Petition for Writ of Certiorari — Missouri Higher Education Loan Authority, Petitioner v. Jeffrey Good, et al.

Supreme Court briefMar 12, 2025

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No. 24IN THE

Supreme Court of the United States

___________

THE HIGHER EDUCATION LOAN AUTHORITY OF THE

STATE OF MISSOURI,

Petitioner,

JEFFREY GOOD, AND THE UNITED STATES DEPARTMENT

OF EDUCATION,

Respondents.

___________

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Tenth Circuit

___________

PETITION FOR A WRIT OF CERTIORARI

___________

JORGE R. PEREIRA

SIDLEY AUSTIN LLP

1001 Brickell Bay Drive

Suite 900

Miami, FL 33131

(305) 391-5270

DANIEL J. FEITH*

KATHLEEN M. MUELLER

JEREMY ROZANSKY

SIDLEY AUSTIN LLP

1501 K Street, NW

Washington, D.C. 20005

(202) 736-8000

dfeith@sidley.com

Counsel for Petitioner

March 12, 2025

* Counsel of Record

QUESTIONS PRESENTED

Under Missouri law, the Higher Education Loan

Authority of the State of Missouri (MOHELA) is a

“public instrumentality of the State” serving the “essential public function” of expanding access to higher

education for Missouri residents. MOHELA does so

by financing, purchasing, and servicing student loans

and using its revenues to fund scholarships, grants,

and capital projects at Missouri colleges and universities. MOHELA is governed by a board comprising

state officials and individuals appointed by the Governor and confirmed by the Missouri Senate, all of

whom the Governor may remove for cause; must

comply with state laws “respecting the conduct of

public business by a public agency”; and must submit

financial reports to the State’s higher education

agency. The decision below nevertheless held that

MOHELA is not an arm of Missouri immune from

suit under the Eleventh Amendment because the

State is not liable for MOHELA’s judgments and has

given MOHELA “a fair degree of operational autonomy” through attributes incident to MOHELA’s status

as a public corporation. The questions presented are:

1. Whether a state treasury’s liability for an entity’s judgments is the most important factor in

determining whether that entity is an arm of

the state.

2. Whether incidents of corporate status, such as

the capacity to sue and be sued, own property,

and contract, are relevant to determining

whether a public corporation established by a

State for a state-wide public purpose and governed by a Board comprising state officials and

individuals appointed by the governor and confirmed by the legislature is an arm of the state.

(i)

PARTIES TO THE PROCEEDING

The petitioner is the Higher Education Loan Authority of the State of Missouri (MOHELA), and the

respondents are Jeffrey Good and the U.S. Department of Education.

RELATED PROCEEDINGS

There are no related proceedings in state or federal

courts.

iii

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED .................................

PARTIES TO THE PROCEEDING .....................

RELATED PROCEEDINGS.................................

TABLE OF AUTHORITIES .................................

PETITION FOR A WRIT OF CERTIORARI .......

OPINIONS BELOW .............................................

JURISDICTION....................................................

STATUTES INVOLVED ......................................

INTRODUCTION .................................................

STATEMENT OF THE CASE..............................

REASONS FOR GRANTING THE WRIT ...........

I. THE CIRCUITS ARE DIVIDED OVER

THE

TEST

FOR

DETERMINING

WHETHER AN ENTITY IS AN ARM OF

THE STATE ENTITLED TO SHARE THE

STATE'S SOVEREIGN IMMUNITY...........

A. The Circuits Disagree Over Whether the

State’s Liability for Judgments Against

the Entity Is the Most Important Armof-the-State Factor. ..................................

1. Three Circuits Treat the State’s Potential Liability for the Judgment

as the Most Important Factor. ........

2. Three Circuits Use Tests that Do

Not Give Special Weight to a

Judgment’s Impact on the State

Treasury ...........................................

TABLE OF CONTENTS—continued

B. The Circuits Are Divided Over Whether

Normal Incidents of Corporate Status

Bear on Whether a Public Corporation Is

an Arm of the State..................................

Page

1. The Tenth and Fifth Circuits Weigh

Incidents of Corporate Status

Against Immunity for Public Corporations ..........................................

2. The Ninth and D.C. Circuits Do Not

Give Weight to Incidents of Corporate Status .......................................

II. THE DECISION BELOW VIOLATES THE

CENTRAL PURPOSE OF THE ELEVENTH AMENDMENT BY FAILING TO

PROTECT MISSOURI’S SOVEREIGN

DIGNITY ......................................................

A. The Tenth Circuit Erred in Deeming It

Irrelevant that Judgments Against MOHELA Could Harm the State Fisc by

Impairing MOHELA’s Ability to Support

Missouri Higher Education .....................

B. The Decision Below Failed to Respect

Missouri’s Sovereign Right to Determine How to Structure Its Government

to Perform Its Sovereign Functions ........

III. HOW TO DETERMINE WHETHER AN

ENTITY IS AN ARM OF THE STATE IS

AN IMPORTANT AND RECURRING

QUESTION AFFECTING MANY KINDS

OF ENTITIES ..............................................

CONCLUSION ....................................................

TABLE OF CONTENTS—continued

Page

APPENDICES

APPENDIX A: Opinion, Good v. U.S. Dep’t Of

Educ., 121 F.4th 772 (10th Cir. 2024) ..............

APPENDIX B: Memorandum And Order, Good

v. U.S. Dep’t Of Educ., No. 21-CV-2539-JARADM, 2022 WL 2191758 (D. Kan. June 16,

2022) ................................................................... 82a

APPENDIX C: State Statutes .............................. 110a

TABLE OF AUTHORITIES

CASES

Page

Albrecht v. Comm. on Emp. Benefits, 357 F.

3d 62 (CADC 2004) ...................................

Alden v. Maine, 527 U.S. 706 (1999) ........... 3, 26

Bank of Augusta v. Earle, 38 U.S. (14 Pet.)

519 (1839) ..................................................

Berg v. Access Grp., Inc., No. 13-5980, 2014

WL 4812331 (E.D. Pa. Sept. 26, 2014) .....

Biden v. Nebraska, 143 S. Ct. 2355

(2023) ............................. 2, 7, 8, 9, 25, 26, 27, 28

Christy v. Pa. Turnpike Comm’n, 54 F.3d

1140 (CA3 1995) ........................................

Dykes v. Mo. Higher Educ. Loan Auth., No.

4:21-CV-00083-RWS, 2021 WL 3206691

(E.D. Mo. July 29, 2021) ...........................

In re Entrust Energy, Inc., 101 F.4th 369

(CA5 2024) ..................................... 15, 16, 21, 22

Fed. Mar. Comm’n v. S.C. State Ports

Auth., 535 U.S. 743 (2002) ........................ 3, 27

Franchise Tax Bd. of Cal. v. Hyatt, 587

U.S. 230 (2019) ..........................................

Fresenius Med. Care Cardiovascular Res.,

Inc. v. P.R. & Caribbean Cardiovascular

Ctr. Corp., 322 F.3d 56 (CA1 2003) ..........

Gaffney v. Ky. Higher Educ. Student Loan

Corp., No. 3:15-cv-01441, 2016 WL

3688934 (M.D. Tenn. July 12, 2016) ........

Gowens v. Capella Univ., Inc., No. 4:19-CV362-CLM, 2020 WL 10180669 (N.D. Ala.

June 1, 2020) .............................................

Grajales v. P.R. Ports Auth., 831 F.3d 11

(CA1 2016) ............................................ 13, 14, 17

Gregory v. Ashcroft, 501 U.S. 452 (1991).....

vii

TABLE OF AUTHORITIES—continued

Page

Hennessey v. Univ. of Kan. Hosp. Auth., 53

F.4th 516 (CA10 2022) ..............................

Hess v. Port Auth. Trans-Hudson Corp.,

513 U.S. 30 (1994) ..................................... 3, 11

Highland Farms Dairy, Inc. v. Agnew, 300

U.S. 608 (1937) ..........................................

Irizarry-Mora v. Univ. of P.R., 647 F.3d 9

(CA1 2011) .................................................

Karns v. Shanahan, 879 F.3d 504 (CA3

2018) .......................................................... 18, 19

Kashani v. Purdue Univ., 813 F.2d 843

(CA7 1987) .................................................

