members of the hospital’s medical staff have been delegated the responsibility of hiring lower level employees for the hospital. Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhibit 51, pp. 48-52. However, the physicians at the University Hospital are all members of the Stony Brook medical faculty appointed by the president of the State University of New York, at Stony Brook.

Id.

at p. 50.

Plaintiffs argue that the University Hospital is financially self-sufficient, as New York state provides a small percentage of the hospital’s net operating costs.

40

The hospital maintains its own financial statements, and prepares its own budget. Plaintiffs’ Memorandum of Law, Appendix Volume 9, Exhibit 6, Volume 11, Exhibit 51, pp. 16, 63-64. However, the University Hospital’s budget is submitted for approval to the Dean and Director of the Stony Brook Medical Center, the university vice-president of Health Sciences, the president of the university, and the chancellor of SUNY. Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhib

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it 51, pp. 64, 66-68. The SUNY trustees provide fiscal review and coordinate the budget for all of the state operated institutions, including the hospital’s, for submission to the governor. N.Y.Educ.L. § 355(4)(a).

As stated, the primary purpose of Stony Brook University Hospital is to provide “educational and research programs in the health sciences through the provision of high quality health care at ... [the] hospitals].... ” N.Y.Educ.L. § 351(d). As such, the hospital provides an important state governmental function.

See Skehan,

815 F.2d at 248 .

Several courts have granted SUNY entities the protection of Eleventh Amendment immunity.

See, e.g., Yoonessi v. State University of New York,

862 F.Supp. 1005, 1012 (W.D.N.Y.1994),

lv. to appeal denied,

56 F.3d 10 (2d Cir.1995) (claims against State University of New York entities were dismissed on Eleventh Amendment grounds);

Dube v. State University of New York,

900 F.2d 587, 594 (2d Cir.1990) (SUNY is an integral part of the government of the state of New York and when it is sued New York is the real party in interest),

cert. denied sub nom., Wharton v. Dube,

501 U.S. 1211 , 111 S.Ct. 2814 , 115 L.Ed.2d 986 (1991);

Meadows v. State University of New York at Oswego,

160 F.R.D. 8, 9 (N.D.N.Y.1995) (dismissing civil rights claims against SUNY at Oswego on Eleventh Amendment grounds);

Wright v. State University of New York Health Science Center at Brooklyn,

1990 WL 213062 , *1 (S.D.N.Y.1990) (Eleventh Amendment immunity bars suit against the SUNY Downstate Health Science Center Medical School as it is an entity of the state);

Derechin v. State University of New York at Buffalo,

731 F.Supp. 1160, 1163 (W.D.N.Y.1989) (dismissing suits against SUNY and the University at Buffalo on Eleventh Amendment grounds);

Cassells v. University Hospital at Stony Brook,

1987 WL 3717 , *3 (E.D.N.Y.1987) (Eleventh Amendment bars suit against both the State University at Stony Brook and the University Hospital). Other decisions support this conclusion by holding that the state’s limited waiver of sovereign immunity requires that actions against SUNY based upon state law must be sued in the state’s court of claims.

Turner v. State of New York,

49 A.D.2d 269 , 374 N.Y.S.2d 731, 732-33 (3d Dep’t. 1975) (Research Foundation of SUNY conducting programs at SUNY Stony Brook is an arm of the State University of New York authorized to carry out fiscal duties of the State University, thus, as part of the state university, which constitutes part of the state government, the state is the real party in interest and must be sued in the state court of claims);

State University of New York v. Syracuse University,

206 Misc. 1003 , 137 N.Y.S.2d 916, 917 (Sup.Ct. Albany Cty. 1954) (the legislature intended SUNY to be a mere subordinate agency within the state’s department of education to carry out certain of its governmental functions with respect to higher education, as such, SUNY is immune to suit in state supreme court),

aff'd,

285 A.D. 59 , 135 N.Y.S.2d 539 (3d Dep’t. 1954).

All SUNY entities, including Stony Brook University Hospital, are broadly controlled by the trustees; such entities lack the requisite degree of legal autonomy from the state government to be considered political subdivisions of New York state and thereby outside the ambit of the Eleventh Amendment. Indeed, although SUNY has some attributes of self-governance, its fiscal affairs are substantially intertwined with those of the state as to make such autonomy illusory. Also, as noted SUNY legally exists as a corporation within the University of State of New York, a state constitutionally created entity, headed by the Regents of New York, a body which is unquestionably an arm of the state. As such, SUNY must similarly be cast as an extension of this arm of the state. Moreover, SUNY entities including Stony Brook University Hospital have been protected from suit in federal court by extending Eleventh Amendment immunity to them. These factors weigh strongly in favor of granting Eleventh Amendment immunity to Stony Brook University Hospital in this action.

Further, it is clear that any judgment against SUNY or one of its constituent units in excess of insurance coverage or an uninsured claim would be paid out of the judgment and claims account of the state of New York, funded by legislatively appropriated

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funds.

