Ernst v. Roberts

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206 2 Ernst, et al. v. Roberts, et al. No. 02-2287

ELECTRONIC CITATION: 2004 FED App. 0266P (6th Cir.)

File Name: 04a0266p.06

Member, Michigan Judges -

Retirement Board, -

UNITED STATES COURT OF APPEALS Defendants-Appellees. -

-

FOR THE SIXTH CIRCUIT N

_________________ Appeal from the United States District Court

for the Eastern District of Michigan at Detroit.

J. RICHARD ERNST , WILLIAM X No. 01-73738—Bernard A. Friedman, Chief District Judge.

T. ERVIN , JAMES E. WILSON, -

- Argued: January 30, 2004

and JOHN PATRICK O’BRIEN,

- No. 02-2287

on behalf of themselves and - Decided and Filed: August 12, 2004

all others similarly situated, >

,

Plaintiffs-Appellants, - Before: SUHRHEINRICH and CLAY, Circuit Judges;

- GWIN, District Judge.*

v. - _________________

-

DOUGLA S B. ROBERTS, - COUNSEL

-

Treasurer of the State of

- ARGUED: Kenneth A. Flaska, KASIBORSKI, RONAYNE

Michigan; CHRISTOPHER M. - & FLASKA, Detroit, Michigan, for Appellants. Wendell A.

DE ROSE , Director, - Wilk, DYKEMA GOSSETT, Lansing, Michigan, for

Department of Management - Appellees. ON BRIEF: Kenneth A. Flaska, Chester E.

and Budget Office of - Kasiborski, Jr., KASIBORSKI, RONAYNE & FLASKA,

Retirement Systems; GEORGE - Detroit, Michigan, for Appellants. Wendell A. Wilk, Lori M.

- Silsbury, DYKEMA GOSSETT, Lansing, Michigan, Larry F.

M. ELWORTH, Member, - Brya, OFFICE OF THE ATTORNEY GENERAL, Lansing,

Michigan Judges Retirement - Michigan, for Appellees.

Board; ROY PENTILLA , -

Member, Michigan Judges - CLAY, J., delivered the opinion of the court, in which

Retirement Board; ERIC E. - GWIN, D. J., joined. SUHRHEINRICH, J. (pp. 37-57),

DOSTER, Member, Michigan - delivered a separate dissenting opinion.

-

Judges Retirement Board; -

LYLE VAN HOUTEN , Member, -

Michigan Judges Retirement -

*

Board; and ROBERT RANSOM, - The Ho norable James S. Gwin, United States District Judge for the

Northern District of Ohio, sitting by designation.

1

No. 02-2287 Ernst, et al. v. Roberts, et al. 3 4 Ernst, et al. v. Roberts, et al. No. 02-2287

_________________ violations of state law not related to equal protection, namely,

wasting trust and breach of fiduciary duty.1

OPINION

_________________ Plaintiffs sought various forms of relief. Plaintiffs sought

certification of the action as a class action pursuant to FED . R.

CLAY, Circuit Judge. Plaintiffs, J. Richard Ernst, William CIV . P. 23. Plaintiffs also sought restitution in the form of

T. Ervin, James E. Wilson, and John Patrick O’Brien, appeal monetary awards. Additionally, Plaintiffs sought declaratory

from the order issued by the United States District Court for and injunctive relief, to alter the retirement system’s

the Eastern District of Michigan, entered on September 30, functioning, for the purpose of bringing it into compliance

2002, granting the motion to dismiss of Defendants with the laws whose violation Plaintiffs alleged.

(Treasurer of the State of Michigan Douglas B. Roberts and

affiliated parties), declining to exercise supplemental The federal law counts relied upon 42 U.S.C. § 1983 as the

jurisdiction over Plaintiffs’ state law claims, and denying as basis for pleading the liability of Defendants (the Treasurer of

moot Defendants’ motion for abstention or, alternatively, for the State of Michigan and affiliated parties), all of whom are

a stay of proceedings, and Plaintiffs’ motion to strike an government officials. On December 7, 2001, Defendants

affidavit, in this action under 42 U.S.C. § 1983, challenging filed a Motion for Abstention or, Alternatively, for a Stay in

the Michigan Judges Retirement Act of 1992, MICH. COMP. the Proceedings. On December 18, 2001, Defendants filed a

LAWS § 38.2101 et seq., as violating the United States and Motion to Dismiss or, in the Alternative, for Summary

Michigan Constitutions and also asserting state law claims for Judgment. On February 8, 2002, Plaintiffs filed a Motion to

wasting trust and breach of fiduciary duty. For the reasons set Strike the Affidavit of Daniel A. Norberg. On March 20,

forth below, we REVERSE the district court’s dismissal of 2002, the district court held a hearing on Plaintiffs’ motion to

Plaintiffs’ federal claims. strike, Defendants’ motions to dismiss or for summary

judgment, and Defendants’ motion for abstention or for a stay

BACKGROUND of proceedings.

Procedural History On September 30, 2002, the district court entered an

opinion and order, granting Defendants’ motion to dismiss

On September 5, 2001, Plaintiffs filed a complaint, in Plaintiffs’ federal claims (Counts I, III, V, and VII) due to

which they alleged that the Michigan Judges Retirement Act Defendants’ Eleventh Amendment immunity; declining to

of 1992, MICH. COMP. LAWS § 38.2101 et seq., violates the exercise supplemental jurisdiction over Plaintiffs’ state claims

Equal Protection Clauses of the United States and Michigan (Counts II, IV, VI, VIII, IX, and X); denying as moot

Constitutions and various provisions of state law. The Defendants’ motion for abstention or for a stay of

complaint set forth ten counts. The initial eight counts of proceedings; and denying as moot Plaintiffs’ motion to strike

Plaintiffs’ complaint alleged four separate theories of the Norberg affidavit. Ernst v. Roberts, 225 F. Supp. 2d 781,

violation of equal protection. For each theory of the

complaint, one count is devoted to federal law and another to

state law. The final two counts of the complaint alleged

1

The district court o pinio n set forth the counts in de tail. Ernst v.

Roberts, 225 F. Supp. 2d 7 81, 784-85 (E .D. Mich. 2002 ).

No. 02-2287 Ernst, et al. v. Roberts, et al. 5 6 Ernst, et al. v. Roberts, et al. No. 02-2287

789 (E.D. Mich. 2002). Plaintiffs filed a timely notice of -- George Elworth, Roy Pentilla, Eric Doster, Lyle Van

appeal. Houten, and Robert Ransom, all of whom are members

of the Michigan Judges Retirement Board (“MJRB”).

Substantive Facts

Under the JRA, as amended in 1996, all Michigan judges

The district court stated the background facts that gave rise are covered by one of two pension plans. “Tier 1” is a

to this case as follows: defined benefit plan; “Tier 2” is a defined contribution

plan.[3] Judges who first entered office before March 31,

The plaintiffs in this case are a Michigan circuit judge, a 1997, were in Tier 1. Judges who first entered office

Michigan probate judge, a Michigan district judge, and thereafter were in Tier 2. The 1996 amendment to the act

a retired Michigan circuit judge. The case has not been permitted Tier 1 participants to move to Tier 2, but they

certified as a class action, nor have plaintiffs moved yet had to make this election by a certain date in 1998.

for class certification. Nonetheless, plaintiffs purport to

represent all active and retired Michigan judges who are Ernst v. Roberts, 225 F. Supp. 2d at 783-84. More of a

“similarly situated.” The basic allegation in the factual background is not needed, for purposes of this

complaint is that the Judges Retirement Act of 1992 opinion, because the district court never reached the merits.

(“JRA”), which created the Judges Retirement System As explained below, the district court’s dismissal of the

(“JRS”), treats judges of the 36th District Court more federal claims under the Eleventh Amendment constituted a

favorably than the “non-36th District Court judges.” dismissal for lack of jurisdiction.

Plaintiffs claim that this disparity violates equal

protection because there is no rational basis for providing DISCUSSION

judges of the 36th District Court more favorable

pensions. Plaintiffs make four arguments. First, Plaintiffs claim that

the district court erred in dismissing the federal claims on the

The defendants are: basis of Eleventh Amendment immunity. Secondly, Plaintiffs

argue that even if, arguendo, the federal claims were properly

-- Mark Murray[2], the Treasurer of the State of dismissed due to Eleventh Amendment immunity, the district

Michigan;

-- Christopher DeRose, the Director of the Office of 3

Retirement Systems, which is part of the Michigan These two types of plans d iffer as follows:

Department of Management and Budget. DeRose is also In a defined contribution plan “employees are not promised any

the executive secretary of the Judges Retirement System; particular level of benefits; instead they are pro mised only that

and they will receive the ba lance in their individual accounts.”

Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 637

n.1, 110 L. Ed . 2d 5 79, 110 S. Ct. 2668 (199 0). T his is in

contrast to a defined bene fit plan which pro vides a fixed b enefit

2

to the employee. 29 U.S.C. § 1002 (35).

The tre asu re r at th e time o f th e complain t, Mark A . M urray, was

replaced by Douglas B. Roberts, who was substituted as a Defendant, by Ben nett v. CONRAIL Matched Sav. Plan Admin. Comm., 168 F.3d 671,

a district court order, on November 8, 2001. 675 n.2 (3d C ir. 1999).

No. 02-2287 Ernst, et al. v. Roberts, et al. 7 8 Ernst, et al. v. Roberts, et al. No. 02-2287

court erred in dismissing the claims with prejudice. Thirdly, asserting immunity establishes that immunity applies.6 In

Plaintiffs aver that the district court erred by granting burden allocation, as well as in other respects, Eleventh

Defendants’ motion to dismiss without identifying the precise Amendment immunity may be considered to be an affirmative

rule upon which it relied and by ruling without affording defense to jurisdiction.7

Plaintiffs discovery regarding the Eleventh Amendment

immunity defense. Finally, Plaintiffs argue that if Defendants Plaintiffs argue that Eleventh Amendment immunity does

are not entitled to Eleventh Amendment immunity, then the not bar the federal claims in this case. The Eleventh

district court should be required to revisit the issue of Amendment bars suits against a state by citizens of another

assuming supplemental jurisdiction over Plaintiffs’ state law state, and, under Hans v. Louisiana, 134 U.S. 1, 10 S. Ct. 504,

claims. 33 L. Ed. 842 (1890), the Eleventh Amendment prohibits

citizens from suing their own state. Barton v. Summers, 293

Because we rule that Defendants are not entitled to F.3d 944, 948 (6th Cir. 2002) (citing Hans).

Eleventh Amendment immunity on any of the claims, we

decline to address Plaintiffs’ second argument. We take the When a state or an arm of the state is sued, there are various

remaining three issues in order. exceptions to immunity; 8 but none of these exceptions fully

The first two issues that we address are reviewed de novo,

because these issues address the ruling on Eleventh 6

Amendment immunity. Barton v. Summers, 293 F.3d 944, The party asserting Eleventh Amendment immunity bears the

burden of establishing it. Gragg v. Ky. Cabinet for Workforce Dev., 289

948 (6th Cir. 2002). F.3d 958 , 963 (6th Cir. 2002).

I. 7

Higgins v. Mississippi, 217 F.3d 951 , 953 (7th Cir. 2000)

(characterizing Eleventh Amendment immunity as “an affirmative

Eleventh Amendment immunity bars federal courts from defense rather than a limitation on jurisdiction.”).

exercising jurisdiction4 over a claim,5 where the party Generally, the party asserting jurisdiction has the burden of

establishing it. E.g., Hudson v. Coleman, 347 F.3d 13 8, 141 (6th Cir.

2003). The difference b etween Eleventh A mendme nt immunity and other

jurisdictional issues, in this respect, supports the view of the immunity as

4

an affirmative defense to jurisdiction.

Eleventh Amendm ent immunity is an issue of jurisdiction, but the There is further support for the characterization as an affirmative

issue is no longer classified as sim ply a question of subject matter defense in the fact that Eleve nth Amendment immunity can be waived by

jurisdiction. Ku v. Tennessee, 322 F.3d 431, 434 (6th Cir. 2003) (“by the state or agency (see infra note 8), while original jurisdiction cannot be

creating a clear rule of waiver by removal, the Supreme Court [in Lapides waived. E.g., United States v. County of Muskegon, 298 F.3d 569 , 579

v. Bd. of Regen ts of the Univ. Sys. of Ga., 535 U.S. 613, 122 S. Ct. 1640, (6th Cir. 2002).

152 L. Ed. 2d 806 (2002)] has unequivocally rejected the view that, in The notion of this imm unity as an affirmative defense to jurisdiction

cases over which the federal court otherwise has original jurisdiction, the helps to exp lain its differences from other issues of jurisdiction. Henry v.

additional ‘jurisdictional bar’ erected by the Eleventh Amendme nt should Metro. Sew er Dist., 922 F.2d 332, 338 (6th Cir. 1990) (“the atypical

be treated as a matter o f ‘subjec t matter’ jurisdiction rather than ‘person al’ jurisdictional bar of the eleventh amendment”).

jurisdiction.”).