Kohn v. State Bar of Cal., 87 F.4th 1021

(CA9 2023) .......................... 1, 16, 17, 18, 22, 23

Lebron v. Nat’l R.R. Passenger Corp., 513

U.S. 374 (1995) ..........................................

Maliandi v. Montclair State Univ., 845

F.3d 77 (CA3 2016) ................................... 19, 31

Mancuso v. N.Y. State Thruway Auth., 86

F.3d 289 (CA2 1996) ................................. 12, 32

Owens v. TransUnion, LLC, No. 4:20-CV665-SDJ, 2021 WL 4501595 (E.D. Tex.

Sept. 30, 2021) ...........................................

P.R. Ports Auth. v. Fed. Mar. Comm’n, 531

F.3d 868 (CADC 2008) ........... 16, 17, 23, 28, 30

Pellegrino v. Equifax Info. Servs., LLC, 709

F. Supp. 3d 206 (E.D. Va. 2024) ...............

Perkins v. Equifax Info. Servs., LLC, No.

SA-19-CA-1281-FB (HJB), 2020 WL

13120600 (W.D. Tex. May 1, 2020)...........

Redondo Constr. Corp. v. P.R. Highway &

Transp. Auth., 357 F.3d 124 (CA1 2004)..

Regents of the Univ. of Cal. v. Doe, 519 U.S.

425 (1997) .................................................. 11, 25

viii

TABLE OF AUTHORITIES—continued

Seminole Tribe of Fla. v. Florida, 517 U.S.

44 (1996) ....................................................

Skidmore v. Access Grp., Inc., 149 F. Supp.

3d 807 (E.D. Mich. 2015) ..........................

Steadfast Ins. Co. v. Agric. Ins. Co., 507

F.3d 1250 (CA10 2007)..............................

In re Stout, 231 B.R. 313 (Bankr. W.D. Mo.

1999) ..........................................................

Sturdevant v. Paulsen, 218 F.3d 1160

(CA10 2000) ...............................................

Sw. Bell Tel. Co. v. City of El Paso, 243

F.3d 936 (CA5 2001) .................................

Takle v. Univ. of Wis. Hosp. & Clinics

Auth., 402 F.3d 768 (CA7 2005) ...............

U.S. ex rel. Lesinski v. S. Fla. Water Mgmt.

Dist., 739 F.3d 598 (CA11 2014) ...............

U.S. ex rel. Oberg v. Pa. Higher Educ.

Assistance Agency, 804 F.3d 646 (CA4

2015) ..........................................................

Watson v. Univ. of Utah Med. Ctr., 75 F.3d

569 (CA10 1996) ........................................

Page

CONSTITUTION AND STATUTES

U.S. Const. amend. XI .................................. 11, 24

12 U.S.C. § 244 .............................................

§ 248(l) ..........................................

28 U.S.C. § 1254(a) .......................................

Mo. Rev. Stat. § 173.350, et seq. ..................

§ 173.360 .............................. 4, 5, 6

§ 173.365 .............................. 6, 30

§ 173.370 ..............................

§ 173.385 ..............................

§ 173.385(8) .......................... 6, 29

§ 173.385(14) ........................

TABLE OF AUTHORITIES—continued

Page

Mo. Rev. Stat. § 173.385.1(3)–(5) .................

§ 173.385.1(6)–(8) ................ 4, 25

§ 173.385.1(11) .....................

§ 173.385.1(12) ..................... 5, 25

§ 173.385.1(13) .....................

§ 173.385.1(14) .....................

§ 173.385.1(18) ..................... 4, 25

§ 173.385.1(19) .....................

§ 173.385.2 ...........................

§ 173.387 ..............................

§ 173.390 .............................. 5, 29

§ 173.392 ..............................

§ 173.395 ..............................

§ 173.405 ..............................

§ 173.415 .............................. 4, 5

§ 173.420 ..............................

§ 173.445 .............................. 6, 29

LEGISLATIVE MATERIALS

S. Bill No. 389, 94th Gen. Assemb., 1st

Reg. Sess. (Mo. 2007) ................................ 5, 6

PETITION FOR A WRIT OF CERTIORARI

MOHELA respectfully petitions for a writ of certiorari to review the judgment of the United States

Court of Appeals for the Tenth Circuit.

OPINIONS BELOW

The Tenth Circuit’s opinion is reported at 121 F.4th

772 and reproduced at Pet. App. 1a‒81a. The district

court’s unpublished opinion is reported at 2022 WL

2191758 and reproduced at Pet. App. 82a‒109a.

JURISDICTION

The court of appeals entered judgment on November 12, 2024. On February 4, 2025, Justice Gorsuch

extended the time for filing a writ of certiorari to and

including March 12, 2025. This Court has jurisdiction

under 28 U.S.C. § 1254(a).

STATUTES INVOLVED

MOHELA is established and governed by the Missouri Higher Education Loan Authority Act, Mo. Rev.

Stat. § 173.350, et seq., which is reproduced at Pet.

App. 110a‒130a.

INTRODUCTION

The Eleventh Amendment applies not only to suits

against a State as a named party but also to suits

against an arm of the state. Yet “[t]here is no standard test for determining whether an entity is an arm

of the state for purposes of sovereign immunity.”

Kohn v. State Bar of Cal., 87 F.4th 1021, 1026 (CA9

2023) (en banc). This case presents an opportunity for

this Court to resolve two issues concerning the armof-the-state test that divide the lower courts.

Respondent Jeffrey Good alleges that Petitioner

Higher Education Loan Authority of the State of Missouri (MOHELA) violated the Fair Credit Reporting

Act. As this Court knows, MOHELA is “[b]y law and

function” an “instrumentality of Missouri” established by the state legislature to perform “the ‘essential public function’ of helping Missourians access

student loans needed to pay for college.” Biden v. Nebraska, 143 S. Ct. 2355, 2366 (2023) (quoting Mo.

Rev. Stat. § 173.360). MOHELA “is governed by state

officials and state appointees, reports to the State,

and may be dissolved by the State.” Id. It is authorized to finance and service student loans, and uses

the money it earns to fund higher education in Missouri: MOHELA “has provided $230 million for development projects at Missouri colleges and universities

and almost $300 million in grants and scholarships

for Missouri students.” Id. Thus, actions that cause

financial loss to MOHELA impair “its efforts to aid

Missouri college students,” harming its “performance

of its public function” and “necessarily [causing] a direct injury to Missouri itself.” Id.

Nevertheless, the Court of Appeals for the Tenth

Circuit held that MOHELA is not an arm of Missouri

and thus does not share the State’s immunity from

suit. It did so primarily because the State “is not directly responsible in the first instance for a judgment

against MOHELA,” based on its view that the “foremost reason for sovereign immunity” is protecting the

state treasury. Pet. App. 74a–75a. The court then

compounded its error by holding that because the

State is not liable for MOHELA’s judgments, and because incidents of MOHELA’s corporate status give

MOHELA some “operational autonomy,” private lawsuits against MOHELA would not offend Missouri’s

dignity. Id. at 76a. Those rulings are wrong and im-

plicate two circuit splits warranting this Court’s review.

First, the circuits disagree over whether a state

treasury’s liability for judgments against the entity is

the most important factor in determining whether

the entity is an arm of the state. Several circuits—

including the Tenth Circuit below—“describe the impact on the treasury as the most important factor in

the arm-of-the-state analysis.” Pet. App. 20a n.11 (citing cases). In contrast, the Third, Ninth and D.C. Circuits “have jettisoned arm of-the-state-tests that give

any special weight” to the impact on the state treasury of a judgment against the entity. Id. They have

done so in recognition of the fact that protecting

States from money judgments is not the “driving concern of the Eleventh Amendment.” Hess v. Port Auth.

Trans-Hudson Corp., 513 U.S. 30, 60 (1994)

(O’Connor, J., dissenting). Rather, “[t]he preeminent

purpose of state sovereign immunity is to accord

States the dignity that is consistent with their status

as sovereign entities.” Fed. Mar. Comm’n v. S.C.