41

Plaintiffs’ Memorandum of Law, Appendix Volume 9, Exhibit 6, Doc. No. 1112, ¶ 8(a), (b), Volume 11, Exhibit 51, pp. 86-87. Thus, as New York State’s treasury is a potentially direct target of this action, should Plaintiffs prevail, this factor also strongly points in favor of granting Eleventh Amendment immunity to Stony Brook University Hospital.

Balancing all of the relevant factors, the court finds the State University of New York at Stony Brook University Hospital is immune from suit in this court under the Eleventh Amendment. As each of the factors indicative of Eleventh Amendment immunity supports granting such immunity, the court need not apply the

Hess

analysis, as it would reach the same conclusion.

5.

University Hospital at the University of New Mexico School of Medicine

The University of New Mexico is a state educational institution created by the New Mexico state constitution. N.M. Const. art. XII, § 11; N.M.StatAnn. § 21-7-1 (Michie 1994).

42

Control and management of the university and University Hospital is vested with the Board of Regents (“the Regents”), whose seven members are nominated by the governor of New Mexico, and confirmed by the state senate.

43

N.M. Const. art. XII, § 13; N.M.StatAnn. § 21-7-3. The Regents are responsible for the “care and preservation of all [university] property, the erection and construction of all buildings necessary for [university] use and the disbursements and expenditures of all money.” N.M.Stat.Ann. § 21-7-3. The Regents also retain the power to sue

44

and to contract. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 29, pp. 37, 43. However, the Regents “may delegate authority or functions to officers or subordinate bodies within the state educational institutions ... for the efficient functioning of their respective educational institutions.” 1995 N.M. Laws Ch. 167, § 21-1-10. New Mexico University Hospital is one of the institutions of higher learning created by the New Mexico Constitution, Article XII, Section 11. The hospital is defined as a state agency under to Section 11-4-2.1 of the New Mexico Statutes Annotated, which states that a state agency includes “any department, institution, board, bureau, commission, district or committee of government----”

See Korgich v. Regents of the New Mexico School of Mines,

582 F.2d 549, 551 (10th Cir.1978) (“[i]t is clear that New Mexico considers its institutions of higher learning as state agencies and a state function”).

Thus, the Regents appointed a president for the University of New Mexico as its chief executive officer, and created a Board of Trustees to operate the University Hospital. Plaintiffs’ Memorandum of Law, Appendix Volume 11, Exhibit 42, pp. 5-6, 14-15. The trustees are authorized to adopt bylaws and policies for the management of the property and business of the hospital. Plaintiffs’ Memorandum of Law at VI-30.

The chief executive officer of the University Hospital is responsible for fiscal planning, budgeting and management, as well as the hiring and firing of hospital employees. Plaintiffs’ Memorandum of Law at VI-30. The employees of the hospital are employees of the University of New Mexico. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 29, p. 15. Moreover, the hospital’s chief executive officer has been granted the authority to incur capital expenditures for the hospital, and fix the fees to be charged to patients for services it provides. Plaintiffs’ Memorandum of Law at VI-30 — VI-31. However, all expenditures of the University

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of New Mexico and its constituent institutions for the purchase of real property, construction or major remodeling of buildings must be approved by state authorities outside the university. N.M.Stat.Ann. § 21-1-21.

Although the, hospital’s trustees and chief executive officer are authorized to manage and administer its daily business and administrative affairs, Plaintiffs’ Memorandum of Law at VI-30, they remain ultimately responsible to the Regents. Plaintiffs’ Memorandum of Law at VI-30. Thus, the state of New Mexico retains a significant degree of influence over the operations of the Regents and, through the Regents, the university.

Although the University Hospital maintains its own,separate records and financial statements, and has dedicated bank accounts in the name of the university; Plaintiffs’ Memorandum of Law at VI-31, Appendix Volume 10, Exhibit 29, pp. 17, 30-31, the-hospital’s financial affairs are controlled by the New Mexico State Commission on Higher Education. N.M.Stat.Ann. § 21-1-26. The university’s budget, including the hospital’s budget, is also subject to review and adjustment by the State Commission on Higher Education, N.M.StatAnn. §§ 21-1-26 A, B, prior to its submission to the state budget subdivision of the Department of Finance and Administration for final approval. N.M.Stat.Ann. § 21-1-26 A(3). The Commission on Higher Education must also conduct annual audits of New Mexico’s institutions of higher education, the results of which are reported to the state Department of Finance and Administration and the legislative Finance Committee. N.M.Stat.Ann. § 21 — 1— 26.3. Further, the commission considers the audit findings in making its recommendations to the state’s executive and legislature for higher education funding. N.M.Stat.Ann. § 21-1-26.3.

The University Hospital is located on land which it leases from the County of Bernalillo, a political subdivision of New Mexico. However, as discussed, the hospital is administered by the University of New Mexico and the Regents, not the county. Defendants’ Immunity Reply at p. 24.