8

5

Even if the party being sued is a state or an arm of the state,

Eleventh Amendment analysis must be d one on a claim-by-claim Eleventh Amendment immunity will not apply to a claim, under various

basis. Henry v. Metro. Sewer D ist., 922 F.2d 33 2, 338 (6th Cir. 1990). circumstances.

No. 02-2287 Ernst, et al. v. Roberts, et al. 9 10 Ernst, et al. v. Roberts, et al. No. 02-2287

governs the present case. Contrary to the dissent’s great pains to emphasize that monetary relief is sought. But,

characterization of our holding,9 we do not rule that the state as explained below, the question of Eleventh Amendment

has waived its immunity to suit. The dissent emphasizes that immunity hinges on whether or not the state would potentially

a waiver of state court immunity does not constitute a waiver be liable for a judgment in the case; hence, the fact that

of immunity to suit in federal court. This proposition is monetary relief is sought is not determinative–rather, the key

perfectly true and equally irrelevant. Our holding is not that question is where the monetary relief would come from, if a

the state has waived immunity to suit against the JRS; rather, judgment were entered. (The dissent rightfully acknowledges

for the reasons stated below, we hold that the JRS is akin to this point, stating, “To rephrase the issue a bit: by providing

a political subdivision (and not an arm of the state), which the requested relief, would we be ordering prospective

means that immunity never applied. Because immunity never injunctive relief, or monetary damages? And if the latter,

applied, it was not waived. where would the money come from?”)

Under Ex Parte Young, there is no immunity for a claim for The dispute as to jurisdiction in the present case arises due

only prospective, non-monetary relief. See supra note 8. to the fact that the Eleventh Amendment does not bar all suits

Various federal claims in this case clearly seek monetary against non-federal public agencies. The Eleventh

relief, including the refund and payment of portions of Amendment does not apply to political subdivisions, such as

Plaintiffs’ contributions to the JRS. Because we hold that municipalities. Monell v. Dep’t of Soc. Servs., 436 U.S. 658,

none of the claims for monetary relief are covered by 691 (1978). As stated in Hall v. Medical College of Ohio,

Eleventh Amendment immunity, we need not reach the issue

of whether there are any federal claims seeking only When an action is brought against a public agency or

prospective, non-monetary relief. The dissent has gone to institution, and/or the officials thereof, the application of

the Eleventh Amendment turns on whether said agency

or institution can be characterized as an arm or alter ego

of the state, or whether it should be treated instead as a

Immunity may be waived by the state or agen cy. Lapides v. Bd. of political subdivision of the state.

Reg ents, 535 U.S. 613 , 619 (2002); Law son v. Shelby C oun ty, 211 F.3d

331, 334 (6th Cir. 2000); Nelson v. Miller, 170 F.3d 64 1, 646 (6th Cir. 742 F.2d 299, 301 (6th Cir. 1984) (citing Mt. Healthy City

1999).

Immunity may be waive d by C ongress. Nelson v. Miller, 170 F.3d

Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280, 97 S. Ct.

at 646; Will v. Mich. Dep’t of State Police, 491 U.S. 58, 66 (1 989). 568, 50 L. Ed. 2d 471 (1977)). The question before us is

There will be no immunity if the claim challenges the whether the JRS is identifiable as an arm or alter ego of the

constitutionality of actions against state officials and seeks o nly state, as is necessary for the JRS and its agents10 to be

prospective, non-monetary dam ages, such as an injunc tion. Rossborough

Mfg. Co. v. Trim ble, 301 F.3d 482, 489 (6th Cir. 2002) (citing Edelman

v. Jordan, 415 U.S. 651, 664, 94 S. Ct. 1347, 39 L. Ed. 2d 662 (1974) and

Ex Parte Young, 209 U.S. 123 , 150 -60, 2 8 S. C t. 441 , 52 L. Ed. 714 10

“In addition to the states themselves, the Eleventh Amendment

(1908)); Nelson v. Miller, 170 F.3d at 646. immunizes departments and agencies of the states. Pennhurst State Sch.

9

& Hosp. v. Halderman, 465 U.S. 89, 1 00, 1 04 S . Ct. 900, 79 L. Ed. 2d 67

The dissent states, “In fact, on the flip side, the Supreme Court has (1984).” Dubuc v. Mich. Bd. of Law Exam ’rs, 342 F.3d 61 0, 615 (6th Cir.

consistently held that a state does not waive its Eleventh Amendment 2003).

immunity by consenting to suit only in its own co urts.” (E mph asis in W hen sued in their official capacities, individual defendants enjoy

origina l.) immunity if they are officials of a state agency that would enjoy

No. 02-2287 Ernst, et al. v. Roberts, et al. 11 12 Ernst, et al. v. Roberts, et al. No. 02-2287

covered by Eleventh Amendment immunity, or whether, to Citing Blake, this Court determined that Eleventh

the contrary, the JRS is better deemed a political subdivision, Amendment immunity barred suit against the Medical

akin to a municipality. College of Ohio at Toledo (“MCO”), in part due to the

definition of this entity under state law; in explaining the

State law is crucial to the analysis, because state law decision, this Court explicitly emphasized the importance of

defines the nature of agencies. In Mount Healthy City School state law, which can be controlling, in Eleventh Amendment

District Board of Education v. Doyle, the Supreme Court analysis:

made clear that state law plays a role in determining whether

an agency is more akin to a municipality or to an arm of the Although we can find no reported decision, federal or

state: state, dealing specifically with the status of MCO, it is

highly significant that the statute which created and

The issue here thus turns on whether the Mt. Healthy governs the University of Cincinnati as a state university

Board of Education is to be treated as an arm of the State is virtually identical in its terms to the statute which

partaking of the State’s Eleventh Amendment immunity, created and governs the Medical College of Ohio. See

or is instead to be treated as a municipal corporation or Ohio Rev. Code Ann. §§ 3361.01-.05 (Page 1980). It

other political subdivision to which the Eleventh would therefore appear that Ohio considers MCO an

Amendment does not extend. The answer depends, at “arm of the state,” and not merely a political subdivision

least in part, upon the nature of the entity created by state thereof. The question of its status for purposes of the

law. Eleventh Amendment is, of course, a matter of federal,

not state, law, but Ohio decisions and laws shedding light

429 U.S. 274, 280 (1977), superseded on other grounds by on the relationship of the school to the state government

statute, by 5 U.S.C. § 1221(e)(2). In accordance with this are important, and potentially controlling. See Blake v.

principle, in Blake v. Kline, 612 F.2d 718 (3d Cir. 1979), state Kline, 612 F.2d at 722, see also Hughes-Bechtol, Inc. v.

law was vital to the analysis of a state treasury’s potential West Virginia Board of Regents, 737 F.2d 540, slip at 5

legal liability. The Third Circuit stated that once (6th Cir. 1984); Long v. Richardson, 525 F.2d at 75, 79.

Pennsylvania made a contribution to a retirement plan, the

funds contributed might no longer be general state funds, Hall, 742 F.2d at 303-04. The law of this Circuit is so clear

under Pennsylvania law. Id. at 724, 728 (remanding for in emphasizing the importance of state law in questions of

further inquiry into state law). Eleventh Amendment immunity that another circuit has cited

our Circuit on this issue. Jacintoport Corp. v. Greater Baton

Rouge Port Comm’n, 762 F.2d 435, 439 (5th Cir. 1985) (“the

. . . Sixth Circuit[] ha[s] held that although the question of

Eleventh Amendment immunity is a matter of federal law,

immunity. Will v. Mich. Dep’t of State Police, 491 U.S. 58, 71 (1989)

state decisions concerning the relationship of the entity to the

(stating, regarding a claim against an individual state official, pursuant to state may be an important, and under certain circumstances a

42 U.S .C. § 19 83, “a suit against a state official in his or her official controlling factor in determining immunity under the

capacity is not a suit against the official but rather is a suit against the Eleventh Amendment.”) (citing Hall, 742 F.2d at 302;

official’s office. As such, it is no different from a suit against the State internal quotation marks omitted).

itself.”) (citations omitted). See also Hall v. Med. Coll. of Oh io, 742 F.2d

299, 301 (6th Cir. 1984).

No. 02-2287 Ernst, et al. v. Roberts, et al. 13 14 Ernst, et al. v. Roberts, et al. No. 02-2287

The dissent misconstrues the law, here, by failing to ultimately be liable for any money judgment against the

recognize the significant role that state law plays in the entity. Brotherton v. Cleveland, 173 F.3d 552, 560-61 (6th

analysis. The dissent states, “If the state treasury is immune Cir. 1999).”); Brotherton v. Cleveland, 173 F.3d 552, 561

from liability . . . , it is because of the Eleventh Amendment (6th Cir. 1999) (“The Hess [v. Port Auth. Trans-Hudson

and not Article IX, § 24 of the Michigan Constitution or the Corp., 513 U.S. 30 (1994)] opinion focused on the impact on

Musselman decision.” Apparently, in the dissent’s view, the a State treasury, and [Regents of the University of California

Eleventh Amendment provides this Court the basis for v.] Doe slightly altered that emphasis by establishing that

determining whether a non-federal public agency is akin to an potential liability, not actual ability to pay or indemnification,

arm of a state or is akin to a municipality. The dissent would determines the Eleventh Amendment status of an entity. See

have us consult the Eleventh Amendment to determine Doe, 117 S. Ct. at 904-05.”). See also Alkire v. Irving, 330

whether or not the Michigan state treasury could potentially F.3d 802, 812 (6th Cir. 2003) (“Hess’s emphasis on the State

be held liable for a judgment against the JRS. This reasoning treasury”).

overlooks this Court’s pronouncement that in employing

Eleventh Amendment analysis to determine whether an entity Prior to Hess v. Port Authority Trans-Hudson Corp., 513

is akin to an arm of the state or is akin to a municipality, state U.S. 30, 51 (1994), potential state treasury liability was only

statutes and state court decisions “are important, and one of a number of factors in the Eleventh Amendment

potentially controlling.” Hall, 742 F.2d at 303-04. analysis. The other factors included the entity’s status under

state law; whether the entity performs a governmental or

The general question of how to characterize a non-federal proprietary function; whether the entity has been separately

public entity has not been left to federal courts’ whim or incorporated; the degree of autonomy that the entity exercises

intuition. Rather, under established case law, in Eleventh over its own operations; whether the entity can sue or be sued

Amendment analysis, the question of whether a public entity and enter into contracts; immunity from state taxation; and

is best characterized as an arm or alter ego of the state, instead whether the sovereign has immunized itself from

of being deemed a political subdivision of the state, hinges on responsibility for the entity’s operations. Hall, 742 F.2d at

whether there is potential legal liability of the state treasury 302 (quoting Blake v. Kline).

to satisfy a judgment. If a claim against a public agency

exposes the state treasury to potential legal liability, then But Hess enhanced the importance of state treasury

Eleventh Amendment immunity bars the claim from being liability, to the extent that, after Hess, the possibility arose

heard in federal court; if there is no such potential liability, that other factors (aside from state treasury liability) can no

then there is no immunity. Regents of the Univ. of Cal. v. longer be considered at all. In Brotherton v. Cleveland, we

Doe, 519 U.S. 425, 431 (1997) (“[I]t is the [state] entity’s were able to reach a ruling without determining whether Hess

potential legal liability for judgments, rather than its ability or had eliminated any consideration of the other factors, and we

inability to require a third party to reimburse it, or to explicitly left this question unresolved. 173 F.3d at 561

discharge the liability in the first instance, that is relevant in (“Whether we view as dispositive Hess's emphasis on the

determining the underlying Eleventh Amendment question.”); State treasury, or interpret it as placing significant weight on

Dubuc v. Mich. Bd. of Law Exam’rs, 342 F.3d 610, 615 (6th one factor of a multi-factor test, we conclude that EBAA may

Cir. 2003) (“To determine whether an entity is a state not properly invoke the Eleventh Amendment.”) (citation

department or agency for purposes of the Eleventh omitted).