State Ports Auth., 535 U.S. 743, 760 (2002). “The

founding generation thought it ‘neither becoming nor

convenient that the several States of the Union, invested with that large residuum of sovereignty which

had not been delegated to the United States, should

be summoned as defendants to answer the complaints of private persons.’” Alden v. Maine, 527 U.S.

706, 748 (1999). The Tenth Circuit’s approach is

wrong and warrants this Court’s review. See infra

§ I.A.

Second, the circuits also disagree over whether incidents of corporate status, such as capacity to sue

and be sued, own property, and contract, bear on

arm-of-the-state status. The Tenth and Fifth Circuits

give these factors substantial weight, tipping the

scales against immunity for instrumentalities established as public corporations (as many are). But the

Ninth and D.C. Circuits accord these factors no

weight in their tests, respecting States’ prerogatives

to structure their governments as they see fit. See infra § I.B.

This Court’s review is needed to make clear that a

proper arm-of-the-state analysis must, in accordance

with this Court’s Eleventh Amendment jurisprudence, treat protecting States’ dignity as at least

equal in importance to protecting their treasuries,

and respect States’ sovereign rights to determine the

appropriate structure of their governments. Where,

as here, a State uses a state-controlled instrumentality to perform public functions, the entity is an arm of

the state that shares in the State’s sovereign immunity. And where, as here, private lawsuits against the

entity could interfere with its ability to perform the

public function for which the State created it, State

sovereignty and dignity are implicated. See infra § II.

The petition for writ of certiorari should be granted.

STATEMENT OF THE CASE

1. The Missouri General Assembly established

MOHELA in 1981 as “a separate public instrumentality of the state” to perform the “essential public function” of assuring that all eligible postsecondary education students have access to student loans. Mo.

Rev. Stat. §§ 173.360, 173.415. The enabling statute

gave MOHELA the authority to issue bonds to obtain

funds to purchase student loan notes or finance student loans; to purchase, finance, and sell student loan

notes; to service student loans; and to invest excess

funds in certain government-backed or governmentinsured instruments. Id. § 173.385.1(6)‒(8), (18); see

also id. §§ 173.390, 173.395, 173.405 (describing

MOHELA’s authority to issue bonds).

To carry out these functions, MOHELA may enter

contracts, buy and sell personal property, maintain

an office in Missouri, use a corporate seal, and sue

and be sued. Id. § 173.385.1(3)–(5), (11), (14). MOHELA may also, in connection with its student loan

operations, collect “reasonable fees and charges,”

which “shall be used to pay” MOHELA’s costs. Id.

§ 173.385.1(12). Any bonds or other forms of indebtedness issued by MOHELA “shall be deemed to be

securities issued by a separate public instrumentality

of the state of Missouri.” Id. § 173.415. But nothing in

MOHELA’s enabling act “shall be construed to deprive the state … of [its] powers” over MOHELA’s assets or to impair the power of any state agency or official that “otherwise may be provided by law.” Id.

§ 173.420. And given MOHELA’s “public function,”

MOHELA’s income and property is exempt from taxation. Id. § 173.415.

In 2007, the Missouri legislature expanded MOHELA’s purpose and gave it new authority. See S.

Bill No. 389, 94th Gen. Assemb., 1st Reg. Sess. at

17‒23 (Mo. 2007). MOHELA was authorized (1) to

“support the efforts of public colleges and universities

to create and fund capital projects”; (2) to “support

the Missouri technology corporation’s ability to work

with colleges and universities” in commercializing

technologies; and (3) to “create, acquire, contribute to

or invest in any type of financial aid program that

provides grants and scholarships to students.” Id. at

17, 20 (codified at Mo. Rev. Stat. §§ 173.360,

173.385(19)). MOHELA was also required to “distribute three hundred fifty million dollars of assets” to

“the Lewis and Clark discovery fund”—a new fund

created in the state treasury to provide funds for cap-

ital projects at public colleges and universities and

for the Missouri technology corporation’s work with

colleges and universities. Id. at 20 (codified at Mo.

Rev. Stat. §§ 173.385.2, 173.392).

Since its inception, MOHELA has been assigned to

the Missouri Department of Higher Education and

Workforce Development (“Department of Higher Education”). MOHELA must provide the Department of

Higher Education with annual reports of its income,

expenditures, and indebtedness, and the Department

of Higher Education must approve certain student

loan note sales by MOHELA. Mo. Rev. Stat.

§§ 173.445, 173.385(8). MOHELA is run by a board

composed of Missouri’s Commissioner of Higher Education (who heads the Department of Higher Education), a member of Missouri’s Coordinating Board for

Higher Education, and five members appointed by

the Governor and confirmed by the Missouri Senate.

Id. § 173.360. All board members are removable by

the Governor for cause, id., and receive no compensation for their services, id. § 173.365. MOHELA’s

board may appoint an executive director, who is removable at will. Id. § 173.370. MOHELA’s board

meetings “shall be open to the public,” and MOHELA’s “proceedings and actions” must “comply with

all statutory requirements respecting the conduct of

public business by a public agency.” Id. § 173.365.

2. Disputing the accuracy of his credit report, respondent Jeffrey Good sued the U.S. Department of

Education (which originated his student loan),

TransUnion LLC (the credit-reporting agency), and

MOHELA (his loan servicer) for violations of the Fair

Credit Reporting Act. MOHELA sought judgment on

the pleadings on the ground that MOHELA “is an

arm of the State of Missouri” and so “is immune from

suit under the Eleventh Amendment.” The district

court granted the motion and dismissed Good’s

claims.

The district court based its holding on four arm-ofthe-state factors in Tenth Circuit case law. The court

concluded first that MOHELA is characterized as an

arm of the state under Missouri law since it “is specifically ‘declared to be performing a public function and

to be a separate public instrumentality of the state.’”

Pet. App. 87a. Second, although MOHELA is “given

some autonomy” to hire employees, enter contracts,

and sue, the court held that “[o]n balance, the control

that the State exercises over MOHELA through appointment of the board, limitations on financial expenditures and requirements for spending and filing

reports weighs slightly in favor of finding that MOHELA is an arm of the state.” Id. at 89a. Third, the

court thought MOHELA’s finances, and particularly

the fact that Missouri is not responsible for a judgment against MOHELA, “weigh[] against a finding of

Eleventh Amendment immunity.” Id. at 90a. Fourth,

the court found that MOHELA’s concern with

statewide matters, not local ones, favors immunity.

Id. at 89a–90a. Balancing these factors, the court

concluded that overall, they “weigh in favor of finding

MOHELA an arm of the State of Missouri.” Id. at

92a.

3. Good appealed. While the case was pending at

the Tenth Circuit, this Court held in Biden that Missouri had standing to challenge a federal plan to cancel student loans that would cause MOHELA to lose

loan-servicing fees because “harm to MOHELA is also

a harm to Missouri.” 143 S. Ct. at 2366. This Court

determined that “[b]y law and function, MOHELA is

an instrumentality of Missouri,” is “subject to the

State’s supervision and control,” was created by Missouri “to perform the ‘essential public function’ of

helping Missourians access student loans needed to

pay for college,” and has contributed hundreds of millions of dollars towards Missouri higher education.

Id. (quoting Mo. Rev. Stat. § 173.360). Accordingly,

the loan forgiveness plan that cuts MOHELA’s revenues and “impair[s] its efforts to aid Missouri college

students” is an “acknowledged harm to MOHELA in

the performance of its public function” and “necessarily a direct injury to Missouri itself.” Id.

4. Thereafter, the Tenth Circuit issued its decision

reversing the district court’s judgment and holding

that MOHELA is not an arm of Missouri. The Tenth

Circuit began by acknowledging that Biden “illuminates highly relevant aspects of MOHELA’s relationship with the State of Missouri.” Pet. App. 30a. Biden

found that MOHELA is an “instrumentality of Missouri,” and “the general rule is that state instrumentalities are arms of the state.” Id. at 31a (quoting

Biden, 143 S. Ct. at 2366). But the Tenth Circuit did

not find that dispositive under the two-step multifactor arm-of-the-state test it distilled from its circuit

precedents.