New Mexico has exempted the University of New Mexico and its institutions from taxation, a status that some courts find indicative that an entity is an arm of the state rather than a subdivision.

Kashani, supra,

at 846 . N.M.Stat.Ann. § 7-9-13 A(2). New Mexico, however, also extends that status to its political subdivisions, so as to this Defendant, such exemption is of less significance. N.M.Stat. Ann. § 7-9-13 A(2).

As the University Hospital lacks the authority to initiate legal action, Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 29, p. 37, the Regents therefore must file suit on its behalf. Also, all contracts which the hospital wishes to make must be reviewed by both the university and the state’s Department of Health Sciences counsel. Plaintiffs’ Memorandum of Law, Appendix Volume ' 10, Exhibit 29, at pp. 43-44.

“In determining whether an action brought against a governmental institution is actually a suit against the state within the meaning of the Eleventh Amendment, state law is decisive.”

Korgich, supra,

at 551 (citing

Harris v. Tooele County School District,

471 F.2d 218 (10th Cir.1973)). Both' federal and state courts' have held that the University of New Mexico and its institutions are state agencies immune from suit in federal court.

Korgich, supra

(University and its institutions are treated as arms of the state of New Mexico for purposes of the Eleventh Amendment);

Eisenberg v. University of New Mexico,

No. 87 Civ. 787, slip op. at pp. 1-2 (D.N.M. October 11, 1989) (see Defendants’ Immunity Reply Memorandum, Exhibit B) (University of New Mexico is an arm of the state and immune from suit in federal court under the Eleventh Amendment);

Bernalillo County Medical Center Employees Association v. Johnson,

No. 82 Civ. 281, slip op. at p. 2 (D.N.M. June 23, 1982) (see Defendants’ Immunity Reply Memorandum, Exhibit C) (New Mexico University Hospital is an arm of the staté entitled to Eleventh Amendment immunity).

See also Clothier v. Lopez,

103 N.M. 593 , 711 P.2d 870 (1985) (University of New Mexico Hospital/Bernalillo County Medical Center is a state educational institution);

Livingston v. Regents of New Mexico College of A. & M.A.,

64 N.M. 306 , 328 P.2d 78 (1958)

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(action against Board of Regents is one against the state).

Cf. United States ex rel. Santa Ana Indian Pueblo v. University of New Mexico,

731 F.2d 703 , 704 n. 2 (10th Cir.) (the University of New Mexico and the regents of the university are instrumentalities of the state that may assert Eleventh Amendment immunity, however, the Eleventh Amendment does not preclude an award of damages on grounds that the ultimate benefit would be for Indians, as the United States acted under its fiduciary obligation in bringing the claim),

cert. denied,

469 U.S. 853 , 105 S.Ct. 177 , 83 L.Ed.2d 111 (1984).

“It is

clear that New Mexico considers its institutions of higher learning as state agencies and a state function.”

Korgich, supra,

at 551 .

Additionally, the New Mexico Tort Claims Act, which authorizes suits against the state and its agencies by limiting the application of sovereign immunity as to certain state law claims, applies to the university and its employees, including the employees of the University Hospital.

Clothier, supra,

at 871-72 (University of New Mexico Hospital is the principal teaching hospital of the university, thus, the doctors and staff of the hospital are public employees which may be hable under the state’s tort claims act). Further, the exclusive jurisdiction for any claim under the state’s tort claims act is in the district state courts of New Mexico.

45

N.M.Stat.Ann. § 41-4-18 A. This factor, along with the fact that the University Hospital retains only limited autonomy from the Regents, weighs in favor of granting the hospital Eleventh Amendment immunity.

The primary purpose of the University of New Mexico and its various institutions is to “provide the inhabitants of the state of New Mexico with the means of acquiring a thorough knowledge of the various branches of literature, science and arts.” N.M.Stat.Ann. § 21-7-2. Further, the University of New Mexico was to develop and maintain programs of research, scholarship, and cultural innovation, as well as programs of direct public services which derive from these edu-eational efforts, for the post-secondary student.

See

Defendants’ Immunity Reply Brief, Exhibit F. As -the principal teaching hospital of the University of New Mexico, the hospital is a state educational institution whose state-wide purposes reflect the exercise of sovereign state power, an attribute justifying the application of the Eleventh Amendment.

Plaintiffs argue that the University Hospital is financially self-sufficient as only 8.4% of the hospital’s net operating budget comes from sources other than patient revenue, including funding from both the state and county, and that as any judgment achieved in this case would therefore not appreciably affect the state’s treasury, Eleventh Amendment immunity is unwarranted. Plaintiffs’ Memorandum of Law at VI-29. However, the hospital states that the costs of this suit, and any judgment resulting from it, would be paid by the Risk Management Division of the New Mexico General Services Department, an agency of the state, rather than any independently generated revenues. N.M.Stat. Ann. § 15-7-1

et seq.;

Defendants’ Immunity Reply at p. 25; Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 29, at p. 44.