Amendment, the primary issue is whether the state would

No. 02-2287 Ernst, et al. v. Roberts, et al. 15 16 Ernst, et al. v. Roberts, et al. No. 02-2287

In Dubuc, we dealt with the question of whether the other to clearly point towards the opposite conclusion of that

factors (aside from state treasury liability) survived Hess in reached as to state treasury liability. For example, in cases in

any form. We ruled that when no evidence is presented which it appeared that there were no potential state treasury

regarding the issue of whether the funds to satisfy a judgment liability, but all or almost all of the other factors clearly

would come from the state treasury, the other factors may be indicated that the agency was akin to an arm of the state,

considered. 342 F.3d at 615 (“The parties have not submitted perhaps immunity would apply.

any evidence regarding whether the State of Michigan would

be ultimately responsible for any money judgment against the But we need not determine which interpretation of the role

Board or the Bar. The other factors, however, weigh in favor of the other factors is correct, because in the present case it is

of finding the Board and the Bar immune from this lawsuit.”). undisputed that there is sufficient evidence and legal authority

However, in Dubuc and in Alkire v. Irving, 330 F.3d 802 (6th to support a conclusion as to state treasury liability, 11 and the

Cir. 2003), we reiterated our statement from Brotherton that, other factors do not align together to counter the state treasury

after Hess, it is unclear whether other factors may even be liability analysis. Quite a few of the other factors (apart from

considered when evidence is presented regarding the whether potential liability of the state treasury) support the view that

the state treasury would be liable for a judgment. Dubuc, 342 the JRS is akin to a municipality. The JRS’s function is more

F.3d at 615 (citing Brotherton); Alkire, 330 F.3d at 811-12 aptly characterized as proprietary than as governmental,

(citing Brotherton). because the JRS’s function is for the profit or material benefit

of itself (and its beneficiaries), and not the general public.12

Our cases uniformly make clear that, even if the other The JRS enjoys a fair degree of autonomy. E.g., MICH.

factors can be considered, still, the most significant factor is COMP. LAWS § 38.2204(1) (“The retirement board has the

potential liability of the state treasury. Alkire, 330 F.3d at 811 rights, authority, and discretion in the proper discharge of

(“we now recognize that the question of who pays a damage retirement board duties pursuant to the executive organization

judgment against an entity as the most important factor in act of 1965, Act No. 380 of the Public Acts of 1965, being

arm-of-the-state analysis, though it is unclear whether it is the sections 16.101 to 16.608 of the Michigan Compiled Laws.”).

only factor or merely the principal one.”) (citing Brotherton). It is undisputed that the JRS can sue and be sued in state

In light of the statements in Brotherton, Alkire, and Dubuc,

indicating that Hess may have completely eliminated any

consideration of the other factors, we reiterate the position

taken in those cases: potential liability of the state treasury is 11

the most important factor, and the other factors may have The dissent reaches a different conclusion from ours, as to potential

state treasury liability, but there is no dispute that we have sufficient

been rendered completely obsolete by Hess. This could mean evide nce and legal autho rity to decide the issue. Cf. Dubuc, 342 F.3d at

that the other factors are of no significance, unless (as in 615.

Dubuc) there is not sufficient evidence or legal authority to

support a conclusion as to state treasury liability. Arguably, 12

According to B LACK’S L A W D ICTIONARY (7th ed. 1 999 ), a

there is also the possibility that other factors could also prove “governmental function” is the legally authorized cond uct of a

significant in cases in which there is sufficient evidence and government agenc y “that is carried out for the b enefit of the general

legal authority to support a conclusion as to potential state public.” Id. at 704. A “proprietary function” is “[a] m unicipality’s

conduct that is performed for the profit or benefit of the municipality

treasury liability, but all or almost all of the other factors were rather than for the benefit of the general public.” Id. at 1235.

No. 02-2287 Ernst, et al. v. Roberts, et al. 17 18 Ernst, et al. v. Roberts, et al. No. 02-2287

court.13 The JRS can enter into contracts: the JRS has the conclusion, the other remaining factors could not possibly

statutory authority to enter into contracts with private sway our conclusion that there is no Eleventh Amendment

individuals or corporations; this authority has been exercised, immunity.

e.g., to retain actuarial services;14 also, the JRS enters into

contracts with the state, from whom the JRS leases office Thus, we proceed to the analysis of the key factor, potential

space and purchases legal, administrative, and investment legal liability of the state treasury for a judgement.

services.15 Theoretically, there are two ways in which potential legal

liability for a judgment against the JRS might reach state

To be sure, certain of the remaining factors favor the view treasury funds. First, JRS funds might be commingled with

of the JRS as an arm of the state; for example, it is undisputed general state funds–which is to say that JRS funds might be

that the JRS is not separately incorporated. But we express available for general use by the state for other purposes,

no definitive view as to the remaining other factors, because, unrelated to the retirement system. If funds are commingled,

even if they all weighed in favor of Defendants’ position, they then any JRS liability would be tantamount to state treasury

would not be sufficient to change the analysis. In light of the liability. Secondly, even if JRS funds are segregated from

numerous factors enumerated above, which indicate that the state treasury funds, the JRS might not have sufficient funds

JRS is akin to a municipality, and in light of our analysis of to satisfy a judgment; applicable state law could make state

potential state treasury liability below, reaching the same treasury funds available to satisfy the part of the judgment

that exceeded the amount of funds available to the JRS. We

examine both possibilities.

13

In a state court action alleging discrimination on much the same

basis that discrimination is alleged in the present action, the JRS was A. Whether JRS Funds Are Segregated from State

named as the defendant. The matter was contested on the merits. It was Treasury Funds

undisp uted that the JR S could be sued in state co urt. (J.A. at 312 .)

The dissent somehow misses this point, stating, in its footnote 16, The first question is whether JRS funds are commingled

“This leads to a curious result: although the state canno t be sued in state with general state funds. If the JRS’s funds are not separate

court because it has exercised its sovereign immunity, it can be sued in

federal court because it cannot be sued in state court.” The dissent

from the state treasury, then any judgment against the JRS

conflates the JR S with the state. It is undisputed that the JRS can be sued would necessarily impose liability on the state treasury.

in state co urt.

Defendants argue that Michigan law makes retirement

14

M ICH . C O M P . L A W S § 38.2205 (“The department shall be funds general state funds. Defendants cite the Michigan

respo nsible for the budgeting, procurement, and related management Constitution, Art. IX, § 19, which specifies, “The state shall

functions of the retirement system. The director of the bureau of not subscribe to, nor be interested in the stock of any

retirement systems in the dep artment is the executive secretary of the company, association or corporation, except as follows:

retirement system. The executive secretary, with dep artment app roval,

shall employ the services of an actuary and, subject to rules of the civil (A) Funds accumulated to provide retirement or pension

service commissio n, shall em ploy m edica l advisers, clerical, technica l, benefits for public officials and employees may be invested

and administrative employees the executive secretary considers necessary as provided by law.” Defendants argue, “If the retirement

for the proper operation of the retirement system.”); (J.A. 316) (JRS funds were not considered State funds, there would be no

bud get). need for the framers to carve out this exception.”

15 (Defendants’ Br. at 20 n.9.) However, this argument is one of

The paym ents for these services are substantial. See infra note 17.

No. 02-2287 Ernst, et al. v. Roberts, et al. 19 20 Ernst, et al. v. Roberts, et al. No. 02-2287

semantics. The use of the term “state” in Art. IX, § 19 of the However, the dissent mischaracterizes the significance of

Michigan Constitution does not establish that JRS funds are the state contributions to the JRS, under MICH. COMP. LAWS

state funds, under Eleventh Amendment analysis. Eleventh § 38.2302. The presence of funds contributed by the state is

Amendment analysis hinges upon potential state treasury simply the scenario described in Blake–after the state funds

liability–Defendants’ argument here does not bear on this are contributed to the retirement plan, “that money loses its

issue. identity as [general state] funds and becomes trusteed funds

earmarked for a particular purpose.” 612 F.2d at 724. State

Other sources of law make clear that JRS funds are law specifies with clarity16 that JRS funds are kept in a

segregated from the state treasury. This means that relief for separate trust from general state funds; thus, funds taken from

Plaintiffs’ claims would not come from general state funds the JRS to satisfy a judgment would not be funds from the

but, rather, from the trust devoted solely to the JRS. As stated state treasury. In other words, once general state funds (from

in MICH. COMP. LAWS § 38.2604(6): the state treasury) are contributed to the JRS, the funds

become specifically earmarked for JRS use and cannot be

The assets of the retirement system shall be held in trust used for any other purpose; JRS funds cease to constitute

and invested for the sole purpose of meeting the general state funds. MICH. COMP. LAWS § 38.2604(6).

legitimate obligations of the retirement system and shall Hence, a judgment against the JRS does not impose liability

not be used for any other purpose. The assets shall not on the state treasury.

be used for or diverted to a purpose other than for the

exclusive benefit of the members, vested former Indeed, not only is state law clear on this matter; also, the

members, retirants, and retirement allowance record before us helps to confirm our conclusion. The JRS

beneficiaries before satisfaction of all retirement system makes arms length payments to the state, for office rental

liabilities. space and services rendered.17 The existence of these

payments from the JRS to the state again suggests that the

See also MICH. COMP. LAWS § 38.2208 (stating that funds of these two entities were not commingled; the detailed

retirement payments are “payable out of funds of the accounting of the payments further supports the notion that

retirement system”). funds were not commingled.

It is true that some of the funds in the JRS are contributed

by the state. Part of the JRS comes from contributions from

16

the public employees themselves (such as Plaintiffs). As In Blake, the Pennsylvania Attorney General advanced the notion

Plaintiffs state, “Any judgment for Plaintiffs . . . might require that under Pennsylvania law the retirement funds become segregated. 612

a refund to Plaintiffs of contributions illegally extracted from F.2d at 724. The Pennsylvania Attorney G enera l did no t cite any state

them . . . .” (Plaintiffs’ Br. at 23.) The remainder of the JRS law supporting this view, and thus further inquiry was needed.

Consequently, the case was rem anded to the district court, with the Third

comes from annual state contributions, under MICH. COMP. Circuit vacating district co urt’s order dismissing the complaint as barred

LAWS § 38.2302. See Ernst v. Roberts, 225 F. Supp. 2d at by the E leventh Amendment. Id. at 728.

789 (“Part of the relief plaintiffs are seeking in this case is a

17

refund of the allegedly overfunded Tier 1 plan which, they In 2000, the JRS paid to the state $1211 in building rentals; $8096

concede, includes ‘the State’s mandatory contribution to the in technological support; $38,224 in fees to the Attorney General; and

Tier 1 Plan.’”) (emphasis added). $65,000 for investment services. In 1999, the corresponding figures were

$11 83, $ 16,3 79, $ 377 6, and $63 ,600 , respectively. (J.A . at 307 .)

No. 02-2287 Ernst, et al. v. Roberts, et al. 21 22 Ernst, et al. v. Roberts, et al. No. 02-2287

B. Whether State Treasury Funds Might Be Called treasury being forced to actually pay part of a judgment may

Upon, if the JRS Lacked Sufficient Funds to Satisfy be quite low.18

a Judgment

Defendants allege that a legal obligation, creating state

Even where, as here, the agency’s funds are segregated treasury liability, arises from Art. IX, § 24 of the Michigan

from the state treasury, there remains the possibility that a Constitution, which states:

monetary judgment would exceed the current amount of funds

held by the agency and that such a judgment could reach the The accrued financial benefits of each pension plan and

state treasury. We must determine whether, under state law, retirement system of the state and its political

if there were a judgment against the JRS that exceeded the subdivisions shall be a contractual obligation thereof

JRS’s current level of funds, the State of Michigan could which shall not be diminished or impaired thereby.

possibly be compelled to use state treasury funds to satisfy the Financial benefits arising on account of service rendered

remainder of the judgment. in each fiscal year shall be funded during that year and

such funding shall not be used for financing unfunded

In determining “potential legal liability,” we do not accrued liabilities.

consider the actual level of funding of the JRS. It is irrelevant

whether the JRS actually has enough funds to satisfy the Yet there is no potential legal liability of the state treasury

amount sought in any judgment. Brotherton, 173 F.3d at 561 if there cannot be a legal action to compel the state to divert

(“The Hess opinion focused on the impact on a State treasury, funds from the state treasury to satisfy a judgment that

and [Regents of the University of California v.] Doe slightly exceeds the JRS’s funds. Legal liability exists only when

altered that emphasis by establishing that potential liability, some legal action can be brought to enforce a legal duty. 19

not actual ability to pay or indemnification, determines the The case of Musselman v. Governor of Michigan, 533

Eleventh Amendment status of an entity. See Doe, 117 S. Ct. N.W.2d 237, 448 Mich. 503 (1995) establishes that Art. IX,

at 904-05.”) (emphasis added). Rather, the relevant question § 24 does not create any right of action that could force state

is whether the state could be legally obligated to pay part of

a judgment, under the hypothetical scenario in which the

funds of the separate agency (in this case, the JRS) were not 18

It is not clear whether a court may ever separate a claim into the

sufficient to satisfy the judgment. For the purposes of this portion that could be satisfied by segregated a gency funds and the excess

hypothetical inquiry, we must assume that the amount of portion that might reach the state treasury–essentially, Plaintiffs have

liability imposed by a judgment would exceed the agency’s suggested such a scenario, through an offered stipulation. Whether a

current level of funds; we then ask whether the state treasury plaintiff can separate a claim in this manner is a question that we need not

decide in this case.

could be held liable for the remainder of the judgment. If,

under our hypothetical inquiry, the state treasury could be 19

“Liability” is universally defined to inc lude a mechanism to

liable for a judgment on a claim, then that claim is barred by com pel enforcement. See, e.g., B LACK’S L A W D ICTIONARY 925 (7th ed.