At the first step, the Tenth Circuit’s test considers

four “Steadfast factors”: “(1) the character ascribed to

the entity under state law; (2) the autonomy accorded

the entity under state law; (3) the entity’s finances;

and (4) whether the entity in question is concerned

primarily with local or state affairs.” Pet. App. 16a. If

those factors “are in conflict or point in different directions,” the court proceeds to a second step and

“considers the ‘twin reasons’ underlying the Eleventh

Amendment—avoiding an affront to the dignity of the

State and the impact of a judgment on the state

treasury.” Id. at 20a. The Tenth Circuit treats the

latter interest as most important because, in its view,

“avoiding state liability for any judgment against the

entity” is “the ‘foremost’” of the twin reasons. Id.

Thus, according to the Tenth Circuit, “where it is

clear that the state treasury is not at risk, then the

control exercised by the State over the entity does not

entitle the entity to Eleventh Amendment immunity.”

Id. at 22a‒23a (cleaned up). The Tenth Circuit

acknowledged, however, that several circuits have

“jettisoned” this approach. Id. at 20a‒21a & n.11.

Applying its test, the Tenth Circuit first concluded

that the four “Steadfast factors” pointed in different

directions. The court found that “MOHELA was

structured as a state agency”—a conclusion “in line”

with this Court’s decision in Biden that points in favor of treating MOHELA as an arm of Missouri. Pet.

App. 35a‒36a. In addition, “MOHELA was established to address statewide concerns” and “to perform

the ‘essential public function’ of helping Missourians

access student loans needed to pay for college,” which

also suggests MOHELA is an arm of the state. Id. at

71a (quoting Biden, 143 S. Ct. at 2366).

The Tenth Circuit found that the other two Steadfast factors—MOHELA’s autonomy and financing—

point against arm-of-the-state status. The court

acknowledged Biden’s finding that MOHELA is under the State’s “supervision and control” because its

board consists of state officials and individuals appointed by the Governor and approved by the Senate,

and because it “must provide annual financial reports

to the Missouri Department of Education.” Biden, 143

S. Ct. at 2366; see Pet. App. 42a‒43a. But it found

that control outweighed by other factors, including

that the Governor cannot directly veto MOHELA’s

actions, that MOHELA’s board can hire employees

outside state civil service laws, and that MOHELA

can enter contracts, own property, sue and be sued,

and manage day-to-day operations, subject to statu-

tory restrictions that the court dismissed (without

explanation) as “relatively minor” limitations that “do

not carry much weight in the analysis.” Id. at

42a‒52a.

The court also found that MOHELA has financial

independence from Missouri. It emphasized that “the

State bears no legal liability for MOHELA’s debts—

including judgments against MOHELA.” Pet. App.

54a, 64a‒70a. And, disregarding the various statutory limits on MOHELA’s uses of its funds, supra at

46 & infra at 29‒30, the court took the view that

MOHELA “has the ability to generate its own revenue without meaningful State interference” and “retains the exclusive power to manage its own funds.”

Pet. App. 54a‒64a.

With the structural factors pointing in different directions, the Tenth Circuit moved to step two, where

it found the “foremost” factor—effect on the treasury—was not met because Missouri is not liable for a

judgment against MOHELA. Pet. App. 73a‒74a. The

court did not dispute that judgments against MOHELA could have “indirect impacts” on the State’s

treasury by impairing “MOHELA’s ability to make

payments to the Lewis and Clark Development Fund

or to provide scholarship funding” to Missouri students, or that disregarding such risk may “ignore

economic reality.” Id. at 22a, 74a (cleaned up). But it

deemed that irrelevant, holding that where “the state

treasury is not at risk, then the control exercised by

the State over the entity does not entitle the entity to

Eleventh Amendment immunity.” Id. at 74a. And because MOHELA is “a financially independent entity”

with “a fair degree of operational autonomy—

particularly in its ability to make contracts, own

property, manage its day-to-day affairs, and select its

leadership”—the court further found that a suit

against MOHELA would not offend Missouri’s dignity. Id. at 76a.

REASONS FOR GRANTING THE WRIT

I. THE CIRCUITS ARE DIVIDED OVER THE

TEST FOR DETERMINING WHETHER AN

ENTITY IS AN ARM OF THE STATE ENTITLED TO SHARE THE STATE’S SOVEREIGN IMMUNITY.

The Eleventh Amendment states that the “Judicial

power of the United States shall not be construed to

extend to any suit in law or equity, commenced or

prosecuted against one of the United States by Citizens of Another State, or by Citizens or Subjects of

any Foreign State.” U.S. Const. amend. XI. “It has

long been settled” that sovereign immunity extends

to both “actions in which a State is actually named as

the defendant” and actions against instrumentalities

that “should be treated as an arm of the state.” Regents of the Univ. of Cal. v. Doe, 519 U.S. 425, 429–30

(1997) (cleaned up). But this Court has not provided a

clear test for determining when an instrumentality is

an “arm of the state.”

The provisions of state law that establish the instrumentality and define its character are clearly important to the determination of whether it is an arm

of the state. Id. at 429 n.5. And the inquiry should be

informed by the “Eleventh Amendment’s twin reasons for being”—protecting States from the indignity

of being hauled into court without their consent and

from suits that could drain state treasuries. Hess, 513

U.S. at 47‒48.

The lower courts, however, are divided over how to

implement these principles. “The jurisprudence over

how to apply the arm-of-the-state doctrine is, at best,

confused,” Mancuso v. N.Y. State Thruway Auth., 86

F.3d 289, 293 (CA2 1996), with the circuits disagreeing over what factors should be considered and over

how those factors should be weighed.

The decision below implicates two such disagreements. First, the Tenth Circuit held that the so-called

“treasury factor”—whether judgments against the entity will impact the state treasury—is the most important factor in determining whether an entity is an

arm of the state, and on that basis held that MOHELA is not an arm of Missouri because the State of

Missouri is not liable for MOHELA’s debts or judgments. That decision is consistent with decisions from

the First and Fifth Circuits that similarly treat state

liability for an entity’s debts and judgments as the

most important factor in determining whether the

entity is an arm of the state. But, as the Tenth Circuit acknowledged, that decision conflicts with decisions from the D.C. and Ninth Circuits, which do not

give predominant weight to the impact of a judgment

on the treasury.

Second, the Tenth Circuit found that MOHELA’s

incidents of corporate status—e.g., its ability to make

contracts, sue and be sued, own property, and manage its day-to-day affairs—give it “operational autonomy,” such that allowing lawsuits against MOHELA

would not offend Missouri’s dignity. That approach is

consistent with that of the Fifth Circuit, but again

conflicts with decisions from the D.C. and Ninth Circuits, which give such attributes no weight and look

primarily at indicia of control by the governor and

legislature, such as how members of the entity’s governing body are appointed and removed.

A. The Circuits Disagree Over Whether the

State’s Liability for Judgments Against

the Entity Is the Most Important Arm-ofthe-State Factor.

1. Three Circuits Treat the State’s Potential Liability for the Judgment as

the Most Important Factor.

a. The First Circuit employs a two-step arm-of-thestate test. First, the court considers four “structural

indicators” to determine whether a State “clearly

structured the entity to share its sovereignty.” Grajales v. P.R. Ports Auth., 831 F.3d 11, 17–19 (CA1

2016). The four indicators are (a) how state law characterizes the entity; (b) the nature of the functions

performed by the entity; (c) the entity’s overall fiscal

relationship to the State; and (d) how much control

the State exercises over the operations of the entity.

If those four indicators “point in different directions” or “there is an ambiguity about the direction in

which the structural analysis points,” the court proceeds to the second step, where “the ‘dispositive question concerns the risk that the damages will be paid

from the public treasury.’” Id. at 18 (emphasis added)

(citation omitted).