Although the University Hospital may retain its excess revenues, it must obtain permission from the Regents and its trustees before using these funds, as they are considered state funds. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 29, pp. 16-17, 41-42. The hospital also maintains a self-insurance trust fund through the Risk Management Division of the University of New Mexico. The Risk Management Division receives funds from the New Mexico, legislature, and is responsible for paying any settlement or judgment resulting from a claim against the University or New Mexico University Hospital. 1995 N.M.Laws Ch. 173, § 1.

As each of the relevant indicia demonstrate that New Mexico University Hospital is subject to significant controls by the state and thus acts as an arm of the state, and as

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the state’s funds would pay an award if obtained in this case, such would interfere with the fiscal autonomy and sovereignty of New Mexico, thereby impairing the dignity of the state. Therefore, New Mexico University Hospital is entitled to Eleventh Amendment immunity from suit in this action.

6.

University of Massachusetts Medical Center

The University of Massachusetts was created by state statute as a “state university.” Mass.Gen.L. ch. 75, § 1 (West 1994).

46

The university is governed by a board of nineteen voting trustees, seventeen of whom are appointed by the governor of Massachusetts to serve a five year term.

47

Mass.Gen.L. ch. 75, §§ 1, 1A. The two remaining members are full-time students of the university, who each serve a one year term. Mass.Gen.L. ch. 75, § 1A..

The Massachusetts legislature granted the university’s Board of Trustees the responsibility of establishing the policies necessary for the administrative management of personnel, staff services, and the general business of the university. The trustees were also granted the duties of managing and administering, on behalf of the Commonwealth of Massachusetts, the university and all real and personal property belonging to the commonwealth and used or occupied by the university. Mass.Gen.L. ch. 75, § 12. The trustees may sell or lease commonwealth property to any professor, instructor, employee, or society or association, after the conveyance has been approved by the governor and the Higher Education Coordinating Council.

48

Mass.Gen.L. ch. 75, §§ 25-27. Additionally, the trustees have the authority to make purchases for $100,000 or less, or to purchase, without limitation, library books, educational and scientific supplies and equipment. Mass.Gen.L. ch. 75, § 13.

The trustees may delegate some authority or responsibility to the president of the university, or other officers of the university.

49

Mass.Gen.L. ch. 75, §§ 1A, 3A. Further, the trustees were given the authority to establish schools or colleges of the university to meet the needs of the commonwealth in the field of public higher education. Mass.Gen.L. eh. 75, § 2. Each campus, including the University Medical Center, has a council appointed by the trustees, which advises the campus president and the trustees. Mass.Gen.L. ch. 75, § 14B. Thus, the Commonwealth of Massachusetts exercises significant influence over the operations of the trustees and the university’s medical center.

The trustees appoint the chancellor of the medical center, who in turn fills the senior management positions. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 26, pp. 43-45. However, the trustees may reject someone whom the chancellor has selected or appointed in a leadership position.

Id.

at p. 45. All officers and employees of the medical center, professional and non-professional, are employees of the commonwealth, irrespective of the source from which their salaries or wages are paid. Mass. Gen.L. ch. 75, § 14. These employees retain the same retirement benefits, group insurance, industrial accident coverage, and other coverage as all other commonwealth employees retain. Mass.Gen.L. ch. 75, § 14.

The medical center was created by state statute, which required the trustees to maintain a medical school for the University of Massachusetts. Mass.Gen.L. ch. 75, § 34.

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The medical center is considered

a

“state institution” as it is operated and administered by the commonwealth through the dean and the trustees. Mass.Gen.L. ch. 6A, § 31. The trustees are authorized to work with state and federal agencies and to accept grants or funding from the federal government or other sources for constructing, equipping, financing, improving or expanding the medical school. Mass.Gen.L. ch. 75, § 34. The trustees also elect the dean, officers, and professional staff of the medical school. Mass.Gen.L. ch. 75, § 35.

In order to provide the university medical center some degree of autonomy, Massachusetts law requires that the budget estimates and annual financial forecasts for the medical school are to be submitted to the trustees separately from those of the university. Mass.Gen.L. ch. 75, § 36. The trustees then submit the medical school budget to the Higher Education Coordination Council, which submits the budget, along with its recommendations and comments, to the Commonwealth’s Secretary of Administration and Finance, the Massachusetts legislature’s house and senate committees on ways and means, and the legislature’s joint committee on education, arts, and humanities. Mass.Gen.L. ch. 15A, § 15B. The trustees of the university subsequently receive the state appropriation directly, in one lump sum. Mass.Gen.L. ch. 15A, § 15.