Eleventh Amendment immunity–there is potential legal 1999) (“liability” is “[t]he quality or state of being legally obligated or

liability, notwithstanding that the probability of the state accountable; legal responsibility to another or to society, enforceable by

civil remedy or crimina l punishment.”); W EBSTER ’S T H IR D N EW

I NTERNATIONAL D IC T IO N A R Y 1302 (1993) (defining “liability,” inter alia,

as “accountability and responsibility to another enforc eable by legal civil

or criminal sanctions”).

No. 02-2287 Ernst, et al. v. Roberts, et al. 23 24 Ernst, et al. v. Roberts, et al. No. 02-2287

treasury funds to be used to pay any part of a judgment Constitutional Convention of 1961, p. 773 (delegate

against the JRS. In Musselman, the Michigan legislature did Brake).]

not appropriate money for health benefits earned by current

employees. 533 N.W.2d at 239-40, 448 Mich. at 507-08. In other words, insofar as the plaintiffs are asking us to

The plaintiffs alleged that the legislature’s action violated Art. require the Legislature to appropriate funds for

IX, § 24. 533 N.W.2d at 240, 448 Mich. at 509-10. Yet, in retirement health care benefits, we understand that the

denying mandamus, the Supreme Court of Michigan intention of the drafters was that the second sentence of

explained that there could be no legal action to enforce the Const. 1963, art. 9, § 24 is not self-executing. Because

“shall be funded” provision of Art. IX, § 24: the provision does not alter the rule that legislative action

is necessary to appropriate funds, it fails to lay down

Given that the plaintiffs have failed to show that there is rules by means of which its principles may be given the

a pool of funds available to be transferred to the reserve force of law.

for health benefits, the requested relief necessarily

involves funds from the state treasury. The only 533 N.W.2d at 245-46, 448 Mich. at 522-23 (footnotes and

defendant with authority to appropriate funds from the internal quotation marks and brackets omitted).

treasury is the Legislature. See Board of Education of

the City of Detroit v. Elliott, 319 Mich. 436, 453; 29 The Supreme Court of Michigan explained that the purpose

N.W.2d 902 (1947). “No money shall be paid out of the of Art. IX, § 24 was to prevent the legislature from borrowing

state treasury except in pursuance of appropriations made from the accrued assets of plan participants. 533 N.W.2d at

by law.” Const. 1963, art. 9, § 17. 241-42, 448 Mich. at 511-12. Such borrowing, or “back

door” spending, as it was called, could create situations in

In this context, this Court lacks the power to require the which the liabilities of a public retirement system far

Legislature to appropriate funds. This was the surpassed the system’s assets. Id. Yet even where this

understanding of the drafters of art. 9, § 24, who likewise purpose was being circumvented–as in Musselman, where

did not contemplate that the prefunding requirement current health care benefits were not being funded–the

could be enforced by a court. They expected that the legislature could not be legally compelled to devote state

decision to comply rested ultimately with the Legislature, treasury funds to fund the benefits. 533 N.W.2d at 242, 448

whom the people would have to trust: Mich. at 522 (“the drafters of art 9, § 24 . . . did not

contemplate that the prefunding requirement could be

It is the intention that we will put in each year enforced by a court.”). The state treasury cannot be held

enough in every fund to take care of the liability legally liable, even where the very purpose of Art. IX, § 24 is

occurring during that year, so it will not go farther at stake.

and farther behind.

Under Musselman, a legal action cannot be maintained in

. . . [But] there is no way to compel the legislature to state court, in Michigan, to compel the state to devote state

appropriate money. There is no way that I know of treasury funds to fulfill the mandate of Art. IX, § 24. Nor

to compel a city council to raise more money. We could Art. IX, § 24 provide the basis for any subsequent legal

have to put some faith in somebody, and this is action in federal court to compel state treasury funds to be

being put in the legislature. [1 Official Record, devoted to fulfilling a judgment in a lawsuit. As stated in

No. 02-2287 Ernst, et al. v. Roberts, et al. 25 26 Ernst, et al. v. Roberts, et al. No. 02-2287

Musselman, “[t]he only defendant with authority to In a legal action, rights and remedies are separate

appropriate funds from the treasury is the Legislature.” 533 elements.21 “[W]here there is a legal right, there is also a

N.W.2d at 245-46, 448 Mich. at 522. Needless to say, where legal remedy by suit or action at law, whenever that right is

there cannot be a legal action to enforce the Michigan invaded.” Marbury v. Madison, 5 U.S. 137, 163 (1803)

Constitution against the state treasury, there could be no (quoting BLACKSTONE ’S COMMENTARIES). However, the

action to enforce a state statute, such as MICH. COMP. LAWS scope of remedies for a legal right is not unlimited.

§ 38.2302, against the treasury. The Eleventh Amendment Musselman did not rule out the possibility of injunctive relief

bars any action against the state legislature, which, unlike the to enforce Art. IX, § 24. For instance, if the state attempted

JRS, could never be considered a political subdivision akin to to divert JRS funds to finance state liabilities unrelated to the

a municipality but, rather, would always be identified as a JRS, then presumably Art. IX, § 24 would provide grounds

branch of the state itself.20 There can be no action in any for injunctive relief, independent of any rights established in

court to force the state treasury to pay any part of a judgment MICH. COMP. LAWS § 38.2604(6).22 Musselman simply made

relating to a federal claim in a lawsuit concerning the clear that there can be no monetary relief from the state

JRS–thus, the state treasury is not subject to potential legal

liability. Even if the JRS lacked sufficient funds to satisfy a

judgment in this case, the state treasury could not be held

liable for any unpaid portion of the judgment. 21

As stated in a scholarly commentary:

The scope of a cause of action . . . flows from the primary right

theory that every judicial action consists of the following

elements: (1) a p rimary right which is possessed by the p laintiff

and a correspo nding prima ry duty owed by the defendant; (2) a

wrong done by the defendant which consists of a breach of the

primary right and duty; (3) remedial right of the plaintiff and a

reme dial duty of the d efendant; (4) a remedy or relief.

20

The liability analysis regarding the JR S would no t apply to the state

legislature. Elizabeth L. Hisserich, C omm ent, The C ollision of De claratory

The JRS is a state-created p ublic agency that performs a function Jud gm ents and Res Judicata, 48 UCLA L. R EV . 159, 165-66 (2000)

within the narrow area of retirement benefits. Thus, potential legal (footnotes omitted ). See also Do rothy M . Rob ins, Comment, When the

liability analysis applies to determine whether the JRS is more akin to a Gleam in Your Eye Becomes A G lare: C app ed D am age s in Fertility

municipality than an arm or alter ego of the state. But this analysis only Malpractice Actions, 26 U.S.F. L. R EV . 717, 751 n.66 (19 92) (“Every

applies to specialized state entities, such as agencies that perform judicial action must . . . involve the following elements: a primary right

administrative functions within narrow areas. possessed by the pla intiff, and a corresponding primary duty devolving

The state legislature is not specialized in one particular area but a upon the defendant; a delict or wro ng do ne by the defendant which

constitutionally authorized branch of state government. M IC H . C ONST . consisted in a breach of such prima ry right and duty; a remed ial right in

art. IV, § 1. The state legislature is by definition an arm of the state, not favor of the plaintiff, and a remedial duty resting on the defendant

an agency. Of course, this distinction is ultimately moot. E ven if, springing from this delict, and finally the remedy or relief itself.”)

arguendo, the state legislature were subject to po tential liability analysis, (citations omitted).

immunity would apply. A federal monetary judgment for a claim against 22

the state legislature would be interpreted as attempting to compel the An injunction wo uld enforce Art. IX, § 24’s provision that

legislature to use its authority to appropriate state tre asury funds to sa tisfy “[f]inancial benefits arising on account of service rendered in each fiscal

the judgment. The claim would thus be barred by the Eleventh year shall be funded during that year and such funding shall not be used

Amendment, under po tential legal liability analysis. for financing unfunded acc rued liabilities.”

No. 02-2287 Ernst, et al. v. Roberts, et al. 27 28 Ernst, et al. v. Roberts, et al. No. 02-2287

treasury; the case did not rule out the possibility of a non- of the Supreme Court’s holding in Doe, this Court has

monetary remedy. repeatedly referred to the term “liability” in characterizing the

legal standard that governs immunity analysis. Dubuc, 342

Absent the Musselman case, it might have been argued that F.3d at 615 (“To determine whether an entity is a state

the state treasury could have been held liable pursuant to Art. department or agency for purposes of the Eleventh

IX, § 24. Governmental actors have been held liable for Amendment, the primary issue is whether the state would

damages based on rights granted in a constitution, even where ultimately be liable for any money judgment against the

no statute explicitly authorizes such damages. See Bivens v. entity.”) (citing Brotherton); Brotherton, 173 F.3d at 561

Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 (“The Hess opinion focused on the impact on a State

U.S. 388 (1971) (establishing monetary liability of federal treasury, and Doe slightly altered that emphasis by

officials for violations of the Fourth Amendment23). Thus, establishing that potential liability, not actual ability to pay or

absent a clear statement of law to the contrary, we would have indemnification, determines the Eleventh Amendment status

to hold that Art. IX, § 24 creates potential state treasury of an entity.”) (citing Doe).

liability. But Musselman clearly holds that there is no

potential state treasury liability. Consequently, none of the The dissent states that the majority’s “reasoning is faulty

claims are barred by Eleventh Amendment immunity. because a state’s exercise of state sovereign immunity does

not control the question of federal constitutional immunity.”

The dissent’s counter-arguments prove unpersuasive. The Indeed, the dissent repeatedly characterizes Michigan as

dissent states that “any funding requirement, even if it must exercising “state sovereign immunity.” However, the dissent

be honored by the legislature and not ordered by a court, will is mistaken, here. The state has not immunized the JRS from

necessarily impact on the state treasury.” However, an suit in state court; to the contrary, the JRS has been named as

“impact” on the state treasury–resulting from the legislature’s the defendant in an action in state court that was adjudicated

voluntary decision to appropriate funds to make up for a on the merits. See supra note 13. Nor does it appear that

possible depletion in an agency’s funds–is not akin to there would be state court immunity for any of the state

“liability.” The cases cited by the dissent in support of its officials who are named as Defendants in this case. See

proposition24 pre-date the Supreme Court’s adoption of the Marrical v. Detroit News, Inc., 805 F.2d 169, 173 (6th Cir.

term “potential legal liability” in Doe, which was decided in 1986) (“We initially note that the Michigan legislature, when

1997. 519 U.S. at 431. The term “liability” has a precise it enacted its governmental immunity statute, declined to

meaning (discussed above). We have no reason to believe extend immunity to governmental officials and contemplated

that the Supreme Court used this term heedlessly. As a result that they would be subject to suit for torts committed in the

course of their duties.”).

23

At the time that Bivens was decided, 42 U.S.C. § 1983 had already The Musselman case had nothing to do with state court

established that state officials may be held liable for damages for immunity. Immunity is a defense, where a suit could

violations of the federal constitution. But this statute did not provide a otherwise be brought (absent the immunity). E.g., Cartwright

basis for establishing the liability of federal officials for violations of the v. City of Marine City, 336 F.3d 487, 490 (6th Cir. 2003)

federal constitution. Bivens, 403 U.S. at 399 n.1 (Harlan, J., concurring). (“Qualified immunity is an affirmative defense shielding

24 governmental officials from liability as long as their conduct

Edelman v. Jordan, 415 U.S. 651 (1974); Fitzpatrick v. Bitzer, 519

F.2d 559 (2d Cir. 19 75), rev’d on other grounds, 427 U.S. 445 (1976).

does not violate clearly established statutory or constitutional

No. 02-2287 Ernst, et al. v. Roberts, et al. 29 30 Ernst, et al. v. Roberts, et al. No. 02-2287

rights of which a reasonable person would have known.”) If the act which the state attorney general seeks to

(citation and internal quotation marks omitted); see also supra enforce be a violation of the Federal Constitution,

note 7. Musselman held that there never had been any the officer, in proceeding under such enactment,

mechanism for bringing a suit in state court to enforce Art. comes into conflict with the superior authority of

IX, § 24 against the state treasury. Thus, under Musselman’s that Constitution, and he is in that case stripped of

holding, it would be superfluous, even meaningless, to speak his official or representative character and is

of immunizing the state treasury from suit in state court to subjected in his person to the consequences of his

enforce Art. IX, § 24. Immunity applies as a defense only individual conduct. The state has no power to

where, contrary to the situation here, there is an existing impart to him any immunity from responsibility to

means for bringing a suit. the supreme authority of the United States.