Applying that test, the First Circuit has held that

the Puerto Rico Ports Authority (PRPA) is not an arm

of Puerto Rico. The court recognized that PRPA

“plainly” is “a government-created entity that is subject to gubernatorial control, exercises some governmental functions, and is charged with serving the

Commonwealth’s general welfare.” Id. at 23. It nevertheless concluded that the four structural factors

pointed in different directions. It thought the control

factor pointed in favor of arm-of-the-state status because the governor “exercises a meaningful degree of

control and supervision over PRPA,” id. at 28, and it

deemed the nature of PRPA’s functions to be neutral

because PRPA performs both “governmental” and

“proprietary” functions, id. at 23–24. But the court

held that Puerto Rico law gave PRPA considerable

autonomy and treated it as an entity that is “‘separate and apart’ from the ‘Government.’” Id. at 23. And

the court found there was fiscal separation between

the Commonwealth and PRPA, since PRPA can raise

its own revenue by charging fees and issuing bonds

for which Puerto Rico is not liable. Id. at 24‒27.

With the “structural factors” pointing in different

directions, the First Circuit turned to the treasury

factor, which was dispositive. PRPA was not an arm

of the Commonwealth because it “failed to show that

this action poses any risk to the Commonwealth’s

fisc,” since the Commonwealth would not be liable for

a judgment against PRPA as either a “legal” or “practical” matter. Id. at 29.

b. In the decision below, the Tenth Circuit applied a

two-step test similar to the First Circuit’s. Pet. App.

18a‒25a. As noted above, the Tenth Circuit first considered four “Steadfast factors” that it thought pointed in different directions, in significant part because

MOHELA can generate revenue to pay its expenses

and “the State does not bear legal liability for any of

MOHELA’s debts or liabilities, including adverse

judgments.” Id. at 69a‒70a; see also id. at 72a n.32

and supra at 8‒10.

The Tenth Circuit then proceeded to a second step,

where it purported to consider the “Eleventh

Amendment’s twin reasons for being: protecting a

State’s dignitary interests and protecting a state

treasury.” Pet. App. 73a. Deeming the treasury factor

“foremost,” the court found it pointed away from considering MOHELA to be an arm of Missouri because

“there is no risk to the State’s treasury. Id. at

74a‒75a. The court then found that a suit against

MOHELA would not offend Missouri’s dignity because “MOHELA is a financially independent entity”

with “a fair degree of operational autonomy.” Id. at

76a.

In short, the Tenth Circuit’s assessment that a

judgment against MOHELA would not impact the

state treasury significantly influenced the result of

every step of its arm-of-the-state analysis.

3. The Fifth Circuit’s six factor arm-of-the-state test

also gives the treasury factor the greatest weight.

The Fifth Circuit considers: (1) whether state law

views the entity as an arm of the state; (2) the source

of the entity’s funding; (3) the entity’s degree of authority independent from the State; (4) whether the

entity is concerned primarily with local as opposed to

statewide problems; (5) whether the entity has the

authority to sue and be sued in its own name; and

(6) whether the entity has the right to hold and use

property. In re Entrust Energy, Inc., 101 F.4th 369,

383

(CA5

2024).

The

second

factor

asks whether the State is liable for the entity’s judgments and obligations and whether there is “financial

entanglement between the entity and the state treasury.” Id. at 384. It is the test’s “most important” factor and is dispositive when the factors are otherwise

evenly split. Id. at 383 (cleaned up).

Applying this test, the Fifth Circuit held that the

Electric Reliability Council of Texas (ERCOT) “is not

an arm of Texas and not entitled to immunity in federal court.” Id. at 387. ERCOT is the entity tasked

with managing Texas’s electrical grid. Id. at 378‒79.

“Texas caselaw says unequivocally that ERCOT ‘is an

organ of government’ that performs a ‘uniquely governmental function,’” and ERCOT is under the con-

trol of the state Public Utility Corporation. Id. at 383,

386. But the Fifth Circuit found that Texas would not

be “directly liable for a judgment against ERCOT or

for ERCOT’s general debts,” and since the six arm-ofthe-state factors overall were evenly split, it treated

that finding as dispositive. Id. at 384‒87.

2. Three Circuits Use Tests that Do Not

Give Special Weight to a Judgment’s

Impact on the State Treasury.

As the decision below acknowledges, the D.C.,

Third, and Ninth Circuits have “jettisoned arm-ofthe-state tests that give any special weight to the

question of impact on the state treasury.” Pet. App.

20a n.11. These circuits’ arm-of-the-state tests give

factors that “advance the states’ dignity interests”

equal weight with the treasury factor. Kohn, 87

F.4th at 1030.

a. The D.C. Circuit led the way in a decision by

then-Judge Kavanaugh involving the same entity,

PRPA, that was the subject of the First Circuit’s Grajales decision. See supra at 13‒14. The D.C. Circuit’s

test examines three factors: (1) the State’s intent regarding the entity’s status; (2) the State’s control over

the entity; and (3) the entity’s overall effects on the

state treasury. P.R. Ports Auth. v. Fed. Mar. Comm’n,

531 F.3d 868, 873 (CADC 2008). Importantly, the

court rejected the argument that the inquiry should

focus “largely if not entirely on the entity’s financial

impact on the state treasury and whether the State

must pay judgments against the entity,” explaining

that Hess “pays considerable deference to the dignity

interest of the state” as well. Id. at 873 (cleaned up).

Notably, the First Circuit in Grajales recognized this

test’s divergence from its own, asserting that the D.C.

Circuit did not follow the “proper approach,” under

which “the question whether the pending action plac-

es the Commonwealth’s fisc at risk is dispositive” at

the second step. 831 F.3d at 19.

The D.C. Circuit’s different test also yielded a different conclusion about PRPA: Unlike the First Circuit, the D.C. Circuit held that PRPA is an arm of the

Commonwealth even though it is “not financed out of

the Commonwealth’s general revenues” and the

Commonwealth would not be liable for the judgment

in that case. P.R. Ports Auth., 531 F.3d at 879. The

court found that Puerto Rico intended PRPA to share

in its immunity because PRPA’s enabling statute described PRPA “as a ‘governmental instrumentality of

the Commonwealth of Puerto Rico’ and ‘government

controlled corporation,’” charged it with performing

state governmental functions, and subjected it to

Puerto Rico laws that apply to governmental instrumentalities. Id. at 875‒76. The court also held that

the Commonwealth’s control over PRPA supported

arm-of-the-state status. Id. at 877. Looking “primarily at how the directors and officers of PRPA are appointed,” the court emphasized that PRPA is governed by a board of directors composed of government

officials appointed by the Governor and a private citizen who is appointed by the Governor with the consent of the Senate, all of whom the Governor could

remove. Id. And although Puerto Rico generally

structured PRPA to be financially self-sufficient and

separate from its treasury, much as Missouri did with

MOHELA here, there were situations in which the

Commonwealth could be liable for certain torts committed by PRPA officers or employees. Id. at 880.

2. The Ninth Circuit, sitting en banc, has adopted

the D.C. Circuit’s three-factor test as “consistent with

current Supreme Court precedent.” Kohn, 87 F.4th at

1030. The Ninth Circuit agrees that the impact on

the treasury, “though relevant, is not dispositive,” be-

cause the “Eleventh Amendment is equally concerned

with the ‘dignity interests of the [S]tate.’” Id. “The intent and control factors advance the [S]tates’ dignity

interests, and the treasury factor protects the state’s

financial solvency”—thus addressing “the Eleventh

Amendment’s ‘twin reasons for being.’” Id. (quoting

Hess, 513 U.S. at 47).

Under its test, the Ninth Circuit has held that the

State Bar of California is an arm of the state even

though “California law[s] makes the State Bar responsible for its own debts and liabilities, so California would not be liable for a judgment against the

State Bar.” Id. at 1036. The Ninth Circuit reached

that result because California law characterizes the

State Bar as a “governmental instrumentality,” subjects it to California’s public-records and openmeeting laws, and tasks it with fulfilling the governmental functions of admission and discipline of attorneys. Id. at 1032‒33. Also, California exercises control over the State Bar through the appointment of

the board of trustees (who are appointed by the state

supreme court, state legislature, and governor), the

state supreme court’s review of admissions rules and

disciplinary decisions, and fee caps imposed by the

legislature, which impose limits on the State Bar’s

ability to raise revenues. Id. at 1034.

3. The Third Circuit applies a similar three-part

test. It asks: (1) whether the payment of the judgment will come from the state; (2) what status the entity has under state law; and (3) what degree of autonomy the entity has. Karns v. Shanahan, 879 F.3d

504, 513 (CA3 2018). As in the D.C. and Ninth Circuits, “each of the factors is considered co-equal”;

none “is predominant.” Id. Thus, the Third Circuit

has also found entities to be arms of the state even

though their funds were financially independent from

the State’s funds and the State was not liable for a

judgment against them.