All university accounts, including the medical center’s, under the direction and control of the trustees, are audited annually by the state auditor. Mass.Gen.L. ch. 75, § 6. The trustees are required to prepare and submit' a detailed budget for the university, including the medical center, to the governor. Mass.Gen.L. ch. 75, § 7. Further, monthly statements of the receipts and expenditures of the university, including medical center, must also be made to the state comptroller, and a complete financial report covering all university receipts and expenditures is given annually to the governor and the legislature. Mass.Gen.L. ch. 75, § 10. Thus, the funds of both the medical center and the university are regulated through the trustees, acting on behalf of the governor and legislature.

The university medical center may enter into contracts on its own behalf, however, this authority is restricted. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 26, p. 46. The medical center cannot enter into contracts for professional services or consultation (non-medical) services. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 26, pp. 46-47. However, the trustees are often involved in authorized contract negotiations to provide guidance, and the trustees may disapprove any contract that the medical center is authorized to enter. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 26, pp. 47-48.

Although only about 7%

50

of the medical center’s funding comes from state appropriations, whereas two-thirds of the funding represents patient services revenue, these funds are used to support the hospital’s physical maintenance and pay faculty salaries. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 26, pp. 8-9. Plaintiffs argue that the commonwealth’s “insignificant contribution to [the medical center’s] operations proves that the State does not bear significant financial responsibility for the medical center under

Hess.”

Plaintiffs’ Memorandum of Law at VI-25. However, in determining whether Massachusetts bears financial responsibility for the medical center, the court must consider more than the amount of aid received in the form of direct state appropriations.

Fitchik,

873 F.2d at 660 (the nature of the state’s obligation to contribute is more important than the size of the contribution).

The University of Massachusetts Medical Center cannot issue bonds to raise revenue. Plaintiffs’- Memorandum of Law, Appendix Volume 10, Exhibit 26, p. 20. Although the medical center received eleven million dollars in tax-exempt financing from the Massachusetts Health and Education Administration, there is no indication in the record that the medical center could obtain financing to satisfy a judgment against it. Plaintiffs’ Memo

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randum of Law, Appendix Volume 10, Exhibit 26, pp. 20-21.

The patient revenues received by the medical center are not paid over to the Massachusetts treasury, rather, they become part of an account into which all funds generated by the University of Massachusetts campuses are placed. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 26, p. 24. The trustees control this account, and any request, including one from the .medical center, to receive finances from the account for expenses, must be approved by the trustees. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 26, pp. 24-28.

The medical center cannot sue or be sued in its own name, and state case law makes clear that the medical center is financially accountable to the commonwealth.

See McNamara v. Honeyman,

406 Mass. 43 , 546 N.E.2d 139, 142 (1989). Further, the medical center has no authority to issue bonds. All of these factors indicate that the university, and especially the medical center, are agencies of the commonwealth, rather than separate entities.

Relevant ease law also indicates that the University of Massachusetts is an arm of the state.

Robinson v. Commonwealth,

32 Mass.App.Ct. 6 , 584 N.E.2d 636, 638 (1992) (the University of Massachusetts is an agency of the Commonwealth),

review denied,

412 Mass. 1101 , 588 N.E.2d 691 (1992);

McNamara, supra,

546 N.E.2d at 142 (the university is an agency of the Commonwealth of Massachusetts, not a separate entity);

Cantwell v. University of Massachusetts,

551 F.2d 879, 880 (1st Cir.1977) (University of Massachusetts as a state entity dismissed from action on ground of sovereign immunity);

Hannigan v. New Gamma-Delta Chapter of Kappa Sigma Fraternity, Inc.,

367 Mass. 658 , 327 N.E.2d 882, 883 (1975) (the University of Massachusetts trustees are the same as the commonwealth).

Although courts have rendered judgments against the medical center, there is no fund separate from the state treasury to pay such judgments except for a separate fund for payment of medical malpractice judgments. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 26, pp. 51-54. Any other judgment rendered against the medical center must be submitted to the commonwealth’s Secretary of Administration Finance, a member of the governor’s cabinet, for determination as to how to pay the judgment. Plaintiffs’ Memorandum of Law, Appendix Volume 10, Exhibit 26, pp. 53-54, 65.

The university’s enabling statute provides that the Commonwealth shall settle the affairs of the corporation, and shall be subject to its legal obligations and liable for its lawful debts. Mass.Gen.L. ch. 75, § 1. As the statute requires the commonwealth to pay the university’s legal obligations and lawful debts, it is clear that any money judgment achieved against the university and its medical center in this action would be against the university and ultimately the commonwealth. This fact amply supports the finding that medical center is an instrumentality of the commonwealth.

Finally, Plaintiffs contend that the medical center is not entitled to Eleventh Amendment immunity because it is engaged in a commercial, rather than a governmental function. Plaintiffs’ Memorandum of Law at VI-26. However, Plaintiffs’ argument fails to recognize that the medical center was created solely as an public educational institution, to provide research facilities and quality care to the residents of Massachusetts. The primary purpose of the medical center is to “promote high standards of health care within the Commonwealth by providing high quality patient services to the public and by supporting the clinical education programs of the Medical School.” Plaintiffs’ Memorandum of Law, Appendix Volume 6, Exhibit 3, Doc. No. LL14 00181. Providing education is considered a governmental, rather than a proprietary, function.