Nothing in our ruling would prevent a state from exercising 209 U.S. 123, 159-60, 52 L. Ed. 714, 28 S. Ct. 441

state sovereign immunity for its agencies. The state could (1908).

prohibit suit in state court against any of its agencies. Where

a judgment against an agency would potentially impose Dubuc, 342 F.3d at 617. This reasoning is inapposite here,

liability on the state treasury, the agency would be immune because the state treasury would not be stripped of its public

from suit in federal court; the agency could also be immune character, if a judgment rendered the JRS liable for violations

from suit in state court. Where a judgment against an agency of the federal constitution. The phrase “individual

could not potentially impose liability on the state treasury, the defendants” is not used carelessly in the passage quoted by

agency could be immune from suit in state court but not in the dissent. The state treasurer would liable for a judgment in

federal court. Our ruling in no way impedes states from this case, but (per Musselman) only insofar as he could satisfy

implementing state court immunity for agencies. that judgment with funds from the JRS. The Eleventh

Amendment is necessary to protect the state treasury precisely

The dissent quotes from Dubuc, 342 F.3d at 617, which because, unlike an individual defendant, the state treasury

states, “[w]hile [a provision of the Michigan Supreme Court cannot possibly be stripped of its identity as part of the state.

Rules Concerning the State Bar of Michigan providing the

staff of the State Bar and the Board of Law Examiners] may Under the dissent’s misreading of Dubuc, municipalities

immunize the individual defendants from state law claims, no would enjoy sovereign immunity: state laws and rules create

state law or rule can immunize anyone from liability for and define municipalities, but “no state law or rule can

violating the United States Constitution.” The dissent immunize anyone from liability for violating the United

selectively ignores the phrase “individual defendants.” In States Constitution.” In essence, the dissent would attempt to

Dubuc, this Court simply made clear that a state cannot contradict the Supreme Court’s clear ruling that

invoke federal immunity for individual state officials who municipalities are not entitled to sovereign immunity, Monell

violate the federal constitution, because the act of violating v. Department of Social Services, 436 U.S. 658, 691 (1978),

the constitution strips the individuals of their status as state and the Supreme Court’s clear ruling that non-federal public

officials: agencies are not entitled to immunity if they are akin to

municipalities. Mt. Healthy City Sch. Dist. Bd. of Educ., 429

In Ex parte Young, the Supreme Court explained the U.S. at 280 (“The issue here thus turns on whether the Mt.

supremacy of federal law over state law: Healthy Board of Education is to be treated as an arm of the

No. 02-2287 Ernst, et al. v. Roberts, et al. 31 32 Ernst, et al. v. Roberts, et al. No. 02-2287

State partaking of the State’s Eleventh Amendment immunity, raised the issue of the merits of the claims; rather, the parties’

or is instead to be treated as a municipal corporation or other appellate briefs discuss only the issue of jurisdiction.

political subdivision to which the Eleventh Amendment does Because the merits of the claims are not argued on appeal,

not extend.”). Defendants’ motion for summary judgment cannot be

addressed by this Court, in the present appeal proceeding.

The dissent misconstrues our ruling as determining that E.g., Kocsis v. Multi-Care Mgmt., 97 F.3d 876, 881 (6th Cir.

there has been a waiver of Eleventh Amendment immunity: 1996) (“Although plaintiff's notice of appeal indicates that she

“The majority’s unique use of state sovereign immunity is appealing the entire district court judgment, she raises only

doctrine as some kind of implied waiver of constitutional the dismissal of her ADA claims in her brief on appeal.

immunity constitutes an impermissible end run around the Accordingly, plaintiff has waived all other arguments.”)

well-established principles of the Eleventh Amendment.” Yet (citation omitted). This Court will not rule on the merits at

there is no “implied waiver” here. For something to be this stage.

waived, it must initially have been applicable (prior to the

waiver). The majority holds that the JRS never enjoyed II.

immunity, because the JRS is akin to a municipality. The

state cannot waive immunity that the JRS never had. Plaintiffs claim that the district court erred by not

identifying the rule it relied upon in dismissing the case and

The state does not “waive” immunity by establishing a in not affording Plaintiffs discovery regarding the Eleventh

municipality or a municipality-like agency, in this or any Amendment immunity issue. However, here, Plaintiffs fail to

other instance. Municipalities and municipality-like entities assert an additional meritorious basis for relief.

never enjoy immunity; these entities are created by state law,

but there is no immunity to “waive” for these entities. Under Neither Defendants’ motion to dismiss nor the district

the dissent’s bizarre, erroneous use of the term “waive,” a court’s opinion cited a subsection of FED . R. CIV . P. 12(b).

state would “waive” its immunity for a city, through the Plaintiffs claim that Defendants’ motion failed to meet the

state’s act of first establishing the city. The dissent’s pleading standard, under FED . R. CIV . P. 7(b)(1) (requiring

misunderstanding of the law stems from its unwillingness to that a motion “shall state with particularity the grounds

accept that state law is a crucial part of defining the nature of therefor”). However, we do not require a citation to a specific

a non-federal public entity in Eleventh Amendment analysis. subsection of Rule 12, in asserting Eleventh Amendment

Mt. Healthy City Sch. Dist. Bd. of Educ., 429 U.S. at 280; immunity. In fact, although Eleventh Amendment immunity

Hall, 742 F.2d at 303-04; Jacintoport Corp., 762 F.2d at 439; is a defense to jurisdiction, Defendants and the district court

Blake, 612 F.2d at 724. had good reason to avoid citing FED . R. CIV . P. 12(b)(1)

(subject matter jurisdiction) or 12(b)(2) (personal

Finally, the dissent argues that an alternative basis for jurisdiction): namely, the Supreme Court has dispelled the

dismissal exists, because the dissent concludes that Plaintiffs’ notion of this immunity as simply an issue of subject matter

claims fail on the merits. The district court never ruled on the jurisdiction, without classifying this immunity as entirely an

merits, instead dismissing the case for lack of jurisdiction; issue of personal jurisdiction. See supra note 4. Defendants

thus, ordinarily it would be improper for this Court to issue and the district court acted properly when they cited the

the initial ruling on Defendants’ motion for summary Eleventh Amendment itself as the controlling legal

judgment. Moreover, on appeal, neither of the parties has

No. 02-2287 Ernst, et al. v. Roberts, et al. 33 34 Ernst, et al. v. Roberts, et al. No. 02-2287

authority–no specific citation to a subsection of Rule 12(b) A district court’s decision to decline supplemental

was necessary. jurisdiction over state law claims is reviewed for abuse of

discretion. As stated in Musson Theatrical v. Fed. Express

Additionally, we note that if, arguendo, it were clear which Corp., 89 F.3d 1244, 1254 (6th Cir. 1996),

subsection of Rule 12(b) were applicable, then this Court

could substitute the proper subsection of Rule 12(b) for an A district court has broad discretion in deciding whether

erroneous or incomplete citation by the district court; this is to exercise supplemental jurisdiction over state law

assuming that, contrary to our ruling on issue I, above, claims. Transcontinental Leasing, Inc. v. Michigan Nat'l

Defendants had established Eleventh Amendment Bank of Detroit, 738 F.2d 163, 166 (6th Cir. 1984). That

immunity. 25 discretion, however, is bounded by constitutional and

prudential limits on the use of federal judicial power.

Since there was sufficient evidence on the record for us to Gibbs itself expressed one of the most important of these

reverse the grant of Eleventh Amendment immunity, we limits: “Certainly, if the federal claims are dismissed

decline to entertain Plaintiffs’ argument that the district court before trial, even though [the federal claims are] not

erred in failing to grant discovery. insubstantial in a jurisdictional sense, the state claims

should be dismissed as well.” [United Mine Workers v.]

III. Gibbs, 383 U.S. [715,] 726 [, 86 S. Ct. 1130, 16 L. Ed.

2d 218 (1966).]

Plaintiffs argue that the district court should be required to

revisit the issue of assuming supplemental jurisdiction over See also Smith v. Dearborn Fin. Servs., Inc., 982 F.2d 976,

Plaintiffs’ state law claims if, as we concluded in issue I, 983 (6th Cir. 1993) (“because the district court properly

above, Defendants are not entitled to Eleventh Amendment dismissed plaintiff's federal claims for lack of subject matter

immunity on all of the claims. jurisdiction, the district court also was within its discretion to

dismiss plaintiff's pendent state law claims without

prejudice.”) (citations omitted).

25

Under 28 U.S.C. § 1367(c):

In civil cases, a district court’s error in form–such as citing the

wrong subsection of a rule of civil procedure, or providing analysis that The district courts may decline to exercise supplemental

fails to discuss certain relevant issues–does not provide grounds for

autom atic reversal or remand. Rathe r, this Court can affirm a ruling of a

jurisdiction over a claim under subsection (a) if--

district court for any va lid grounds stated o n the rec ord. City Mgmt. Corp. (1) the claim raises a novel or complex issue of State

v. U.S. Chem. Co., 43 F.3d 244, 251 (6th Cir. 1994) (“we may affirm on law,

any grounds supported by the record, even though they may be different (2) the claim substantially predominates over the claim

from the grounds relied on by the district co urt”) (citations omitted). Cf. or claims over which the district court has original

F ED . R. C RIM . P. 32(i)(3)(B ) (formerly F ED . R. C RIM . P. 32(c)(1)) (in jurisdiction,

federal criminal cases, at the sentencing phase, district courts are required

to set out sp ecific findings on contro verted matters); United States v. (3) the district court has dismissed all claims over which

Osborne, 291 F.3d 9 08, 911-12 (6 th Cir. 2002) (under F ED . R. C RIM . P. it has original jurisdiction, or

32, a district cou rt’s failure to set forth the appropriate findings on (4) in exceptional circumstances, there are other

controverted matters provides grounds for this Court to vacate a sentence compelling reasons for declining jurisdiction.

and remand for re-sentencing).

No. 02-2287 Ernst, et al. v. Roberts, et al. 35 36 Ernst, et al. v. Roberts, et al. No. 02-2287

The district court concluded that each of these four CONCLUSION

provisions would provide independent grounds for declining

supplemental jurisdiction. Ernst v. Roberts, 225 F. Supp. 2d For the aforementioned reasons, we REVERSE the district

at 790. Because Eleventh Amendment immunity does not court’s dismissal of each of Plaintiffs’ federal claims, and

apply, the district court erred in stating that § 1367(c)(3) REMAND for proceedings not inconsistent with this opinion.

would provide cause for declining supplemental jurisdiction.

However, Plaintiffs wrongly identify the district court as

relying solely on § 1367(c)(3). Plaintiffs do not challenge the

other three independent reasons for declining supplemental

jurisdiction. A district court has “broad discretion” in

deciding whether to exercise supplemental review. Musson

Theatrical, 89 F.3d at 1254. Plaintiffs fail to establish error

in any of the district court’s three other independent,

unchallenged reasons for declining supplemental jurisdiction.

Therefore there was no abuse of discretion.

Of course, nothing would prevent the district court from

reconsidering its exercise of discretion, on its own volition, in

light of our remand of the federal claims. Under 28 U.S.C.

§ 1367(c), the district court has the option of declining

supplemental jurisdiction if any one of the provisions apply,

but the district court is not bound to decline supplemental

jurisdiction merely because one or more provisions apply. By

declining to instruct the district court to reconsider the issue

of supplemental jurisdiction, in light of our reversal of the

dismissal of all federal claims, we in no way impair the

district court’s discretion to exercise supplemental

jurisdiction, notwithstanding the applicability of other

provisions of 28 U.S.C. § 1367(c). Indep. Enters. v.

Pittsburgh Water & Sewer Auth., 103 F.3d 1165, 1170 n.3 (3d

Cir. 1997) (“The district court, having dismissed the federal

claims, declined to exercise supplemental jurisdiction over

Independent’s state claims and dismissed them without

prejudice. It may reconsider that decision on remand in light

of our disposition of the federal claims.”). We simply refuse

to interfere with the district court’s discretion on this matter,

at a stage in the proceedings when the district court has

already set forth three independent, unchallenged reasons for

declining supplemental jurisdiction.

No. 02-2287 Ernst, et al. v. Roberts, et al. 37 38 Ernst, et al. v. Roberts, et al. No. 02-2287

______________ compensate for past violations.” Erwin Chemerinsky, Federal

Jurisdiction 425 (4th ed. 2003).