In Karns, the Third Circuit held that the New Jersey Transit Corporation is an arm of New Jersey even

though it is “financially independent from the state,”

and “the state is under no legal or other obligation to

pay NJ Transit’s debts or to reimburse NJ Transit for

any judgment it pays.” Id. at 515‒16. The court did so

because of the “considerable indication that New Jersey law considers NJ Transit an arm of the state.” Id.

at 517 (noting, among other things, that NJ Transit

is “allocated within the Department of Transportation” and “constituted as an instrumentality of the

State exercising public and essential governmental

functions”). The court also noted that NJ Transit is

“subject to several operational constraints” imposed

by the legislature, and that its governing board is appointed by the Governor, who can veto the board’s actions. Id. at 518.

The Third Circuit has also held that a New Jersey

state university is an arm of the state even though

the State does not have “ownership” over the university’s funds and is not liable for judgments against

the university. Maliandi v. Montclair State Univ.,

845 F.3d 77, 88‒90 (CA3 2016). The court reasoned

that the university’s status under state law indicates

it is an arm of the state. Id. at 96. And although the

Governor cannot veto the university’s decisions and

the university is run by a board of trustees with “significant” management authority, the court held that

the State exercises sufficient control through the appointment of board members (who are appointed by

the Governor and confirmed by the state senate), and

oversight by the Secretary of Higher Education (who

has licensing authority and can review budget requests). Id. at 98‒99.

B. The Circuits Are Divided Over Whether

Normal Incidents of Corporate Status

Bear on Whether a Public Corporation

Is an Arm of the State.

1. The Tenth and Fifth Circuits

Weigh Incidents of Corporate Status Against Immunity for Public

Corporations.

a. The Tenth Circuit considers normal incidents of

corporate status—e.g., the capacity to sue and be

sued, own property, contract, and make by-laws, see

generally Bank of Augusta v. Earle, 38 U.S. (14 Pet.)

519, 541 (1839)—at both steps of its arm-of-the-state

test. First, it considers them as part of assessing an

entity’s autonomy, one of the four “Streadfast factors”

constituting the first step of its test. See Pet. App.

19a, 39a (considering “whether the entity has ownership or control of property,” “whether the entity has

the ability to form its own contracts,” “whether the

entity has the ability to set its own policies without

state oversight,” and “whether the entity has the ability to bring suit on its own behalf”). It then considers

them again at the second step, when it assesses

whether allowing suit against the entity would offend

the State’s dignity. Id. at 76a.

In the decision below, the Tenth Circuit concluded

that the autonomy factor weighs against classifying

MOHELA as an arm of Missouri largely because of

these attributes. Although it acknowledged that

Biden had found MOHELA to be subject to state “supervision and control” and “directly answerable” to

the State by virtue of the governor’s appointment and

removal powers vis-à-vis MOHELA’s board, Pet. App.

42a, the court held that MOHELA’s ability “to enter

into contracts, to hold and sell property, and to bring

suit on its own behalf,” as well as its ability to adopt

bylaws, select its executive director, and manage its

own assets, weighed in favor of autonomy and against

arm-of-the-state status, id. at 46a‒53a.

The court also relied heavily on these attributes to

conclude that allowing suit against MOHELA would

not offend Missouri’s dignity. The court acknowledged

that MOHELA’s enabling act “suggests that MOHELA was intended to have the character of a state

agency.” Pet. App. 76a. But it concluded that MOHELA’s financial independence and “fair degree of

operational autonomy—particularly in its ability to

make contracts, own property, manage its day-to-day

affairs, and select its leadership”—generates “‘mixed

signals’ as to whether a suit against MOHELA would

truly be a suit that implicates the State’s dignity.” Id.

The court held that “[w]hem such ‘mixed signals’ are

present … it does not offend the state’s dignitary interests to permit an action against the entity to proceed.” Id.

b. The Fifth Circuit’s arm-of-the-state test similarly

gives significant weight to incidents of corporate status: As noted above, two of the six factors in the Fifth

Circuit’s test are “[w]hether the entity has the authority to sue and be sued in its own name” and

“[w]hether the entity has the right to hold and use

property.” In re Entrust, 101 F.4th at 383.

These factors were critical to the Fifth Circuit’s determination, described supra at 15‒16, that ERCOT is

not an arm of Texas.1 The court found that, “[a]s a

Texas non-profit corporation,” ERCOT may acquire

1 The Fifth Circuit also considers the entity’s contracting authority, but it found that factor weighed in favor of immunity

because the Public Utility Commission “has ultimate control

over the price of electricity in every contract ERCOT enters.” In

re Entrust, 101 F.4th at 386.

property and “sue and be sued in its own name,” and

it gave these factors equal weight with its determinations that the state intent and state control factors

supported arm-of-the-state status. Compare 101

F.4th at 386‒87, with id. at 383 (“ERCOT is an organ

of government that performs a uniquely governmental function.” (cleaned up)); id. at 386 (ERCOT is under the Public Utility Commission’s “ultimate control”). The court’s findings on these factors ultimately

caused the six factors to be “even[ly] split,” resulting

in the court’s using the “most important” treasury

factor to break the tie and deny ERCOT immunity.

Id. at 387.

2. The Ninth and D.C. Circuits Do Not

Give Weight to Incidents of Corporate

Status.

Unlike the Tenth and Fifth Circuits, the Ninth and

D.C. Circuits do not weigh standard attributes of corporate status in their arm-of-the-state tests.

In Kohn, the Ninth Circuit expressly repudiated its

prior test that considered “whether the entity may

sue or be sued,” “whether the entity has the power to

take property in its own name,” and “the corporate

status of the entity.” 87 F.4th at 1027‒28 (cleaned

up). Noting this Court’s holding “that a [S]tate does

not ‘consent to suit in federal court merely by stating

its intent to “sue and be sued,’” the Ninth Circuit explained that an entity’s capacity to sue and be sued

“has little relevance for purposes of federal immunity.” Id. at 1028 (quoting Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666,

676 (1999)). The court accordingly gave that factor no

weight in assessing whether the State Bar is an arm

of California. See id. at 1034.

The court similarly dismissed the property factor as

carrying “little weight,” because even when an entity

can hold property in its own name, the State may

“treat[] such property as state property.” Id. at 1029

(cleaned up). The court found that to be the case for

the State Bar, which used its funds “for essential

public and governmental purposes.” Id. at 1036

(cleaned up). Finally, the court gave no weight to the

State Bar’s status as a “public corporation.” Because

many types of entities can be public corporations, “labeling the State Bar as a ‘public corporation’ begs the

question of whether it is an arm of the state.” Id. at

1032–33.

The D.C. Circuit followed a similar approach in

Puerto Rico Ports. The court noted the PRPA was a

“government controlled corporation” that “owns and

operates Puerto Rico’s air and marine masstransportation facilities” and “can ‘sue and be sued’

and enter contracts.” 531 F.3d at 871, 879. Yet the

court attached no weight to these attributes in its

arm-of-the-state analysis. Id. at 874‒80. That stands

in stark contrast to this case, where the Tenth Circuit

found, at both steps of its test, that these attributes

show that “MOHELA has a substantial degree of autonomy” and weigh against arm-of-the-state status.

Pet. App. 52a‒53a.

II. THE DECISION BELOW VIOLATES THE

CENTRAL PURPOSE OF THE ELEVENTH

AMENDMENT BY FAILING TO PROTECT

MISSOURI’S SOVEREIGN DIGNITY.

In addition to implicating two circuit splits, the

Tenth Circuit’s decision warrants review because it

violates the “central purpose” of state sovereign immunity by failing to protect Missouri’s sovereign dignity and afford it the respect it is owed as a separate

sovereign. Fed. Mar. Comm’n, 535 U.S. at 766. The

court deemed it irrelevant that judgments against

MOHELA could impact the state treasury by reducing the funds MOHELA provides for scholarships and

development projects at Missouri colleges and universities. Pet. App. 74a. And the court held that a

suit against MOHELA is not an affront to Missouri’s

dignity because Missouri is not liable for MOHELA’s

debts and MOHELA has “operational autonomy” over

its day-to-day affairs, id. at 75a‒76a. Both rulings are

inconsistent with this Court’s decisions.