Hall, supra,

742 F.2d at 305 ;

Rutledge, supra,

660 F.2d at 1349 . As discussed,

see

Discussion Section 1(a),

supra,

that the nature of the public service provided by the entity at issue may be viewed as one also having characteristics similar to that provided by a private sector commercial business is not a ground to deny Eleventh Amendment protection.

Based upon the factors relevant to an Eleventh Amendment inquiry discussed, the

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court finds that the University of Massachusetts Medical Center is entitled to Eleventh Amendment immunity.

Summary of Findings on Eleventh Amendment Defenses

Upon review of the legal organization and powers of the foregoing hospital Defendants in determining whether each is more like an arm or instrumentality of a state or a political subdivision, the degree of control and state supervision over each entity, their respective degree of financial autonomy and the state’s obligations and liabilities with respect to each,

see Lake Country Estates,

440 U.S. 391 , 99 S.Ct. 1171 ;

Feeney,

873 F.2d 628 , the court finds that hospital Defendants Ohio State University Hospital, Oregon Health Sciences University Hospital, the University of California (Los Angeles) Medical Center, the University of California (Irvine) Medical Center, the University of California (San Diego) Medical Center, University Hospital at the State University of New York at Stony Brook, University Hospital at the University of New Mexico School of Medicine, and University of Massachusetts Medical Center should be dismissed from the action as they are immune from suit in this court under the Eleventh Amendment.

b.

State Action Doctrine

Plaintiffs assert that Defendants have engaged in unlawful anticompetitive conduct, and seek a judgment from this court for damages and enjoining the Defendants from the continuing violation of both the Sherman Act and the Clayton Act. Second Amended Complaint at ¶ 1. Several of the hospital Defendants created by' state law — Lincoln Medical and Mental Health Center, Ohio State University Hospital, Oregon Health Sciences University Hospital, Tri-City Medical Center, the University of California (Los Angeles) Medical Center, the University of California (Irvine) Medical Center, the University of California (San Diego) Medical Center, University Hospital at the State University of New York at Stony Brook, University Hospital at the University of New Mexico School of Medicine, and University of Massachusetts Medical Center,— counter that they are entitled to an exemption from federal antitrust laws because they are acting as an arm of state government, for and on behalf of their respective states, in their sovereign capacity, and that their requirements that emergency physicians be ABEM certified or eligible for certification is therefore not actionable. These Defendants rely upon the landmark case of

Parker v. Brown,

317 U.S. 341 , 63 S.Ct. 307 , 87 L.Ed. 315 (1943), and subsequent cases interpreting it.

Parker

and its progeny established the general proposition that states acting in their sovereign capacities are exempt from federal antitrust laws, the so-called state action doctrine. To qualify for this judicially created exemption from the" antitrust laws, amendment must demonstrate either that it is the state

51

acting in its sovereign capacity or that it is acting pursuant to a “clearly articulated and affirmatively expressed state policy.”

Hoover v. Ronwin,

466 U.S. 558, 568-69 , 104 S.Ct. 1989, 1995-96 , 80 L.Ed.2d 590 ,

reh’g denied,

467 U.S. 1268 , 104 S.Ct. 3564 , 82 L.Ed.2d 865 (1984).

It is clear under the state action doctrine that the legislative and judicial branches of state government act as the state in its sovereign capacity.

See Parker, supra,

at 351 , 63 S.Ct. at 313-14 (legislature acts as the state);

Hoover, supra

at 573, 104 S.Ct. at 1997-98 (state supreme court which maintained sole authority to determine who

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should be admitted to practice law, despite delegation of the administration of the admissions process, was acting in a sovereign capacity and was entitled to exemption from federal antitrust laws under the state action doctrine);

Bates v. State Bar of Arizona,

433 U.S. 350, 360 , 97 S.Ct. 2691, 2697 , 53 L.Ed.2d 810 (1977) (state supreme court acting in legislative capacity acts as the state). Further, both the Fifth and Ninth Circuits have held that the executive branch of state government is entitled to an exemption from federal antitrust laws.

See Charley’s Taxi Radio Dispatch v. SIDA of Hawaii,

810 F.2d 869 , 874-76 (9th Cir.1987) (Hawaii Department of Transportation entitled to an exemption from federal antitrust laws as part .of executive branch);

Deak-Perera Hawaii, Inc. v. Department of Transportation,

745 F.2d 1281, 1282 (9th Cir.1984),

cert. denied,

470 U.S. 1053 , 105 S.Ct. 1756 , 84 L.Ed.2d 820 (1985) (similar conclusion);

Saenz v. University Interscholastic League,

487 F.2d 1026, 1027-28 (5th Cir.1973) (division of University of Texas entitled to an exemption from the federal antitrust laws under the state action doctrine).