DISSENT

______________ So the central question in this case is whether the state is

the real, substantial party in interest even though the named

SUHRHEINRICH, Circuit Judge, dissenting. I dissent defendants are Douglas B. Roberts, Treasurer of the State of

because I believe that the Eleventh Amendment bars all of the Michigan; Christopher DeRose, Director, Department of

claims in this case. Further, the state law claims should have Management and Budget Office of Retirement Systems;

been dismissed under the doctrine of Pennhurst State Sch. & George M. Elworth, Member of the Michigan Judges

Hosp. v. Halderman, 465 U.S. 89 (1984). Finally, to the Retirement Board (“MJRB”); Roy Pentilla, Member of the

extent that Plaintiffs have stated a valid federal equal MJRB; Eric E. Doster, Member of the MJRB; Lyle Van

protection claim for prospective injunctive relief, I would Houten, Member of the MJRB; and Robert Ransom, Member

dismiss that claim because the state law at issue has a rational of the MJRB.1 To rephrase the issue a bit: by providing the

basis and is therefore not unconstitutional. requested relief, would we be ordering prospective injunctive

relief, or monetary damages? And if the latter, where would

I. the money come from?

The case before us involves a straightforward application II.

of Eleventh Amendment principles. In Hans v. Louisiana,

134 U.S. 1 (1890), the Supreme Court held that the Eleventh To answer these questions, we must examine the nature of

Amendment bars suits against a state by its own citizens. the relief sought, which means examining the complaint.

Barton v. Summers, 293 F.3d 944, 948 (6th Cir. 2002). Here, Precedent directs that “‘[a] federal court must examine each

the state is not a named party; various state officials are the claim in a case to see if the court’s jurisdiction over that

named defendants. The Eleventh Amendment does not claim is barred by the Eleventh Amendment.’” Henry v.

preclude official capacity suits against state officials for Metro. Sewer Dist., 922 F.2d 332, 337 (6th Cir. 1990)

injunctive relief. Ex parte Young, 209 U.S. 123 (1908). (quoting Pennhurst State School & Hosp. v. Halderman, 465

However, it prohibits a federal court from awarding U.S. 89, 121 (1984)). Counts I, III, V, and VII of the

retroactive monetary relief against state officials when those Complaint are based on the Equal Protection Clause of the

damages will be paid by the state treasury. See, e.g., Edelman Fourteenth Amendment and are brought pursuant to 42

v. Jordan, 415 U.S. 651 (1974); Ford Motor Co. v. Dep’t of U.S.C. § 1983. Count I alleges that the Act violates

Treasury, 323 U.S. 459 (1945). In Ford Motor Co., the Plaintiffs’ rights because judges of the 36th District Court are

Supreme Court said: “[W]hen the action is in essence one for entitled to retirement allowance under the Tier I Plan which

the recovery of money from the state, the state is the real, exceed that to which Plaintiffs and are entitled even though

substantial party in interest and is entitled to invoke its judges of the 36th District Court contribute a smaller

sovereign immunity from suit even though individual officials percentage of their compensation into the Tier 1 Plan for that

are nominal defendants.” Ford Motor Co., at 464. In short, greater retirement allowance.

“[a] federal court may order future compliance by state

officials, but it may not compel payment of damages to

1

All of the defendants were su ed in the ir official capacities.

No. 02-2287 Ernst, et al. v. Roberts, et al. 39 40 Ernst, et al. v. Roberts, et al. No. 02-2287

Count III alleges that the Act does not provide for annual contributions required of judges of the 36th District Court.”3

percentage increases in the retirement allowance paid under In Paragraph 5, Plaintiffs ask the court to afford to Plaintiffs

the Tier 1 Plan although certain of the statutes creating the who have remained members of the Tier 1 Plan but have not

retirement plans of other state and governmental employees yet retired “a retirement allowance upon their retirements

provide for an annual percentage increase in the retirement equal to that to which [comparable] judges of the 36th District

allowance paid. Count V challenges the constitutionality of Court” are or will be entitled.4 Paragraph 6 seeks restitution

the Act because it prescribes the calculation of the retirement in the form of “the difference between the dollar amount of

account value of the judges who transferred from the Tier 1 retirement allowance” that Plaintiffs have received “and the

Plan to the Tier 2 Plan in a disparate manner. Count VII greater amount of retirement allowance they would have

alleges that the Act violates the constitutional rights of received” if they were 36th District Court judges.5 Paragraph

Plaintiffs because per the terms of the Act judges of the 36th 7 seeks an annual percentage increase in retirement allowance

District Court who elected to transfer from the Tier 1 Plan to equivalent to the annual percentage increases afforded to

the Tier 2 Plan were able to transfer substantially greater other state funded retirement systems.6 Paragraph 8 seeks

amounts of money than non-36th District Court judges of the

same age and same length of service because the Act, as

complained of in Count I, afforded 36th District Court judges 3

4. Order that Defendants forthwith refun d to those

a higher allowance under the Tier 1 Plan. Plaintiffs and me mbers o f The C lass who are m embe rs,

former vested mem bers, re tirants, or retirement

Counts II, IV, VI, and VIII mirror Counts I, III, V, and VII, allowance beneficiaries of the Tier 1 Plan, with interest,

but instead of being founded upon the Equal Protection that portion of their past contributions into the Tier 1

Clause of the Fourteenth Amendment, are founded upon Plan in excess of the past contributions required of

Article I, Section 2 of the Michigan Constitution. Counts IX judges of the 36th District C ourt[.]

and X assert state law claims for wasting trust and breach of 4

fiduciary duty, respectively. 5. Order Defendants to afford to Plaintiffs and T he Class

members who have remained mem bers of the Tier 1

Plan but have not yet retired a retirement allowance

Also critical to the analysis is the relief requested. upon their retirements equal to that to which judges of

Plaintiffs’ prayer for relief reveals that the primary thrust of the 36th District Court with the same age and length of

the suit is to obtain monetary relief.2 In Paragraph 4, service are or will be entitled[.]

Plaintiffs ask that Defendants refund to members and 5

beneficiaries of the Tier 1 Plan “that portion of their past 6. Order Defendants to forthwith make restitution to

contributions into the Tier 1 Plan in excess of the past Plaintiffs and m emb ers of T he Class who are retira nts

or retirement allowanc e beneficiaries by paying to

them, with interest, the difference between the dollar

amount of retirement allowance that they have received

and the grea ter amount o f retirement allowance that

they would have received if they had been judges of the

36th District Court[.]

2

Paragraphs 1 and 2 request the court to certify the action as a class 6

action and declare that the Act violates the Fourteenth Amendment and 7. Order that Defendants forthwith afford to Plaintiffs and

the State C onstitution. Neither are claims for prospective, injunctive members of The Class who are retirants or retirement

relief. allowance beneficiaries of the Tier 1 Plan an annual

No. 02-2287 Ernst, et al. v. Roberts, et al. 41 42 Ernst, et al. v. Roberts, et al. No. 02-2287

restitution in the form of “the difference between the dollar them to revoke their original elections to participate in the

amount of retirement allowance equivalent to those afforded Tier 2 Plan so that they can make their elections effective as

by other state funded retirement systems.”7 Although of some different date in time. Paragraph 12 asks the court

couched in equitable terms, Paragraphs 4 through 8 in reality to order the defendants to pay excess contributions.9 In short,

seek compensation for the State’s past action which Plaintiffs the foregoing assertions all seek the equivalent of money

perceive as inequitable. damages that are more than incidental, and seek retroactive

monetary relief. Paragraphs 13 through 16 are not related to

Paragraphs 9 through 11 similarly seek to correct past the federal constitutional claims, but are based on Plaintiffs’

errors by requiring Defendants to recalculate how benefits “wasting trust” claim under state law.10 Paragraphs 17

should be calculated. 8 Plaintiffs also seek an order allowing

Class who have elected to transfer to the Tier 2

percentage increase in retirement allowance equivalent Plan, Defendants recalculate their APV as of the

to the annual percentage increase afforded by other app licable APV d ate as though the T ier 1 P lan’s

state funded retirement systems which provide for accumulated bene fit obligation to them was

annual percentage increases in benefits[.] equivalent to that of a judge of the 36th District

Court of the same age and length of service and

7 transfer the difference between the recalculated

8. Order that Defendants forthwith mak e restitutio n to

those Plaintiffs and memb ers of The Class who are APV and the APV previously calculated, with

retirants or retirement allowance beneficiaries of the interest, from the reserves of the Tier 1 Plan to that

Tier 1 Plan by paying to them, with interest, the perso n’s Tier 2 P lan acc ount[.]

difference between the dollar amount of retirement 9

allowance equivalent to those afforded by other state 12. Order Defendants to pay The Excess

funded retirement systems. Contributions to members, retirants and

retirement allowance beneficiaries of the Tier

8 1 Plan[.]

9. Order Defendants to perm it Plaintiffs and members of

The Class the opp ortunity to terminate me mbe rship in 10

the Tier 1 Plan and irrevocably ele ct to pa rticipate in 13. Pr e l i m i nar i l y a n d p e r m a n e n tl y e n j o in

the Tier 2 Plan as of a designated date certain each Defendants from transferring or paying

year, which date will be used for calculating APV[.] monies from the Tier 1 Plan’s reserve for

employer contributions to the court fee fund,

10. Order Defendants to permit Plaintiffs and from transferring or paying monies from the

members of The Class who have elected to transfer court fee fund to the court equity fund, and

from the Tier 1 Plan to the Tier 2 Plan the from transmitting court fees to the treasurer

opp ortunity to have the Actuarial Present Value for deposit into the court fee fund instead of

(“APV”) of their ac counts recalculated as of a d ate into the reserve for employer contrib utions[.]

subsequent to June 30, 1998 and order Defendants

to transfer the difference between the recalculated 14. Ord er Defendants to cause the preparation of

APV and the APV previously calculated, with an annual report for the current fiscal year and

interest, from the reserves of the Tier 1 Plan to that future fiscal years that fully and accura tely

perso n’s Tier 2 ac count. repo rts all of the reserve acco unts of the Tier

1 Plan and o f the cou rt fee fund and all

11. Order that, as to Plaintiffs and members of T he activities of the Tier 1 Plan, including but not

No. 02-2287 Ernst, et al. v. Roberts, et al. 43 44 Ernst, et al. v. Roberts, et al. No. 02-2287

through 19 seek attorney fees, interest, and any other claims for prospective injunctive relief. Only paragraph 3,

appropriate relief.11 Although not claims for prospective which I will discuss momentarily, appears to seek prospective

injunctive relief, they would likely be allowed as ancillary injunctive relief.12

relief, see Hutto v. Finney, 437 U.S. 678 (1978), but only if

the action were otherwise proper under § 1983. These are not III.

So the question becomes, if the requested relief is ordered,

where would the money come from? Because all of the

limited to the transfer or payment of monies defendants are sued in their official capacities, it is anticipated

out of the court fee fund into the court equity that the monies would come from the related agencies, the

fund[.] JRS, and the state treasury (the state treasurer Douglas

15. Order Defendants to provide an accounting

Roberts, is also a named defendant). This brings us to the

for past fiscal years of the various reserve next issue, is the JRS an arm of the state for purposes of the

acco unts of the Tier 1 Plan, of the court fee Eleventh Amendment? As the majority correctly states, “[i]n

fund, and of all of the activities of the Tier 1 Eleventh Amendment analysis, the question of whether a

Plan, including but not limited to the transfer public entity is best characterized as an arm or alter ego of the

or deposit of monies into and between the

various reserve accounts of the Tier 1 Plan,

state, instead of being deemed a political subdivision of the

the deposit of monies into the court fee fund, state, hinges on whether there is potential legal liability of the

and the transfer of payment of monies out of state treasury to satisfy a judgment.” Maj. Op. at 8 (footnote

the court fee fund into the court equity fund[.] omitted). As this Court recently observed in Dubuc v.

Michigan Bd. of Law Exam’rs, 342 F.3d 610 (6th Cir. 2003):

16. P r e l imin a rily a n d p e r m a n e n t l y e n j oi n

Defend ants, their successors, and their agents

“To determine whether an entity is a state department or

from transferring to the treasury at the time of agency for purposes of the Eleventh Amendment, the primary

termination of the Tier 1 Plan those funds issue is whether the state would ultimately be liable for any

remaining in the various accounts in the Tier money judgment against the entity.” Id. (quoting Brotherton

1 Plan in excess of those needed to pay v. Cleveland, 173 F.3d 552, 560-61 (6th Cir. 2003)).13

retirement allowances to members, vested

former members, retirants and retirement

allowance beneficiaries of the Tier 1 Plan and

order Defendants and their successors to pay

such funds to those persons who at time of 12

termination are members, vested former 3. Preliminar ily and pe rman ently enj oin

memb ers, retirants, or retirement allowance Defendants from requiring those Plaintiffs and

beneficiaries[.] memb ers of The Class who have remained as

participants in the Tier 1 Plan to contribute a

11 higher percentage of their compensation for a

17. Award Plaintiffs and memb ers o f T he Class

attorneys fees pursuant to 42 USC § 1988[.] retirement allowance than jud ges of the 36th

18. Award Plaintiffs and members of The Class District Court.

interest to which they are entitled; and 13

19. Award Plaintiffs and members of The Class Unlike the majority, I do not read Dubuc, Brotherton, and Irvine

such additional or different relief to which as basica lly rendering other factors irrelevant when evidence is presented

they are entitled. regarding whether the state treasury wo uld be liable for a jud gment.