A. The Tenth Circuit Erred in Deeming It

Irrelevant that Judgments Against MOHELA Could Harm the State Fisc by Impairing MOHELA’s Ability to Support

Missouri Higher Education.

The Tenth Circuit adopted a misguided view of the

Eleventh Amendment when it focused only on whether Missouri is directly liable for MOHELA’s debts and

deemed it irrelevant that judgments against MOHELA could impact the state treasury by impairing

MOHELA’s ability to provide scholarships and fund

development projects at Missouri colleges and universities.

1. The Eleventh Amendment bars “any suit in law

or equity” by a private party against a nonconsenting

State. U.S. Const. amend. XI. It thus “does not exist

solely in order to ‘prevent federal-court judgments

that must be paid out of a State’s treasury.’” Seminole

Tribe of Fla. v. Florida, 517 U.S. 44, 58 (1996) (quoting Hess, 513 U.S. at 48). The Eleventh Amendment

“also serves to avoid ‘the indignity of subjecting a

State to the coercive process of judicial tribunals at

the instance of private parties.” Id.; see also, e.g.,

Franchise Tax Bd. of Cal. v. Hyatt, 587 U.S. 230, 238

(2019) (“immunity from private suits” is an “integral

component of the States’ sovereignty”) (cleaned up).

Consequently, the question of whether the State

would be liable for a money judgment is important

not as an end in itself, but because it is “an indicator

of the relationship between the State and its creation.” Doe, 519 U.S. at 431. This Court has never held

that the State’s liability is the only indicator of the

relationship. And for good reason. A lawsuit against

an entity that is created and controlled by a State to

perform a public function can cause financial harm to

the State and impair the exercise of the State’s sovereign power, even if the State is not directly liable for

the entity’s debts. MOHELA provides a prime example.

2. As this Court recognized in Biden, an action that

causes financial loss to MOHELA “is also a harm to

Missouri.” 143 S. Ct. at 2366. The reason is that Missouri created MOHELA as a “public instrumentality”

to “perform the ‘essential public function’ of helping

Missourians access student loans needed to pay for

college.” Id. (quoting Mo. Rev. Stat. § 173.360). To fulfill MOHELA’s “public function” Missouri empowers

it to issue bonds and to purchase, finance, and service

student loans, activities for which MOHELA can

charge fees and earn revenues. Mo. Rev. Stat.

§ 173.385.1(6)–(8), (12), (18). MOHELA’s “profits help

fund education in Missouri.” Biden, 143 S. Ct. at

1366. MOHELA is required by statute to give $350

million to the Lewis and Clark Discovery Fund—a

fund in the state treasury that the legislature uses to

fund capital projects at public colleges and universities and to help colleges and universities identify opportunities to commercialize technologies. Mo. Rev.

Stat. §§ 173.385.2, 173.392. MOHELA may use its

other assets to create or contribute to any type of financial aid program that provides grants and scholarships to students. Id. § 173.385.1(19).

Thus, just as the federal loan forgiveness plan in

Biden harmed Missouri by reducing the loan servicing fees MOHELA earned, so too, lawsuits against

MOHELA harm Missouri by reducing MOHELA’s assets. In both situations, the harm to MOHELA “in the

performance of its public function” is a harm to Missouri “that created and controls MOHELA.” Biden,

143 S. Ct. at 2368. It makes no difference that the

funds MOHELA uses to perform its public function

are kept separate from the general state treasury, or

that MOHELA transfers money to the state treasury,

and not the reverse. As the statutory requirement for

MOHELA to transfer $350 million to the state treasury makes clear, Missouri treats MOHELA’s assets

as state assets available to support Missouri higher

education. Ignoring this reality and opening MOHELA to suit, as the Tenth Circuit did, exposes Missouri to the very risk the Eleventh Amendment aims

to guard against: It subjects “the course of [Missouri’s] public policy and the administration of [its]

public affairs” to “the mandates of judicial tribunals

without [its] consent, and in favor of individual interests.” Alden, 527 U.S. at 750 (cleaned up).

B. The Decision Below Failed to Respect

Missouri’s Sovereign Right to Determine

How to Structure Its Government to

Perform Its Sovereign Functions.

The Tenth Circuit also erred in concluding that because Missouri structured MOHELA to have some

“operational autonomy,” it would not offend Missouri’s dignity to subject MOHELA to private lawsuits in federal court. Pet. App. 75a‒76a. A “State defines itself as a sovereign” through “the structure of

its government, and the character of those who exercise government authority.” Gregory v. Ashcroft, 501

U.S. 452, 460 (1991). “How power shall be distributed

by a State among its governmental organs is commonly, if not always, a question for the [S]tate itself.”

Highland Farms Dairy, Inc. v. Agnew, 300 U.S. 608,

612 (1937). In failing to recognize MOHELA as an

arm of Missouri, the court of appeals failed to accord

Missouri due respect as a joint sovereign—violating

the “central purpose” of sovereign immunity. Fed.

Mar. Comm’n, 535 U.S. at 765. This Court’s review is

needed to make clear that a proper arm-of-the-state

analysis must respect the States’ sovereign prerogatives to allocate power among the branches and instrumentalities of the state government.

1. In Biden, this Court held that MOHELA is “subject to the State’s supervision and control” and ‘“directly answerable’ to the State” through MOHELA’s

board, reporting obligations to the Department of

Higher Education, and state law setting the terms of

its existence. Biden, 143 S. Ct. at 2366. The Tenth

Circuit, in contrast, thought MOHELA was subject

only to “some degree of gubernatorial and legislative

control,” which was “undercut” by the fact that the

Governor “lacks veto power” over MOHELA’s decisions, and that MOHELA’s board can hire an executive director and employees who are paid from MOHELA’s funds and are “not subject to the State’s merits systems for hiring or the State’s retirement plan.”

Pet. App. 44a‒45a. (emphasis in original).

The Tenth Circuit did not explain why those factors

suggest that MOHELA is not an arm of the state. Nor

could it. Congress has given similar discretion to

some independent federal agencies that share the

United States’ sovereign immunity from suit. See,

e.g., 12 U.S.C. §§ 244, 248(l) (Board of Governors of

the Federal Reserve System may hire employees who

are paid with the Board’s funds and are not covered

by the civil service laws); Albrecht v. Comm. on Emp.

Benefits, 357 F. 3d 62, 67 (CADC 2004) (Board of

Governors “enjoys sovereign immunity” even though

it is a “non-appropriated fund instrumentality that

receives no funding through congressional appropriations”). Indeed, this Court found a far lesser degree of

control sufficient to make Amtrak “part of the Government” for constitutional purposes. Lebron v. Nat’l

R.R. Passenger Corp., 513 U.S. 374, 397–98 (1995)

(recognizing that Amtrak is “under the direction and

control of federal governmental appointees” where

Amtrak’s directors are appointed by the President,

notwithstanding that, “unlike commissioners of independent agencies,” the directors “are not, by the explicit terms of [Amtrak’s enabling] statute, removable

by the President for cause, and are not impeachable

by Congress”).

The Tenth Circuit also emphasized that MOHELA

“has a fair degree of operational autonomy—

particularly in its ability to make contracts, own

property, manage its day-to-day affairs, and select its

leadership.” Pet. App. 76a. Those attributes, however,

are incident to MOHELA’s status as a public corporation, a form States frequently use for instrumentalities established to perform specific governmental

functions. See P.R. Ports, 531 F.3d at 872. They say

nothing about whether an entity exists to pursue

state governmental objectives under a State’s ultimate control. As this Court has recognized, “[e]very

government corporation has such a distinct personality; it is a corporation, after all, with the powers to

hold and sell property and to sue and be sued. Yet

“such an instrumentality—created and operated to

fulfill a public function—[may] nonetheless remain[]

‘(for many purposes at least) part of the Government

itself.’” Biden, 143 S. Ct. at 2367.