See also Pharmaceutical and Diagnostic Services, Inc. v. University of Utah,

801 F.Supp. 508, 514 (D.Utah 1990) (state university and its officials exempt, from federal antitrust liability for operating radio-pharmacy since university constituted state acting in its sovereign capacity).

The Supreme Court has stated that when anticompetitive conduct is undertaken by the sovereign itself, for example, through its legislature or its supreme court, that activity is

ipso facto

immune from federal antitrust laws, regardless of the state’s motives in taking the action.

Hoover, supra,

at 579-580, 104 S.Ct. at 2001. However, “[w]hen a state agency, municipality,-or other state subdivision claims a state immunity from federal law, it must first identify a ‘clearly expressed state policy’ that authorizes its actions.”

52

Cine 42nd Street Theater Corp. v. Nederlander Organization, Inc.,

790 F.2d 1032 , 1043 (2d Cir.1986) (citing

Town of Hallie, supra,

at 40, 105 S.Ct. at 1717) (the court interpreted the clear articulation standard broadly; if the legislature “contemplated the kind of action complained of,” it is sufficient to satisfy the standard).

See also Montauk-Caribbean Airways, Inc. v. Hope,

784 F.2d 91, 95 (2d Cir.1986) (“It is not necessary for the state legislature to have stated explicitly that it expected a municipality to engage in conduct having anti-competitive effects”) citing

Town of Hallie, supra.

However, to avoid the argument that the entity’s actions fall outside the actual scope of delegation of state power to an agency, municipality, or other state subdivision, a claimed reliance upon broad legislative authority to regulate free of antitrust challenge in a specific area must foreseeably result from an entity’s properly exercising anticom-petitive power.

See, e.g., Town of Hallie, supra

(where the municipality’s anticompeti-tive conduct in providing sewage collection and transportation services were authorized by the state).

Cf. Cantor v. Detroit Edison Co.,

428 U.S. 579 , 96 S.Ct. 3110 , 49 L.Ed.2d 1141 (1976) (state regulation applied only to the distribution of electric power, thus, as the light bulb market was completely separate from the business of providing electric power, the right to monopolize one could not, without a clearly articulated state policy, transfer to the other as the actions of the utility in selling light bulbs were neither authorized nor foreseeable).

The Second Circuit has concluded that to provide a basis for application of the state action doctrine the enabling legislation need not explicitly authorize the precise actions undertaken, rather, it is only necessary that the permitted actions produce anticom-petitive consequences that foreseeably flow from the grant of general state authority to the entity in question.

Cine 42nd Street,

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supra,

at 1043. Thus, the enabling statute must affirmatively designate a particular area to be regulated, provide methods of regulation, and create grounds within the regulatory scheme for a reasoned belief that some anticompetitive activity could be envisioned.

Cine 42nd Street, supra,

at 1043-44. “The clarity of such policy is often a function of how broadly the legislation is drawn, with the existence of such policy being more readily discernable in narrowly drawn legislation. The legislation must contain an affirmative showing of intent, though it need do no more than authorize the challenged conduct.”

Cine 42nd Street, supra,

at 1043 (citing

Southern Motor Carriers Rate Conference, Inc. v. United States,

471 U.S. 48, 61-62 , 105 S.Ct. 1721, 1728-1729 , 85 L.Ed.2d 36 (1985)). “So long as the resulting anticom-petitive activities are a foreseeable consequence of the state delegation, the ‘clear articulation’ standard has been met.”

Cine 42nd Street, supra,

at 1043 (citing

Town of Hallie, supra,

at 43-44, 105 S.Ct. at 1718-19 ). To meet this requirement the party claiming the state action defense must show that the “legislature contemplated the action complained of.”

Town of Hallie, supra,

at 43-44, 105 S.Ct. at 1718 -1719 (quoting

City of Lafayette, Louisiana v. Louisiana Power & Light Company,

435 U.S. 389, 415 , 98 S.Ct. 1123, 1138 , 55 L.Ed.2d 364 (1978)).

The second requirement, active state supervision, is no longer required in the case of a municipality, as, unlike a private party, municipalities are considered to have no incentive to act other than in the public interest.

Town of Hallie, supra,

at 45-46, 105 S.Ct. at 1719-1720 .

Cine 42nd Street, supra,

at 1043; Likewise, “in cases in which the actor is a state agency, it is likely that the active state supervision would also not be required.”

Town of Hallie, Supra,

at 46 n. 10, 105 S.Ct. at 1720 n. 10.

Cf. Federal Trade Commission v. Ticor Title Insurance Company,

504 U.S. 621 , 112 S.Ct. 2169 , 119 L.Ed.2d 410 (1992) (where the state has articulated a clear and affirmative policy to allow anticompetitive conduct and provides active supervision of anticompetitive conduct by private actors, state law can provide a basis for an exemption from federal antitrust laws);

California Liquor Dealers v. Midcal Aluminum,

445 U.S. 97 , 100 S.Ct. 937 , 63 L.Ed.2d 233 (1980) (challenged restraint must be clearly articulated and affirmatively expressed as state policy, and actively supervised by the state itself).