No. 02-2287 Ernst, et al. v. Roberts, et al. 45 46 Ernst, et al. v. Roberts, et al. No. 02-2287

As the majority notes, there are two ways in which In other words, there is no commingling of funds. Regarding

potential legal liability for a judgment against the JRS might the second method, the majority recognizes that, other things

reach state treasury funds. “First, JRS funds might be co- being equal, the state treasury might be liable for any shortfall

mingled with general funds–which is to say that JRS funds

might be available for general use by the state for other

purposes, unrelated to the retirement system. If funds are co-

mingled, then any JRS liability would be tantamount to state (E.D. Va. 1997 ) (holding that Virginia’s Retirement System is an arm of

treasury liability.” The second method asks whether “even if the state entitled to Eleventh Amendm ent imm unity); Mello v.

JRS funds are segregated from state treasury funds, the JRS Woo dhouse, 755 F. Sup p. 923 (D. N ev. 199 1) (holding that suit against

might not have sufficient funds to satisfy a judgment; the Nevada P ublic Employees’ Retirement Board was barred by the

applicable state law could make state treasury funds available Eleventh Amendme nt).

to satisfy the part of the judgment that exceeded the amount Blake v. Kline, 612 F.2d 71 8 (3d Cir. 197 9), cited by the m ajority, is

not particularly persuasive. Although the Third Circuit directed the

of funds available to satisfy the part of the judgment that district court to consider on remand an opinion by the Pennsylvania

exceeded the amount of funds available to the JRS.” Maj. Attorney General stating that the money deposited in the retirement fund

Op. at 12. had lost its identity as Commonwealth fund s, the Co urt ultimately stated

that the district court needed to determine whether the state, in making a

The majority concludes that under the first method, “JRS contribution, was acting in the role of sovereign or some o ther capacity.

Id. at 724.

funds are kept in a separate trust from general state Other factors, see H all v. M ed. C ollege of O hio, 742 F.2d 299 , 302

funds–thus, funds taken from the JRS to satisfy a judgment (6th Cir. 1984), reflect that the JRS is an arm of the state. The M ichigan

would not be funds from the state treasury.” Maj. Op. at 13.14 Judges Retirement System and the Michigan Judges Retirement Board

were created by the Michigan Judg es Retirement Act. o f 1992, M ich.

Comp. Laws §§ 38.21 01-2670 . The Act mand ate that the Boa rd consist

14

of the State Treasurer and the Attorney General of Michigan, as well as

I disagree with this conc lusion as well, because it is contrary to the one sitting judge and two additional members appointed by Governor of

statutes establishing the JRS, which require the State Tre asurer to invest Michigan with the advice and consent of the Michigan Senate. Mich.

JRS assets like all other assets of the State. Mich. Comp. Laws Comp. Laws § 38.2202(1). The Act is integrated with other Michigan

§ 38.2 206 (1), 38.11 32-3 8.11 40i. T he Act requires the State T reasurer to departments. Indeed, the Michigan Judg es Retirement Bo ard “is created

dep osit JRS funds in the same manner as and subject to the laws in the departm ent [of m anagement and budget].” §§ 38 .2202(1 );

gove rning the deposit of other State funds. Id. § 38 .220 6(1). 38.2104(5). The M ichigan Departm ent of M anagement is respo nsible

Other courts have held that funds deposited in a retirement system do “for the budgeting, procurement, and related management functions of the

not lose their fundamental character as public funds. See Fitzpatrick v. retirement system.” Id. § 38 .220 6(1). The State Tre asurer “is the

Bitzer, 519 F.2d 559 , 565 n.4 (2d Cir. 197 5), aff’d in part, rev’d in part treasurer of the retirement system.” Id. § 38 .220 6(l). T he M ichigan

on other grounds, 427 U.S. 445 (1976). Relatedly, courts have held that Attorney General is the Board’s legal advisor and repre sents the B oard in

retirement systems are arms of the state and therefore entitled to Eleventh all litigation. Id. § 38.2207. The retirement system is required to prepare

Amendm ent immunity. See, e.g., M cGinty v. New Y ork, 251 F.3d 84 (2d an annual report each fiscal year “regarding the financial, actuarial, and

Cir. 2001) (holding that the New York Retirement System is an arm of the other activities of the retirement system,” and present it to the Governor

state; dismissing the plaintiffs’ claims as barred by the Eleventh and Legislature. Id. § 38.2209. Furthermore, “[t]he retirement system

Amendm ent); JMB G roup Trust IV v. Pennsylvania M un. Ret. Sys., 986 shall draw its warrants upon the state treasury, payable out of funds of the

F. Supp. 534, 53 8 (N.D. Ill. 1997) (holding that the Pennsylvania retirement system, for the payment of retirement allowances, accumulated

Retirement System was an arm of the state where the duties and contributions, and the paym ent of salaries and other expenses necessary

responsibilities of the Retirement System were “totally defined and in the administration of the retirement system.” Id. § 38.2208. The

limited by the Commonwealth of Pennsylvania under the provisions of the retirement system, is funded, in part, by annual legislative appropriations

Pen nsylvania Code”); Schu lthorpe v. V irginia Ret. Sys., 952 F. Supp. 307 and other p ublic m onies. Id. 38.2 303 , 38.2 304 .

No. 02-2287 Ernst, et al. v. Roberts, et al. 47 48 Ernst, et al. v. Roberts, et al. No. 02-2287

pursuant to Art. IX, § 24 of the Michigan Constitution. See have been held liable pursuant to Art. IX, § 24.” Maj. Op. at

Maj. Op. at 19. That provision states: 19; see also id. at 7 n.8 (“Various federal claims in this case

clearly seek monetary relief, including the refund and

The accrued financial benefits of each pension plan and payment of portions of Plaintiffs’ contributions to the JRS.”).

retirement system of the state and its political The majority nonetheless concludes that because Musselman

subdivisions shall be a contractual obligation thereof “establishes that Art. IX, § 24 does not create any right of

which shall not be diminished or impaired thereby. action that could force state treasury funds to be used to pay

Financial benefits arising on account of service rendered any judgment against the JRS,” Maj. Op. at 15, there is no

in each fiscal year shall be funded during that year and Eleventh Amendment immunity bar to suit. See Maj. Op. at

such funding shall not be used for financing unfunded 7 n.8 (“Because we hold that none of the claims for monetary

accrued liabilities. relief are covered by Eleventh Amendment immunity, we

need not reach the issue of whether there are any federal

Musselman v. Governor, 533 N.W.2d 237, 240 n.7 (Mich. claims seeking only prospective, non-monetary relief.”). The

1995), on reh’g on other grounds, 450 N.W.2d 346 (Mich. majority’s conclusion that the Eleventh Amendment is not

1996). The provision itself is clear, and Musselman further implicated, despite the provisions of Art. IX, § 24, is based on

indicates that the state is obligated to prefund said benefits: the following reasoning:

“We hold that the state is obligated to prefund health care

benefits under art. 9, § 24.” Id. at 246. [t]here can be no action in any court to force the state

treasury to pay any part of a judgment relating to a

However, Musselman also held that Article IX, § 24 is not federal claim in a lawsuit concerning the JRS–thus, the

self-executing: state treasury is not subject to potential legal liability.

Even if the JRS lacked sufficient funds to satisfy a

In other words, insofar as the plaintiffs are asking us to judgment in this case, the state treasury could not be held

require the Legislature to appropriate funds for liable for any unpaid portion of the judgment.

retirement health care benefits, we understand that the

intention of the drafters was that the second sentence of Maj. Op. at 17-18.

Const. 1963, art. 9, § 24 is not self-executing. Because

the provision does not alter the rule that legislative action In other words, the majority reasons that, because state law

is necessary to appropriate funds, it fails to “‘lay[]down says that the money cannot come from the state treasury, a

rules by means of which [its] principles may be given the federal court could not order such relief either, so there is no

force of law.’” need to worry about the Eleventh Amendment. This

reasoning is faulty because a state’s exercise of state

Id. (alteration in original; footnote omitted); see also id. sovereign immunity does not control the question of federal

(“However, because we have no authority to order the constitutional immunity. Cf. Dubuc, 342 F.3d at 617 (stating

Governor or the Legislature to appropriate funds, mandamus that “[w]hile [a provision of the Michigan Supreme Court

is denied.”) Rules Concerning the State Bar of Michigan providing the

staff of the State Bar and the Board of Law Examiners] may

The majority acknowledges that “[a]bsent the Musselman immunize the individual defendants from state law claims, no

case, it might have been argued that the state treasury could state law or rule can immunize anyone from liability for

No. 02-2287 Ernst, et al. v. Roberts, et al. 49 50 Ernst, et al. v. Roberts, et al. No. 02-2287

violating the United States Constitution”).15 In fact, on the The raison d’etre for the Eleventh Amendment is to

flip side, the Supreme Court has consistently held that a state protect, in a federal forum, a state’s exercise of sovereignty

does not waive its Eleventh Amendment immunity by immunity. As recently observed by a majority of Justices in

consenting to suit only in its own courts. Port Auth. Trans- Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (1996):

Hudson Corp. v. Feeney, 495 U.S. 299, 305 (1990) (citations

omitted); Atascadero State Hosp. v. Scanlon, 473 U.S. 234, Although the text of the Amendment would appear to

241 (1985) (“Thus, in order for a state statute or constitutional restrict only the Article III diversity jurisdiction of the

provision to constitute a waiver of Eleventh Amendment federal courts, “we have understood the Eleventh

immunity, it must specify the State’s intention to subject itself Amendment to stand not so much for what it says, but for

to suit in federal court.”); Pennhurst, 465 U.S. at 99-100 n.9 the presupposition . . . which it confirms.” Blatchford v.

(citations omitted); Florida Dept. of Health & Rehabilitative Native Village of Noatak, 501 U.S. 775, 779 . . . (1991).

Servs. v. Florida Nursing Home Assn., 450 U.S. 147, 150, That presupposition, first observed over a century ago in

1981 (per curiam); Great Northern Life Ins. Co. v. Read, 322 Hans v. Louisiana, 134 U.S. 1, . . . (1890), has two parts:

U.S. 47, 54 (1944) ( “[I]t is not consonant with our dual first, that each State is a sovereign entity in our federal

system for the Federal courts to be astute to read the consent system; and second, that “‘[i]t is inherent in the nature of

to embrace Federal as well as state court. . . . [A] clear sovereignty not to be amenable to the suit of an

declaration of the state’s intention to submit its fiscal individual without its consent,’” id., at 13 . . . (emphasis

problems to other courts than those of its own creation must deleted), quoting The Federalist No. 81, p. 487 (C.

be found”). By the same token, the state should not lose its Rossiter ed. 1961) (A. Hamilton). See also Puerto Rico

constitutional immunity simply because it exercised its state Aqueduct and Sewer Authority, supra, [506 U.S. 139

sovereign immunity. 16 As the foregoing precedent 1993] at 146 (“The Amendment is rooted in a recognition

establishes, the state must make its consent to suit in federal that the States, although a union, maintain certain

court clear. attributes of sovereignty, including sovereign

immunity”). For over a century we have reaffirmed that

federal jurisdiction over suits against unconsenting States

“was not contemplated by the Constitution when

establishing the judicial power of the United States.”

Hans, supra, at 15. [Fn7]

15

In Dubuc, the individual d efendants, all of whom were sued in their

official capacities, argued that they were immune from the federal claims _____________

under 42 U.S.C. § 1983 because state law ma de them “ab solutely immune FN7. E.g., North Carolina v. Temple, 134 U.S. 22, 30,

from suit for conduct arising o ut of the p erform ance of their duties.”

Dubuc, 342 F.3d at 617. This Court rejected this argum ent because state

10 S. Ct. 509, 511, 33 L. Ed. 849 (1890); Fitts v.

law canno t insulate the defendants from violations of federal law. It is for McGhee, 172 U.S. 516, 524, 19 S. Ct. 269, 272, 43 L.

this proposition that I cited Dubuc, and no other. T hus, the d octrine of Ex Ed. 535 (1899); Bell v. Mississippi, 177 U.S. 693, 20 S.

Parte Young was therefore applicable to the individual defendants sued Ct. 1031, 44 L. Ed. 945 (1900); Smith v. Reeves, 178

in their official capacities. U.S. 436, 446, 20 S. Ct. 919, 923, 44 L. Ed.1140 (1900);

16 Palmer v. Ohio, 248 U.S. 32, 34, 39 S. Ct. 16, 16-17, 63

This leads to a curious result: although the state cannot be sue d in L. Ed. 108 (1918); Duhne v. New Jersey, 251 U.S. 311,

state court because it has exercised its sovereign immunity, it can be sued

in federal court bec ause it cannot b e sued in state co urt.