Furthermore, to find that MOHELA enjoyed “operational autonomy,” the Tenth Circuit had to deem all

the limitations in MOHELA’s organic statute to be

“relatively minor” restrictions that “do not carry

much weight” in the arm-of-the-state analysis. Pet.

App. 51a. The court did not explain that conclusion,

and a review of restrictions shows that they impose

significant limitations on MOHELA’s activities.

As an initial matter, Missouri has authorized MOHELA to hold and sell property only “to carry out its

purposes,” Mo. Rev. Stat. § 173.385(14), which involve issuing and servicing student loans, providing

grants scholarships to students, and giving money to

the Lewis and Clark Discovery Fund. See id.

§ 173.385 (listing MOHELA’s powers). MOHELA has

no authority to acquire or use property for other purposes.

Missouri also restricts how MOHELA carries out

its authorized student-loan activities. Among other

things, Missouri law:



restricts the type of assets in which MOHELA

may invest its funds, id. § 173.385.1(13);



requires Missouri’s Department of Higher Education to approve MOHELA’s sale of student

loans

guaranteed

the

State,

id.

§ 173.385.1(8);



limits Stafford loan originations, id. § 173.387;



limits the types, terms, and nature of MOHELA’s bond issuances, id. § 173.390;



requires MOHELA to file an annual financial

report with the Department of Higher Education, id. § 173.445; and



requires that MOHELA’s board meetings be

“open to the public” and that its proceedings and

actions comply “with all statutory requirements

respecting the conduct of public business by a

public agency,” id. § 173.365.

The Tenth Circuit might prefer that the Missouri

Governor have the power to veto MOHELA’s decisions or that MOHELA’s board manage day-to-day

operations rather than delegating that task to an executive director and staff. But our constitutional system leaves States, as separate sovereigns, broad latitude to structure their agencies and instrumentalities

in the manner they believe best advances their interests. A proper arm-of-the-state test should respect,

not punish, that sovereign choice.

III. HOW TO DETERMINE WHETHER AN ENTITY IS AN ARM OF THE STATE IS AN

IMPORTANT AND RECURRING QUESTION AFFECTING MANY KINDS OF ENTITIES.

This Court’s review is also warranted because the

question of how to determine whether an entity is an

arm of the state is an important and recurring question that affects many kinds of state entities and frequently arises in connection with special-purpose

public corporations. See P.R. Ports, 531 U.S. at 872.

The question often arises for loan servicer entities

like MOHELA. As the Tenth Circuit recognized, lower courts have reached different conclusions about

whether MOHELA is an arm of Missouri. Pet. App.

8a–11a.2 Court have similarly divided over whether

2 Compare Gowens v. Capella Univ., Inc., No. 4:19-CV-362CLM, 2020 WL 10180669, at *2‒4 (N.D. Ala. June 1, 2020)

(MOHELA is an arm of Missouri); In re Stout, 231 B.R. 313,

the Kentucky Higher Education Student Loan Corporation is an arm of the state.3 The issue has arisen

with respect to other loan guaranty agencies as well.4

The question also affects public universities5 and

public hospitals.6 It affects entities ranging from

315‒17 (Bankr. W.D. Mo. 1999) (same), with Pellegrino v.

Equifax Info. Servs., LLC, 709 F. Supp. 3d 206, 210 (E.D. Va.

2024) (MOHELA is not an arm of Missouri); Dykes v. Mo. Higher

Educ. Loan Auth., No. 4:21-CV-00083-RWS, 2021 WL 3206691,

at *2‒4 (E.D. Mo. July 29, 2021) (same); Perkins v. Equifax Info.

Servs., LLC, No. SA-19-CA-1281-FB (HJB), 2020 WL 13120600,

at *2‒5 (W.D. Tex. May 1, 2020) (recommended decision) (same).

3 Compare Skidmore v. Access Grp., Inc., 149 F. Supp. 3d 807

(E.D. Mich. 2015) (entity is an arm of the state), with Gaffney v.

Ky. Higher Educ. Student Loan Corp., No. 3:15-cv-01441, 2016

WL 3688934 (M.D. Tenn. July 12, 2016) (entity is not an arm of

the state); Berg v. Access Grp., Inc., No. 13-5980, 2014 WL

4812331 (E.D. Pa. Sept. 26, 2014) (same).

4 See, e.g., U.S. ex rel. Oberg v. Pa. Higher Educ. Assistance

Agency, 804 F.3d 646 (CA4 2015), cert. denied, 580 U.S. 1047

(Jan. 9, 2017) (Pennsylvania Higher Education Assistance

Agency is not an arm of the state); Owens v. TransUnion, LLC,

No. 4:20-CV-665-SDJ, 2021 WL 4501595 (E.D. Tex. Sept. 30,

2021) (Michigan Guaranty Agency is an arm of the state).

See Maliandi, 845 F.3d at 84; see also, e.g., Sturdevant v.

Paulsen, 218 F.3d 1160 (CA10 2000) (Colorado State Board for

Community Colleges and Occupational Education is an arm of

the state); Irizarry-Mora v. Univ. of P.R., 647 F.3d 9 (CA1 2011)

(University of Puerto Rico is an arm of the state:) Kashani v.

Purdue Univ., 813 F.2d 843 (CA7 1987) (Purdue University is an

arm of the state).

6 Watson v. Univ. of Utah Med. Ctr., 75 F.3d 569 (CA10 1996)

(University of Utah Medical Center is an arm of the state);

Fresenius Med. Care Cardiovascular Res., Inc. v. P.R. & Caribbean Cardiovascular Ctr. Corp., 322 F.3d 56 (CA1 2003) (Puerto

Rico and the Caribbean Cardiovascular Center Corporation is

not an arm of the state); Hennessey v. Univ. of Kan. Hosp. Auth.,

53 F.4th 516 (CA10 2022) (University of Kansas Hospital Authority is not an arm of the state); Takle v. Univ. of Wis. Hosp. &

transportation and ports authorities,7 to water and

sewer authorities,8 energy authorities,9 and even bar

associations. 10 Though not exhaustive, this list is sufficiently broad to demonstrate the scope of the confusion generated by the circuit splits and the corresponding need for this Court’s intervention.

Clinics Auth., 402 F.3d 768 (CA7 2005) (University of Wisconsin

Hospital and Clinics is not an arm of the state).

7 See supra at 1314, 1617 (discussing circuit split over the

Puerto Rico Ports Authority); see also, e.g., Mancuso, 86 F.3d at

293 (CA2 1996) (New York State Thruway Authority is not an

arm of the state); Redondo Constr. Corp. v. P.R. Highway &

Transp. Auth., 357 F.3d 124 (CA1 2004) (Puerto Rico Highway

and Transportation Authority is not an arm of the Commonwealth of Puerto Rico); Christy v. Pa. Turnpike Comm’n, 54 F.3d

1140 (CA3 1995) (Pennsylvania Turnpike Commission is not an

arm of the state).

8 See, e.g., U.S. ex rel. Lesinski v. S. Fla. Water Mgmt. Dist.,

739 F.3d 598 (CA11 2014) (South Florida Water Management

District is an arm of the state); Steadfast Ins. Co. v. Agric. Ins.

Co., 507 F.3d 1250 (10th Cir. 2007) (Grand River Dam Authority

is an arm of the state); Sw. Bell Tel. Co. v. City of El Paso, 243

F.3d 936 (CA5 2001) (El Paso County Water Improvement District is not an arm of the state).

9 See supra at 1516, 2122 (discussing ERCOT).

10 See supra at 1718, 2223 (discussing State Bar of Califor-

nia).

CONCLUSION

For the foregoing reasons, the petition for writ of

certiorari should be granted.

Respectfully submitted,

JORGE R. PEREIRA

SIDLEY AUSTIN LLP

1001 Brickell Bay Drive

Suite 900

Miami, FL 33131

(305) 391-5270

DANIEL J. FEITH*

KATHLEEN M. MUELLER

JEREMY ROZANSKY

SIDLEY AUSTIN LLP

1501 K Street, N.W.

Washington, D.C. 20005

(202) 736-8000

dfeith@sidley.com

Counsel for Petitioner

March 12, 2025

* Counsel of Record

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.