None of the hospital Defendants can claim that it is

ipso facto

immune as the state simply because it exits and operates by action of the state. Rather, each hospital- Defendant must demonstrate that its alleged anticompetitive actions were authorized by the state.

Goldfarb, supra,

at 792, 95 S.Ct. at 2015-2016;

Cine 42nd Street, supra,

at 1044. For example, in

Hoover ,

an exemption from federal antitrust laws for state action was granted for an adjunct committee to the state supreme court which graded state bar examinations.

Hoover, supra,

at 558, 104 S.Ct. at 1989. The court created the committee, it selected the subjects to be tested, and permitted direct appeals by unsuccessful applicants. This high degree of state involvement signalled, according to the Supreme Court, that the activities of the committee were those of the court and consequently those of the state.

Hoover supra,

at 569-74, 104 S.Ct. at 1995-98.

Compare Ticor Title Insurance Co., supra,

(as actual state -involvement is a prerequisite to protection under the state action doctrine, this defense was not available under the regulatory schemes in Montana and Wisconsin with respect to their title insurance companies);

Westborough Mall, Inc. v. Cape Girardeau,

693 F.2d 733 (8th Cir.1982) (court found no state action where a conspiracy to thwart normal zoning procedures • and to directly injure the plaintiffs by illegally depriving them of their property was not in furtherance of any clearly articulated state policy).

In the instant case, the high level of direct participation or control by the legislative or executive branch of state government in the affairs of each hospital Defendant is absent, and thus militates against finding that the hospital Defendants were directly acting in a sovereign capacity when they are alleged to have violated federal antitrust laws. Therefore, it is necessary to evaluate whether the anticompetitive conduct attribut

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able to the Defendants was authorized by their respective'States.

53

1.

Lincoln Medical and Menial Health Center

'

In 1969, the New York State legislature authorized the New York Health and Hospital Corporation (“the HHC”) to operate Lincoln in the interest of providing and maintaining medical services, research, education, and training programs for the residents of New York state. N.Y.Unconsol.L. §§ 7382, 7385(8), (11) (McKinney 1979 & 1995 Supp.).

54

The HHC is a public corporation created and empowered by New York State to operate a public hospital system in New York City, including Lincoln Medical and Mental Health Center.

See Bryan v. Koch,

492 F.Supp. 212, 215-16 , 216 n. 1 (S.D.N.Y.),

affd,

627 F.2d 612 (2d Cir.1980) (discussing the HHC and New York City’s municipal hospital system).

See also

Lincoln Medical and Mental Health Center’s Motion to Dismiss, filed May 2,1994, Exhibit B.

The HHC is empowered to “operate, manage, superintend and control” the hospitals under its authority. N.Y.Unconsol.L. § 7385(7). The corporation also has the capacity to sue or be sued, make contracts, borrow money, acquire or sell property, and adopt, alter, or repeal rules and regulations for the management, organization, and regulation of its affairs. N.Y.Unconsol.L. §§ 7385(l)-(6). Moreover, the HHC was intended to provide continuous medical services, and sponsor and conduct research, educational and training programs, in connection with its purpose of providing quality care and treatment through adequately trained and qualified personnel. N.Y.Un-consol.L. §§ 7382, 7385(8). In fulfilling these purposes, the HHC was also granted the authority to determine, in accordance with standards established by the New York City Department of Health, “the conditions under which a physician may be extended the privilege of practicing within a facility under the jurisdiction of [the HHC],” as well as “[t]o cooperate with any organization, public or private ... the objects of which are similar to the purposes of [the HHC].” N.Y.Unconsol.L. §§ 7385(10), (12), (18).

The HHC is governed by a sixteen member Board of Directors consisting of five New York City officials, ten persons appointed by the Mayor and City Council, and the remaining director is the chief executive officer of the corporation. N.Y.Unconsol.L. § 7384(1). All of the hospitals, including Lincoln Medical and Mental Health Center, operated by HHC are subject to supervision by the New York State Department of Health, inspection by various New York City agencies, and are obligated to conform their respective services and regulations with the New York City Department of Health’s policies. N.Y.Unconsol.L. §§ 7384(9), 7386(7).

From its inception, the HHC was structured to operate independently of both the state and city governments. As a public benefit corporation, the HHC exercises governmental authority, and interacts with the City of New York in providing medical services through HHC hospitals.

See

N.Y.Unconsol.L. §§ 7386(l)(a), (3)(c); Lincoln Medical and Mental Health Center’s Motion to Dismiss, filed May 2, 1994, Exhibit B. In determining whether Lincoln is entitled to the state action doctrine defense, the court must find that Lincoln, which is concededly not a state agency, is a political subdivision

55

of the State of New York and that the s

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