313, 40 S. Ct. 154, 64 L. Ed.280 (1920); Ex parte New

No. 02-2287 Ernst, et al. v. Roberts, et al. 51 52 Ernst, et al. v. Roberts, et al. No. 02-2287

York, 256 U.S. 490, 497, 41 S. Ct. 588, 589, 65 L. Ed. impermissible end run around the well-established principles

1057 (1921); Missouri v. Fiske, 290 U.S. 18, 26, 54 S. of the Eleventh Amendment. If the state treasury is immune

Ct. 18, 20-21, 78 L. Ed. 145 (1933); Great Northern Life from liability for such purposes, it is because of the Eleventh

Ins. Co. v. Read, 322 U.S. 47, 51, 64 S. Ct. 873, 875, 88 Amendment and not Article IX, § 24 of the Michigan

L. Ed. 1121 (1944); Ford Motor Co. v. Department of Constitution or the Musselman decision. And the Eleventh

Treasury of Ind., 323 U.S. 459, 464, 65 S. Ct. 347, 350- Amendment directs that if, as here, the state is the real party

51, 89 L. Ed. 389 (1945); Georgia Railroad & Banking in interest, has not consented to suit in a federal forum, and

Co. v. Redwine, 342 U.S. 299, 304, n. 13, 72 S. Ct. 321, monetary relief is sought, the suit must be dismissed.

324, n. 13, 96 L. Ed. 335 (1952); Parden v. Terminal

Railway of Ala. Docks Dept., 377 U.S. 184, 186, 84 S. Contrary to its assertion, the majority and I actually agree

Ct. 1207, 1209-1210, 12 L. Ed. 2d 233 (1964); United that state law plays a significant role in the Eleventh

States v. Mississippi, 380 U.S. 128, 140, 85 S. Ct. 808, Amendment immunity analysis. However, I do not perceive

814-15, 13 L. Ed. 2d 717 (1965); Employees of Dept. of Art. IX § 24 and the Musselman decision as leading to the

Public Health and Welfare of Mo., 411 U.S. 279, 280, 93 conclusion that the JRS is not an arm of the state. Rather, I

S. Ct. 1614, 1615-1616, 36 L. Ed. 2d 251 (1973); see them as confirming the contrary conclusion. Further, any

Edelman v. Jordan, 415 U.S. 651, 662-663, 94 S. Ct. funding requirement, even if it must be honored by the

1347, 1355-1356, 39 L. Ed. 2d 662 (1974); Fitzpatrick v. legislature and not ordered by a court, will necessarily impact

Bitzer, 427 U.S. 445, 96 S. Ct. 2666, 49 L. ed. 2d 614 on the state treasury. Cf. Fitzpatrick v. Bitzer, 519 F.2d 559

(1976); Cory v. White, 457 U.S. 85, 102 S. Ct. 2325, 72 (2d Cir. 1975), rev’d on other grounds, 427 U.S. 445 (1976).

L. Ed. 2d 694 (1982); Pennhurst State School and (holding that “[a] judgment against the Connecticut State

Hospital v. Halderman, 465 U.S. 89, 97-100, 104 S. Ct. employees fund would automatically increase the obligations

900, 906-908, 79 L. Ed. 2d 67 (1984); Atascadero State of the general state treasury and amount to a judgment against

Hospital v. Scanlon, 473 U.S. 234, 237-238, 105 S. Ct. the state” because the state was required to appropriate funds

3142, 3144, 3145, 87 L. E.2d 171 (1985); Welch v. Texas annually on an actuarial basis such that at least 75% of the

Dept. of Highways and Public Transp., 483 U.S. 468, total retirement income payment for each year had to made by

472-474, 107 S. Ct. 2941, 2945-2946, 97 L. Ed. 2d 389 the state). See generally Edelman, 415 U.S. at 664 (stating

(1987) (plurality opinion); Dellmuth v. Muth, 491 U.S. that “the general rule is that relief sought nominally against an

223, 227-229, and n. 2, 105 L. Ed. 2d 181 (1989); Port officer is in fact against the sovereign if the decree would

Authority Trans-Hudson Corp. v. Feeney, 495 U.S. 299, operate against the latter” (internal quotations omitted)); see

304, 110 S. Ct. 1868, 1872, 109 L. Ed. 2d 264 (1990); id. n.11 (stating that “[t]he general rule is that a suit is against

Blatchford v. Native Village of Noatak, 501 U.S. 775, the sovereign if the judgment sought would expend itself on

779, 111 S. Ct. 2578, 2581, 115 L. Ed. 2d 686 (1991); the public treasury or domain” (internal quotations omitted)).

Puerto Rico Aqueduct and Sewer Authority v. Metcalf &

Eddy, Inc., 506 U.S. 139, 144, 113 S. Ct. 684, 687-688, Finally, the majority fails to address the impact of Mich.

121 L. Ed. 2d 605 (1993). Comp. Laws. § 38.2302, which imposes mandatory state

contribution requirements:

Seminole Tribe, 517 U.S. at 54. The majority’s unique use of

state sovereign immunity doctrine as some kind of implied Sec. 302. (1) Except as provided in subsection (2), the

waiver of constitutional immunity constitutes an legislature shall annually appropriate to the retirement

No. 02-2287 Ernst, et al. v. Roberts, et al. 53 54 Ernst, et al. v. Roberts, et al. No. 02-2287

system the amount determined under subsection (2) in determined under this subsection in the executive budget

order to fund the retirement system the amount to the legislature for appropriation in the next fiscal year.

determined under the fiscal year for which the

appropriation is made. The legislature shall annually (4) If applicable, the bureau of retirement systems in

appropriate to the retirement system the amount the department shall certify to the director of the

determined under subsection (3) in order to reconcile the department an amount equal to the difference between

estimated appropriation made in the previous fiscal year the estimate actuarial funding requirement for the next

with the actual appropriation needed to adequately fund fiscal year and the sum of the estimated revenue to be

the retirement system for the previous fiscal year. received by the retirement system during the next fiscal

year from employer contributions pursuant to section

(2) The legislature shall annually appropriate to the 303, court fees pursuant to section 304, and mandatory

retirement system an amount equal to 3.5% of the member contributions pursuant to section 305. The

aggregate annual compensation of the difference between department shall submit the amount determined under

the sum of the contribution rates determined under this subsection in the executive budget to the legislature

section 301(2) and (3) multiplied by the aggregate annual for appropriation in the next fiscal year.

compensation and the estimated revenue from court fees

under section 304, whichever is greater. The department Mich. Comp. Laws Ann. § 38.2302 (West 1997). See also

shall submit the amount determined under this subsection § 38.2208 (stating that “[t]he retirement system shall draw its

in the executive budget to the legislature for warrants upon the state treasury, payable out of funds of the

appropriation in the next fiscal year. If the department retirement system, for the payment of retirement allowances,

receives notification from the United States internal accumulated contributions, and the payment of salaries and

revenue service that this subsection will cause the other expenses necessary in the administration of the

retirement system to be disqualified for tax purposes retirement system”). In my view, the foregoing provisions

under the internal revenue code, this subsection does not clearly reflect that the state considers the JRS a state agency,

apply and subsection (4) applies. in the department of budget and management, §§ 38.2201(1),

38.2104(5), funded by the treasury, and not merely a political

(3) Not later than 60 days after the termination of each subdivision.

state fiscal year, the bureau or retirement systems shall

certify to the director of the department the actual In sum, I would affirm the district court’s dismissal on the

aggregate annual compensation paid to all active basis of Eleventh Amendment immunity.

members during the preceding state fiscal year and the

difference, if any, between the actual actuarial funding IV.

requirement and the sum of the actual revenue received

by the retirement system during the preceding fiscal year Plaintiffs’ state law claims were also properly dismissed,

from the appropriation pursuant to subsection (2) or (4), although for reasons different than those stated by the district

whichever is applicable, employer contributions pursuant court. In Pennhurst v. State Sch. & Hosp. v. Halderman,

to section 303, court filing fees pursuant to section 304, supra, the Supreme Court held that the Eleventh Amendment

and mandatory member contributions pursuant to section prohibits federal courts from ordering state officials to

305. The department shall submit the amount conform their conduct to state law, and also bars state law

No. 02-2287 Ernst, et al. v. Roberts, et al. 55 56 Ernst, et al. v. Roberts, et al. No. 02-2287

claims brought under pendent jurisdiction. 465 U.S. at 103- “primary thrust of the suit” remains the money. See Barton,

06. This is true whether the relief sought is prospective or 293 F.3d at 949. As we observed in Barton, “the interest of

retroactive. Id. In distinguishing federal claims against state a sovereign in allocating state funds is a ‘very serious’ one,”

officials from state law claims against state officials, the and “an attempt to force the allocation of state funds

Court reasoned that: implicates core sovereign interests.” Id. at 951 (quoting

Kelley v. Metro. County Bd. of Educ., 836 F.2d 986, 995 (6th

This need to reconcile competing interests [the need to Cir. 1987)). The Eleventh Amendment bars this type of

promote the supremacy of federal law vs. the claim as well. See Barton, 293 F.3d at 949-51 (discussing

constitutional immunity of the States] is wholly absent, exception to doctrine of Ex Parte Young; stating that the

however, when a plaintiff alleges that a state official has injunctive relief must be truly prospective, non-monetary

violated state law. In such a case the entire basis for the relief with only incidental impact on the state treasury, and

doctrine of Young and Edelman disappears. A federal that “[t]he dividing line, therefore, is whether the money or

court’s grant of relief against state officials on the basis non-monetary injunction is the primary thrust of the suit”).

of state law, whether prospective or retroactive, does not

vindicate the supreme authority of federal law. On the Furthermore, even if this claim–and any of the others for

contrary, it is difficult to think of a greater intrusion on that matter–truly seeks prospective, nonmonetary injunctive

state sovereignty than when a federal court instructs state relief and is therefore not barred by the Eleventh Amendment,

officials on how to conform their conduct to state law. relief is still not appropriate if there is no constitutional

Such a result conflicts directly with the principles of violation. In my view, dismissal was proper because the JRS

federalism that underlie the Eleventh Amendment. We has a rational basis and therefore its application does not

conclude that Young and Edelman are inapplicable in a violate the federal equal protection clause. See generally

suit against state officials on the basis of state law. Terre v. Boraas, 416 U.S. 1 (1974) (holding that in equal

protection cases not involving a suspect classification or

Id. at 106. Thus, even if only injunctive relief were sought, fundamental right, courts apply a rational basis test). As the

dismissal of Counts II, IV, VI, VIII, IX, and X was proper. Michigan Supreme Court ruled in Harvey v. Michigan, 664

N.W.2d 767 (Mich. 2003):

V.

The state, by assuming the entire funding of the pensions

Paragraph 3 asks the court to enjoin Defendants from of 36th District judges in the financially distressed city of

requiring Plaintiffs who have remained as participants in the Detroit, made those pensions more secure. Certainly the

Tier 1 Plan to pay a larger contribution to the JRS than the Legislature would or could understand that this would

36th District Court judges. Although couched as prospective induce competent and qualified attorneys to become

language, in essence Plaintiffs seek to require the allocation judges or to remain judges, just as the legislation did in

of state funds that are subject to the requirements of the Act.17 Hughes [v. Judges Retirement Bd., 282 N.W.2d 160

Thus, the injunctive relief requested is not “truly prospective (Mich. 1979)]. Accordingly, we agree that the trial

non-monetary relief,” and it is not incidental; therefore, the court’s holding that plaintiffs have not satisfied their

burden to show that there was no rational basis for this

legislation. Thus, the statute withstands constitutional

17

This is equally true as to a ll of Plaintiffs’ claims.

scrutiny.

No. 02-2287 Ernst, et al. v. Roberts, et al. 57

Id. at 774.18 I agree with the Michigan Supreme Court that

the proper test is rational basis and that the Judges

Retirement Act easily passes constitutional scrutiny. I would

hold that Defendant state officials did not violate Plaintiffs’

equal protection rights by enforcing the provisions of the

Judges Retirement Act.

VI.

For the foregoing reasons, I believe that we should affirm

the judgment of the district court dismissing in its entirety

Plaintiffs’ complaint.

18

In Hughes v. Judges’ Ret. Bd., 282 N.W .2d 1 60 (Mich. 19 79), a

group of already-retired judges challenged legislation amending the

Judges Retirement Act to increase the pension benefits to judges who

retired after its effected date. The amendment caused the pension of new

and still-active judges to be higher than retirees’ benefits. The M ichigan

Supreme Court analyzed the statute under the rational-basis test and

concluded that statute was constitutional. Ir reasoned that the legislation

was rational because the Legislature was inducing “competent and

qualified attorneys to become judges, or to remain judg es if alread y in

office.” Id. at 168.